How to reduce the cost of getting a degree
Reducing College Expenses
by Gary Foreman
College Textbooks for Less
College Saving Tips from a College Student
Are student loans the next financial bubble we'll face? Could be. The statistics are staggering.
Tuition and fees have increased nearly 130% in the last twenty years (source IRS & College Board data).
According to the College Board's Trends in College Pricing total costs (including tuition, fees, room and board) in the 2011/12 school year were $18,391 for students attending four-year public colleges and universities in-state and $31,7280 out-of-state. For students at private schools the tab was $40,917. Plus students will spend another $4k for textbooks, supplies, transportation and other expenses.
Those higher costs are causing students to borrow more to finance their education. Total student loans were expected to top $1 trillion (yes, with a "T") before 2012 was over. There are already more student loans outstanding than all the credit card debt combined.
And, it's not just student loans. Undergrads are running up their credit cards, too. Over 20% had balances exceeding $3k. (Source: Sallie Mae, How Undergraduate Students Use Credit Cards, 2009)
So I spoke with Derek Haake, the founder of Campushift.com. Derek received a degree from The University of Texas at Arlington, then an MBA and JD from the University of Akron. He started Campus Shift looking for a better way to save on textbooks while in college. Along with helping students find the least expensive source for their books, Campus Shift also provides discount deals on food, concerts, campus activities, and clothing.
Given his expertise in the things that students buy I asked Derek about some of the ways that college students can reduce expenses.
Q: After tuition, what are the biggest expense categories for college students?
Derek: After tuition, the biggest expense is a student's living expenses, but these can be managed by proper planning. The second biggest expense for the new student is their purchasing things that they really do not need - such as the biggest and best meal plan on campus. From there, entertainment expenses and spending money are probably equal to or right at the same cost for most students as textbooks.
Q: Which categories offer the greatest chance for savings for a student?
Derek: Smart living - i.e. living off campus, renting a house with classmates, and buying things from the University that you need or will use are probably the places where you can save the most money. Also, using the fact that they are a college student can save them on their daily expenses. Flash that student ID wherever you go and receive your student discounts and be sure to stay up to date on any campus deals.
Q: Is it generally cheaper for students to live on campus or off?
Derek: In most cases off campus is cheaper. First of all, a student can share rent with other classmates of a house or apartment, which can be a fraction of the cost of living in the dorms. Living in a house can also greatly reduce the cost, as many times rental prices of a home are less than that of an apartment. With the current economy, house rental prices are surprisingly inexpensive in a lot of communities. Finally, a student, if they want a meal package for on campus, they usually can still get one, even if they live off campus, but, buying groceries - buying non-perishables and other things that will get used and not "luxury items", will save them substantially.
Q: What expense tends to be the most surprising to students?
Derek: Textbooks are one of those costs that a lot of students, especially those that are first-time college students in a family, are surprising. Outside of college, students don't have to buy books, and the $1000 per year that the average student spends can be a major surprise to a lot of students. Living expenses in a college town generally can be managed, and most people have an idea of how much these expenses will be, but these costs add up quickly.
Q: Paying for a college degree is a major expense. How can students increase the odds of finding jobs that will pay enough to make the expense worthwhile?
Derek: Students can look at fields that are hiring - especially hiring new graduates. Fields like medicine, engineering and business often will have high placement rates. Your other hard sciences will always be in demand at some level, but students should anticipate going to graduate school before they are able to truly find a job that will become a career for them.
Gary Foreman is a former financial planner and purchasing manager who founded The Dollar Stretcher.com website and newsletters in 1996. He's been featured in MSN Money, Yahoo Finance, Fox Business, The Nightly Business Report, US News Money and he's a regular contributor to CreditCards.com. You can follow Gary on Twitter or visit Gary Foreman on Google+. Gary is also available for audio, video or print interviews. For more info see his media page.
Take the Next Step
- For all things "college," please visit the TDS library.
- Turn everyday activities into money for college. Visit upromise.com to set up your account today.
- Save hundreds on your college textbooks with BookRenter.com!
Share your thoughts about this article with the editor: Click Here
Also in 20 Somethings
- The power of compound interest
- Where should I put my savings to get the best return? Video
- The emotions behind buying stuff
- How to change banks
- What to do if you have a car wreck
- Exploring your financial options when returning to school
- 4 first-apartment tips for frugal millennials
- 4 saving and investing tips for 20-somethings
- 6 tips for merging finances as newlyweds
- $6-a-day road to retiring rich
- 4 to-do's for millennials who want to own a home
- 5 reasons 6 figures won't make you rich
- Student budget calculator
- Lunch savings calculator
- Save a million dollars calculator
- Student loan debt calculator