How does student loan reform affect you?
In the spring of 2010 when President Obama’s Administration was passing health care reform, included in the final bill were some important changes to how federal student loans are administered.
What does student loan reform mean to the average college student? Well, first and foremost it eliminated private banks from collecting government subsidies for administering federal loans to students. To put it simply, the reform cut the middleman out of the federal student loan process.
$60 billion in savings goes toward Pell grants
Obama says the student loan reforms will save $60 billion over the next decade. That money that would have gone to private banks for handling government loans, will now fund more Pell grants — welcome news to students looking to minimize their loan debt.
Read more at InternInc.com: What does student loan reform mean for you?
Calculate the cost of college
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How to calculate the cost of college and set your college budget
Are preparing to college and trying to figure out how much it will cost? There are so many factors that go into planning for the financial burden that goes with higher education…it makes is difficult to both find and give advice.
From loans, to work studies, to a whether or not you get a job while you’re in school…there are a ton of factors you have to manage when balancing your college budget.
If you still have time to plan before you settle on a college, or if you’re already at school and are trying to set a budget, it’s important to calculate all the expenses that go with college life.
Let’s take a look at where you can get started:
Tuition and Fees
This might seem straightforward, but tuition is usually the highest cost of attending college and can look vastly different depending on whether you go to a public or private school and whether you’re an in-state or out-of-state student.
CNN Money has a quick and easy to use college cost calculator that will spit out what you can expect to pay for tuition, fees, and room and board.
A couple quick searches show annual tuition at a local private school, the University of Denver and a local public college, Metropolitan State College of Denver.
University of Denver
Metropolitan State College of Denver
Room and board; rent
Room and board can be a hefty chunk of your college expenses. Many colleges require students to live on-campus for at least a year. With that in mind, paying for room and board to stay on campus could be worth it if your school is in an expensive city like New York City, Chicago or San Francisco.
A great way to estimate your rental costs if you plan to move off-campus is to do a quick survey of Craigslist rentals in your prospective college town. See what a one or two bedroom apartment costs (hint: the expensive apartments are probably going to be in the town’s social hotspots). Use this to help project your off-campus living costs. Don’t forget utilities — assume it’s not included in rent for the sake of your budgeting.
Continuing with our Denver example, here’s a quick search to see what housing looks like near the University of Denver and the Auraria Campus near downtown, where Metro State is located.
Rentals / Housing
Books, supplies
Books and supplies can be a real budget-breaker as these costs are often an afterthought, but can be significant. As any student who’s spent $600 on books for a semester can tell you, it’s an expense that would be great to reign in. Buying used books isn’t always possible and usually asking your professor if you need the latest edition is a good idea. If you can buy a used book without missing out on info from a new edition, it’s an easy way to save hundreds of dollars.
Amazon.com is your friend when it comes to finding used college textbooks. Also check the Facebook Marketplace for people at your school that may have just finished a class and are looking to offload their textbooks. Buying used is a huge money-saver.
Textbooks
College is expensive, so create a budget!
Going to college is expensive. Beyond tuition, we’ve taken a look here at the additional costs that can tack on $6,000 to $8,000 each year. That’s not even counting a computer, money for entertainment, extracurriculars, spring break and more.
The takeaway point is that it’s best to figure out your college expenses, set a budget, and stick to it. There are a few free financial planning websites that are great for planning your personal finances. One of which, Mint.com offers great tools and access to all of your student loans, bank accounts, investments and more — all for free.
A college education counts for a lot. It also costs a lot, and the best way to prepare is by doing your research and setting a budget you can stick to.