Education Planning > Three hidden costs of college
A closer look at three hidden costs of college
Some school costs are a given: room and board (if you'll be living on campus), books, and of course, tuition. However, there are a handful of things you can't always prepare for when writing out your budget for the academic year.
Here are some costs you may not be anticipating:
#1: Credit cards and all their enticing sign-up perks
Be careful about signing up for a credit card without taking a close look at all the fine print. Some cards offer lower rates and limits than others, while others require an annual fee; so know what you're signing up for, should you decide to get a card. You're responsible for paying the bill when it comes each month.
Be prepared to pay at least the minimum balance every month so you don't get behind. Late fees, hidden fees, and rate increases will add up and your credit report will be affected if you're not careful.
Take-away tip: Only get a credit card if you're going to be responsible enough to pay it back the smart way... each month, on or before the due date, and without any late fees! Otherwise, you could wind up paying a lot more for that "free t-shirt" you got when you applied for the card than you would ever be willing to pay at a store.
Just because you have a credit line, doesn't mean you should access all you have available. It is recommended that you use about one-third of your credit line, leaving two-thirds of it untouched. Borrowing less on your revolving accounts (in contrast to your fixed-payment accounts such as a home or car loans) may help increase your credit score. Credit-scoring companies like to see that you haven't maxed out your cards.
For more information on managing your credit and understanding your credit score, visit MyFico's education center.
#2: Living off campus and leaving behind the college meal plan
While on-campus living can be full of fond memories, you'll discover that there's just as much fun to be had living off campus, out of the dorm. Don't be surprised at how different your budget looks once it's going towards things you didn't have to worry about before – like rent, utilities, more groceries, gasoline, furniture, and everyday household items.
While dorm-living, most students have their room, board and meal plan rolled into their tuition bill, so they don't always see those day to day costs on a regular basis. All of that changes when you move off campus and are expected to pay the bills, on the due date.
Take-away tip: Get ready to enjoy your time living off campus as much as you've loved on-campus life. The difference will be having the money ready when the bills are due... so get a job or adjust your budget far enough in advance that you're prepared for the added costs to come. When adjusting your budget, make reasonable and responsible choices – leaving yourself $2 a day for food so you can have a full cable package AND wireless internet is maybe not the best option – and gives you a budget that you won't be able to stick to in the long run.
#3: Paying for additional credit hours because you transfer or change your major later in the game than you bargained for
Unless you've known for years what course of study you'll pursue in school, chances are you'll need to test the waters and explore majors that interest you. This could involve taking a few classes that might lead you down an entirely different path than where you started, with the possibility of having to extend your time in the classroom.
Another common scenario for students is transferring to a different school part-way through their college career. An unforeseen cost could be waiting for you at the other end if all of your hard-earned credits don't transfer and you have to play catch-up.
Take-away tip: Should you have to stay in school longer than you thought, be sure to plan for the extra money you'll need to earn that degree that's right for you. If you might transfer to another school, do some advance research to try and make sure all of your credits will transfer.