Pros and Cons of Living at Home During College

Staying at home during college provides numerous costs and benefits

Young black girl on her bed studying When people describe the typical college experience, it usually involves living on campus in a dorm. Many colleges actually require students to live in dorms for their first two years, unless they commute. After moving out of the dorms, many students often move into a nearby apartment during their junior and senior years.

However, the quintessential college experience is changing. In fact, according to a report from Forbes, 54 percent of students now choose to live at home during their college years. Whereas living at home was seen as a rarity in the past, it is now rather commonplace. University students have come to recognize the various benefits that living at home provides them during their college career.

Of course, living at home does come with its drawbacks as well. Each student must weigh out the costs and benefits of choosing to live at home while attending college to determine which path is right for them.

Benefits of living at home

The most obvious benefit of living at home, and the number one reason why students choose to do so, is cutting costs. Amy Diluna of NBC News reports that students can save around $10,000 a year by commuting from home, depending on what college they attend. With each passing year, college grows more expensive and many students are forced to rely upon loans to pay for their education. Room and board will only add to the climbing amount of debt that students acquire by the end of their academic journey.

Beyond room and board, living at home can save students money in other ways. Doing laundry will likely be a much simpler and less expensive task while meals will probably cost less as well. Living at home carries more than just financial benefits. Staying with family can often provide students with a social support system, according to Kate Ashford of Forbes. College can often be a tough time of transition for many students and living away from home can make them feel isolated. Living at home often eliminates much of that isolation.

Drawbacks of living at home

Living at home might eliminate the distractions of those late-night parties, but it will also reduce the number of social gatherings and events for students as a whole. NBC News’ Amy Diluna explains that many students that live at home can feel like social outsiders, due to their reduced presence on campus. Students who commute are less likely to join clubs and activities than those who choose to live on campus.

Living away from campus doesn’t just make socializing with other students harder. It also makes working with them harder. Diluna also notes that scheduling group projects can be more difficult when one student lives farther from campus. The distance between where students live and where they go to school can often land them with a long and arduous commute. Said commute can drain students of energy or even cost them a hefty fee in terms of gas money, according to Susannah Snider of U.S. News & World Report.

Furthermore, commuting to school and living at home only works if the university that students are interested in attending is in the same vicinity as their family home. If students truly want to live at home during college, then it can greatly reduce the number of universities where they can feasibly enroll. Needless to say, the decision to live at home also depends on how strong the relationship is between students and their family members. Many students will pursue the independence that living away from home provides, even if it may cost them more in the long run.

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Saving on College Moving Expenses

Tips to save money on your move to college
Young man carrying tote with personal items, his mom and dad are in the background packing their SUVThe transition from high school student to college student is momentous emotionally, mentally and often geographically. Heading off to college typically includes relocating, and whether that relocation is across the city, state or country, it requires planning, energy and money to move your belongings from your old life to your new life.

To start your college experience on a frugal foot, consider the following tips to help you save as much as you can on your college move.

Take stock of your belongings
A move is the perfect time to take stock of your possessions and really weed out what should be kept, thrown out or donated. By going through what you already have, you’ll have a clearer picture of what you need to buy.

MoneyCrashers.com writer Lainie Petersen suggests hosting a garage sale, which is a great way to drum up funds, purge your inventory and avoid packing items you don’t really want or need.

Pack with a minimalist mindset
Moving is an emotional experience, which is why it makes sense that your instinct is to take as much as you can that reminds you of home, but for the sake of efficiency, effort and reducing expenses, fight that instinct.

“One of the basic rules of moving is that the more stuff you have, the more it costs to move. Save money by packing smart. Consider your living situation and plan your belongings accordingly. If you’re living in a furnished apartment or dorm room, you probably don’t need to bring your old desk or beanbag chair,” advise the experts at DealSpotr.com.

Research what you truly need to bring by seeking advice from older students and the housing department at your college and coordinating packing responsibilities with your roommate.

Source free packing materials
Round up as many free cardboard boxes and packing materials as possible—and the sooner the better, according to Petersen. She recommends reaching out to neighbors and friends for any packing supplies they can spare while the experts at DealSpotr.com suggest asking a manager at big box stores like Wal-Mart for boxes, which are set to hit the trash or recycle bin that you can claim.

Call in the professionals
Even after you have purged and stuck to a strict packing list of essentials, you might realize you have more items than can easily and safely fit into your vehicle. If making multiple trips is not possible, you will need to seek professional help and rent a truck. Renting a truck or trailer may seem like an extraordinary expense, but you can save some money by sharing the cost of the truck or trailer rental with your roommate or friend, according to the DealSpotr.com experts. If you plan to rent a truck, they recommend shopping around early to find the best deals.

