how to pay for college

How to Pay For College

Coming up with a financial plan for your college education will free you up to enjoy the college experience and focus on your schoolwork. While it’s true that payment is arguably the least exciting thing about college, keep in mind that it’s the facilitator of your education, and that the lack of a financial plan can produce overwhelming stress for both students and parents. While college financial planning ideally begins long before applications are completed and acceptances received, you can create a great plan by starting right now, wherever you are in the college admissions process.

 

Paying for College Step 1: Determine Your College Costs

This is the first research-heavy step of making a college financial plan. Understanding exactly what you’ll need to pay for while you’re attending college can feel like a big reality check; maybe you were expecting to pay for tuition and housing, but hadn’t factored in additional administrative fees and the mandatory freshman meal plan. Each school is different, so find out the following information about each of the schools to which you’re applying. If you’re still a few years away from applying to college or specific information is unavailable, look up the average costs of the items on the following list so you’re prepared when the time comes. 

  • College Tuition

    Tuition is fairly simple to understand; it’s the amount the college requires to attend class. At some colleges, there’s a flat tuition amount regardless of how many credit hours are taken. At others, the amount depends on the number of credit hours. The first thing you’ll want to do when adding up the total cost is put down the exact tuition amount. If the school bases the amount on number of credit hours, assume 15 hours per term.

  • College Administrative Fees

    There are some fees required of all students and some that may have to be paid simply because of the major your child chooses. For example, science majors may have to pay a refundable lab breakage deposit of $50 to $100 per lab course. Assume that you’ll get none of this amount refunded, since even the most careful student breaks a beaker occasionally. Some colleges may also have an optional student services fee, depending upon whether you choose to participate in certain activities.

  • Books and Supplies

    Here again, this figure will vary according to the major. For example, science books can be extraordinarily expensive ($75 or more for some), and there could be ten or more books required for one English literature course. Additionally, there may be lab workbooks, photocopied articles, and study guides that don’t always get figured in. While the financial aid office usually provides an average annual amount, this figure is apt to be low. Estimate between $500 and $700 per year.

  • Room and Board

    This expense is dependent on whether you live in a dorm, off-campus apartment, group house, relative’s home, etc. The dorm costs may also vary depending on whether the room is a single, double, triple, or quad bedroom. You won’t know the actual amount until after you’ve been assigned a spot. For calculating purposes, use the average figure the college provides. Unfortunately, many colleges lump room and board charges together, which can be misleading, but the cost of dorm rooms or rent usually can be calculated accurately. The range is typically between $3,000 and $4,500 a year. 

    If you live on campus, you may have options as to meal plans. Some schools require that all meals be eaten in the school dining center. Others offer variable meal plans, where you sign up for any number of meals per week. What’s best? You may not need three meals a day, seven days a week. So if you can, choose the plan that meets your needs. Remember, the school’s estimated board cost will include only meal plans, not snacks, socializing, or splurges.

  • Transportation and Travel

    This expense includes both the cost of commuting back and forth from the local residence to classes and the cost of getting to and from home during vacations and breaks. For a student living on campus, the transportation or commuting amount is probably zero, unless you have a car. If a car is involved, there are parking fees, insurance payments, and gas, oil, and maintenance costs. 

    The other transportation amount, referred to here as “travel,” has to do with going between your home and the college. Every family will have a different amount, depending on whether the college is clear across the country or next door, whether you come home once, twice, or a dozen times, and whether the distance can be driven or not. We can’t provide you with averages, but we will say that there are ways to make this figure lower, such as student discounts, public transportation, and ride-shares.

  • Personal Expenses

    A gym membership, laundry, entertainment, a winter coat, new running shoes, etc. all fall into this category.

  • Health Coverage

    You will probably be able to remain on your parents’ health insurance plan while a student, even when living away from home. That being said, some universities require you to have at least partial coverage through the university’s health care plan. 

Paying for College Step 2: Decide Who is Responsible for What Costs

Different families approach this topic in different ways. Some students work their own way through school, while others have full or partial financial assistance from parents/guardians. Determining what portions of your college education you’re responsible for financially and knowing exactly where the rest of the money is coming from will relieve some of the stress that comes with making a financial plan. Additionally, you’ll be required to enter your Expected Family Contribution (EFC) when applying for financial aid, so figure out this piece of information as early as possible.

Some additional questions to discuss with your parents/guardians are the following: 

  • If they’re providing financial support of any kind, when does it stop? Should you expect any help for graduate school, should you choose to go?
  • Do they expect you to be working and saving money while they pay your tuition?
  • What about extra educational expenses, like studies abroad or room and board while interning over the summer?
  • Will your parents give you an additional allowance for entertainment and non-necessary items?
  • What happens if you’re unable to pay for your part of the deal? 
  • Are you expected to pay your parents back for any percentage of their contributions?

Once you know what pieces of your college education you’ll be paying for and approximately how much money you need to cover the costs, start exploring financing options. 

Paying for College Step 3: Research Financial Aid Options

This is the second research-heavy step of creating a college financial plan. Financial aid comes from schools themselves, the government, and outside organizations. There are three types of aid: scholarships, grants, and loans. 

Check out the following articles for an in-depth look at your financial aid options and information on how to go about securing each type of aid. 

Paying for College Step 4: Start Becoming Financially Independent

Even if your parents or guardians are paying for your college education, now is a great time for you to start learning how to be financially independent. 

  • Get a Credit Card.

    You’ll likely need a parent to co-sign with you for your first card. Research banks or credit unions that have a good system for working with first-time credit-card holders and start building credit. 

  • Budget

    Use a spreadsheet or financial program like Mint to track your expenses and make sure you’re living within your means.

  • Get a Job

    If your course load allows, consider getting a job whether or not your education is being financed. If you’ve taken out loans, this will allow you to start paying them back sooner and give you some more flexibility when it comes to entertainment and other purchases. If your parents are paying for your education, getting a job will allow you to save up for the future and help build your resume. Remember to place the emphasis on your education, though; if your schoolwork is suffering because of your employment, consider taking on fewer hours at work or quitting.