The question of whether to live on campus during college is an important one due to the amount of money the decision involves. Schools can charge thousands of dollars for room and board and students can sometimes pay less to live off campus and commute. That said, there are some clear financial pros and cons to living on campus, however, and knowing what they are can make it easier to decide where to live.

On Campus Vs. Off Campus Living
When deciding whether to live on campus, funding from scholarships and student loans are key. Many scholarships and loans can be applied to on-campus housing because the money is directed straight to the school; in many cases, students may not be able to use it to pay off-campus rent.

Further, students with 529 plans or other college savings plans may find that plan rules limit them to living on campus. In general, there is a limit to the amount of money you can deploy from the 529 plan to pay for off-campus housing before it becomes subject to taxes. Depending on the plan in question, a student may have enough money to live off campus comfortably, but not be able to actually use the money for that purpose without incurring significant penalties. (Learn how to put your kids through school without being hounded by the tax man in Clearing Up Tax Confusion For College Savings Accounts.)

The Pros of Living on Campus
While off-campus rents may be cheaper than the price of room and board at school, rent rarely provides the range of services that a school offers. Living in a dorm eliminates electricity, gas and water bills, and sometimes even cable and internet bills. At most schools, the price students pay also covers food - three hot meals a day. Also, unlike apartments, dorms don't require a security deposit.

Another cost that living on campus eliminates is buying furniture. Every dorm room comes with at least a bed and a desk. Most residence halls also offer common areas with couches, televisions and other comforts of home.

The potential cost of having a roommate also decreases when a student lives on campus. If a student leaves mid-semester, his or her roommate doesn't need to worry about covering the full cost of rent or utilities. Schools also handle a certain amount of roommate matching, eliminating the hassle of advertising for roommates and covering full costs until you find one who is suitable.

One benefit of living on campus can be especially financially significant: the cost of a car. Even for students living on campus with cars, gas bills are minimized because they don't need to drive to school every day - they're already there. If a student chooses to do without a car entirely, most colleges and universities are perfect for pedestrian transportation. Students who live within walking distance of their classes also don't have to pay for pricey campus parking permits. (For related reading, see The True Cost Of Owning A Car.)

The Cons of Living on Campus
Many schools promote their room and board offerings as cheaper than living off campus. The truth of those claims varies depending on the area in which the college or university is located. But even in expensive areas, thrifty students may be able to live off campus for less. (Learn more in Are You Ready to Rent? and Easy Ways To Cut Rental Costs.)

Meal plans are an obvious area of inflation: few students eat as often as their meal plans provide for. Also, many cafeterias offer only limited options for healthy eating and special-needs diets, which for some students, could mean regular trips to the grocery store despite the meal plan.

Another drawback to living on campus is that students who live on campus can face larger penalties than their off-campus counterparts. If, for instance, a student must withdraw from school part-way through the semester, he or she could face significant penalties for breaking the housing contract. Even if the student plans to come back the next semester, he or she will need to move out of campus housing immediately. Furthermore, students can face a whole list of fees for infractions like noise complaints that are fairly minor issues when living off campus.

While some schools provide less expensive housing than a student might find on his or her own, students from the area surrounding a college or university often have an option for free room and board if they can live at home, or with family or friends.

Where to Drop Your Head and Books
You may not have a choice in the matter if you attend a school that has a residency requirement. The University of Louisiana, for instance, requires that freshmen live on campus unless they live with their parents or otherwise receive special permission. That said, most schools provide special exceptions for married students.

In contrast, there are also a number of schools that make the decision to live off campus for their students. Not all schools offer an on-campus option for students through all four years of their studies.

The decision to live on campus during college is often described in terms of social networking, student retention and scholastic achievement. But while parents do want to give their children the best education possible, finances can play a large role in the decision. Because each school has varying costs for room and board, the decision can be different for individual students - so be sure to carefully research the particulars of the schools you are considering in making this decision.

For related reading, see Five Ways To Fund Your College Education and Pay For College Without Selling A Kidney.

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