• Written By
    Rachel Christian

    Rachel Christian

    Writer & Researcher

    Rachel Christian is a Certified Educator in Personal Finance with FinCert, a division of the Institute for Financial Literacy. She is committed to promoting financial literacy and making complex financial topics accessible to readers from all walks of life.

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  • Reviewed By Roger Wohlner
  • Updated: May 8, 2023
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Understanding How Much College Actually Costs

Part of financial literacy is knowing just how much you’re spending by attending a school. Each college provides an up-to-date figure on how much a student should expect to spend each year.  Called “cost of attendance,” the figure includes tuition, fees, room and board, books, personal expenses, supplies and transportation.

Here’s a sample cost of attendance from Texas A&M University. The amount is for two full time semesters (or one traditional school year) for someone getting a Bachelor’s degree.

University Tuition and Fees
In-State Out-of-State In-State at Home With Parents
Tuition & Fees $9,428 $28,020 $9,428
Loan Fees $64 $64 $64
Room & Board $10,338 $10,338 $4,950
Books & Supplies $1,194 $1,194 $1,194
Travel $622 $1,150 $622
Personal Expenses $2,378 $2,378 $2,378
Total $24,024 $43,144 $18,636

So let’s take an in-depth look at what these numbers include – and what they don’t include.

Tuition & Fees
Traditionally, this amount is set by the university. Note the huge jump for out-of-state students. This is the most reliable amount in the calculation.
Room & board
Here you can see by looking at the difference between “Resident” and “Resident at home,” that putting a roof over your head is about half. The “board” element is how much meals, snacks and drinks will cost and can change dramatically based on eating habits and preferences.
Books & Supplies
These days there’s not a big price difference between new and used books, so this number isn’t nearly as variable as it used to be. But supplies can differ dramatically depending on major, like getting lab supplies for a Biology major or art supplies for a Fine Arts major.
This is a very low amount that might only reflect the most frugal (non-car owning) student. In Texas, the average 25-year-old driver pays $863.63 a year for car insurance and most households spend more than $1,900 on gas a year. Bottom line: If you have a car you will pay significantly more.
Personal Expenses
This is the “everything else” category and comes out to around $250 a month. That isn’t a whole lot when you consider it includes cell phone bills, clothes, extra-curricular activities and health insurance.

What’s not on here: How you spend your time the other two and a half months of the year. Some students chose to live with parents, study abroad or take extra classes, which all costs varying amounts.

From here you can begin to set up your basic budget, with how much you’ll be paying the school and how much you need to have to meet your needs. On the top, list how much you have from your settlement, and list out each deduction with the data from your school or university.

Selecting a School Based on Your Budget

When you run the numbers on some of the schools you’re interested in you may become discouraged. However, you should apply to a variety of schools. Some may have a higher sticker price but offer more in grants and scholarships. Especially if you know you are a competitive candidate, it’s wise to apply and examine what scholarships are included in your offer letter.

Internships are a great way for students to gain experience in a field and learn on the job skills that help them gain a job after college.

Working During College

College students have several options on how to spend their time outside of college. Some choose to work part-time, while others choose to participate in clubs and organizations that may lead to a job post-graduation.

Traditional Employment

A majority of students work during college. In 2011, 71 percent of undergraduate students were employed. And it can come with perks outside of just a paycheck. Some companies, like UPS and Bank of America, will help employees pay for college, offering a stipend each month towards tuition and fees.


Internships are a great way for students to gain experience in a field and learn on the job skills that help them gain a job after college. Having a structured settlement or other external income coming in may allow a student to take an unpaid internship while still having reliable income coming in.

Clubs and Organizations

Joining a Debate Team or Robotics club may not seem like the same thing as having a job at first blush. However, building skills while meeting like-minded individuals helps your job prospects after college, and can occupy about the same amount of time as a part-time job.

Get cash now to help pay for college.

Financial Risks in College

College is when young adults establish themselves financially. And there’s a lot that can go wrong along the way.

The Big Factors That Can’t Be Ignored

  • Running Out of Money: It’s easy to think your settlement checks (or student loan checks) will go farther than they actually do. Until you’ve had a check for $20,000 deposited into your account, it’s hard to imagine just how quickly it can get spent.
  • Credit Card Debt: When the credit card offers start showing up in the mail they can look like free money. Sure, you need to build your credit. But you don’t need to go into debt. Instead of racking up high-interest credit card debt, cashing out your settlement is an option.

The Little Things That Add Up

  • Lifestyle Inflation: When you’re constantly meeting new people it can become easy to get in the habit of going out to eat frequently and joining clubs. Watch out for adding too many unexpected, reoccurring expenses too quickly.
  • Keeping up: There always seems to be a new phone or new outfit to buy. And there always will be. Make sure that the seemingly minor purchases don’t turn into living beyond your means.

Leaving Money on the Table

  • Ignoring the FAFSA: Just because your settlement pays for a bulk of your studies, it doesn’t mean you shouldn’t apply for other benefits. Take the hour to fill it out online and see what other benefits you could be receiving.
  • Not Applying for Scholarships: Schools and organizations offer all kind of grants and scholarships that can be stacked on top of a structured settlement. Many programs offer an in-state tuition waiver for out-of-state students.

Managing Structured Settlement Payments in College

For those with four yearly lump sums scheduled

Settlements constructed for minors typically have four lump sums scheduled each year after the child turns 18 in order to pay for college. Or in the case of a trust fund, one large amount of money might become suddenly available. Those with settlement payments can also sell some of their future payments to receive a lump sum.

Watch out for:

  • A year’s worth of college expenses is a lot of money to have deposited into your bank account all at once. Make careful, budgeted decisions with the money or you may find yourself without enough money in the end.
  • Four years can go by very quickly. Make sure you’re meeting with your adviser frequently to ensure you graduate in four years or you may run out of money.

For those students with monthly payments

Monthly payments from a structured settlement or Veterans benefits can be a great way for someone to support themselves during college.

Watch out for:

  • Student loans help thousands of students achieve their dream of earning a college diploma. But, make sure you’re only taking out the student loans you absolutely need. Explore all of your other financial aid and scholarship options before taking out a loan.
  • It’s great knowing that your structured settlement is a financial safety net for you in the long run, but don’t let that demotivate you in school. You may not be worried about money, but starting a fulfilling career is a worthwhile venture even without running the numbers.

Managing Setbacks

If college was easy, everyone would go. However, only 33 percent of Americans have a Bachelor’s degree – partially because 44 percent of people who start a four-year degree don’t graduate.

University staff members are there to help. Working within the school allows them to understand loopholes and resources that you may not know about. If you find you’re struggling, ask for their recommendations. If they can’t help you, they’ll be able to tell you who can. For instance, if you’re having trouble affording colleges, talking to the Financial Aid office could help you find opportunities you didn’t even know were available.

Other setbacks come in the academic setting. Sometimes a class seems just plain impossible. Or you fail a test because you’re dealing with the death of a loved one. In moments like these you should schedule time to talk to your professors. Professors are people too – people who spent a lot of time learning, who’ve had their struggles and have people they care about. Before dropping a class or continuously failing to show up, have a conversation with your professor.

Whatever you do, don’t give up.