Friday, September 2, 2011

How to afford college

Just this afternoon, a couple high schoolers writing for the youth section of an Indianapolis newspaper interviewed me, seeking ideas about how to afford college. Because my mind is on the subject and because the fall semester has just begun, I thought I’d put down, in one post, all my ideas on how to afford college.

The Atlantic has recently reported that The College Board has the average student debt at $27,650, which is far more than the $24,000 total I’ve been using for a while. By the time a freshman today leaves college, it’ll probably be more than $30,000…. So if you’re thinking about leaving school with little-to-no debt, here are a couple ideas that might help.

1. Pick an affordable school.

Too often are we lured to certain schools for the wrong reasons: successful sports teams, lavish accommodations (gyms, climbing walls, elegant dining options), and, worst of all, prestige. Some of these things are, no doubt, nice, but are they worth an extra $20,000 of student debt? While some colleges are better than others, there are great professors everywhere, and oftentimes the best ones are not at your priciest and most prestigious schools. (I’ve had mediocre professors at Duke and stellar ones at SUNY Buffalo.) I don’t think it’s a terrible idea to go to community college for two years and transfer to a state school to finish up your degree.

2. Commute from home.

Room and board for a year at many colleges is around $11,000. Which is just ridiculous. It does not cost $11,000 to house and feed yourself. In my first semester in the van, I lived on $103/week. Over the course of the school year, that’s about $3,700, and that includes EVERY cost in my life—entertainment, transportation, clothes. Every cost but tuition. Let me breakdown how much housing and feeding and transporting yourself costs depending on your style of home...

Living in a dorm: $11,000 / academic year (includes mandatory housing and meal plan)

Living in an apartment: $7,733 / academic year (includes rent [$550 x 10 months=$5,500], food, all vehicle costs).

Living in a van: $2,233 / academic year (includes food and all vehicle costs).

Living with parents: $1,524 / academic year (includes vehicle costs, but not food.)

The above costs only reflect the cost of food, housing, and vehicles (gas, insurance, and repairs). Of course, each of these numbers will get bigger when you factor in cell phone bills, entertainment, clothes, haircuts, etc. And the estimates are by no means perfect because—during my first semester at Duke—I ate very cheaply and drove very little. But the estimates should indicate just about “how low you could go” and highlight just how ludicrous the costs of a dorm/apartment/meal plan are. Over the course of four years, you could pay $44,000 to live in a dorm versus $8,932 in a van or $6,096 in your parents’ home.

3. Manage your finances meticulously.

Find out where your money’s going. Write everything down.

My first semester I kept track of my every cent. I wrote down, in a Microsoft Word file, what I bought, how much I bought it for, and when I bought it. By the mid-point of the semester, I could see how much of my money was going to food, to gas, to insurance… If you watch your money carefully, you’ll quickly see how much of it goes to unnecessary luxuries, and you’ll be enlightened as to which costs are bleeding you dry.


4. Don’t buy crap you don’t need.

We desire things less because we need them and more because other people have them. And we think we can climb to their social status by looking the way they look, acting the way they act, or having what they have. That’s nothing but nasty, weak-kneed conformity. It's what Thorstein Veblen calls "emulative desire." Don’t sacrifice your independence and freedom to fit in with the mass of materialists. Be comfortable as yourself. Be comfortable having a friend cut your hair, buying your clothes at secondhand shops, or cooking noodles and vegetables for $5 instead of going out to eat for $20.

5. Speaking of food, avoid campus dining plans.

Campus dining is a crime. At Duke, it costs as much as $25 a day to eat. A day! That’s highway robbery, and I’m sure it’s just as bad at most other colleges. I ate healthily, deliciously, and abundantly for $4.34 a day. Here’s what it looks like over the course of an academic year:

Duke’s priciest meal plan: $5,500 / academic year

Spaghetti stew meal plan: $1102 / academic year ($4.34 x 254 days)

6. Live in a van.

Live in the woods. Live in a tent. Live in three-foot by six-foot box. I know a girl who lived in a tent and a sailboat at college. I know another girl who lived in a yurt at Duke. I know a guy who lived in a tipi. There are lots of ways to live creatively, boldly, and cheaply that will not only save you—literally—tons of money, but will give you, arguably, a more valuable education than the one you’ll get in the classroom.

