University Cost Estimates
No matter how carefully you and your student plan for college expenses, you will not be able to precisely predict the actual cost. The cost of attendance depends on the college, the major, and lifestyle choices. Even after the student selects a college and a major, you won’t be able to pinpoint a dollar amount. If the school says one year at their institution is likely to cost, for example, $28,000, it is just an estimate. And every year, the cost is probably going to change.
Tuition is only a portion of the cost that students must cover in order to succeed. Technology fees can vary within the institution, with an engineering major facing a higher fee than an English major. Some courses, especially science courses, will have additional lab fees. Books can cost more or less, depending on the classes. Supplies might be more expensive for a design class or a culinary program. Students who live in a single room will pay more in residence hall charges than students who live in a double or triple. The meal plan your student selects can affect the bottom line.
Because costs can vary depending on the school, the major, and the choices a student makes, it is important for family members to talk before school starts–and while the student is attending college–about college finance, debt, and projected income after graduation.
Student Spending Habits
Student spending habits cover a wide spectrum and will raise or lower the anticipated cost of college. Some students hang out at coffee shops between every class, meet friends for a burger or pizza, and go shopping or to a concert or movie a couple of times a week. Their expenses quickly mount up. Others, however, discover they can socialize with next-door neighbors in the residence hall, drink more than enough coffee in the dining center during meal hours, and watch videos online for entertainment, so their daily spending needs are minimal. Students who need regular updates to their wardrobe, bring a car to campus, or are tempted by online shopping will spend well beyond the anticipated cost of attendance.
Then there are the unanticipated, uncontrollable expenses. An illness, an unexpected trip home, or the theft of a backpack can suddenly break the budget. To be safe, some financial advisers suggest adding 20% to the estimated cost of enrollment. Emergencies happen, and it’s always wise to have emergency expenses added into your budget.
Tip: Discretionary spending is defined as money spent on nonessential goods and service. It can help to talk to your student in advance about how much discretionary spending money makes sense each month. If he or she exceeds the budget, where will those dollars come from?
How much money does your student really need?
There is no “typical” spending amount for college students. Theoretically, students who live in a residence hall and have a full meal plan would not need more than incidental expenses. Nevertheless, students want to go out for the occasional meal off-campus, or they might agree to meet other students at a coffee shop for a study group. A 14-meals-per-week dining plan will need to be supplemented with funds for occasional extra meals. Basic supplies add up. And some students are simply accustomed to spending money more freely than others.
A question to decide before your student starts college is whether you will provide an allowance for spending money, or will your student need to use personal savings or work to earn spending money?
To Work or Not to Work
Students should consider their education to be their first priority, but a part-time job can have more benefits than just the paycheck. Most students say that the structure of a work schedule helps them manage their time better. If they know they have to work on the weekend, they will not procrastinate on their homework during the week. Students who work on campus can usually find a job close to their residence hall or near their classes. They have a support network of staff or faculty to give them advice on college life, and they meet other students who work in the same department.
The majority of college students today work while they are in school. Indeed, financial aid packages are calculated with the expectation that students will contribute a portion of their college expenses. When students work too many hours, however, they stop thinking of themselves as “students.” As a general rule of thumb, working more than 10 to 15 hours a week can interfere with an education more than it helps, especially among first- and second-year students.
Most students choose to work more hours during college, rather than take out more loans or otherwise incur debt. When the extra work time leads to doing poorly in school, or if the student takes less than a full-time academic load, the long-term costs can prove to be more expensive than a student loan. Living costs over four years are less expensive than food and lodging for six years. The cost of tuition typically increases each year more than cost-of-living expenses. There are opportunity costs for working at a part-time job for two extra years, rather than moving into a professional position with a higher salary and benefits. It’s estimated that every extra year at a public, four-year college will add more than $22,000 to the cost of a college degree.