It is officially autumn and we are starting to pull out the sweaters and prepare for the season that is upon us. This is also the time of year when we see all the yellow school buses on the road, and it stands as a reminder of the next step in our student’s life, which leads us on to a happier conversation.
Paying for college.
(Yes, that was sarcasm.)
So much ink (and an abundance of pixels) has been spilled over the past decade about rising tuition costs that sometimes parents overlook the fact that tuition isn’t the only component of college costs to consider.
Here’s what I mean…
“Real World” Personal Strategy Note
Total Cost of Attendance for College
“The things taught in schools and colleges are not an education, but the means to an education.” – Ralph Waldo Emerson
If you’re reading this, you fall into one of two categories:
- The parent with a child approaching, attending or having graduated college.
- Someone who knows a parent with a child approaching, attending or having graduated college.
And instead of highlighting ways to save for those college costs (which we’ve done in the past and likely will revisit in the future), let’s break down some of what makes college so expensive in the first place.
Because it’s not just rising tuition.
By the way, if you have questions on immediate ways to save for college, please give me a call or stop by the office to setup an appointment. There are MULTIPLE tax-sensitive components of higher-Ed savings, and I’d love to discuss them in-depth with you over the phone or during a meeting.
Tuition & FEES
“Tuition” specifically relates to the education a student receives while at university — the classes, faculty, campus resources, and opportunity to earn a degree. The “fees”, on the other hand, relate to those hidden costs within that education: admin fees, school activities and clubs, etc.
In addition, there are other costs SEPARATE from even tuition and fees — “Room” (the costs for housing) and “Board” (costs for a meal plan). And lastly, books and other classroom materials that add up to a large chunk of change for students.
When living in on-campus housing, the university will typically issue a combined bill for all tuition, room, board and fees that apply to each student. This is the “total cost of attendance” (in terms of billed costs), or TCOA.
Financial aid is applied to this bill beforehand so the cost is shown and collected at a more manageable rate (for the spender).
These total costs are a topic about which parents/caregivers and their students should communicate. If parents are paying any part of the bill each semester, it’s important the student has an idea of the payment structure (both present AND future) backing his or her education. Too many students graduate with a load of debt to pay off and have no idea how such a large number accumulated over time.
And this is often because they are blindsided by the fact that tuition isn’t the only item being billed. And then, there are the…
One could infer: unbilled costs are the “hidden” costs associated with college (books and classroom materials, travel, personal expenses and so on).
This is where strategy comes into play when planning your college costs. All college-goers should keep in mind the following when budgeting for unbilled costs — those costs that aren’t “required” by the university but inevitably work your way.
- Cost of living in the college town itself
- Various off-campus housing options
- A budget-friendly meal plan (or a grocery budget)
- Ancillary costs associated with particular classes and majors
- On-campus entertainment (and alternatives)
- Travel and transportation expenses
If a student can devise a solid strategy (read: budget) pertaining to these items (in addition to the standard, predictably “billed” costs), then he or she is set up for success in the college costs game.
Many of us know the short-term gratification college can bring to the student, but the delayed gratification comes with steady bouts of responsibility and faithfulness.
These, my friend, are the total costs of attendance.
And all of it should be planned for.
PS – If you’re in Oregon, look into an Oregon 529.
(503) 648-6184(503) 648-6184