College Decisions That Can Affect Your Finances for Years

One of the biggest financial decisions many young adults make today is choosing a college to attend. While many treat choosing a college as purely an academic decision, many factors go into the total cost of a student’s college education, including housing, the cost of transportation, the way in which a student takes his or her courses, how a student eats, how a student pays for books and other required supplies, how a student borrows to pay for college, and how a student chooses to spend his or her money in addition to tuition while attending college.

For families from the Triad region who are trying to manage their financial resources while helping their students succeed in college, making smart decisions along the way is crucial to creating a positive and affordable collegiate experience for their students. Many of the financial decisions students make early in their college careers will follow them long after they have graduated and returned to the Triad to start their careers and families.

Understand the Full Cost Before Committing

Just because a college lists a tuition price on their website doesn’t mean that is the true cost of attending that college. Most colleges list a tuition price and then a list of additional fees. In addition to the tuition and fees, there are also costs for items such as housing, meal plans, textbooks, technology (laptops, tablets, etc), a parking decal, transportation to and from campus, lab fees for science classes, and personal expenses such as haircuts, going out to eat, movies, and more. It is easy to underestimate these additional costs when planning for college.

When looking at the total cost of a college, try to figure out how much of that will be covered by savings, by the student’s income, by scholarships, by grants, and by federal financial aid. Compare the repayment terms, fees, and interest rates of any student loans with low interest rates needed to cover any remaining funding gaps at each college.

The goal when considering finances for a college student is to figure out how to pay for the upcoming semester and to realize how your financial decisions will affect you after graduation, when you are paying back loans. Therefore, before committing to a college, students and their families must consider how their financial decisions will affect them in the long run.

Think Carefully About Housing

The largest expenses outside of tuition are typically for housing. If a student lives on campus in college-sponsored housing, they will likely have to pay for a required meal plan in addition to housing costs and any additional fees. If a student chooses to live off campus in rental housing, the student will pay for the housing. Still, in addition to that, the student will pay for utilities, furniture and appliances, internet, a car and gas to travel back and forth to campus, car maintenance, and a security deposit on the rental property.

On the other hand, living with a family member and commuting could save a student money on housing. However, the student’s transportation expenses could increase significantly and need to be taken into account when comparing the cost of living in a dorm versus at home. Other things to consider include gas for commutes, parking costs, car maintenance, and the time the student spends traveling back and forth between home and college. All of these things could add up to more than the student would pay in dorm rent.

Students should look beyond the monthly price and calculate the total annual cost of each arrangement.

Avoid Paying for Classes More Than Once

Switching majors can require completing additional semesters to graduate, incurring even greater expense. While students do not need to have a clear idea of the career they wish to pursue while still in college, it is very important for them to understand the degree requirements and to regularly meet with their academic advisor.

Students also must avoid taking too many extra semesters to complete their degree, because while every student’s career path does not have to be planned out in advance, it is wise for every student to be aware of the degree requirements for their specific major, and students should seek advice from an academic adviser often. Dropping and adding classes after the refund date for a full refund has passed for each semester, or taking extra credits that do not apply to your degree of study, can be a large waste of a student’s financial aid dollars. By working with your academic adviser and creating a class schedule that best supports exploration while still completing all requirements to graduate within the desired college timeframe, a student can complete their degree while taking a variety of classes.

Consider the Financial Impact of Working

Students should look for jobs that provide enough hours to cover necessary expenses, but not so many that the job interferes with studying and causes them to fall behind in school.

A job can be a great way to pay for items such as food, transportation, books, and other personal expenses. It can also be a great way to gain experience in a particular field. However, a job can also be a hindrance to completing your studies if you are working too many hours and do not have enough time to complete your schoolwork to the best of your ability. The student must seek a balance between the two.

Build Financial Habits Before Graduation

College is also the time to form spending habits. A student can find ways to save while in college by tracking spending, avoiding too much use of credit cards, saving a little money for an emergency, and paying bills on time. Forming these spending habits in college can make post-graduation even easier.

The financial decisions a student makes in college may affect them for years after they graduate. Carefully comparing the costs and potential effects of the choices a student can make, and understanding their long-term consequences, can leave the student with a lot more than just a college degree.