college education costs - how to calculate

[jeffmem]

I'd like some help settling a disagreement with a friend.

He claims that education costs include tuition, books, housing, food, insurance, medical, phone, cable, etc. I disagree. Although one may not have a job and live at home, educational costs include only anything directly to the education itself such as tuition and books. Everything else you would have to pay for no matter what unless you live with your parents. Now I know some would agrue, well, I don't have a job and I don't live with my parents, so technically housing and food should be included in the total educational costs. I don't know, I still feel they are an indirect educational expense and should not be included. When planning for an education I know all that stuff has to be considered, but when it comes to do an educational cost itself, to me, only tuition and books can be included in this...

What do you all think?


Edit: By the way, this would include both B.S. and a master's but at different schools and at different times. Not 4 years then 2 years. It was 4 years, 1-2 years working then back for masters for two years in a different city...

[kork13]

For tax purposes (such as those expenses qualifying as 529 qualified withdrawals), I believe "education expenses" include tuition & fees, books/supplies/equipment, lab fees, and room/board (not to exceed the amount charged by the university for staying in the dorms).

Here's the applicable IRS publication, essentially says the above, but it has additional details about 529 Plans if you need it.

[jeffmem]

For tax purposes (such as those expenses qualifying as 529 qualified withdrawals), I believe "education expenses" include tuition & fees, books/supplies/equipment, lab fees, and room/board (not to exceed the amount charged by the university for staying in the dorms).

Here's the applicable IRS publication, essentially says the above, but it has additional details about 529 Plans if you need it.

Wasn't really looking at this from a tax perspective. The friend in question was living off campus in an apartment during his master's degree. During the BS was living in university apartments. Got married before moving into uni apartments and wife was not going to school. So to me, it still is not included, but it it is interesting that the IRS does classify it as such.

[feh]

For tax purposes (such as those expenses qualifying as 529 qualified withdrawals), I believe "education expenses" include tuition & fees, books/supplies/equipment, lab fees, and room/board (not to exceed the amount charged by the university for staying in the dorms).

Here's the applicable IRS publication, essentially says the above, but it has additional details about 529 Plans if you need it.

That's pretty much the same definition I would use. Tuition, books, fees, room & board.

[breathemusic]

I think it's definitely reasonable to count appartment costs (not exceeding the cost of room and board offered by the school) only because of the fact that for the average person, going to school full time prevents you from otherwise being able to work enough to afford the expenses on your own.

Sure, if you weren't going to school and didn't live at home you'd have to pay housing costs anyway, but you'd have the free time to get a full time day job too. I don't think you can get a pricey place and consider it all education costs though because people in school can work on the side. So I think limiting it to no more than what the school's costs for room and board are is a reasonable estimate.

[sblatner]

We have just been through all this with our senior. The cost of college is called "Cost of Attendance" or COA. If you search on a college and put cost of attendance after the name, you will see links that take you to the college's website. The schools include room/board, transportation, personal, books/supplies, and tuition in their dollar amounts.

We are including all of these costs when we look at colleges as we just don't think our costs at home are going to go down that much once he leaves. We don't have a mortgage but if we did, we would still have to pay it along with property taxes, insurance, groceries, utilities, etc. We are hoping our grocery and electric/water bills go down.

I do see your side but in looking at the big picture, we are saving and have saved for the "Cost of Attendance". Don't want any surprises.

[Baby_nurse]

I agree with everyone else here. Housing/ food is included in education costs. At many schools around here, freshman are required to live on campus and enroll in the dining programs. Even after that, the choice of where you live is influenced by where you go to school.

[Like2Plan]

I'd like some help settling a disagreement with a friend.

He claims that education costs include tuition, books, housing, food, insurance, medical, phone, cable, etc. I disagree. Although one may not have a job and live at home, educational costs include only anything directly to the education itself such as tuition and books. Everything else you would have to pay for no matter what unless you live with your parents. Now I know some would agrue, well, I don't have a job and I don't live with my parents, so technically housing and food should be included in the total educational costs. I don't know, I still feel they are an indirect educational expense and should not be included. When planning for an education I know all that stuff has to be considered, but when it comes to do an educational cost itself, to me, only tuition and books can be included in this...

What do you all think?


Edit: By the way, this would include both B.S. and a master's but at different schools and at different times. Not 4 years then 2 years. It was 4 years, 1-2 years working then back for masters for two years in a different city...

When planning, I would go with sblatner's cost of attendance. True, you these costs anyway. But, if you didn't have the money to cover these basic expenses you wouldn't be able to attend college.

[jeffmem]

Ok.. So would it be fair to say then than if a married couple whom one is working and one is going to school that only half of the room and board could be added to educational costs?

[~bs]

some of the other cost, which would be incurred regardless aren't true costs of college education such as medical,food, cell phone bill. Housing could swing either way, depending on if you'd be living with your parents if not in college.

One cost you didn't consider is opportunity costs. If you estimate that you could earn xx,xxx per year doing full time work instead of being in college full time, that's also a real cost. You're giving up 4 years of work experience and potentially working your way up to lower level management in that period of time. So say if your college cost is $50,000 a year, and you make $25,000 a year by working instead, the true cost is actually $75,000 a year because you'd be comparing +$25,000 against -$50,000.

[feh]

Ok.. So would it be fair to say then than if a married couple whom one is working and one is going to school that only half of the room and board could be added to educational costs?

What is the context here? Is it for tax purposes?

I would say a spouse living at home would not be able to designate mortgage/rent as a cost of education. But, I'm certainly not an expert. I'd contact the IRS.

[Baby_nurse]

Ok.. So would it be fair to say then than if a married couple whom one is working and one is going to school that only half of the room and board could be added to educational costs?

IMO, no.

Unless the spouse that is going to school would be living with a roommate, the cost of rent utilities etc would still be the same even if they were single.

[Like2Plan]

Ok.. So would it be fair to say then than if a married couple whom one is working and one is going to school that only half of the room and board could be added to educational costs?

Obviously, you could describe all sorts of living situations from supporting a family to living in an oversized mansion. But, there are limits such as the IRS guidelines Kork13 pointed out--"room/board (not to exceed the amount charged by the university for staying in the dorms)."

[Jimhassel]

There is more to college expenses than just tuition and housing bills. Everything from books to supplies to trips back home adds to the overall price. Students have lots of small personal expenses that add up and can make a huge difference to the total cost.