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Tips to control college expenses

August 17, 2007|By TIFFANY ARNOLD

Fall semester is around the corner for college students, and parents are bracing for the dent it's going to put in their wallets.

While the cost of tuition cannot be controlled beyond choosing a college, there are ways to keep other college expenses at bay, said Laura Fisher, director of the American Bankers Association's Educational Foundation.

"Eat in the cafeteria," said Fisher, who said eating out is one way students rack up unnecessary expenses. She also recommends teaching students how to set up financial goals and realistic budgets.

"What can you do if you don't have a paycheck and you're depending on your parents for money?" Fisher said.

Tallying up the cost

According to Census data, the average annual earning of U.S. workers 18 and older with advanced degrees was $79,946. Those with undergraduate degrees earned $54,689.

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Compare those annual earnings with the $29,448 in earnings received by those with only a high school diploma - $19,915 for those without a high school degree.

But the benefits of having a college degree come with a hefty price tag.

In-state tuition for University of Maryland's undergraduates costs $3,984 per semester this fall (2007-08 school year) - and that's not including the costs of room and board.

Nationally, in-state tuition and room and board averaged $13,425 per academic year for the 2005-06 school year, according to U.S. Census data.

Controlling what you can

Textbooks are an easy way to cut costs, buying used books or renting them altogether.

According to data from the National Association of College Stores, an Ohio-based trade association for collegiate retailers, students can save 25 percent by buying used books.

The association also encourages students to question whether they need textbooks that are packaged with study guides and software, as they are often nonreturnable once opened.

Textbookflix.com is a Web-based business that lets students rent textbooks and return them much like a movie rental, explained Usman Rasheed, the company's CEO and founder.

"We wanted to create a marketplace that cuts out the middleman," Rasheed said in a phone interview.

By renting, the student (though, it's usually the parents who pay) ends up paying 65 to 55 percent less than they would had they purchased the book, Rasheed said.

Students find the book they need by entering a search on the Web site's database. Textbookflix has more than 2 million books in its inventory. A selected book is mailed to the student to use for the semester and comes with the return label.

Students have the option to purchase the book at the end of the term. But if they don't return the book on time, they'll be charged for it, Rasheed said.

What students can do to cut costs

Though parents end up bearing the brunt, Fisher says there are many things students can do to help keep costs down. She offers the following tips:

1. Set realistic goals

"A lot of times you'll hear that you'd want three months' salary saved up, really $500 to $1,000 is more realistic for a student," Fisher said.

Fisher said such amounts would be enough to cover a typical emergency a college student might face, such as a flat tire or other car trouble.

2. Treat credit cards as a short-term loan

Avoid emotional triggers for spending, like "buying everyone a round of pizza or shopping because you're lonely or because you got a bad test grade," Fisher said.

Or using the card to pay for movies because you don't have any cash.

"That could end up being the most expensive movie you'll ever watch."

3. Think realistically about life after graduation

"When they graduate, they are expecting that $40,000 to be just around the corner, but the truth is that $40,000 doesn't go very far when you've got rent, a car payment, a student loan payment and on top of that a credit card payment," she said.

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