Purchase big items upon arrival
Upon arrival, you might realize the bookshelf you hauled doesn’t work in your new space. To avoid mishaps with bulky stuff, the DealSpotr.com experts recommend purchasing bigger items, like furniture or appliances, once you get to your new address.

With these tips, you’ll be able to save money and reduce anxiety on your college move.

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Smart Ways to Save on College Textbooks

Don’t overpay for your next semester’s college textbooks
piggy bank next to a stack of textbooksPurchasing textbooks is one of the highest recurring costs of attending college, with prices consistently rising. Consumer Reports contributor Beth Braverman cites a report from the Student Public Interest Research Group published in 2016, which showed a 78 percent increase in the cost of college textbooks over the last 10 years.

However, there are a few good ways to avoid the high expense at the start of each semester.

Avoid the bookstore
The first place that a student would be tempted to go for their books is certainly the university bookstore. But from a financial point of view, consumer expert Clark Howard says that the bookstore is the last place they should go, as even used books are typically sold at a high markup thanks to the store’s convenience.

Clark Howard does, however, point out that there is an exception if the professor requires the use of a custom-printed and -bound companion book for their class, which won’t be available anywhere else.

Shop around
As with many other items, the best way to find the best price on college textbooks is to do research. According to Braverman, most often the best price for a new book can be found online, although there are other options to consider. If a book won’t be needed after the end of the class and isn’t likely to be marked or damaged, then renting the book may be a good option. Alternatively, e-books are often offered at prices similar to paperback copies, though are often limited in the number of devices they can be accessed on.

Braverman also encourages buyers to consider what may happen once the class ends. If a new edition will be coming next year, then the value of the current version will drop considerably when it comes time to sell it.

Wait to buy
Clark Howard advises students to wait until after the first class to buy a book, stating: “Some college professors are just as fed up with the rising cost of textbooks as their students.” Some professors may only be using certain parts of the text and are willing to offer other, less expensive options.

This may seem to be a risk, but typically first days in class are devoted to syllabi and course expectations, which would give the student information which may be crucial to the textbook shopping problem. For example, it is possible that an older edition of the text could be perfectly sufficient for the class, and available for a much-discounted price.

Check the library
Finally, both Clark Howard and Beth Braverman agree on one other option: checking to see if the required book is available at the library. This does have one caveat, though—this method will probably only work for more common texts. Clark Howard adds that this method favors texts for liberal arts courses, particularly literature classes that use classic novels in their course materials. Beyond that, Braverman suggests that students could make copies of important pages and chapters, and if the book is unavailable, the student could ask the professor to put one on reserve in the library for that purpose.

Using this variety of methods, the steep recurring cost of college textbooks can be greatly reduced and, in some cases, eliminated entirely.

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The True Value of a College Education

Is higher education worth the cost?
As tuition at universities and both public and private colleges rises, so does student debt—this begs the question: is a college education valuable enough to make it worthwhile?

The second edition of the Gallup-Purdue Index from 2015 found that 50 percent of college graduates surveyed nationwide strongly agreed that college was worth the investment; however, the answers varied based on the type of institution they attended, when they graduated, and how much undergraduate debt they accumulated. But do the statistics support this overall opinion? In general, the answer is yes.

A 2016 study from Jaison R. Abel and Richard Deitz via the National Bureau of Economic Research found that since the Great Recession, only about 9 percent of recent college graduates have begun their careers in a low-skilled service job. Furthermore, Brittany Hackett of the National Association of Student Financial Aid Advisors summarized report findings that about 40 percent of recent college graduates were employed in the two highest-paid tiers of jobs, compared with only 18 percent of those without degrees. Additionally, more than half of those in the workforce without a college degree are working within the lowest paying and skill categories of jobs—double the amount of college-degree holders.

That same study from Abel and Dietz found that even the underemployed college graduates are making more than those without a degree in the same fields. Almost a quarter of them hold positions in fields making more than $55,000 per year, in contrast to the 9.8 percent of workers without a college degree that make the same. Making those numbers even more significant is that 59% percent of student loan borrowers owe less than $20,000 in debt, so the average debt-to-income ratio is very manageable, according to Jason Furman, chairman of the White House’s Council of Economic Advisors.

More research, this time from Georgetown University’s Center on Education and the Workforce, showed that a staggering 97 percent of all 2.9 million “good jobs” (defined as those paying more than $53,000 annually for a full-time, full-year worker) that were added since the economic downturn in 2010 went to college graduates. Significantly, “good jobs” made up nearly half of the total jobs added during that time of recovery. Additionally, researchers Anthony P. Carnevale, Tamara Jayasundera and Artem Gulish also found that middle- and low-wage jobs were much more likely to be filled by workers with some college or an associate degree.

