Are you socking money away in a college saving plan in preparation for the onslaught of tuition, room and board bills you will face when your child heads to college? If you are only focusing on the big-ticket items associated with higher education, you may be surprised when the “hidden” costs test your patience and your bank account.
In 2016-2017, the average tuition, fees, room and board costs at public in-state universities rose to $20,090 while the price tag at private universities hit $45,370 per year, according to the College Board’s “Trends in College Pricing” report. While those numbers grab headlines, military families often overlook all the unexpected college-related expenses that may throw their budgets out of whack, everything from student parking passes to campus club dues.
Financial aid expert Mark Kantrowitz estimates “incidental and hidden” charges can tack another $250 to $500 per month onto the cost of a college education, as much as $20,000 more than anticipated over four years.
Budget for the extras
Where does all that money go? Here are examples of “optional” fees at a variety of universities:
- Laboratory or course fees for students majoring in the art, music or sciences. ($25-$300/course, Coastal Carolina University)
- Music Facilities Service Fee ($57/per quarter, plus $17-$68 to reserve a practice room, UCLA)
- Convenience fee on credit card transactions (2.4%, University of Texas)
- Athletic event fee ($140, University of Florida)
- Greek life activity fees ($40 to $300/semester, University of South Carolina)
- Parking permit fee ($121 to $906/year, Ohio State University)
- Change of schedule fee ($40, Baylor University)
- Student health center fee ($375, Washington University in St. Louis)
- Capstone Course field trip fee (up to $3,000, Portland State University)
- Graduation fee ($47, California State University, Northridge)
Kantrowitz notes parents who help pay for their child’s college education “almost never” budget for the numerous extra expenses that crop up throughout the semester.
“It’s a surprise for them,” says Kantrowitz, publisher and vice president of Cappex.com, a website connecting students with scholarship opportunities. “That is why many students phone home in the middle of the semester saying they need more money. They run out of money for even basic things.”
While Air Force spouse Andrea Anfinson Clark didn’t receive the dreaded “out-of-money” text or phone call during her two older children’s college careers, she was surprised by the many unexpected expenses that added to their education costs. Top on that list was her daughter’s study abroad program, which didn’t raise tuition costs, but did result in a bonus bill for transferring the academic credits she earned overseas to her home school, Dartmouth College.
“We ended up having to pay to transfer those credits into the university, which was a little detail that wasn’t emphasized to us,” Clark said. “It ended up being about $2,100 that we had to pay to get those credits on her record.”
To help pay the extras
The cost of the “extras” associated with college is the reason Christie Garton established the 1,000 Dreams Fund, which offers scholarships of up to $1,000 to help college-bound women pay for study abroad programs, accept unpaid internships or travel to conferences and seminars.
“We created the fund knowing it was access to those activities that in this day and age are difference makers in terms of one’s overall potential career success and ultimately their ability to go beyond the wildest dreams they may have for themselves,” explained Garton, noting the 1,000 Dreams Fund’s (www.1000dreamsfund.org) recent “Hidden Costs of College” survey revealed 74% of college students had to turn down enrichment activities due to lack of money and roughly half of students did not feel prepared to manage their college finances.
Kantrowitz acknowledges that many college students do not have the financial literacy skills needed to manage money wisely. He says students don’t realize how quickly a routine small purchase such as coffee, energy drinks or pizza can snowball into a large expense. A $10 per week pizza habit becomes a $1,200 bill during four years of college, he notes.
“In some cases, money is burning a hole the student’s pocket. They have all this money available and aren’t planning for the future so they spend it on things they don’t necessarily need,” he says. “But it may be a mix of reasons. They may be running out of money because of unanticipated real expenses plus some eating out and entertainment they can’t afford.”
Kathy Sweedler, consumer economics educator, University of Illinois Extension, says parents can help college students manage their money by letting them know how much discretionary money they have each month and revisiting the money topic throughout the school year and before the child moves off campus.
“There is something to be said for learning by experience,” she says. “Education needs to be timely. Maybe at the beginning of the school year it doesn’t all click, but check in, for example, at Thanksgiving. ‘How are you doing on your money?’ Don’t wait until March when things bottom out.”
Sweedler also suggests parents be aware of how transportation expenses can derail a budget, including the cost of having a car on campus, which leads to added spending for parking, gas and — not infrequently — parking tickets.
“Transportation is one of those categories that can be surprising,” she says. “Sometimes we don’t think to figure in parking costs and travel costs home for the holidays or if a student is feeling homesick and wants to come home more often.”
Financial Skills
Military Saves Communication Strategist Alecia Blair advises parents to teach budgeting and saving lessons to teens by making certain expenses the child’s responsibility and having them earmark a percentage of what they earn through part-time jobs for college. Not only do studies show students with college savings are more likely to attend and graduate college, but Blair notes the child also will have learned financial literacy skills they will take to college and into the future.
“It prepares them for the world they are going to experience after college when they are on their own and have their first job,” Blair said. “They are more likely to be successful as young professionals in having a budget, balancing a budget and then setting savings goals and reaching those goals. The financial education and literacy young people get from home carries through their entire life and can set them up to have a successful retirement.”
