College Expenses

April 22, 2021

There’s no hiding the fact that college is expensive. In the 2018-19 school year, the average tuition and fees to go to a 4-year, private school, including room and board was $34,758 and tuition is just one part of the equation when it comes to college expenses.

Students have to pay for housing food, supplies and equipment like a laptop. That doesn’t include other costs like entertainment or school and club activities.

It’s important to be prepared for the costs that you’ll face as part of your college education. Knowing what to expect can help you save money and prepare.

The Advertised Costs of College

When you’re trying to decide which college to attend, there are a lot of things to look at, like student life, academics and location. Colleges will also advertise their cost of attendance, which you can use to estimate how much you’ll pay for your education.

Tuition and fees

The most basic cost of going to college is tuition. Colleges charge money for you to go to classes.

For the 2018-2019 school year, the average cost of tuition and required fees at non-profit, private schools was $34,758. By contrast, public schools charged $9,212.

Tuition generally covers just the cost of classes. Most schools will charge additional fees that students have to pay.

Some common fees include:

Orientation fees
Campus fees
Lab fees
Technology
Athletic fees
Transportation fees
Health and wellness fees

These fees pay for things like campus events, access to computer equipment and tickets for athletic events. Together, they can add hundreds to thousands of dollars to your bill each year.

In certain cases, you might avoid some fees. For example, orientation fees only apply to new students who have to attend orientation sessions.

Off-campus students might be able to avoid campus fees because they won’t be living in a dorm. However, tuition and fees are some of the most basic costs of college so you should assume you have to pay the full sticker amount.

Room and board

Tuition and student fees cover the cost of going to classes and events on campus, but students still need somewhere to live and food to eat.

Colleges will publish the cost of room and board for students. They have a lot of leeway in determining these costs, but federal guidelines state that it must be based on the cost of on-campus housing and, for off-campus students, the expenses “reasonably incurred by such students for room and board.”

If you want to go to college in an expensive city, room and board are likely to be far more expensive than if you attend a school in a less expensive area.

Many schools have rules regarding which students live on campus and which live off-campus. It’s common for new students, including freshmen and sophomores, to have to live on campus while upperclassmen have the freedom to move off-campus. Expect to pay close to the advertised cost of room and board in your first year or two at college.

Once you can move off-campus, you can often find less expensive housing than the college’s advertised cost of room and board. This is especially true if you’re willing to increase your commute time or live with roommates. If you attend school close to home, living with your parents can significantly reduce your housing costs, which can have a big impact on the overall cost of your education.

Hidden Costs to Consider

Schools generally advertise the cost of tuition and room and board in their costs of attendance, but there are a lot of other educational expenses to consider if you’re going to attend college. These hidden costs can make up a significant portion of the overall cost of attendance.

Books and supplies

Students pay tuition to go to class, but a lot of the learning at any school takes place outside of the classroom. Even in the classroom, students need equipment and textbooks to fully participate.

The tools required for school can vary based on what you’re studying.

Someone taking computer science or graphic design classes will likely need a powerful (and therefore expensive) computer, unless they want to do all their work on school-provided devices.

Humanities students might get by with a less expensive laptop, but may need to spend on other things like books.

Music students will probably want an instrument, so they can practice in their free time.

Textbooks for college are also notoriously expensive. Buying used books when possible can help you save money, but you may still find yourself spending hundreds each semester to buy books for classes.

Even basics like notebooks and pens cost money. They might not cost much, but they can add up to a significant amount over the course of four years in college.

Often, the full cost of books and other equipment isn’t fully reflected in a college’s advertised cost of attendance, but they’re still essential purchases that you need to make to get the most out of going to class.

Personal expenses in college

There’s more to going to college than going to class, going home, doing homework, sleeping and doing it all over again.

College is a time to try new things in a new place, but there’s a good chance that the things you want to do cost money.

If you’re in a city, you might want to go to the theater or a local sporting event. Even if you have a meal plan, you’ll probably get tired of the dining hall and want to get takeout or go to a nearby restaurant. Even if you’re at a more rural school, there will be outdoor activities like skiing or day-trips that cost money.

You’ll also have ongoing costs like your cell phone bill or paying to do laundry at the laundromat.

