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Spending a few extra years in college may cost you more than you think

(Mark Felix/Orange County Register via AP)

It is pretty common these days for college students to take six years to complete a bachelor’s degree, but those extra two years in school could mean forgoing tens of thousands of dollars in earnings and retirement savings, according to a new study from NerdWallet.

The San Francisco-based consumer finance company used a combination of government data and employment surveys to analyze the lifelong cost of spending a few additional semesters in school. Here are some of the highlights:

Lost Wages: Researchers used data from the National Association of Colleges and Employers to determine that a student who takes five years to graduate could forgo $46,355 in income, the average starting salary for the class of 2013. If that same student took six years, she could miss out on $94,353, assuming wage growth of 4 percent in the second year on the job, according to the study.

Less Retirement Savings: If you’re not working, chances are you’re not saving for retirement. And as the adage goes, every year you’re not saving for retirement is an extra year you’ll have to work. Let’s assume a newly minted college graduate would stash 7.1 percent of their income in a retirement plan, the average contribution for people under 25, according to the Bureau of Labor Statistics. Compound those savings over 45 years based on a standard 7 percent annual return and a student who takes five years to graduate would miss out on $82,074 in lifetime retirement savings, according to NerdWallet. Taking six years to graduate would cost that same student up to $150,882.

Extra Tuition: Spending an extra year or two isn’t cheap. Researchers at NerdWallet took the average tuition at public and private nonprofit colleges, coupled with the expense of repaying student loans at an annual interest rate of 4.9 percent over the standard 10 years, to figure out the added costs. An extra year at a public college would run a student an average $12,557 in tuition and fees, plus an additional $6,040 in interest on a student loan. At a private college, that extra year could run you $18,992 in tuition and fees and $7,823 in interest over 10 years.

Why so many students are spending six years getting a college degree

Higher education reform groups say colleges need to revamp remedial courses and degree requirements that often keep students in school for much longer than needed. Universities often require students with weak academic records to take courses to help them catch up to the rest of their classmates, but those remedial classes don’t count toward a degree. A recent study by think tank Education Reform Now found one in four students have to enroll in remedial classes their first year of college. Those students, nearly half of which hail from middle and upper-income households, can end up paying more in tuition and fees because those courses often delay them from graduating on time.

Remedial classes have become a hidden cost of college

Complete College America, a nonprofit advocacy group, has called on colleges to offer remediation alongside college-level courses, instead of having students take remedial classes before their core courses. The group also says capping the number of credit hours required to earn a degree would make it easier for students to graduate on time as long as they take 15 credit hours a semester.

Though most educators say 120 credits is sufficient, the average graduate accumulates 138.4 credits by the time they receive a bachelor’s degree, according to the Department of Education. Add another 20.3 credits for the average amount of courses that students fail, repeat or withdraw from and those credit hours jump to 158.7 credits earned or attempted. At an estimated cost of $361 per credit, those credits start to add up.

Still, students juggling school, work and family may have a hard time carrying a full course load. Nearly two thirds of students at community colleges, for instance, attend part time because of those kinds of obligations, according to data from the American Association of Community Colleges. Earning an associates in two years would certainly reduce costs for those students, but increasing their grant aid could arguably be more effective.

Needy college students have a good chance of getting government grants to take summer classes … again

The Obama administration has urged Congress to expand the federal Pell grant program to boost graduation rates among college students in financial need. A Senate subcommittee recently approved an appropriations bill that authorizes full-time students who qualify for Pell to receive the grants three semesters a year instead of two. The administration has said this will help students afford to take a full load of courses year-round, earn a degree faster and avoid taking on a lot of student debt. Members of Congress say the bill has a good chance of clearing both chambers.

Want to learn more about the cost of college? Check out these stories:

The University of California just jacked up its tuition. Why your state could be next.

Middle-class families are fed up with their financial aid options

Students now pay more of their public university tuition than state