How To Reduce College Expenses

"How To Reduce College Expenses" submitted by SchoolGrantsfor Editorial Team and last updated on Monday 9th January 2012

Okay, so you've read about School Costs, Direct and Indirect Costs. Now it's time to learn about a few things you can do to reduce some of those costs. In addition to scholarships, grants and student loans, there are things you can do to directly effect the cost of your education. Expenses means costs incurred includes living and food costs, transportation, debt payments, entertainment, etc. When attending school expenses also include tuition, fees and books.

Paying for College?

Does the process of paying for college seem way too complicated and expensive? There's no doubt college is a major investment. However, there are a number of entities such as federal and state governments, private institutions, and colleges themselves-that will assist you in completing the financial aid process and share the costs with you.

Receiving financial aid does require that you and your family share information. That's why parents applying for aid are asked to report financial information to the federal and state governments, as well as to the colleges to which their child applies. The student's assets and earnings are also considered. This information is used to determine how much financial aid you can receive in grants, student loans and work-study, to ease the burden of the expenses you and your family must bear. You will not have to cover all the costs alone.

Get organized

Set up separate files for your bank statements, household bills, insurance payments, college applications, financial aid papers, loan documents and correspondence with your college and lender. Keep them in a safe place.

Spending Plan

What is the definition of a Spending Plan?

A spending plan is a monthly breakdown of the cost of attendance expenses, your additional expenses, and income.

Create a monthly spending plan and stick to it

First, you’ll need to know your income and expenses. To figure out your expenses, write down all your purchases every day for at least two weeks to understand where your money is going. Also, look at your bank or credit card statements at the end of the month. You’ll get a good idea of the number of coffees you bought, how many times you ate out, any clothes, shoes, books or other items you bought, and your regular household expenses, such as rent, utilities and food.

What costs are included in the financial aid budget?

What's the difference between the financial aid budget and my Spending Plan?

The financial aid budget (also known as the Cost of Attendance) is an itemized list of the amount of money required to complete the academic year at a particular school. Your Spending Plan will show a monthly breakdown of the cost of attendance expenses along with other expenses that may not be included in the Cost of Attendance but are expenses you incur. Examples of these types of items would be eating out, CDs, etc.

What are the steps to making a Spending Plan?

  1. List your sources of money for school.
  2. Enter expenses.
  3. Chart when your income and expenses occur on a calendar so that you can make your Spending Plan.
    • Rent
    • Utilities
    • Food
    • Transportation
    • Health Insurance
    • Personal Expenses
    • Savings

What's not included in the budget?

Some students think that car payments, credit card payments, summer expenses, and vacations are included in the financial aid budget. These costs may be included in your Spending Plan but not in the financial aid budget. Plan to pay for these costs through a part-time job or some other source of funding.

How do I keep track of my expenses and money?

Complete an Expense Diary so that you can figure out where your money is going and where you can trim expenses. Some of the places where you can trim expenses are:

Shop around for textbooks

Research new and used textbooks online. Compare ISBNs (every book has its own International Standard Book Number, located on the copyright page) to make sure you get the right edition. Also, ask if your college has a book rental or buyback program.

What tips do you have to help me save money?

Are there online forms I can use as a guide to develop my spending plan?

Are there online calculators that can assist me in computing my loan payments?

Yes, visit to calculate the most accurate loan payment amount(s), but first get out all of your loan papers and tally the total amount(s) you borrowed.

What can I do to reduce my spending and control my debt?

Avoid using credit cards

It’s easy to get a credit card and even easier to get into trouble. Consider a debit card instead, but you’ll still need to read the fine print. If you decide to use a credit card, shop around and be wary of low introductory rates that quickly jump higher. Look out for hidden fees. If you have a credit card, pay your balance in full each month. If you can’t, try to pay more than just the minimum payment.

Save Your Credit Card for Emergencies

Thinking about using your credit card to pay for college? Think again. Let’s say you use your credit card to pay tuition one semester, giving you a balance of $1,400. If you make only the minimum payment of $56 each month (and continue to pay 4 percent of your outstanding balance as now required) at an interest rate of 18 percent, you’ll end up paying $756 in interest—that’s more than half the original amount you charged! The same $1,400 in a federal student loan would cost you at most about $129 in interest, paying $50 a month at 6.8 percent. That’s a savings of $627.

Which of your resources will you use to repay your student loans?

You will be using your future earnings to repay your student loans.

How do I find out how much my costs will be for the academic year?

The cost of attendance (COA) is established by the financial aid office to provide students with the expenses required to complete the curriculum and to live for an academic year. Visit the financial aid office's web site, the catalog, or call the financial aid office for this information.

Which of my financial records are important to keep?

How can I confirm the student loans I borrowed?

If you don't know your current lender or you just want to check on the loans you have, you can find your loans online at The National Student Loan Data System

What should I be spending on household expenses?

Here is a list of recommended percentages of your household budget:

Why should I save money during school?

To cover emergencies and have peace of mind. If you keep this money in a savings account, you can earn interest. That is free money! Saving small amounts may seem inconsequential, but it is getting into the habit of saving that is most important.

Start saving

No matter how little, set aside something every month. Even $20 a month will get you in the habit of saving and help build a cushion for a financial emergency.

Know how much you need

Your expenses during college amount to more than just tuition and fees. Find out the current costs of nearly every college in the country by exploring the College Navigator Web site at and the College Board’s Web site at

What is the rule of 72?

Formula for calculating how quickly invested money will grow. Mire Details: Rule of 72 to reduce spending to increase savings and compounding interest benefit.

Why should I make Spending Plan?

To achieve your financial goals, to accumulate less debt, to have confidence that you can afford what you need and want, and to have peace of mind so that you can handle emergencies that may arise. Getting what you want --that is what a Spending Plan is all about!

What steps can I take to become financially successful?

If lowering college expenses is important to your family, here are some options that you may want to consider:

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