There are ways to avoid or reduce many of these costs. Skipping a night out at the bar or not going away for a long weekend can mean saving money. However, you don’t want to miss out on important parts of the college experience because you were overly frugal.

Transportation

Transportation costs for school can vary widely depending on where your school is located and where you live in relation to the school.

If you go to school in a major city, you probably won’t want to bring a car because of the cost of finding parking. However, that means paying for public transportation whenever you want to go somewhere. Longer trips mean renting a car or finding someone who has one to drive you.

Some schools offer discounted transit passes, so check with your school to see if that’s an option.

People who aren’t in the city might want to keep a car, which comes with gas and insurance costs. You also have to pay down your car loan if you don’t own the vehicle outright.

If you have a part-time job or live off-campus, that means additional transportation costs unless you can walk to work and school from home.

Beyond the ongoing costs of transport, think about the costs of getting to and from school. If you’re going to school halfway across the country, you either have to buy plane tickets or settle in for a long drive when it’s time to move to campus or home for the summer.

Winter and spring breaks also mean travel expenses.

Front-loaded aid

This isn’t exactly a cost of going to college, but it’s something that can increase the amount you have to pay in your later years of attendance, making it important to pay attention to.

When a college accepts your application, you’ll usually get an offer of financial aid that includes any grants, scholarships, and loans that you qualify for. It’s important to pay close attention to the financial aid package to see how it works.

Some schools will offer more financial aid in the first years of your education, reducing the aid as years pass. That means that you’ll pay more to attend in the later years of school than you do for the first year or two. You’ll want to make sure you have enough money to cover the additional expenses during your later years of college.

It’s easy to look at just the cost of the first year and not see how much you’ll have to pay for the later years. If there’s a significant reduction in the aid offered past your first year of school, a college that seemed affordable at first glance may wind up being outside your price range.

Paying for College Expenses

There are many different ways to pay for a college education, such as scholarships, grants, and working part-time.

Here are two of the most popular options.

529 plans

529 plans are a very popular way to save for college expenses. Parents frequently open these accounts to save for their child’s education.

The benefit of a 529 plan is that they offer tax advantages when you use them to save for college.

Money in the account grows tax-deferred, and you pay no taxes on money withdrawn from the account if you use it to pay for qualified education expenses. States can offer additional tax incentives as well.

Another benefit of 529 plans is that they have a lower impact on need-based financial aid than other types of accounts.

One potential drawback of a 529 plan is that the money in the account has to be used for qualified education expenses, or you lose the tax benefits.

You may find yourself wanting to use the funds for something that isn’t on the list. If you do, you will owe income tax on the earnings portion of the amount withdrawn, plus a 10% tax penalty. Your state may also impose tax penalties. You will never have to pay taxes or penalty on your contributions, since they are made with after-tax money.

Recent laws have expanded the list of qualified expenses to include private education at the K-12 level, as well as student loan payments, making 529s somewhat more flexible.

If you don’t use the full balance of the 529 plan, your parents can change the beneficiary to another child or qualified family member who can then use the money for college.

Student loans

If you can’t afford to pay for college out of pocket or with the scholarships you earn, student loans are an effective way to pay for school.

One of the advantages of student loans is that they’re relatively flexible.

Often, there are few restrictions on how you use the money you borrow. That means you can use your loan to pay for tuition and cover living expenses in college such as rent and food.

The obvious drawback of student loans is that you have to pay them back eventually.

If you get non-subsidized loans, they’ll also accrue interest while you’re in school, meaning your loan balance will grow from the time you get the loan to the time you graduate.

The average student who borrows money to pay for college expenses graduates with just over $30,000 in student loan debt, according to a U.S. News Survey. However, the debt is often worth it. Workers who have a bachelor’s degree earn a median annual income of $24,900 more than someone with just a high school diploma. .

On average, it takes 18.5 years to pay off student loans, meaning most people are in their late 30s or early 40s by the time they fully pay for their education.

Before you opt for student loans, think about how you plan to pay down your debt.

If you have a part-time job while you’re in college, you may consider making payments while you’re still in school.

Depending on your course of study, you may also consider pursuing loan forgiveness programs, which can get you out of debt sooner than a traditional payment plan. If you borrow a student loan with a high interest rate, you may be able to save money by refinancing.