Hello! Please enjoy this post from a blog friend.
College is often the first financial decision many young adults make.
Unfortunately, for many, it is often the most expensive decision after factoring in repayment terms and cost of interest.
While many may have a first choice of school they’d like to attend, students should objectively compare college costs in order to determine what will be the best fit in the long run.
Here are three key factors to consider when comparing college costs.
Depending on the size of school, competition for admission, and where the school is located a student may be granted more aid at one institution than another.
It is up for the student to weigh scholarship costs with coming out of pocket or taking out student loans to make up the difference at another school that may not offer as much aid!
Even if the school only offers a certain amount, students are encouraged to get creative and apply for private scholarships through big companies, civic groups, or service and leadership awards. Some individuals may also qualify for grants, which do not have to be paid back.
Not all loans were created equal.
While federal loans are subsidized by the government and can be offered at a competitive interest rate, many students need to take our private loans to offset college costs.
Being young and inexperienced, many students go with the loans/lenders often recommended by their desired universities.
What many do not know is that just one afternoon’s worth of research and comparison loan shopping (affiliate link) could save them thousands of dollars in interest over the life of the loan.
Cost of Living
Many students receive enough federal aid to cover the cost of their tuition and books, but need additional financing to cover room and board.
With this in mind, it is important to take into consideration the cost of living for the college town you are considering.
Obviously New York City will cost more than a typical, small college town. There are pros and cons for both: large cities will have better public transportation and reduce the need for a car, while small college towns probably offer more discounts to stimulate the college student economy.
Other items to consider in cost of living: if students need a new computer, if the only housing available is on-campus, and if there are abundant job opportunities for both college students and recent graduates.
While we can’t make you promise you won’t trust your gut and make an instinctive choice when deciding on which college to attend (after all you’ll spend four years there and learn some of life’s most important lessons during that time!), students should always go in with eyes open and become educated borrowers before signing on the dotted line.
How much did attending college cost you? Did you forget any of these factors when you made the decision of where you would go to college?
Author Bio: Allen Kors is the Founder and CEO of Achieve Lending (affiliate link), the first ever search engine for education loans. Designed to help both traditional and non-traditional students find the best student loans, Achieve Lending offers users a free online portal to search, find, and compare student loans, often in as little as 30 seconds.
Kors founded Achieve Lending at just 27 years old after six years of working in the finance industry. His resume boasts time spent at the world’s premier financial firms, with positions in investment banking, private equity, angel investing, and consulting. After leaving his job in angel investing to pursue entrepreneurship and form his own financial technology company, Kors now aims to build the ‘Kayak’ for education loans and empower Achieve Lending users by providing financial education on the loan process and terminology.
My parents full paid my college tuition fee, but I totally regret it because I didn’t make well during that years. 🙁 Now that I have a daughter, I always told her that college is really important.
Michelle S. says
At least you can tell her now 🙂
Laurie @thefrugalfarmer says
We are considering all of these things as we prepare for our kids to enter college in a few years. There are so many ways these days to help keep college costs at bay for those willing to do the research. Great post, Allen!
Michelle S. says
Yes, college doesn’t have to as expensive as some make it sound to be.
K Miller says
I made a lot of mistakes when entering college. I lived my first year on campus, which cost three times as much as my last three years living at home. I did not understand that the only loans I qualified for gained interest while I was in school and should have made an effort to pay on the interest and principle while studying. I probably should have considered finishing my base courses at a community college in less time and finishing with a different more demanded degree – I ended up with $65,000 in school loan debt and a first job that paid $8/hr. But the lessons we learn can motivate us into enlightenment. I regret that the debt has held me back from doing more, but once I am free from it, I know I won’t make the same mistakes again.
On to the next learning experience 🙂
Michelle S. says
Yes, exactly! Great job on being so positive.
Taylor Lee @ Engineer Cents says
Despite the sticker costs, my family ended up paying $0 for my college education due to scholarships and grants. It was a great help to me when I graduated, being able to start my “real adult life” debt-free!
Michelle S. says
I just graduated in 3.5 years, and my biggest piece of money saving advice is graduate early. Even this one semester for me is leading to about $15000 saved because I’m not only saving from shelling out another $6500 in tuition for the semester but am also working full time. I was able to do this by taking 5 college classes during my junior and senior year of high school. Before you take these classes, figure out if they will transfer into your college AND contribute to your degree requirements.
My other trick was using a credit card to my advantage. I got a Citi credit card right before my freshman year and paid off the balance in full each month. With my ThankYou points, I’ve been able to pay $300 off my school loans. It seems small but free money is free money, especially if I need to buy groceries and gas anyway!
Besides that, just live like a college student. Don’t have a car if you don’t need it. Pack a lunch for school. Don’t take out more loans than you need and definitely pay the interest while you’re in school.
