Understanding the cost of college

Understanding the cost of college

The costs most people think about when it comes to college are tuition, room and board. Although these expenses are often the largest expenses, a college budget should also cover the extra expenses like going out, potentially studying abroad, the fees to participate in fraternities or sororities, daily essentials and other costs that may come up throughout the year.

As you or someone you know prepares to begin college, consider these costs:

1. Tuition. This is the biggest cost associated with higher education, and a plan will be mapped out before decision day. Determine the cost you can afford, and discuss who will be contributing, along with factoring in plans for federal or private student loans or whether a 529 college savings plan will be used. Additionally, take into consideration the difference in cost between types of schools. Compare the tuition between schools using the College Scorecard.
2. Room and board. According to the Education Data Initiative, average room and board expenses for the 2025-2026 school year were more than $14,000. Discuss the cost of living at a dorm and having a meal plan versus living off campus. Explore the option of living at home and commuting to school to cut costs, if possible.
3. Materials. The cost of essential school supplies like textbooks, a laptop, a durable water bottle and items for their dorm can add up quickly. Take into account the cost of these and other incidentals.
4. Transportation. Think about the cost of gas or public transportation throughout the year and during breaks. Keep in mind the cost of traveling back home and going on vacations.
5. Fees and extracurriculars. While the main fees are generally paired with your tuition in the bill, there are other fees and unexpected expenses that can pop up throughout the school year. Some common fees include a new sorority/fraternity member fee, a parking fee and a fee to use a special facility on campus.
6. Greek life. If participating in fraternities or sororities is of interest, research the cost of membership dues, housing costs and the extra costs that may come with attending events. Costs can vary by school and organization.
7. Entertainment. With college comes new experiences, so set aside some of your budget for discretionary expenses, such as touring the city or shopping with new roommates and friends. To make your money go further, look for student discounts and take advantage of campus amenities.

Ways to save on higher education costs

Applying for scholarships and applying for student aid can change the game entirely. Scholarships are “free money” because unlike loans, you don’t have to pay them back. Financial aid can grant you money as well as qualify you for receiving loans. Check out the KEYS^® Online Paying for College Module to learn more about these financial aid tools.

1. Make scholarships part of the budget discussion. Scholarships are a great way to lower the cost of college and to boost your career. Free to apply for and with many to choose from based on merit, background and interest, scholarships can help cover some or even all of your tuition, as well as other costs.
2. Fill out the Free Application for Federal Student Aid (FAFSA). The FAFSA is a free application for financial aid that a student should fill out ahead of every year they want aid. FAFSA considers more than just a household’s income, so fill it out even if you think your household income is too high. Also, some scholarships and schools require students to fill out the FAFSA to identify a student’s eligibility for financial aid.
3. Build a budget. Create a basic budget for your everyday spending using the 50-30-20 model. Complete the KEYS Online Budget Hacks for College along with other college-specific modules. Learning how to budget now will set you up for financial success.

Taking these costs into consideration, applying for financial aid and scholarships, and creating a budget for college will allow you to focus on your studies and to feel confident as you step on campus for the first time.

By Kera Worobiec

GM Financial