When choosing the college I was going to attend, the most important factor to me was cost. It was always my goal growing up to be able to affod college on my own, so affordability was key. When it came down to final decisions, I ended up going out of state because tuition was cheaper.
Heres what I completely overlooked by choosing a college based on tuition costs:
Location, and more specifically, the cost of living in that location.
Duh. Why didn’t I think about this?
Fortunately for me, I go to The University of Alabama.. Alabama has one of the lowest costs of living, so that really worked out in my favor.
However, I know of others who chose their schools and have to eat up additional living costs due to the city they live in.
Lets compare the University of Alabama, in Tuscaloosa, AL, to the University of Texas, in Austin, TX. I chose to compare UT Austin because I was about to choose it, and never even thought to check out the cost of living.
Lets start in my scenario. I live around 10 minutes away from campus, in a 1 bedroom condo. While I do not pay rent, as it is owned, other units rent for $950/month for a 1 bedroom, around 900 SF. I believe this rent has gone up within the past year or two, but it’s still reasonable.
Comparison time: a one bedroom apartment in Austin TX for student is 545 SF and costs $1785/month! AND it costs $150/month to park your car there (I don’t have to pay to park on my property! 🙂 woohoo )
So, that’s over double what I would have to pay. Considering this over a course of three years, a student at UT Austin would pay around $35,460 more than I will. That’s a lot of money. That is just housing alone and does not account for other additional costs such as more expensive food, entertainment (oh – and probably having to pay for parking just about everywhere you go)
If this number isn’t already enough of a disparity to you, lets see put this more in perspective.
$35,460 is roughly equal to:
-A 20% down payment on a $177,000 house (which is around the U.S. median for starter homes in some smaller cities).
-About 70 average used car payments at $500/month (nearly six years of car payments).
What if this amount was taken on by the student as debt? Here’s what it looks like over time:
| Scenario | Loan Balance | Interest Rate | Term | Monthly Payment | Total Paid |
|---|---|---|---|---|---|
| Federal Loan | $35,460 | 5.5% | 10 years | ~$385 | ~$46,200 |
| Private Loan | $35,460 | 7% | 10 years | ~$410 | ~$49,200 |
So, that extra $35k to sleep in a shoebox could easily cost $10–15k more in interest by the time it’s paid off, meaning they’re really paying $45–50k total for living in a more expensive area.
What if this cash was instead invested by the student starting at 22? Here’s what it would look like:
| Average Annual Return | Value at Age 42 (20 years later) | Value at Age 62 (40 years later) |
|---|---|---|
| 6% | $113,700 | $364,000 |
| 8% | $165,700 | $759,000 |
| 10% | $234,600 | $1,540,000 |
So, that “extra” cost of attending a different college doesn’t just cost $35,460 today… it can cost hundreds of thousands, to over a million, in lost future wealth if it prevents early investing.
With this said, I highly encourage everyone to check out what the cost of living looks like in the area you are interested. I would say the best way to start is just take a look at the cost of apartments in the area to gauge how expensive it could be after you move out of your dorm. It’s also a great idea to reach out to a student at that university as they can give you a heads up on some unforeseeable costs. Another resource I found is https://www.bankrate.com/real-estate/cost-of-living-calculator/. This website can allow you to compare a new city to your current town to see how your current financial situation would look in a different city.