Want to Lower Your Child's College Bill? Tell Them to Live at Home


Next time you open that eye-watering college bill, don’t blame those “greedy” professors. Blame the catering.

Most of the anger about the astronomical cost of obtaining a college diploma revolves around the fact that for decades, colleges have continued to boost tuition fees at a rate that has consistently exceeded inflation. The truth is, these days it’s room and board costs that are the fastest growing money-eaters.

Even if one of the growing number of plans to address the sky-high cost of secondary education – and the resulting debt load under which college graduates can struggle for a decade or more after graduation – succeeds, it’s still only going to solve part of the problem. Because tuition is only part of the financial burden that many American college students and their parents grapple with, as you’ll know all too well if you’ve just bidden one of your own progeny farewell on the steps of a college dorm somewhere across the country in the last few weeks.

In fact, at some state universities, paying for that dorm room and for meal plans at the school cafeterias can end up costing parents more than tuition itself, and in some those costs are rising rapidly. At Ohio State University, state residents will pay $10,037 in tuition and fees for the current academic year – but will have to fork over $11,666 for the university’s most popular room and board plan. 

Ironically, the gap between the two used to be much, much wider. Back in the 1986-87 academic year, for instance, parents had to brace themselves to pay an average room and board bill of $5,666 at a public four-year college in the United States. But in that same year, the average tuition bill at the same institution would have been a mere $2,739. In the decades since, the average cost of room and board has climbed only 60% but tuition and fees have exploded 209%, in inflation-adjusted dollars. And paying $10,000 or so in room and board when it’s coming atop a $12,000 tuition bill is a far cry from paying $8,000 in addition to a $6,000 tuition tab. 

And now, in some pockets of the country, colleges are hiking room and board costs at a faster pace than they are tuition. In fact, the College Board calculates that between 2009 and 2014, while all eyes were on the 13% increase in tuition at private four-year institutions, room and board fees climbed 17%. 

With all the debate swirling around the cost of tuition – how to prepare for it; how to apply for scholarships, grants and loans; what institutions and politicians are doing to reduce its impact on families – it can be easier than ever to forget about the second, and sometimes larger half of the college-going bill. An institution’s financial aid package will address the total cost of attending the college, not just tuition, but there will still be a gap – and the higher the cost of room and board, the bigger the size of that gap. 

There are many factors contributing to this. Some are visible and mundane, including renovation costs and higher operating expenses (including wages). But colleges have also viewed dorms as amenities capable of luring students, including those able to fork over the full tuition bill without feeling the pinch, and therefore have upgraded their new dorms to include features such as spas, rock-climbing walls and movie theaters. Forget the “mystery meat” that cafeterias once offered; today’s cafeterias have chefs and specially planned gourmet menus. 

Another reason why colleges and universities might be willing to hike room and board costs is that while tuition costs are being scrutinized, nobody is yet sounding the alarm bell about how much it costs to house and feed their progeny. There is even an argument that colleges might be taking a portion of those room and board fees and applying them to their operating costs; there is data that suggests there is a gap between how much they collect for “auxiliary revenues” and use for related expenses.

Of course, there are options.

Easiest of all is to restrict your child’s list of college choices to those where he or she can live at home. Alternatively, scan the data and look for colleges that have lower-than-average room and board costs, or those located in cities with a low cost of living (and that are reasonably friendly to students looking to rent apartments on their own). The trick is not to let the affordability of accommodation shape the decision of which college to attend: there’s not much point ending up with a poor fit academically simply because the dorm cost a few thousand dollars less. Given that a college education already is such a massive investment, it’s worth making sure you’re getting the best value, rather than saving 10% to attend a commuter school with a much inferior program. 

Those students attending colleges located in large, expensive cities (think New York and Boston) or who are heading to study in cities that have notoriously costly housing markets (San Francisco) face the toughest predicament. Then there is UC Berkeley, where lodging and a meal plan cost students $15,438, higher than its $13,844 in-state tuition and fees. That won Berkeley the No 5 spot on US News & World Report’s list of the 10 colleges where students pay the most for room and board; the dubious honor of being No 1 belongs to New York’s The New School (room and board: $18,190).

Going off campus can solve a lot of woes, but be aware too of those that it can create. In Rhode Island, Providence’s city council cracked down on this, passing a new rule last week that limits the number of students allowed to live in a single-family house to three. Intended to curb noise and partying in two neighborhoods near Providence College and Rhode Island College, the result will be that students trying to escape rising on-campus residence costs will find that off-campus ones also begin to climb, as the city’s landlords raise per-person rents to cover their overheads.

You know the situation has become slightly absurd when the idea of purchasing a home to live in while attending college actually becomes a viable option. My brother did this while attending university in Canada, and that became the first in a string of real estate purchases – but his decision was motivated as much by interest in real estate as by financial necessity. That said, if you do the math – and have the credit rating, a down payment and the ability and willingness to oversee a real estate investment – this could be a great idea, either for the student or his family, depending on the market. Bear in mind too that the house or apartment you buy could remain an investment property long after your child graduates, and be rented by a wave of other kids attending institutions in the same city.

The harsh reality? Expecting colleges to be good at managing, say, a food and beverage operation and delivering top value for the big bucks you’re paying simply may not be realistic. After all, they’re in the business of educating your child; keeping a roof over her head and ensuring that she’s fed is an ancillary business at best. One way or another, you’ll be footing the bill for that too; to the extent that you and not the college assume the burden of deciding where and how it happens, you’ll be in a better position to at least trim that part of the awful burden of college costs.

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