The question of whether to live on campus during college is an important one. The decision involves a lot of money: the decision involves. Schools can charge thousands of dollars for room and board. That said, there are some clear financial pros and cons to being in a dorm, however, and knowing what they are can make it easier to decide where to live.
First, the Funding
First of all: Are your expenses being paid by any scholarships, grants or student loans? Often, these funds can cover on-campus housing, because the money is directed straight to the school. However, in many cases, students may not be able to use funding from these sources to pay off-campus rent.
Further, students with 529 plans or other college savings plans may find that plan rules virtually 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. (For details, see "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. 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. Even dorm-dwellers who keep a car save on costs, because they don't need to drive to school every day. (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 their off-campus counterparts. That may or may not be true, depending on the geographic area: The cost-of-living in college towns can often be quite pricey. But even in expensive areas, thrifty students may be able to live off campus for less, especially if they can bunk with family or friends. (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, religious restrictions and special-needs diets, which for some students, could mean regular trips to the grocery store despite the meal plan.
Dorm dwellers can face a whole list of fees for infractions like noise complaints or damages to walls that are fairly minor issues when living off campus.
If a student must withdraw from school part-way through the semester, he or she could face significant penalties for breaking the housing contract with the school – or at least, lose a lot more money. Even if the student plans to come back the next semester, he or she will need to move out of campus housing immediately.
The Bottom Line
There are, of course, considerations other than the financial. Living away from the school does cut one off from the campus social life and social networking possibilities – which for many is a key part of the college experience. Many students may not be mature enough to handle living completely on their own for the first time, and the responsibilities of rent, household expenses, etc. It's for this reason that some universities require on-campus residency, especially for freshmen.
But if the school does offer the option, and finances are a concern, it's worth researching decision both the region and various plans, to come up with the most feasible arrangement, both fiscally and emotionally.