“The numbers are clear: postsecondary education is important for gaining access to job opportunities in the current economy, and job seekers with Bachelor’s degrees or higher have the best odds of securing good jobs,” their report stated.

What’s more, the return on investment increases in the long term. According to researchers at the Federal Reserve Bank of San Francisco, new college graduates begin with earnings only slightly higher than high school graduates–about $5,000 to $6,000 more–but over time the gap increases.

“Higher education is one of the most important investments individuals can make for themselves and for our economy with bachelor’s degree recipients typically earning $500,000 more in present value over their lifetimes compared to high school graduates,” Furman said, solidifying the point.

Despite the studies, reports and evidence, the bottom line, and as much of the above has suggested, is that the true value of a college education is always dependent upon your unique outlook and circumstances.

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The Benefits of Going to a Community College

Why you should consider starting small
Though they tend to have a subpar reputation, community colleges give prospective students a lot of options and offer a ton of advantages. When deciding on higher education, consider what benefits a community college can give you.

Save money
Tuition is traditionally much cheaper at community colleges, and you’ll also save on room and board since, according to The Princeton Review, there is a community college within commuting distance of 90 percent of the U.S. population.

“Community college tuition is usually thousands of dollars cheaper than tuition for private and public four-year universities. This total cost is only a fraction of the cost of a private college, and still thousands of dollars less than a four-year program at a state college,” the Princeton Review noted. “Plus, even with the relatively low rates, nearly a third of community college students receive financial aid.”

Flexibility
While four-year schools typically require you to be a full-time student, U.S. News & World Report found that about 60 percent of community college students attend school part time, thus gaining flexibility to pursue other interests or handle responsibilities. Additionally, community colleges usually have multiple campus locations and offer courses both day and night, as well as online.

“This makes community college a good option for nontraditional students like parents and older students who wish to balance school with family or career obligations,” says U.S. News & World Report’s Travis Mitchell.

Give yourself a boost
At a community college, you have the opportunity to improve your academic record or to get ahead, which will also give your confidence a boost. This can be crucial to your future since, as Jeffery King writes in U.S. News & World Report, a large number of students do poorly their first two years, which can impact their educational and professional future.

Personalized attention
Students can also get a boost from the smaller class sizes offered at community colleges. More one-on-one time with instructors and opportunity to learn at a personalized pace can be a great support to young college students.

Ease of transfer
Many community colleges have convenient admissions agreements with select larger schools in the area, which make the entire transfer process nearly seamless.

Transition from high school
Community colleges are a great stepping stone to make hesitant students more comfortable.

“Attending a community college can be a good way for students to ease into the world of higher education and learn at their own pace,” Mitchell writes. “This is especially true for students who struggled in high school or anyone who’s unsure if they want to make the significant time investment in college.”

More time to think about career path
The first two years of college are typically a period of exploring career paths and passions. Though most students declare majors right out of high school, many will end up changing directions once they get more experience in that particular area. If you don’t feel strongly about any area of study right away, know that community colleges are a great tool for undecided students to fulfill general education requirements, saving you from taking unnecessary classes and wasting time and money.

Make an informed, conscious decision about your college experience, and get the best possible start to your future.

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Three Things You Need to Do to Your Student Loans Right Now

Stay ahead of this big expense

Recent college graduates already have enough on their plates worrying about getting a job and supporting themselves — the last thing they want to do is stress over student loan repayment. For most, paying off student loans takes a long time, so no matter where you are in that process, there are three things you should stop and do right now.

1. Get organized
Take an inventory of your student loans. You can get a list by signing up at http://www.nslds.ed.gov/. After a short enrollment process, you will have a handy list of all guaranteed loans that were issued to you by the government, as well as those made by private lenders through June 2010. If you have a private nonguaranteed loan, those should all be present and detailed on your credit report, which you can find for free online.

Create a spreadsheet chronicling the name of each lender, the web address, your username and password (ensure your device is locked or encrypted), the loan balance, and the interest rate. The latter will be helpful if you opt to consolidate or pay off any interest early down the road. But be sure to keep your list up to date, as interest rates on student loans can be fixed or variable.

2. Know your repayment options
“The standard repayment schedule extends your loan payments over ten years, or 120 payments,” explained Maggie McGrath of Forbes. “However, if the standard monthly payments aren’t manageable on your budget — or if you’re unemployed or otherwise unable to repay your loans — the federal government has some alternative repayment plans for you, as well as some deferral options.”

Income-based repayment (IBR) and income-contingent repayment (ICR) extend your payment period to 25 years, capping your monthly payments at a fixed percentage of your income. The income on which payments are based and the actual percentage differ between the two plans. Pay-as-you-earn is a 20-year repayment period, with yet another varying percentage of your discretionary income.

