The Hidden Costs of College

A national survey conducted by 1,000 Dreams Fund and underwritten by Charles Schwab examined the hidden costs of college and the effects on women, minority, and first-generation students.

We learned that 74 percent of students cannot afford the extras associated with college, and almost half don’t feel prepared to manage their finances while in college.The Hidden Costs of College

Effects on Women, Minority, and First-Generation Students

There’s no disputing that college is expensive. But there’s also no disputing its value: Despite the massive financial undertaking of higher education, college is a reliable way to position oneself for future career success and greater lifetime earnings potential. Incoming college students and recent college graduates aren’t shocked by the astronomical face-value price of postsecondary education. At the most expensive universities in the U.S., tuition can tip the scales at nearly $60,000 a year, a fact that has been well-reported in the media over the last several years. Young people have come to expect this.

What they didn’t necessarily expect were the hidden costs. Our survey found that 30% or more of all student respondents express being surprised about hidden costs, from housing to textbooks, with first-generation students expressing the most surprise. The skyrocketing costs go beyond tuition, as our survey explores. These expenses impact every step of the college process, from university selection to graduation rates, as highlighted by our study findings.

A Gender Gap in Financial Confidence

There’s a gender gap in financial confidence that starts before college. Our survey discovered clear male-female discrepancies: There is an imbalance of financial confidence between male and female students, indicating an almost 20-percentage-point difference between how financially prepared women and men feel for college. Additionally, women are more influenced by financial standing from start to finish of the college process and are significantly more likely to quit school entirely due to lack of funds.

Further, a lack of personal financial confidence aligns with higher rates of women dropping out of college due to finances. If they do remain in school, having less money prevents young women from participating in critical extracurricular opportunities, like internships and study abroad, which makes them less marketable once they enter the workforce. Young women also are more likely than young men to say they aren’t prepared to manage their finances while in college (51% vs. 39% respectively), according to a survey conducted by 1000 Dreams Fund, a national scholarship program that awards micro-grants to young American women. The online survey, which was underwritten by Charles Schwab, discovered that when it comes to college completion, of those surveyed, 52% of women said they had to drop out of college because of finances.

The Impact Lasts Past Graduation

College costs include more than just tuition and the impact can be felt long after graduation. In addition to dealing with the unexpected frustrations of the extra costs attached to their educations, these students also face the crushing disappointment of being unable to afford extra-curricular activities that they say would help their careers. Expenses beyond tuition were higher than they thought, too. The top five expenses students said were “much more than expected” include textbooks (63%), housing (56%), food (46%), exam prep classes (45%), and moving (41%).

No Wiggle Room for First-Generation Students

Among first-generation students, 58% of the students who didn’t graduate say it was due to financial reasons, and 71% of first-generation students said their financial standing impacted their college choice. More than half of first-generation college students had to drop out because they couldn’t afford it.

This response contradicts the popular belief that most students quit school due to poor grades or inability to balance a social life. It simply comes down to money. However, even among those who were able to pay tuition bills, there isn’t wiggle room for many first-generation students to take advantage of critical collegiate opportunities.

By an overwhelming margin, first-gen students believe that extracurriculars like unpaid internships, membership in certain campus organizations, and study abroad are very important for post-graduation professional goals; however, the percentage who were actually able to participate in such activities was just a fraction at 15%.

Limited Extracurricular Options

Out-of-classroom opportunities are viewed by students as important to future success but often go unfunded, especially for minority and first-generation students. Academia is a large part of professional success, but students also realize the immeasurable value of real-world experience outside the classroom. 73% of respondents said extracurriculars— study abroad, internships, educational conferences and seminars—are hugely important in pursuing postgraduate goals. The same number also said they had to turn down such opportunities solely due to lack of money.

For many students, studying abroad isn’t about having fun, but about furthering their education. Study abroad was the top collegiate opportunity that respondents couldn’t take advantage of due to finances. Turning down these opportunities can mean fewer job offers after Graduation Day.

A common misconception is that unpaid internships are limited to only certain industries, but this is simply not the case. Students in all types of fields—medicine, technology, politics, media— compete for highly coveted yet uncompensated internships. The “payment” is that, in return, these students have more marketable résumés and a firmer foot in the door. However, given the serious and unexpected expenses of college beyond tuition plus room and board, many simply can’t afford to pick up an uncompensated job.

The 1,000 Dreams Fund

The 1,000 Dreams Fund (1DF) is a non-profit dedicated to providing micro-grants to pay for life-changing “extracurricular” opportunities— like internships and travel to career seminars— so that all American girls, no matter their economic situation, can succeed in college and their careers. The 1,000 Dreams Fund has provided scholarship funding for a variety of these extracurricular requests.

Given this mission, 1DF is committed to understanding the biggest challenges facing young women in the U.S. today across these four big topics: Career, Finance, Education and Diversity. We all know that, just in the past decade, women have made unprecedented strides in these areas.

But what comes next? What milestones can we expect from millennial and Gen Z girls— and how do we help them get there? How do these challenges change when seen through the lens of race and ethnicity? Our goal with the State of the American Girl series of surveys and reports is to uncover the essential facts, figures, and anecdotes to help inform effective public policy initiatives, hiring practices, education, and opportunities to help the advancement of young American women.

To learn more, visit

About the Author
Christie Garton is a social entrepreneur and creator of the Additionally, Garton authored the best-selling college guidebook for women, U Chic: College Girls’ Real Advice for Your First Year (& Beyond!) and Marketing to Millennials: Reach the Largest and Most Influential Generation of Consumers Ever.