Does it pay to start at a community college? It depends

Readers continue to write to us with questions about financing college, including how best to use “529” plans, the tax-advantaged higher-education accounts that invest in mutual funds. We asked experts to help answer this month’s questions.

Does it pay to go to community college for the first two years, and then transfer to a four-year school?

Starting at a community college is more popular than you might think. Of the students who graduated with a bachelor’s degree from U.S. institutions in 2016, 49% had attended a community college, and two-thirds of those did so for three or more terms, according to National Student Clearinghouse data.

As to whether it makes sense, “it depends a lot on what a student’s goals are following the bachelor’s degree,” says Melinda Salaman, director of strategic research at higher-education consulting firm EAB. It’s important to research career outcomes, including what your expected salary trajectory will be, before you decide what sort of degree to pursue and what sort of school to attend, she says.

How much cheaper is community college? In-state residents paid nearly three times as much, on average, for tuition at a four-year public college compared with a two-year public college in the 2015-16 academic year, College Board figures show. So if a student starts at a local community college for two years at a cost of $3,400 annually (in tuition and fees), and then transfers to a four-year in-state school at a cost of $9,400 annually, he or she could shave roughly $12,000 off the cost of a bachelor’s degree (not counting room and board).

From a dollars-and-cents standpoint, earning some credits at a community college would certainly seem to pay off, says Mari Adam, a fee-only financial planner in Boca Raton, Fla.

Community college may make the most sense for students who can live at home, those who need to overcome poor high-school academic performance and those four-year students who take cheaper community-college classes over the summer to save money, Adam says.

But be sure to confirm that the credits you earn will transfer to the four-year school you plan to attend, or you will have wasted both time and money, she says.

To that end, some community colleges have formal arrangements, called articulation agreements, with in-state four-year colleges that allow credits to transfer easily between the two institutions.

But it is also possible to transfer community-college credits to private schools, including elite institutions. For example, students who participate in the rigorous American Honors program at certain…

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