Cost of College Blog

The Hidden Costs of College

Despite media attention surrounding student debt, which has grown to $1.59 trillion in 2021, most parents and their students still vastly underestimate the costs of college. In a recent survey by Fidelity, 1 out of 4 high school parents believes that a full year of college will cost $5,000 or less, $21,820 less than the actual average for a public four-year, in-state school.

The Average Cost of 4 Year College

The average cost per year for a public 4-year in-state college was $26,820 in 2020-2021. The average number for a private school is much higher and costs $54,880, including estimated tuition and fees, room, board, books, and supply costs. 

  • Public, 4 Year, In-state School: $26,820
  • Private 4 Year School: $54,880

Source: The Fidelity Investments 2021 College Savings and Student Debt Study

Of course, these numbers are averages, so many schools cost much more while some cost less. Community college, which typically offers two-year associate degrees, can be a more affordable option.

The Average Cost of Community College

For public community colleges, the average cost per year is $7,460, including estimated tuition and fees, room, board, books, and supply costs. Tuition alone is $3,400 for local students and rises to $8,210 for out-of-state students. 

  • Annual average cost of community college: $7,460
  • Annual average tuition for in-state students: $3,400
  • Annual average tuition for out of state students: $8,210


Community college is somewhat more affordable but still exceeds parent estimates when hidden costs like room and board, health insurance, transportation, meal, and more are applied. For example, on-campus living can add $6,000 to annual costs for community college students.

Make Sure To Budget for College Expenses

Tuition is merely one aspect of college costs. Whether a student attends an out-of-state private school or a local community college, the actual cost of college can escalate when unexpected or overlooked expenses are applied.

One of the reasons these expenses are overlooked is because they vary so widely in cost. To budget accurately for college, you must consider typical costs at your desired school and make estimates based on the unique circumstances of your situation. 

  1. College Room & Board
  2. Having a Car on Campus
  3. College Student Health Insurance
  4. College Scholarship Taxes
  5. Travel To and From School on Holiday Breaks
  6. College Textbooks and School Supplies
  7. College Extracurricular Activity Fees

1. The Cost of College Room & Board

Room and board are the cost of living and eating on campus. While this expense isn’t a surprise, it can often be much more than anticipated. At 4-year institutions, the cost of room and board ranges from $10,216 to $11,945. At public 2-year institutions, students living on campus pay an average of $7,165 for their annual room and board.

  • Room and Board, 4-year School: $10,216 to $11,945
  • Average Room and Board, 2-year School: $7,165


If you plan to live off-campus, expect to add several thousand dollars to your annual housing costs.

Room and board at urban schools tend to be more expensive than accommodations in rural areas. However, rural students may have costs that urban students do not. For example, lack of access to public transportation in rural areas means that more students need cars.

2. Having a Car on Campus

For some students having a car on campus is a necessity. For others, it is a convenience. Some schools have strict rules that prohibit some students (usually underclassmen) from having a car. If you do decide to bring a car to school, make sure to research and account for the cost of having a car on campus. 

Parking fees, gasoline, car insurance, and regular maintenance fees for your vehicle can add several hundred to several thousand dollars to your annual expenses. 

3. The Cost of Student Health Insurance

On average, student health insurance plans cost $1,500-$2,500 per year. Many schools require students to enroll in a school-provided student health insurance plan or prove they have coverage through Medicare or a parent.

Students with coverage through their parents may not see these costs firsthand, but students with school-provided plans will need to pay with them alongside their tuition and fees. 

4. College Scholarship Taxes

Scholarship money for textbooks, tuition, fees, and essential equipment is usually tax-free for degree candidates. However, scholarship money used to pay for room and board, transportation, or as a stipend is taxable. 

5. Travel To and From School on Holiday Breaks

If you live far away from home during school, getting home on holiday breaks can add up. There are usually four major breaks every school year, spring break, summer break, fall break, and winter break. 

Most colleges require students to move off-campus during summer break unless they are taking classes, in which case you should expect your room and board to be higher. If you plan to travel home during breaks, make sure to plan ahead and buy plane tickets early as breaks tend to coincide with high travel times. 

6. College Textbooks and School Supplies

Textbooks may be a predictable expense, but like room and board, many students underestimate how much they will cost. In 2021, the average cost of textbooks and supplies for full-time undergraduate students at a four-year university was $1,240 for the year. This figure doesn’t include the cost of essential technology like computers, tablets, cell phones, and more, which can add thousands of dollars to a student’s upfront expenses for school.


7. College Extracurricular Activity Fees

College extracurricular activities like sports, study abroad, clubs, and organizations are almost pay-to-play. Some expenses may be covered by scholarships, while the rest comes out of pocket or is paid for by loans. 

The Average Cost Of Common College Extracurriculars:

  • Sports and clubs: $355 to $2,500 per year
  • Greek life: $500 to $5,000+ per semester
  • International Study Abroad: $18,000 per semester

Source: Kiplinger and GoAbroad

Financial Aid to Cover the Costs of College

84% of students and their families receive financial aid to help pay for school. Around 71% of college-bound students use federal aid.

Students who attend non-profit, private schools receive the most aid from the state and federal government. 

However, parent and individual contributions still cover a majority of college costs. Parental income and savings, parental borrowing, and college savings accounts cover over half of the students’ educational expenses.

Prepare for The Hidden Costs of College

Students and their families can prepare for the hidden costs of college by saving and investing early to help cover the costs. 

There are two types of tax-advantaged college savings plans designed to help parents finance education: 529 Plans and Education Savings Accounts (also known as ESAs or Coverdell accounts).

  • 529 Plan: A state-sponsored plan that allows for tax-free investments to cover the cost of higher education.
  • Education Savings Accounts (ESA): A savings plan that allows for tax-free savings to cover the cost of primary, secondary and higher education. 

Source: Farm Bureau Financial Services

Both plans allow parents to save money that can be withdrawn tax-free when used for qualifying educational purposes. College savings accounts started early in a child’s life can reduce the burden of college costs significantly.

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