The 3 Surprising Costs of a College Gap Year

college students during gap year in London

Taking a year off between high school and college — a gap year — has become more common in the U.S. over the last few years. A common path for European students, a gap year gives young adults time to explore their interests, the world, and even themselves outside the confines of a classroom.

However, taking a gap year comes with three surprising financial costs that should be considered carefully.

1. Potentially less lifetime earnings.

The Federal Reserve Bank of New York has pointed out that taking a year off between high school and college can have a significant financial impact on your lifetime earnings, up to $90,000. This is because you're giving up a year's worth of post-collegiate wages that your non-gap year peers are enjoying, as well as the experience and pay raises they're getting. That disparity snowballs year after year, eventually putting an insurmountable wage gap between you and your peers who didn't take a year off.

The New York Fed also estimates that taking a gap year cuts the return on your college investment by 13%. College is still a good investment, given that research points out those with college degrees earn significantly more in their lifetimes than those who don't possess degrees (anywhere between $750,000 to $1,000,000 according to research), but nevertheless, the financial impact of a gap year on those lifetime earnings are not insignificant.

2. Expensive formal gap year programs. 

Spend a semester at sea! Intern with an NGO! Learn Spanish in Central America while working on a volunteer project! All of these gap year experiences sound wonderful and can be absolutely life-changing, but they usually come with hefty price tags. Formal gap year programs can range between $10,000 and $20,000, and some go as high as $40,000, so if you're on a budget or have limited funds for educational purposes, they can be a struggle to pay for or even far out of reach for your family.

However, there are budget programs out there, and even a few gap year programs that pay. You can also create your own gap year experience outside of a formal program. One Hanscom FCU employee spent part of her gap year working in a publishing company while living at home, then took some time to travel to a few countries where she could stay with family and friends to save on costs. She says that year helped her figure out what she wanted out of her college experience and prevented her from making a bad choice for a major, something she has never regretted.

3. Less aid and higher tuition costs.

Delaying college for a year means that in all probability, college is going to be more expensive for you. If you've applied to college and decided to take a gap year, you may need to relinquish any scholarships or aid you've received. And if you work during your year off, you'll need to include that income on your FAFSA (Free Application for Federal Student Aid), which could increase the amount of money your family is expected to contribute to college costs and decrease your overall financial award.

Moreover, if you have siblings in college, the timing of your gap year can affect your aid package. For example, if you have a sibling who's in their senior year of college and you take a year off, your family contribution to your education will be higher than it would have been had you both been in college at the same time.

Tuition inflation is something else you need to consider. According to the website Finaid, tuition rates increase each year at about twice the general inflation rate. On average, tuition tends to increase about 8% per year, making the cost of college double every nine years. This means the sooner you can get through college, the less expensive it will be for you and your family.

The financial realities of a gap year may be discouraging. However, there are benefits to a gap year that are harder to measure with dollars. For example, a student who isn't really sure about what they want to study in college may find that year off leads them to a better career decision that will actually earn them more money over their lifetime. It can also be a good idea for a student who has no direction in life; dropping out of college can be an even costlier decision than a gap year, especially if college loans are involved.

The key to making a good gap year decision is having a clear understanding of what you hope to achieve in those twelve months. Talk to your parents, your guidance counselors, and people who've taken gap years, weigh their opinions, advice, and concerns, and map out a plan that works for your needs and goals.


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