It’s easy to miscalculate your college expenses and lose track of your finances as you embrace your college life. Even the most meticulously designed college budgets tend to fall short by yards. While budgeting for your college expenses, it pays to look beyond tuition fees, housing costs, and meals. What about the cost of your textbooks, socialization expenses, transportation, or joining a club?
There’s a plethora of hidden costs that institutions seldom talk about! Now that you are bracing up for a new life away from home, it’s time to budget like a pro. Let’s explore some of the hidden costs of college that can shock you.
Since 2015, the average cost of college has increased by 4.94% across the nation. This translates to around $1,344 additional expense per student each year. Unless you are realistic with your financial planning, it’s easy to go miserably wrong with your finances.
Statistics showing the impact of hidden college expenses
Unplanned college expenses can affect your family budgets as well as your finances. Let’s take a look at the grim reality through these figures.
- As much as 80% of college students report stumbling across at least one unexpected indirect expense at college.
- 51% of students shelled out higher indirect costs than they expected.
- To manage unexpected financial requirements, 53% of college students had to change their eating and food shopping habits. 42% feared that they wouldn’t continue to remain enrolled.
Besides, many colleges make little or no effort to help students learn about the potential expenses beyond tuition fees. The best path to proceed is to stay abreast of the potential expenses.
What are the common hidden costs of college?
Have a look at the commonly overlooked college expenses. A strategic financial plan for your college can help you plan your expenses without stressing yourself.
Student loan interest
Hardly do parents of students look into the breakup of the financial aid package. Maybe when you graduate or land in a financial crisis, you might scan through these hidden expenses. Loan interests, particularly from private lenders, quickly add to your obligations. You might not realize it, but this burden takes a lot of joy away from your graduation.
Parents and students are shelling out interest worth thousands of dollars. The interest on your education loan might accumulate even when you are in college. Knowing that you have a grace period before you start repaying your debt, you don’t tend to care much about these hidden costs. However, these costs keep inflating deep inside and end up extending your student loan late into your thirties.
For many families, the cost of student health insurance comes as a surprise. Besides, many colleges make having one of these policies mandatory. For the 2022-2023 academic year, the average cost of health insurance for students was $2,915.
For some institutions, the insurance sticker price looks excessively high. For instance, the annual health insurance cost of students at Ohio State University is $3,530, while that at New York University is $4,077.
A study shows that, on average, first-year college students shelled out $1,226 on books and supplies in 2020-2021. With textbooks and study materials getting expensive, it pays to allocate adequate funds to make these upfront purchases.
The specific cost of textbooks depends on the domain your major is in. However, this expense takes a significant bite off your budget.
Some colleges also include Orientation as a fee for the first year, further making education expensive.
Additional dining costs
While you might already have budgeted for your meals, you might already be living on noodles! Regardless of your academic level, meals continue to be an essential expense. Prioritizing your health, you can’t always compromise on your diet, right?
It’s worth noting that many colleges do not cover meals. You may also decide against going for an unlimited meal plan. On average, college students end up spending around $341 a month for buying off-campus meals.
Eating expenses also include the cost of dining out with friends, purchasing groceries, and ordering takeout from eateries. Amidst all the fun, students end up overlooking these expenses when they don’t come under their meal plan.
The expenses for off-campus meals also vary in different localities. For instance, if you live in a large city, grocery expenses can easily mount compared to what you pay in a small town.
Well, you might be right on your housing budget or already be sharing your rooms to curtail costs. Have you factored in the expenses for furnishing your dorm or sprucing up its looks?
Think about couches, rugs, lamps, or futons – all that you are going to bring to your dorm. Then you might decorate the rooms with posters, pictures, and lights.
If you reside off-campus, factor in the cost of purchasing kitchenware and additional furniture. These expenses add up silently, so make sure to have a budget for them too. Depending on the college policies, you may also plan to bring a few pieces of furniture into the common room.
Your college life is the phase when you embrace a larger social circle. Naturally, you end up bearing some inherent social costs of college life.
How frequently do you plan to eat out, visit movies, or spend time partying? Although these might seem like occasional expenses, they add up to hundreds of dollars over the months. Unless you are vigilant about money handling, you will feel cramped with your budget sooner or later.
Depending on your institution, social costs include sorority or fraternity costs, fundraisers, club costs, and events at the end of semesters. All these expenses can financially stress you unless you are already earning good enough through a side hustle or a part-time job.
Hidden social costs also include purchasing gifts for your friends and other unavoidable expenses.
Loss of merit aid
Have you applied for your merit scholarship to manage college expenses? Well, you must be aware that failing to fulfill the desired grade-point average in academics can lead to the loss of your merit aid. This can land up in financial hardship, throwing you off track.
