Living Expenses Are Also Increasing Along With Tuition For College
Remember that if you’re borrowing to pay for it, it’s probably costing you twice as much as you think.
Time Money reports.
$4,000 for Pizza and Other Tales From College Debt Hell
When people complain about the rising cost of a college education, they often focus on tuition inflation. But tuition and fees represent only about half the cost of an in-state public college’s cost of attendance, with living expenses accounting for the rest.
Students (and their bill-paying parents) are often shocked to see how quickly those everyday expenses can add up. They might be even more shocked to learn that if they borrow to pay for them, their eventual tab could double.
That’s because, as a general rule, every dollar you borrow in college will cost about $2 by the time you repay the debt, given the mix of interest rates, interest capitalization and repayment plans used by students.
For example, suppose you order a $10 pizza once a week or so. Over the course of a four-year college career, that $10 pizza adds up to $2,000, assuming that you eat about 50 of them a year. If you use student loan money to pay for the pizza, the $2,000 initial cost will grow to about $4,000 by the time your debt is repaid.
Comments
In 2010 I attended an event at Colorado State University. While waiting for the event to start, I read through a copy of the student newspaper. One of the features was an advice column. The writer said she had money left over from her student loan–should she give it back or use it to take a Spring Break Trip?
Of course the “adviser” (another student) replied, “Go on Spring Break–you can pay the loan back after you graduate and get a job!”
Unfortunately, most college kids can’t yet think long term. Worse, though, they think they are entitled to live their parents’ middle-class lifestyle while in college. Not spending big bucks on Super Mega Lattes and Organic Sustainable Locally Sourced Gourmet Dinners is TEH HORRORZ. I got through college on ersatz vending machine coffee and Ramen soup. Was too busy working every break and summer to take any kind of vacation. Those are things a sensible human being puts off until she can afford it. Sadly, too many college kids lack that sense. I see it every day in my college classrooms.
This post is yet another example of people treating college as a consumer item rather than a lifetime-enhancing goal.