Finance Frenzy: What’s all the fuss about?

When you have a student going away, or even if they’ve already completed a year or two, finance is always front and center. Tuition, housing, books, food – they all add up. It’s easy to think financial aid is going to cover everything, but truthfully … that’s a myth in most cases.

First things first. How is financial aid calculated?

Your eligibility for financial aid depends on your Expected Family Contribution (EFC), whether or not you’re full or part-time, and your Cost of Attendance (COA). Cost of attendance … what’s that? Think about the amount of money it will cost to go to school the entire year. That includes tuition and fees, room and board, books, supplies, transportation and other costs. The EFC is calculated by the financial aid office of the school your student wants to attend. It’s based on the figures you reported on the FAFSA.

Here are a few things to consider:

  • Housing

Housing on campus is NOT CHEAP. As dorms move to suite-style housing options instead of community dorms, the aesthetic is nicer but you will definitely pay more. This is a huge chunk of the cost of school whether it is a dorm or apartment. Add in the cost of sheets and other essentials needed and you’re looking at an expense you may not have thought about.

  • Food

Meal plans can be costly, and so can your student when they want to eat out all the time. Weigh the pros and cons of both. If your student doesn’t have to get a meal plan and has access to a way to make meals, that may be a cheaper option.

  • Clothing

If your student is going to another climate, you need to consider clothing as part of the budget. If they are from a warm climate and going to one where snow may become their best friend, you need to start looking for coats, hats, sweaters, gloves and all the things that will keep them functional as they brave the artic.

  • Books

Although many books are now being housed online, it’s still an expense. Because these books are online, professors are adding workbooks and everything else. Put this in your budget but wait until the very first class to determine whether or not the book is really needed. There are many classes that list books but don’t utilize them. Going online to get books and rent them is also a great way to save money. Try places like Chegg, Amazon, Campus Book Rentals, Textbooks.com and Better World Books.

  • Transportation

Most colleges and universities are pretty good about this. They usually provide a bus sponsored by the school to get around, or they have partnerships with public transportation in their town that allows students to ride for free or at a significant discount. The cost may also be provided in their tuition. If your student has a car and wants to bring it with them, consider the cost of insurance and how that may change now that you’re adding another address. This is also a two-part equation. Factor in how much it will cost for your student to travel to and from school during holidays and breaks.

  • Spending Money
No matter what, your student will need some money for the essentials. Make sure you also have that in your budget because at some point, something will come up.
  • Insurance
Last, but not least - does your health insurance cover your student when they are away at school? Things happen, and you don't want to get stuck with an extra bill because they aren't covered. Check on this before they go to school so you can make accommodations. They should be covered by the school's clinic but it's always best to make sure - and all services aren't covered. Most schools do offer an extended health insurance plan. Read the policy carefully.

Is it a lot to take in? YES. Can it be managed. Of course. All you need is proper planning and focus on these things to navigate your budget. Scholarships also help loosen the burden, but it’s best to be prepared for the oncoming costs before you experience them. Stay tuned for our series on student loans coming soon!

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