Hidden Costs of College

Congratulations! You have four years of tuition, room and board stashed away in your 529 plan and your child hasn’t even graduated from high school yet. Now you can breathe easily, right? Well … maybe, maybe not.

The published cost of college attendance can vary substantially from the actual cost for numerous reasons. The primary contributor to this variance; a surprisingly small number of students graduate in four years. In fact, only 60% of students graduate within six years at public institutions according to the National Center for Education Statistics. Now before you blame your child for taking too long to get that degree (and blowing your budget), understand that getting the classes needed to fulfill degree requirements at a large university can be a daunting, if not impossible, Hunger Games-like experience resulting in an extended stay. Changing majors, transferring schools and required remedial classes are other common contributors to a longer-than-expected graduation timeline.

One cost-effective way to manage the timeline is for your child to plan on taking required classes they couldn’t get during the regular school year at their local community college during the summer. Budget for this (hopefully minimal) additional expense and have the classes pre-approved so your student receives credit for their work. Also, insist that your student meet with their advisor before scheduling classes to confirm they are on the right path to meeting their degree requirements. Now that you are on the four-year plan, it’s time to understand some of the other hidden costs of college.

While wandering the park-like grounds and admiring the architecture of the colleges on your tour list, it can be easy to forget a very important question: Is this a comprehensive fee? Quite often the answer is yes at a private college and hard to ascertain at a public school. To help compare apples and oranges, take a checklist of possible extra fees or expenses on your tour so you ask the same questions everywhere.

  • Are there class-specific fees? For example, lab fees for science classes or studio fees for art or music classes.
  • Are there differential fees for specific majors?
  • Does the school charge more for additional credit hours? Some schools have a 50% tuition surcharge for credits in excess of degree requirements.
  • Is tutoring an additional expense? Is the tutoring remedial only?
  • Are there use fees for athletic facilities, the health center, and tech support?
  • Is there a fee for printing?
  • Can you rent textbooks at the campus bookstore?
  • What percentage of the student body lives on-campus vs. off-campus? If your student lives off-campus budget for rent, security deposit, utilities, furniture, and renters insurance.
  • How far is the school from your home? You may need to budget for travel expenses and summer storage fees.
  • What does it cost to have a car on-campus?
  • Do you receive college credit for study abroad programs?
  • What extracurricular activities interest your student? Greek organizations and club sports teams can cost thousands of extra dollars each year.
  • What is the process to get student tickets to football or basketball games and what do they cost?
  • What are some of the other small fees you can expect? Many schools charge an orientation fee, a matriculation fee, and a commencement/graduation fee.
  • And last but not least… expect a 3% fee for paying the other fees with your credit card.

Once your child has narrowed down their list of potential colleges, find someone who has a student there and ask about the hidden extras. You may be surprised to find that the private school (with a slightly higher four-year graduation rate at 66%) and a comprehensive fee compares more favorably than you expected to a large, public university.

Nancy Blackman, CFP®
Senior Portfolio Manager

Share:

Share on facebook
Share on linkedin
Share on email
Share on print

Recent Posts:

How to Talk to Your Children About Your Estate

Talking with your children about disability and/or death can be a difficult task for most people. Parents spend the better part of their financial lives working, saving and planning only to end up avoiding the proper communication and planning with children surrounding death. Parents often do not discuss their estate plans with adult children out of fear that this will only cause tension and improper incentives. But, in my experience as an attorney and financial advisor, the most successful planning results come from good communication.

I Received an Inheritance, Now What? - Parsec Financial

I Received an Inheritance, Now What?

At some point in your life, there is a chance that you will inherit money or assets left from a grandparent, parent, or other family member. When someone that you love passes away, it is an emotional experience and going through the process of inheriting the assets they chose to leave you can add to the rollercoaster of emotions.

IRA Beneficiaries: Per Stirpes vs. Per Capita

Did you know that your IRA beneficiary supersedes your will? No matter how carefully you’ve crafted your last intentions in your will, an IRA beneficiary that was never updated after your divorce and remarriage can unwittingly bestow your former spouse with your IRA inheritance, while also disinheriting your new spouse and children. That’s why it’s important to update your beneficiaries after major life changes such as marriage, divorce, births, illness, domestic issues and deaths.

2020 Newsletters:

Finding Your Passion Edition

“We all know people who have passion. It is admirable and it can be boundless. I hope that you all know your passion. And if you are looking for it, I believe you’ll find it among your value set.” – Rick Manske, Parsec CEO

Please enjoy our latest quarterly newsletter where we discuss various types of passions and the respective financial components, including traveling, leaving a legacy, helping others and serving our country, among others.

Graduations Edition

Whether it is for you or a loved one, a graduation is a truly special moment to celebrate the accomplishment at hand and look forward to the future. As you’ll read in this newsletter, graduations are just as much for parents who are graduating from one spending level to another and adjusting to the new financial demands of the next advancements along the educational path.

Whitepapers:

Get updates from parsec financial

Scroll to Top