When planning to pay for college, students and parents need to consider both direct and indirect costs.
Direct and indirect costs are an important part of the estimated cost of attendance. And while financial aid can cover both types of college expenses, indirect costs is an area where students and parents can save some money.
When researching college costs, students and parents may only look at tuition amounts. However, there are also other costs associated with attending college. And those other costs can vary widely depending on several factors, including the location of the college and the needs or wants of the student.
To determine the true cost of college, students and parents need to first understand what are direct costs versus indirect costs.
- Direct costs are those that are paid directly to the college. In other words, tuition, fees, housing, and a meal plan (room and board) – if you live on campus in the residence halls. These costs appear on your bill for the term. Parking permits may sometimes be considered a direct cost. Books and supplies may also be referred to as a direct cost as some colleges may include these as part of the bill or if they are purchased at the college bookstore.
- Indirect costs are those costs paid by the student or parents. While it’s easy to overlook these costs, students and parents should plan for these expenses which can add up! Indirect costs can include things such as books and supplies, transportation, miscellaneous personal expenses, and loan fees. If you are living off campus, it can include an amount for estimated housing and food, utilities, and internet.
By including both direct and indirect costs in the plan to pay for college, students and parents can understand the true cost of attending a particular institution and can compare institutions to determine which is the best financial fit.