Michelle S. says
Yes, definitely! I graduated early as well and it saved me a lot of money.
Debt free, also. I worked three jobs while attending, though. for additional supplies/costs, and the rest was paid off via scholarships. Go to a community college if you can, also, and knock off your electives. And during summer, get experience (summer job, etc) so that you can easily land on your feet (and save) and have job experience upon graduation. Oh, make great use of the student bank accounts; I had mine for four years and they waived a lot of fees, etc I got a lot of flack for looking for experience during summer starting my freshman year, but I’ve never been out of a job if I was looking for one outside of two weeks, and I think that is also because of extensive experience and skillset.
Michelle S. says
All great tips. Thanks Kammi!
Fervent Finance says
I knew I was going to have to foot the majority of the bill for my college education, so even at 17 years old I ruled out private universities pretty quickly. Another way I offset my expenses was by graduating with my undergrad in 3 years. I did this by enrolling in as many AP and college co-op courses that I could in high school, which made HS a lot more work for me than other students. But this was fine with me as this enabled me to bolster up my transcript which helped me receive a partial scholarship from the state university I attended.
Michelle S. says
Yes, great tip! I took many college courses in high school and it saved me money and time.
Amy @ DebtGal says
I was very fortunate in that my parents paid for my private college education in full. I would like to be able to do this for my daughter, but I don’t think it’ll be possible. In addition to making smart use of scholarships and loans, I will encourage her to get summer jobs throughout high school and college, and to save that money for expenses during the school year. Using AP credits to test out of required courses can also be helpful.
As someone who works in a college career center, I also think it’s critically important for college students to start the career planning process during their first year. Students may not know exactly what they want to do right off the bat, but actively engaging in the process of figuring it out and preparing for a career early on, will greatly improve their chances of securing a job soon after (or even before) graduation. There can obviously be mitigating circumstances – e.g., the recent recession – that make this more challenging, but students should do all in their power to best position themselves.
I served in the military and was deployed for almost 2 years during OIF. I should have taken advantage of the time in the dessert after finishing my bachelors last year online, which I managed to pay off with the Gibill chapter 16, employment discount. My cost of tuition was 120.00 per a class after all the discounts. I am now 31 with 4 classes left for my MBA. Price per class is around 250.00 with the discounts, but I should have done this years back in 2003-2005 of my deployment. Now I’m married with a son and classes have been a bit challenging due to my new work schedule. A I mentioned before, there was plenty of downtime with my job as a cable system maintainer for the army at that time. Better late than never, no regrets. ^_^
Kayla @ Femme Frugality says
Your choice of college can have a HUGE impact on the price of your education. I went to a public in-state university and I don’t think I got any less of an education than what I would’ve gotten at a more expensive private university. Generally, I think you get out of college what you put into it in terms of effort, not money!
We were fortunate to be able to pay for our son’s college all the way through graduate school. Of course he worked in high school and summers to save for daily/fun expenses, gas for his car etc. but his major was an intense one so we didn’t ask him to work during the school year. When he was choosing colleges, we told him that it had to be a public in-state university unless he could get scholarships to fill in the gap. He did receive some nice scholarships but the luckily our state’s flagship university was one of the top ten in the nation for his major, so that worked out well. Parents need to let their kids know early that a private college costing $50,000 a year isn’t in their future so the kids can adjust their ambitions if the money wont support what they want.
Jayson @ Monster Piggy Bank says
I considered scholarship. I applied to different colleges and universities. Then, I passed three colleges (100% tuition fee). I considered afterwards the course I passed and the cost of living. There are really more factors that affected my decisions like the reputation of school, friends, and how convenient it is to study there.
Dan @ Our Big Fat Wallet says
I chose my college based on school reputation, co-op opportunities and of course cost. I managed to avoid taking on student debt but I know lots of people who had student loans. It’s a worthwhile investment but I think students need a solid plan to pay off their debt after they graduate
Elaine Lee says
Thanks Michelle, this is a great post. I completely agree that choice of school and cost of living are important factors to consider. However, sometimes private schools can actually offer you better deals than public ones in terms of scholarships. I went to a small private liberal arts school completely for free because I earned enough money in scholarships to cover everything. I think I would have paid more to go to a state school because they didn’t offer any scholarships that covered room and board like my small school did. Cost of living is definitely a factor as well. Part of the reason I chose to go to Yale over Berkeley for my PhD was because the cost of living is so high in the Bay Area.
Young Millennial says
I would also like to add that many Colleges and Universities (at least in Canada) offer internship/co-op programs which help you find a paid, full time job in between semester for some hands-on experience. Thanks to this program, I graduated with only around $20k in debt after 6 years. Otherwise, it would have been way, way more since my program was fairly expensive for Canada.