New students at college or university may think tuition plus rent equals the total cost of studying, but experts warn of hidden expenses that can increase costs by as much as 30 per cent.

Jeannine Mitchell, publisher of, says the interest on student loans adds often uncalculated long-term costs. It may be interest-free while you’re studying, but a government student loan can rise to 7.75 per cent interest when you’ve graduated.

“If students borrow $20,000, they often think that is what they will repay. But when you factor in the interest costs, that may be a $30,000 loan — or more,” she warns. That goes for groceries and nights out tucked away on your credit card, too, and you won’t get a school-years reprieve on that interest.


A four-year degree often takes five or six years as students change programs, get sick, or just have a hard time getting the required courses to line up. That will jack up the costs of living in an unplanned way, she says.

She recommends students stay at home, if that’s an option, or consult with their parents or older siblings to get a realistic idea of how much it costs to live independently.

Kavita Joshi of the Royal Bank of Canada says “insidious costs” can quickly run up. That includes easily avoided time-management issues like spending money on lunch every day instead of packing one the night before.

She points students to the Better Student Life calculator, which tells students how long their money will last. A recent poll found 35 per cent of students would run out of cash by Christmas.

“We can’t influence the tuition reality, but we can as bankers … have a fulsome discussion to help (students) get a good understand of their financial reality and think of some of the additional costs,” she says.

Tom Hamza of the not-for-profit Investor Education Fund ( has seen students, overwhelmed by mounting debt accrued buying books, computers and just paying the bills, drop out, meaning they don’t get that degree or diploma and lose what money they’ve invested.

He urges students to sit down with the “big b-word”: budget. “When you do that, you’re much more comfortable with the level of debt you assume,” he says. “It’s an investment in yourself and you shouldn’t despair.”

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