Surviving the ‘hidden costs’ of college
By Steven Gagnon
A recent article posted on coursehero.com, “The Outrageous Hidden Cost of College,” claims the nontuition costs of college can average more than $23,000 a year — greater than the cost of the education itself.
But are the hidden costs of college really so high? Is a college education really in danger of becoming financially out of reach for a large number of students? It depends. Do you consider trips to Cancun for spring break and a weekly meal allowance legitimate education-related expenses?
Identify the hidden costs
The hidden costs of college are a real issue. And the truth is, when the average family estimates costs, they tend to focus on the figures offered on college web sites and school catalogs: Tuition and fees, Room and board, and Books and supplies. What can easily be overlooked are travel, mandatory fees, cell phone service…even laundry, coffee, snacks and entertainment expenses.
Take coffee for example. Two large cups of coffee from a local retailer could cost upwards of $4 a day. Over two 15-week semesters, that can add up to more than $800.
A modest weekly dinner out with friends can add up to more than $500 a school year. And then there are computers, which are often mandatory…not to mention software and software updates.
If you’re thinking, wow, it really starts to add up fast, it does. Personal-finance writer Liz Pulliam Weston writes in “The hidden cost of college” that incoming freshman can easily spend more than $1,000 on hidden costs before even stepping foot on campus.
Such items include a dorm-room fridge, microwave, carpet, bed sheets, a parking pass and season sports pass.
Returning students will tell you that this is nothing compared to the hidden costs of the school year.
Separate needs from wants
Sallie Mae estimates that the average college graduate with at least one credit card carries $4,138 in debt. The leading cause: the “want” rather than the “need.”
Most of today’s college students want and expect more than a place to live, food, tuition and supplies. Socializing-dinners, movies, clubbing, shopping-is the foundation on which many lifelong friendships are made, and these relationships are a large part of the college experience.
The good news is the fact that learning to balance needs and wants can actually be one of college’s great lessons. Learning to manage personal finances and how to prioritize spending now will help college students well into the future after graduation.
Develop a budget and exercise restraint
Creating a budget is important. But the truly hard work is being disciplined enough to stick with it. For example, a $20 dinner on a credit card may not seem like much. However, if that money isn’t accounted for in the budget, the money to pay it off when the bill comes due isn’t going to be there.
Sure, some things like lab fees and supplies are unavoidable, but they don’t have to be surprises. Art majors, for example, have many supply related expenses-canvas, paints, brushes, and so on-that a math major will not.
Transportation is another cost you can plan for – visits home can rack up debt depending on where the school is. Be sure to include transportation in your budget.
Another important thing to remember is that many “hidden costs” are actually choices. What you do on spring vacation, how much you spend on clothing purchases and entertainment or the amount you pay for your cell phone plan are all controllable variables.
Ultimately, a little restraint today will pay huge dividends tomorrow. Many college students already enter the working world in debt to student loans. Try to avoid the additional credit card debt that comes from not careful budgeting and planning during the school days.
Steven Gagnon is a senior vice president and Aroostook County market leader for KeyBank in Maine. His office is at 480 Main Street in Presque Isle, and he may be reached at 764-9419 or via e-mail at Steven_L_Gagnon@KeyBank.com.