Parents who have set up a college savings plan for their children may look at their accounts and think they have enough saved to pay for a four-year university. However, many of these individuals may not be considering college-related expenses, such as travel, supplies and laundry, according to the Wall Street Journal.
The report says parents and students may end up spending as much as 10 percent of the college's tuition and housing costs every academic year.
The College Board says the average four-year private institution costs $27,293 a year in tuition alone. Factor in another $10,000 for housing and that's roughly $37,000. With these numbers, parents could be paying another $3,700 for their child's miscellaneous college-related needs.
In addition to federal aid, some families may decide to seek out a private loan to help cover all of these costs; however, private loan interest rates are dependent on a person's credit score; an unfavorable score may mean a higher, costlier rate.
Households that plan to go down this road should make sure their credit reports and scores are in order before applying. In some cases, an error on a person's credit report may be lowering their score unfairly, forcing them to take a loan with a high rate. Individuals who find a questionable item on their documents may benefit from working with a credit repair attorney to investigate and dispute the marks. Taking this approach before applying for a loan may help the applicant save money on interest.