7. Realize that you will not get a good, honorable, well-paying job when you leave school.

It is easy to think that you’ll be one of the exceptions, but it’s probably more responsible and realistic to think that you won’t. In 2008, 17.4 million grads with B.A. degrees had jobs that required less than a B.A. degree such as waiting tables, answering phones, and mopping floors. Your starting salary will not be in the high 40’s. More like the high 20’s, or, at best, the low 30’s. Plan accordingly.

8. Maybe don’t go to college at all…

There are a million things we could do after graduating from high school, but it’s been pounded into our heads so much that we don’t consider any option except going to college. It’s a rare opportunity to be young and free and debtless. We can use that freedom to volunteer, travel, hitchhike, hop trains, live in a van, work odd jobs. We can join WWOOF and travel and learn about organic farming. College is great, but there’s a much larger, and far cheaper classroom that we can learn from: the world at large. And if we go out and learn how to camp, how to save, and how to manage our money, by the time we finally enroll in college, we’re probably not going to be so willing to thoughtlessly take out a giant loan and go $50,000 in debt.

9. Get good at saving money

If you’re just leaving high school, you’ve probably yet to have the chance to learn how much it costs to house and feed and transport yourself. Unless you do something extreme, a large chunk of your salary will go to apartment rent, food, and the other basics. Finding jobs that offer room and board are key. Lodges and working camps often offer free room and board, as do AmeriCorps programs. In many cases like these, you won’t need a car. In other words, every dollar you make is a dollar you save. In one year at Coldfoot Camp in Alaska, I made, at $9/hour, $18,000 and saved almost every dime of it. I forgot exactly how I did the math then, but I determined that my saving capacity ($18,000) was equal to the saving capacity of someone making $42,000 in a conventional home-dwelling, car-driving, supermarket-shopping lifestyle. It goes to show that, when you have room and board, getting paid a little can mean saving a lot.

Resources

Coolworks.com — Great website for finding working camp, lodging, etc. jobs.

Americorps.gov — Lots of great opportunities for young people (18 to 24 year olds) to do good, honorable work for a small, though not insignificant, amount of money.

Wwoof.org — World Wild Opportunities on Organic Farms gives travelers a place to eat, sleep and see culture in return for a bit of work.

[PS: If anyone else has any useful tips, please feel free to share in comment section!]

9 comments:

Romana S said...

If you do live off campus, car pool! If you own a car, find out who lives near you and offer them a ride for a share of running and fuel costs. Put up flyers, join car pool web sites. Get people to share the costs or ride along with them.

It was costing me $50 a week just in fuel to drive to uni. That was too much to cover on my own. So I put the word out and got two people to travel with me. They chipped in $35 a week between them towards fuel.

In Hindsight I should have also calculated a bit extra for maintainance costs as my van is now in need of repair and going nowhere.

Agree on things like cost, pick up times, eating, drinking and smoking rules and what to do if people turn up late. One guy used to always turn up late which kind of pissed the others off, so punctuality can be a big issue.

I also agree with Ken about buying crap. I use the "need or want" budgeting plan a lot. If I need it, like rent, fuel, food and bills, I pay for it. But if it is just a want like the latest tech, new clothing, luxury food, then it is a want. Do I want it enough, and csan afford it? If not, I just don't buy it.

Seth Miller said...

Find like minded people to live with. Renting a two bedroom apartment with four people isn't something most people would want to do but you can save a lot.
If money is important study in fields that pay more. Fields like accounting, computer science, engineering, and healthcare fields.

VJP said...

Consider an area that has free busing. We're lucky to have that in Chapel Hill, but I discovered that it's available in Boone, NC too.

Also, don't get sick! That has blown many a budget.

Constant Writer said...

You always put things into perspective. While I am not quite as extreme about saving money, there are ways to do it if you can manage a budget and stick to it. I keep a spreadsheet rather than a word document for tracking my finances. While I don't write down everything I spend, I do allocate x amount of money for each type of expense I may have and if it's all spent, it's all spent. Gotta wait for the next paycheck.
Putting things in perspective is so important when we're hit with so many different ideas of the way the world should be and the way we should be in it.
Thanks for that :)

Tesaje said...

You have listed most of the strategies I employed to get educated on the cheap in the 1970's. Except for living in a van. I put up with apartment-mates, went vegetarian, and did without a car - rode a bike for transportation and fun. I never did the dorm thing. It was way too expensive. I also bought used books whenever I could and bought my clothing in thrift stores or made them myself.

Default: The Student Loan Documentary said...

Keep up the great work!

Anonymous said...

I lived on $20/week in NYC during college, and that took some doing. While the tent/van/tipi options weren't available (although there was one kid who lived undetected in the library for two semesters), there are a million other ways to save and not sacrifice too much.

