Paying for College

Estimating The True Cost of College

Perhaps the title of this post might be more accurately stated as “UNDERestimating the cost of college.” Many families unfamiliar with the locales in which colleges and universities are located overlook the impact of cost-of-living expenses related to college life. This is an important issue that should be part of estimating the true cost of attendance.

I posted a thread on the College Confidential discussion forum that addresses this issue, mainly through the perspective of a Hechinger Report article by Jill Barshay. The thrust of the article is “Financial aid awards can be compromised by flawed student surveys of cost of living.”

A while back, I wrote about the staggering cost of college, in particular, student budgets. I cited as one example NYU’s Tisch School of the Arts. You can see here that the total student budget comes in at around $76,000. What this figure doesn’t include is just how much it costs to live in New York City, especially if you live off campus.


Let’s take a look at, first, some of Ms. Barshay’s thoughts and, next, some of our College Confidential posters’ comments.

 

Barshay’s opening paragraph is an eye-opener:

How much does it cost to live in Philadelphia, Pennsylvania? According to Drexel University, students who don’t live on campus should budget $18,365 for their living expenses over a nine-month academic year. But Peirce College says it costs only $7,790 for housing, food, transportation, healthcare and other personal expenses, such as clothing. That’s a $10,575 difference in the same city, where both campuses are connected to the city’s public transportation network.

Then there’s the issue of “Who can you trust?” when it comes to estimating local living expenses as they relate to college students:

Naturally, living costs vary by location. But colleges make wildly different cost estimates within the same geographic area, in both urban cities and rural counties. Take Sumter County, South Carolina, for example. Sumter Beauty College says living expenses are $15,705. Morris College, next door, says they’re only $8,725.

Who’s right?

A team of academic researchers found that one third of colleges and universities underestimated actual living expenses by more than $3,000. Another 11 percent of schools overestimated by more than $3,000. In other words, almost half get it wrong by a big margin. (In the two examples above, the researchers calculated that the cost of living for nine months is $16,020 in Philadelphia and $11,889 in Sumter).

Here’s a helpful tool that may be able to clear some of the fog about this issue. It’s an interactive map that compares living costs reported by each college and university in the country, with an estimate calculated using federal data. This creative application was created by Braden Hosch.

What do some College Confidential posters have to say about this article’s issue? Here’s a sampling:

– Both of my kids lived off-campus during the second half of college, and neither of them had cars or supermarkets within walking distance. When they moved off-campus, their food costs actually increased because they had to rely on on-campus cash dining facilities that cost as much as restaurants, expensive convenience stores, and restaurants that deliver.  

– Even for on-campus housing, the costs can vary greatly. At my daughter’s college, the upper class housing is 2K a year more than the freshman housing, and you don’t even get a full kitchen or a single room. If you can live in a place with a full kitchen, the cost savings in cooking for yourself can make up for higher rent.

In expensive cities with very limited on-campus housing, that is a whole different matter. Also, in large cities, the cost of mass transit can rapidly add up if need to use it on a daily basis.  

– My son’s school requires students living on campus to buy a dining plan. It is not an all-you-can-eat plan; instead students are charged for each item and it is deducted from their available funds. I naively assumed that the required dining plan would get him through the school year. His first year in the dorms, we found that he and most of his male friends ran out of dining dollars around February or March. I would say he has a pretty typical appetite for a “growing boy” ha ha. He is a healthy eater and does not really eat junk food. He is a big eater,but no more so than his roommates. Most of his female friends seemed to get through the year with the original plan. The school does allow students to buy unused dining dollars from other students and he was usually able to buy them at about a 50% discount. He was in an on-campus apartment with a kitchen this year and supplemented the dining plan with meals at home but still had to buy some extra dining dollars at a discount. Either way, we did end up spending more on food than we had planned- just something to look at if you are trying to plan for extra expenses.

– Based on our experience, take stated COA, then add 10% (15% if it’s high cost off campus housing area), then maybe you’re in right church, wrong pew, and then hope for no additional surprises.

An example of COA creep is when we as parents were told that dining plans were based on a $7 day budget. Considering school’s cafeteria costs, that was pretty much breakfast. Yeah right an 18 year old ravenous male not eating anything else but breakfast. Then there is problem that friends want to leave campus and get something to eat. They get tired of eating say a baked potato on Monday, french fries on Tuesday, mashed potatoes on Wednesday, etc.

– For those whose kids are living on-campus: Beware the dining plan. It may sound comprehensive, but it has pitfalls.

Colleges do not necessarily design their schedules of classes and activities so that students are guaranteed to be free at the times when meals are served in the dining halls. Your child may find that it’s impossible to eat lunch on Tuesdays and Thursdays, say, because he has classes at 11, 12, and 1, and impossible to eat dinner on Mondays because he has an afternoon lab followed by an evening orchestra rehearsal, with no time in between for dinner. Therefore, he will need to pay cash somewhere for food to make up for the missed meals.

Another issue involves the common “all you care to eat” dining halls, where students can get all the seconds (and thirds and fourths) they want but can’t take any food out of the building. This works great for people who can eat a great deal of food at one sitting, but not everyone can. People who can’t comfortably stuff themselves get hungry before the next dining hall meal and end up having to pay cash for food elsewhere to fill the gap.

How to deal with these challenges: Pick the smallest possible dining plan. Calculate the difference in cost between the largest and smallest plans. Give your kid the difference in cash.

Another food issue: If you plan to have your child spend some of the college breaks on campus to save on transportation costs, remember that the meal plan doesn’t include food served during those breaks. Dining facilities may or may not be open on campus, but even if they are, your child is going to have to pay cash for what he eats. So it’s necessary to give your child extra money so he won’t go hungry during these breaks. And if the only place where he can get food is restaurants, the amount of money he may need could be fairly large.

– … My oldest is moving to a college town for her first job. Rental prices were all over the map. Students who didn’t need parking and were willing to live with a bunch of roommates in a converted older home with steam heat (included in the rent!) could get by fairly cheaply. Want parking? On site laundry? Fewer roommates? Place that doesn’t cater to undergrads? Starts adding up. I can definitely see why the range is so broad. And I don’t fault the college for that.  

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One comment from readers of Barshay’s article notes:

Cost of living figures I’ve seen have been very inaccurate, and it definitely affects federal aid. It also affects 529s, as publication 970 explains that if you live off-campus, you can only use 529s to pay for rent up to the amount reported by your school.

As a final thought on this matter, consider Jill’s ending comment:

Indeed, the flawed living expenses call into question an increasingly used statistic: net price. Net price is simply the total cost of attendance minus aid. And it’s thought to be a better measure of college cost than the posted tuition price tag, which is often discounted. But with all the wild variations in cost-of-living calculations, which can make up the majority of “the cost of attendance,” net price might be worse.

The issue of net price in college attendance is a deep one. If you would like to explore that further, check this helpful U.S. News resource. We’ll discuss net price again here in the near future.

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Be sure to check out all my admissions-related articles on College Confidential.