Instances of merit aid loss are more frequent than you expect. Students who are habitually sound in academics may not continue the good work at college. The workload at competitive universities often turns out to be overwhelming. Eventually, students face a rude shock when they start performing below academic expectations. The impact adversely affects their financial planning, with those ‘free funds’ drying up.
Greek life dues and fees
A typical college life experience in America remains incomplete without the Greek life. While it’s tempting to be a part of a fraternity or sorority, many students fail to realize the hidden costs and fees associated with it. You may be shelling out anything between $600 and $6,000 per semester. Remember, this amount doesn’t cover expenses such as alumni or rush fees.
So, it’s wise to weigh your priorities and decide whether you should go for Greek life. Don’t let hidden costs such as chapter activities, dues, and room costs overburden you.
As you brace up for a smart career, you’d be keen to impress your future employers. However, smart clothing doesn’t come cheap.
Did you consider the cost of purchasing professional attire to visit job interviews or career fairs? These networking events can help you click in your career. Whether you go for paid internships or attend career fairs, you must groom yourself and work on your presentation. Most students overlook these expenses while budgeting for college.
Organization and club fees
College life seems to be bustling with activities. You might be interested in joining different organizations or starting clubs to get involved in campus life. From student publications to intramural sports, there are a lot of activities to engage in. Professional and social activities are available in plenty.
However, did you factor in the cost of running these organizations? At times, students also pay for equipment and travel. Depending on the nature of your activity, the organizational costs and club fees can lead to significant cash outflow.
Emergency expenses and incidental costs
Are you prepared to tackle a financial emergency? It might be a simple mechanical breakdown in your car to an expensive medical emergency!
For most students, managing these unforeseen costs can be overwhelming. A single change in your travel plan can make a difference worth hundreds of dollars. So, it’s wise to build an emergency fund for your college days. When unplanned events arise, your financial resilience should bail you out.
How to avoid financial surprises in college?
As a college student, you can face tons of financial surprises. How do you plan to remain financially afloat?
Realistic and all-encompassing financial planning can make the difference between a stressful and worry-free college life. Here are some strategies that should put your finances on track.
Start saving early
You already know how expensive a college education can be! Considering the value of formal college education for your career, it’s imperative to undergo graduation. Being a parent, you should be proactive in opening a 529 savings account for your child. Your foresight and planning in handling educational expenses can help cover hidden college expenses.
Apply for scholarships and grants
Make the most of the ‘free money’ from scholarships and grants. Be an early applicant while filling out FAFSA every year as you pursue higher education. This way, you would know whether or not you are eligible for financial aid. Once you know how much grant or scholarship you qualify for, apply for a student loan to make up for the deficit.
Curtail your expenses
There are plenty of avenues where you can curtail college expenses. How about ditching pizza parties or unplanned outings with your friends? Why not share a car or use public transportation to save on gas, car insurance, and traffic tickets?
Cultivating financial responsibility while in college largely shapes your spending habits.
A college education is worth your investment. However, it’s critical to weigh your financial stature and plan your expenses logically. Identifying hidden college expenses can be tricky, so make sure to think about your lifestyle and allocate your funds accordingly.
While food and housing costs are tough to cut down on, you can curtail lifestyle and socialization expenses. Living frugally in college delivers its perks as you graduate and takes a stride toward a debt-free life.
How much does college cost in the USA?
If you live on campus during your 4-year college in the US, the cost of attending college would be around $25,707 a year. This implies that the cost of education over four years would be around $102,828. However, nonprofit or private university students shell out around $54,501 a year or $218,004 during the course of 4 years.
Can I avoid paying hidden costs?
As a student, it’s imperative to enjoy a decent social life while enjoying your newfound freedom. Rather than refraining from paying hidden costs, it makes sense to identify these costs beforehand. Accordingly, you can set your course as a college student.
For instance, you may refrain from living a Greek life or curtail expenses on eating out. Of course, it’s possible to avoid paying hidden costs, but an informed decision ensures that living frugally as a college student doesn’t come as a shock.
Which part time jobs can I take in college?
It’s wise to take on a part-time job that would add value to your resume. Depending on the stream of your study, choose your job so that you gain relevant experience by the time you graduate. Some of the other part-time jobs for college students in the US include profiles like a tour guide, library monitoring, peer tutoring, and teaching assistant.
Can hidden costs put me in debt?
Like any kind of unplanned expense, the hidden costs of college can put you in debt. Thousands of students graduate with debt, which adversely affects their long-term financial planning. As you feel financially cramped, you may count on easy-coming education loans. Ultimately, the debts keep mounting and you need to clear them off after you graduate.
What are some financial aids in the US?
A plethora of financial aid is available for students in the US, including grants and scholarships. Submit your application at the FAFSA website to check out the grants you qualify for. Also, different institutes and organizations sanction scholarships for students in the US. Since you don’t have any restrictions on the number of scholarships you can apply for, try to maximize the benefits through these financial aids.