When looking at college costs, many people simply check the posted tuition. They look at the number, grumble, and move on. Unfortunately, they’ve forgotten some significant costs, for tuition is only a part of the cost of college. Additional costs include room and board, fees, insurance, books, and sometimes travel if you live far from your college. Combining all these costs with the tuition figure gives you the true measure of what college really costs: the COA (Cost of Attendance). Let’s look at some of the costs that are not always included in the COA, but still very pertinent.
Travel and automobile expenses
Oftentimes, colleges far away from your home will provide an allowance for travel and include it in the student budget or cost of attendance. If your college does not and if you have been offered financial aid, you may want to try to have the college add a travel allowance as a part of the COA. Doing so will increase your demonstrated need, and thus travel costs could be covered by additional financial aid. Don’t hesitate to open a dialogue with your school’s administration – they accepted you for a reason, they want you at their school. They will be willing to help, to a certain extent, if you work with them. If the aid piece isn’t relevant, calculate what travel to and from college will cost and add that to your personal expenses.
Check with airlines to see if they have any special rates for students attending colleges near a destination served by that airline. Call the college and ask about any student discounts on travel. You’d be surprised by the number of places that offer 10, 15, even 20% discounts on their product/service when you show your student ID – you just have to ask.
If you’re planning on having a car at school, consider how it will increase your costs, even when you are not using it. Many schools don’t let freshmen keep cars on campus anyway, and if you go to school in an urban area, there is little use for one. If you do take a car, take advantage of your school’s ride share program on trips home and back to school in order to save on gas.
Books and supplies
Many colleges include the cost of books (not supplies) as a part of their COA, and thus it’s included in a financial aid package. If a college does not include books in the COA, they can be a significant extra expense. Call the college and ask them for an idea of what books will typically cost for a full-time student. They will give you a generic quote, and it’ll be a large number. Though it may not seem like it, colleges are always looking for ways to become more affordable – to cut back on the cost, and waste, of books, many have programs linked to on-line resources.
Supplies are an entirely different matter. This can be a problem with students in certain specialties and in all sorts of performing arts programs that sometimes require lots of supplies. Find out before college not after you get there.
It’s very, very easy to spend money. Unfairly easy. A pizza here, a case of soda there, and the wad of cash you want to have on you headed into the weekend all add up very quickly. Generally, $1,500 to $3,000 will keep you safe for the year, so get a job in the summer, and even during long vacations to cover your expenses. You’ll complain about working while your friends are at the beach, sure, but having a comfortable balance in the bank is a huge plus when fall comes around and you head off to school. This is one of the few college expenses over which you have complete control, so use your good judgment on this one.
When you go out to eat, always split the bill or have each person pay for what they ordered. Ordering water instead of a Coke can save you as much as $3.50 per meal – it adds up. When money meets alcohol, or any other substance, you have to be very careful. Obviously, that’s all illegal, but we won’t pretend to be ignorant of the college experience. If it’s your style, partying can be fun,but going out Thursday, Friday, and Saturday night every week will take its toll on your wallet, among other things. With your newfound college freedom comes a larger responsibility for your own actions: learning how to budget personal expenses is one of those responsibilities.
One cost that most never consider is the cost of unsubsidized student loans. These loans can be deferred while you are in college, but will accrue interest for the duration of your undergrad studies and wind up costing you more in the long run. If you can, it is a good idea to be paying off old unsubsidized loans while you are in college. That too has a cost that should be figured into your needs while you are still in college; if you can barely subsist on your personal funds at school, it would be foolish to try and begin repaying your loans right then and there.
If you are able to begin repaying your unsubsidized loans, set up a small bank account designed just for this purpose and arrange an automatic electronic payment with the lender every month. This system has many advantages. First, you will graduate with less debt. Secondly, if you are earning any money that can be taxed, you may deduct all interest paid on student loans from your income tax. Lastly, after you graduate, you may want to buy something on credit or apply for a credit card. If you’ve been paying off all unsubsidized student loans electronically with no missed payments, you will get a high credit rating that will reduce the cost of borrowing in the future. Sometimes, students can arrange to set something like this up as a gift from a grandparent or other third party who will cover this expense while you are still in college. No matter what, payment of old loans should be figured into the college cost mix.
Insurance for costs not covered by the college program or by your private carrier
Be sure to review the cost of any insurance you will be paying while in college. Check carefully with the college about its plan and costs if you are required to carry health insurance and/or are not fully covered by your parents’ plan. If you expect to have a car at college, reconsider. Auto insurance is an enormous cost. If you don’t plan to have a car, check with your auto insurance carrier to see if they have a plan for college students that covers you only when you are on vacation. It will save you and your family significant money.
Come prepared for the climate. If you’re from New England and are going to USC, you should probably invest in some more shorts, and leave your parka at home. A friend of mine at Tufts came up to me one day in late September, complaining about the cold. I laughed, until he told me he had already started wearing his winter coat – which was actually a fleece pullover. He was from Southern California, and alarmed to hear that it got down to the 10s in the winter up here. Don’t make the same mistake. You won’t need terribly formal clothes, either.
This cost is only partially out of pocket. Plan on spending four years at college, loving it, learning as much as you can, and graduating exactly on time. Why? An extra year is nothing but wasted money, the cost of another year or semester of college, and four years is expensive enough. Furthermore, opportunity costs factor into the cost of an extra semester or fifth year. “Opportunity costs” refer to the money you won’t be making as a college graduate during that extra year of college. The fifth year at college is whatever it costs, plus the money you are unable to make in the job market as a college graduate which is estimated at between $35,000 and $50,000 annually.
Planning for college costs realistically will enable you to budget both your time and money, allowing you to earn enough to cover costs beyond the published COA. Careful planning will always reduce the total cost and the debt accrued over the course of your college career.