“The Hidden Costs of College
That Many People Rarely Seem to Talk About!”
With the holidays in the rearview mirror and a new calendar year beginning, there are plenty of folks who are spending a little time focusing on plans and changes for the New Year. Whether you are engaging in some resolutions or not, we find that it is a good idea each year to expend some effort in planning for and understanding all of the details surrounding your child’s future educational endeavors. Again, it is our experience that the earlier one begins this process, the better things seem to work out in the long run!
We are the professionals when it comes to understanding and preparing for higher education, from application plans and college selection, to fiscal preparation and cost-saving plans for the college students of tomorrow. This is what we focus on day in, and day out, and it gives us great professional pride and satisfaction to help families tackle such an important step in the lives of their children.
One of the biggest surprises that seems to blindside a lot of parents (and their college-bound kids) is a breakdown of the overall costs of college these days. It is no secret that tuition costs are rising, and with the increase in cost of living the total bill can be something that puts a large lump into a lot of parents’ throats, no matter how much money their family takes home in salary each year.
However, completing that college or university degree is an important goal, so it is vital to have a keen grasp on the overall costs so that proper and sufficient preparation can be made in advance. Let there be no doubt about it, paying for college these days represents a significant financial challenge, and it is important to understand all of the potential costs in advance, so no huge surprises crop up later.
In an effort to help families prepare, we are focusing this month’s newsletter on some groups of education costs that tend to really add up during the college years, although we find that some families either grossly underestimate (or even sometimes completely overlook) them in looking ahead to their child’s years pursuing higher education.
We recognize these things because we see them regularly as college funding experts – and if our experience can assist with your family’s personal college funding circumstances, please do not hesitate to contact us at any time. We have managed this type of monumental event in other families’ lives, and we can proffer the most suitable information for your family’s college preparations, as well.
Group 1: Living Expenses
Yes, of course, most people are quite well aware that there are living expenses at most colleges and universities (while places like the military service academies are a rare exception, for example). However, what can be surprising is just how quickly these costs can add up – especially when a college student changes living circumstances between semesters or academic years, as an example.
It simply does not take very long at all for costs like off-campus rent, restaurant or take-out food costs, mobile phone bills, and others to add up and put a serious strain on the semester budget. Remember that schools will give an estimated cost for living expenses, but these estimations can vary wildly in their accuracy and their expectations, which may or may not represent those of your family and/or your student. Your list of expenses may not match up with the school’s anticipated list of expenses, and it is infrequent that the differences work out to the advantage of the parents, in our experience!
Of course, the school has direct control over the costs for a dorm or apartment on campus, and the on campus cafeteria food plans are also not going to come as a surprise to those in charge at the college or university, since they are part of the organization making the price lists. But wow, once you start factoring in off-campus or unrelated expenses? Well, that is one time when things can certainly start to add up to real money in a hurry.
For this reason, any changes in living arrangements during the undergraduate years should be gone over extremely carefully, and not made in haste if it is at all avoidable. Budgets are generally set in advance for an academic year, so making a change between terms or semesters can also create some unintended – but very real – challenges with the cash flow. Regardless, remember that a chat with your college funding advisor can be extremely helpful when it comes to reviewing and planning for the full spectrum of living expenses at your child’s college or university of choice – and any changes that may come around during the college years, as well.
Group 2: Direct Academic Costs
We hope this does not come as a surprise, but no… tuition costs are not the ONLY academic fees involved in higher education! Yes, it is the largest one in most cases, but there are a number of additional potential costs that can wreak havoc with the finances if they are not reviewed in advance and taken into full consideration.
Students who are interested in studying the sciences, or taking a series of pre-medical coursework, especially classes with extensive laboratory components, will find that “Lab Fees” are added to the regular tuition costs. Even students who are only taking a required science class as a graduation requirement will often find Lab Fees or other course fees tacked on to their tuition bill. Schools have to calculate in extra costs for lab materials and lab instructors for these types of courses, and they pass those costs directly on to the consumer… meaning, the student!
Students who find themselves having challenges in a certain area may also wish to avail themselves of outside tutoring, which is usually at an additional cost to tuition, as well. Some schools will have peer tutoring available, which is great in principle, but the quality of the academic help can vary substantially depending on who is available.
Group 3: Extracurricular Costs
Many universities and colleges offer a wide variety of outside educational activities for their students, which can be absolutely wonderful opportunities for learning, growth, development, and even future careers and job options. Many of these optional activities also can tend to significantly drive up the overall costs for a student while in college, as well.
A few of these options can be exchange programs with other universities, foreign language immersion programs (in a foreign country, with program and travel and living costs!), special training options at industry or government programs, etc. Clubs and other organizations will also add to the costs for a semester or academic year, sometimes quite substantially, so these things need to be discussed in advance whenever possible.
With this type of expenditure in mind, it is important to look ahead and see what offerings might be of interest to your child during his or her studies – both in the classroom and outside of the study hall – especially considering his or her interests, and try to plan for these types of costs in the academic budget.
Group 4: Unnecessary Costs!
Yes, it is true… the very presence of this group in our newsletter DOES mean that there are costs that many people pay for higher education that are completely and utterly unnecessary. Often, these costs are due to poor planning or incomplete preparation, and the assistance of a college funding professional can make all of the difference in that regard. Here are a few examples of frequent costs that people take upon themselves that could be avoided in many, many of the cases we see.
Paying for extra terms, semesters, or even years of tuition, for example, is almost always something that can be avoided with proper planning and focused student performance. However, the average time that students spend in their undergraduate studies seems to be extending well beyond four years pretty regularly, which means that the schools are able to sock away more and more tuition from students who could have (and very often should have) graduated long ago. As long as they can keep filling the classes, of course, the schools will usually be happy to keep taking tuition money!
Unbudgeted recreational costs can add up in a hurry, and we have seen cases where undisciplined students have blown substantial college funds on their “social life” and literally run out of money before the end of a term or semester. Preparation is key, and it is important to include (and follow!) a budget with money for recreation planned into the overall cost.
Even costs like food can come back to unnecessarily bite students (and their parents) later, if a student does not have a well-organized food plan at the college level – there is a huge difference between a pre-paid, on-campus plan with the cafeterias, and unmanaged spending on take-out Thai food and pizzas, so there must be an understanding and a realistic plan in place to avoid running up a food bill that decimates the financial plan for the whole academic year.
Understanding all of the expected costs helps families prepare in ways that can avoid the unnecessary hits to the wallet that many others will experience. We are well-versed in these issues and will be pleased to assist you should you so desire – just let us know if we can help out in any way!
Aside from our monthly newsletters, one way that we try to help the parents of college-bound high school students understand more about financial preparation for college is through our excellent, live College Funding Workshops. These presentations, including face-to-face interactions with some of the best college funding professionals available, provide a valuable service to parents who want to learn more about the money side of their child’s future college or university education. Our workshop information is always up to date and accurate, and we find that parents recommend it highly!
The workshops are without any entrance fee for participants, but we require advance reservations for planning and maintaining an optimal learning group size. For questions about the College Funding Workshops coming up in your area, our workshop staff can be called 614-934-1515. These team members will be able to assist with information about locations, content, time and dates, or other workshop details. They are also able to offer reservations, if you already know that you wish to join us.
We also have published a written report for parents who need the most vital information regarding optimal planning for college expenses. We call this report “Nine New Ways To Beat The High Cost of College.” As with the workshops, we send it out to interested parents free of charge and without any obligation. For your own copy of “Nine New Ways To Beat The High Cost of College,” just reach out to our staff at 614.934.1515 and they will be please to e-mail one out to you right away. Happy New Year!
Until next month,