- Tuition (obviously)
- Fees – some programs have fees for labs or equipment
- Books – figure at least $700 per semester unless you use College Book Renter
- The laptop or tablet he or she will need
- Supplies – backpacks, paper, notebooks, binders, and other office supplies
- Housing – probably the second largest expense
- Food – even a meal plan may not be enough!
- Laundry – it never seems to end, does it?
- Cell phone – if you’re planning to keep them on your plan or pay theirs
- Internet service – many schools provide it while on campus
- Parking and transportation – don’t forget car insurance, fuel, and parking fees
- Clothing – take into account the climate and culture of your child’s school
How to track education spending
One of the best ways to keep a record of your education-related spending is to keep a file of all canceled checks that you write to fund qualified expenses. Many banks will still mail your canceled checks to you each month, but it’s easier to print copies of canceled checks on your bank’s website, especially with the PerkStreet Checking Account.
When to Withdraw
You can withdraw money for qualified college expenses as soon as they come due. If you have more than one college savings plan, it makes no difference whether you draw from one account before the other, or from both at once, I’d advise you to withdraw from the account with the highest fees first — that way you’ll drain your costliest accounts as soon as possible, pay fewer fees, and still cover your expenses
Withdraw from Coverdell accounts first
There’s one more important rule of thumb concerning withdrawals: if you own more than one college savings account and one of those accounts is a Coverdell Savings Plan, withdraw from your Coverdell first. Coverdells treat the beneficiary rather than the contributor as the owner of the account. Since assets held in the student’s name make it harder for the student to qualify for financial aid than assets held in the parent’s name, you should spend the money in your Coverdell account as soon as possible—ideally during the student’s first year or two of college. That way, you can increase your child’s chances of qualifying for financial aid while continuing to use and contribute to another college savings plan that lists you as the owner.
Withdrawing funds for other purposes is expensive
If you withdraw funds for any purpose other than a qualified expense, you’ll pay tax on the investment earnings plus a 10% penalty on any funds you withdraw. Unless it’s a dire emergency, withdrawals from a college savings plan for any reason other than education expenses is a bad idea.