Going off to college can be exciting. It’s the first time most people are out on their own. Legally, college students are adults and can make their own financial decisions … and mistakes. Unfortunately, they don’t have the life experience to understand the long-term consequences of their decisions.
Making a mistake with allowance money doesn’t typically haunt someone past the next installment of allowance. Making a mistake with a credit card or taking on too much loan debt can haunt people for the rest of their lives. Some of the biggest money mistakes college students make relate to college selection.
College Choice
Colleges vary in specialties. Certain colleges are known for specific programs of study. Becoming single minded in college choice can result in spending more on an education than is necessary. Most of the time, a student is paying for the name and prestige of the institution. While that can carry some weight in certain professions, most of the time, it’s not of consequence. An employer faced with the choice of hiring someone straight out of a prestigious school with no other experience or hiring someone out of a state school with internship and industry experience is more likely to hire the person with experience.
That said, don’t discount pricey schools without checking with them. If you have your eye on a more expensive school, include it in your applications and see what it offers. It’s possible that the school could offer you a better financial package than a less expensive school, making it the lower-cost option.
College Location
The school’s location has financial implications. A school that’s in the student’s state of residence is almost always going to be less expense than going to a school out of state. Out-of-state tuition is always more expensive. The average cost of in-state tuition for a public four-year college in 2015-’16 was $8,778. That same year, out-of-state students payed $24,354 on average.
If there are compelling reasons an out-of-state school is the best choice, find out about its residency requirements. If necessary, consider moving to the state and working for a year before enrolling. Some colleges waive out-of-state tuition in certain circumstances, so ask before you decide against an out-of-state college.
Type of College
There are community colleges and four-year institutions. Community colleges tend to be significantly less expensive. Although some community colleges are beginning to offer bachelor’s degree programs, the majority still only offer two-year degrees. Community colleges are an excellent choice to complete lower division, undergraduate general education courses. After completing the first two years of college, the student can transfer to a four-year college for their major specific course and final two years of school.
Living Arrangements
It is so tempting for young adults to move out right away and spread their wings. Most teens naturally long for a taste of the freedom and the independence of being on their own. Not needing permission to go out and not having to answer for coming home late are enticing reasons to move out of their parents’ house.
However, if living at home is an option for at least part of the academic career, it can mean huge savings. The most important thing for students to remember is that financial decisions are intellectual decisions, not emotional decisions. This is one area where you may need to follow your head, not your heart.
Additional Resources:
https://nces.ed.gov/programs/digest/d16/tables/dt16_330.20.asp?current=yes
https://www.thebalance.com/top-money-mistakes-college-students-make-1289967
https://www.huffingtonpost.com/entry/10-money-mistakes-college-students-should-avoid_us_595a3a68e4b0c85b96c66368
https://www.thesimpledollar.com/common-money-mistakes-college-students-make/
https://www.moneycrashers.com/money-mistakes-avoid-college/