I first recommend taking a year off between high school and college; travel, work & save, and you will be a lot more prepared for school, and have some perspective on what you want too. Keep your mind engaged by taking some classes, or try to get an internship in your field of interest while working a different job to save money. If your dream school is very expensive, start at a cheaper school for the first year or two, get the basics out of the way, then transfer.

As noted in the original post, meticulous control of your finances is a must, but many banks (Bank of America, although I hate them, is a good example) have online banking tools that help you track your expenses and are a lot less work than writing everything out yourself. The best way to do this is to use your debit card for everything, and then once a week go back through to recategorize and label your cash expenses if you had to use it. The reasoning behind the debit card is that you can use exact change and you don't have to take out $20 to spend $12 and then have the remaining $8 just evaporate on incidentals.

Next is transport; bikes can get you pretty much anywhere for practically nothing. Invest in a decent bike and a very robust lock (or two), since getting your bike, or pieces of it, stolen totally sucks. And wear a helmet... that brain is going to be worth a lot.

Food: There is more free food on college campuses than you can shake a stick at. Be an opportunist to the max; carry plastic bags/foil with you, and never hesitate to take a whole pizza or whatever home and freeze it if you come across such bounty. Make friends with some people who have unlimited meal plans and can swipe you food for free, and join every club/event you can that has a "free food" flier. Getting creative with your own cooking is always a good option too - and can save you loads. If you do have to go out with friends (don't miss out socially just cause you don't have a trust fund!) just eat beforehand and order an appetizer or two, or offer to share an entree with someone. Always throw a couple dollars extra in at the end though; you can be generous even if you are on a budget; what goes around comes around.

Obviously, make extra money wherever you can. Volunteer for studies, market research, etc, and get a side job or on-campus job that isn't too demanding (above all, do not fall behind in school; you are there to study and learn; that's what you are paying for!).

On that note: take the maximum course load you can without paying extra. Beware of unpaid internships for credit; that is work that you are paying to do (think about it). Do them outside of school or in the summer. Studying abroad can also save you money, depending on the country, because of favorable exchange rates and less "entertainment/food" spending.

For books, do not go to the campus book store. Order them from Amazon, or plan ahead the semester before and buy them from someone who is finishing up the course. Getting a Kindle or the like may actually save you money in the long run (and a lot of weight if you have to carry your things from a distance off campus!), plus it saves paper. Depends on your field and the text availability though.

If you come out under-budget for the month, reward yourself with the savings. It can be really demanding, both mentally and physically to adhere to a shoestring budget, and sometimes a little treat is enough to keep you going.

Tobi said...

Ken,

Great writing and tips. How did you pay for your Grad school tution? How much did you make each month?

Sarah Tobias said...

i saw all men responded, i think? women... What i've found.

1) wait until your sure of your degree. us chicks change our minds.
2) move to area of per-feared college and live a year in advance in order to get instate tuition.
3) get rid of your car if your apartment is cheep, ie: bus system is 70 bucks a month.
4) research other sections of college to get undergraduate classes finished without the added tuition costs. UC. has a college offer credits for 2000 instead of 5000 that transfers to the degree program once you finish the basic math and science courses.
5)look into tuition reimbursement at your job. starbucks has given me 500, and now 750... next year it will be 1000.
6)if you wait to attend college at the age of 24, you'll receive a grant. If you do not wait you will NOT receive a grant, because by the time your 24 you'll be starting graduate college, and the government doesn't give out grants for graduate programs.
7)all veggie diet
8)stop dying your hair, getting your nails done and putting on too much unnecessary makeup.
9)learn to cook. cooking doesn't make you wife in the 50's it just makes you smart.
10)if your join a city commission instead of a gym, your rate is significantly cheeper; ie: 90 bucks a year vs. 40 bucks a month. CRC
11)don't buy books until first day of class. ask to barrown, scan, and be done. or.... order books from library in advance, text books yes, scan onto computer, done.
12) never rent text book. buy, and sell back.
13)get rid of you phone data plan. 27 bucks a month 200 minutes. talk after 9 or call from your work phone. No texting leaves you available to study without interruptions anyways.
14) swear off drinking, smoking and drugs. if you want a trick to remember these things cost money and time away from studying, say; "i just want to be healthy." and everything will fall into place.


not all are related to women, but i feel its more difficult in a way since women add pressure on other women to wear pretty clothes, spend money on appearances and buy in to "going out" to be accepted.