You can read about other repayment options from the government here: https://studentaid.ed.gov/sa/repay-loans/understand/plans. Be wary, as these types of programs can cause your interest costs to increase over time, so always pay as close to your original amount due as you can.

3. Be aware of loan forgiveness opportunities
There are three primary programs that forgive the balance of your loan: Public service loan forgiveness, teacher loan forgiveness and Perkins loan cancellation.

“To qualify for forgiveness, your loans can’t be in default, meaning they’ve gone unpaid for more than nine months,” noted higher education expert Brianna McGurran of Nerdwallet. “Also, private student loans don’t offer forgiveness, though some lenders will let you make interest-only payments or take a temporary interest rate reduction if you’re having trouble affording your bill.”

Public service loan forgiveness requires you to have been working for a nonprofit or the government for at least 10 years in roles including, but not limited to, firefighting, teaching, the military and nursing. In the teacher-specific program, you must work full time as an educator for five consecutive years. The Perkins loan forgiveness also cancels the balance of that loan if you’ve worked as a teacher, firefighter, nurse, police officer, school librarian or public defender for about five years or more. For a complete description of eligibility requirements, visit https://studentaid.ed.gov/sa/repay-loans/forgiveness-cancellation.

If you take the time to do your homework and gather yourself before — or even while — you are repaying your student loans, the process will seem a lot less scary, and a lot more manageable.

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Direct Subsidized and Direct Unsubsidized Loans for Students

The difference between these two types of student loans

If you or a family member is in the process of applying to schools and seeking information about the various ways to cover tuition and the associated costs, you may have already learned that you can choose between applying for loans that are either subsidized or unsubsidized.

There are key differences between these two types of loans that you should learn to make sure you choose the type that better suits your financial needs.

One of the things that make the loan application process slightly more confusing is that different people or organizations may use different names when referring to the same loan. Direct Subsidized Loans and Direct Unsubsidized Loans are sometimes called Stafford Loans or Direct Stafford Loans, respectively, so if you’ve heard those terms, you should be aware that they are the same and not two additional loans out of four different types being discussed. Regardless of what these loans are called, when trying to figure out which type of loan is which, the most important criterion to look at is whether the loan is subsidized or unsubsidized.

Both loan types are offered by the U.S. Department of Education to eligible students who attend participating schools. They can be used at four-year colleges and universities, community colleges, and trade, technical and career schools.

Qualifying for either type of loan requires the student to be enrolled at least half time at a school participating in the Direct Loan Program. Typically, the student’s chosen program must be one leading to a degree or certificate.

Direct Subsidized Loans offer students slightly better terms. This is because they are intended to go to students with financial need.

The website run by Federal Student Aid, an office of the Department of Education, defines financial need as “[t]he difference between the cost of attendance [COA] at a school and your Expected Family Contribution [EFC],” and states, “While COA varies from school to school, your EFC does not change based on the school you attend.”

Although your EFC will not change depending on your chosen school, your school will be responsible for determining the amount that you can borrow. That amount may never exceed your financial need, however.

The biggest advantage of a Direct Subsidized Loan is that the Department of Education pays the interest on the loan while the student is still in school at least half time. The federal government will also pay the interest on the loan if the student has postponed his or her loan payments with an authorized loan deferral. Furthermore, the six months following the student’s graduation are considered a “grace period,” during which time the federal government continues to pay the loan interest. This is intended to make it easier for students to make payments while searching for a job.

Although the party responsible for paying the loan interest differs, the interest rate itself does not depend on the loan type.

“As of 2013, interest rates charged for Federal Direct Loans began to be tied to the 10-year Treasury note, with an additional margin added on to cover expenses,” states Mark P. Cussen, CFP, CMFC, AFC, in an article for Investopedia. “They do not depend on the borrower’s credit score.”

In order to qualify for a Direct Subsidized Loan, the income level of the student’s family must not be above certain levels. The exact criteria that define low family income and sufficient financial need are detailed in the Free Application for Federal Student Aid (FAFSA). More information about the regulations and processes of applying for student aid with FAFSA can be found at https://fafsa.ed.gov.

While Direct Unsubsidized Loans don’t have an income requirement, the student is responsible for the interest accrued during all periods. One advantage of Direct Unsubsidized Loans is that they are available to graduate students, which isn’t the case with Direct Subsidized Loans. A further advantage is that it is possible to take out more money with a Direct Unsubsidized Loan, so students with very large educational costs to cover may find it necessary to use a loan that is unsubsidized.

The cost of education is rising at an alarming pace, but thankfully there are many financial tools, including Direct Subsidized and Direct Unsubsidized loans, to help students and their families cover it. To delve more deeply into the details of these loans and explore the wealth of information available online for students and their families in the application process, visit https://studentaid.ed.gov/sa/.

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