The Hidden Costs of College

1. Identify the Real Cost of Attendance. Many families make the mistake of stopping at the tuition figure when considering whether a school is affordable. By federal law, schools are obligated to provide prospective students with an overall "cost of attendance" or COA. However, many schools low-ball these numbers and others only reveal this estimate when asked, according to U.S. News & World Report.

Remember to factor in additional expenses, such as student activity fees, lab fees, health clinic fees, gym fees and technology fees. There's also room and board, textbooks and school supplies, health insurance and transportation expenses that may apply.

The location of the school also plays a big role in the amount you'll need to shell out over the course of a year -- or a college career.To get an idea of a school's COA, check out the federal government's College Opportunities Online Locator. Of course, for the most accurate and up-to-date information, simply call the school's admissions office and ask.

2. Avoid Wasting Your Money. There are a number of traps that can cause college students and their families to lose money. The most poignant: college dropouts. Only one in five students enrolled in two-year institutions graduate within three years.

Meanwhile, only two out of five students at four-year schools get their degrees within six years, according to a recent survey by the Bill & Melinda Gates Foundation. Today, some states like Tennessee are seeing college dropout rates as high as 55 percent. Out of every 100 college freshmen in the state, only 45 will have a degree by age 26.There's rising evidence that economic stress is an influencing motivator of college dropouts. According to the Gates survey, 71 percent of college dropouts cited job as a factor.

In addition, 60 percent of college dropouts were getting no financial aid from their parents or relatives. Failed courses are another common financial setback. Experts like Kevin Carey, policy director at the Education Sector in Washington, believe colleges in general aren’t effectively getting students to graduate, as noted in a recent Time magazine article. Harvard tops the charts as the school with the highest graduation rate (98 percent). However, Carey emphasizes that the student is just as accountable as the school. Bottom line: Attend college if you're financially and emotionally ready for it and can recognize the value in the investment.

3. Ways to Raise Extra Funds. Fortunately, there are ways to combat rising education costs. You can start by tackling financial aid and scholarship applications, and knowing about tuition-related tax breaks, to name a few. Take a look at U.S. News & World Report's 10 Steps to Raise $15K or More for College Now for more information.

Also check out SmartMoney's 10 Things Financial Aid Offices Won’t Say to get on an edge on the competition for aid and scholarships. Indeed, there are secrets to landing a more desirable financial aid package. Hint: Families should submit their financial information as soon as they can after Jan. 1, preceding the student's freshman year, to maximize their opportunities. So what are you waiting for?
By Renee DeFranco