Q&A: How to cut the 'hidden costs' of college

College is more expensive than ever, but you can save $20,000 to $200,000 during a four-year education just by being a smarter consumer, says Lynnette Khalfani-Cox, author of College Secrets: How to Save Money, Cut College Costs and Graduate Debt Free.

"For every college expense you'll encounter, there are multiple strategies to reduce and even eliminate your out-of-pocket costs," she writes in the book. "You just have to explore your options, use a little creativity and resist the urge to simply whip out your checkbook or credit card every time you're asked."

Paste BN talked to Khalfani-Cox about the new book:

Q: What are the financial literacy skills most Americans lack to understand how to pay for college?

A: Money is so tough. People have their everyday bills to worry about. It's much harder to think about a really big expense like college, which might be five or 10 years down the road. Part of it is a lot of people lack the ability to adequately plan for long-range goals across the board, whether it's paying for college or something as important as preparing for retirement.

The second thing is most people are very uninformed about the economics that are driving college costs. The typical student or parent will think about college mostly in terms of tuition, fees, room and board and sometimes books. They don't realize that's just the tip of the iceberg — there's a whole slew of other expenses to contend with. Those are the hidden costs of college that, frankly, colleges never tell you about. Most parents don't find out about it until they send their kid off to school and they have to call and say, "I need money for this also."

Q: In College Secrets, you write that you can save a total of $20,000 to $200,000 during a four-year education by being a smarter consumer. Are most families even coming close to this? How can they?

A: No, most families currently aren't coming close to that, but they definitely can if they recognize the key areas where they can and should be saving. I think most parents just write the check — they see a number in black and white. It's gospel. They don't think there's room for negotiation, and there is. They don't think there's strategy to lower costs, and they don't know about basic ways to save money.

If you're in high school, some colleges will pay for you to visit with what's called a "fly-in visit." Some states offer the ACT for free. Some students qualify for an SAT fee waiver, that can then qualify you for college application fee waivers down the line. Regional student-exchange programs let students attend colleges in their home region — the Midwest, the South, New England — at in-state costs or just slightly higher. You can buy the international version of a textbook, which will come in paperback and in black and white, and be significantly cheaper. And you can be aware of the hidden costs of, for example, having a car on campus, with its mandatory parking fees, and joining extracurriculars like a fraternity or sorority.

Knowing about these waivers, institutional scholarships and strategies can save significant costs and, yes, even $200,000.

Q: What are the biggest mistakes families make when applying for financial aid?

A: One is that they don't apply at all and miss the opportunity. Missing FAFSA (Free Application for Federal Student Aid) deadlines is a really big mistake. You take yourself out of the running for potentially getting free money. Need-based or merit-based aid requires you to fill out the FAFSA even if it's not need-based aid they give you.

Another mistake people make is relying too much on thinking their kid is going to get an exorbitant amount of financial assistance. You have to be realistic in terms of planning and not just think, "OK, because I have this bright, sharp kid, they're going to win all these scholarships." It really doesn't work that way. Only 1% of students in the country get a full ride — it's the holy grail of college funding. Only 7% win private scholarships at all.

Another mistake is parents don't forecast to know, "What am I likely to get?" There are tools to forecast for financial aid. Even if your kid is not a senior applying this year, you can use the Department of Education's FAFSA4caster to help you project how much money you might get.

People need to talk to their children and say what's realistic. Put a spending cap on what's realistic without the family having to take out a home equity loan. Don't go into excessive debt.

Q: How should prospective students weigh savings vs. academics?

A: The two are inextricably linked. One of biggest mistakes students and parents make when it comes to picking a college is that they segregate the two. We talk about finding best fit. There are three factors of a great fit. First is academic fit, second is social fit, third is financial fit. Academically, ideally, if you want to get the most institutional aid, you want the student to be in top 25% of the student body going in.

So many students fall in love with a campus and start wearing T-shirts and sweatshirts and say this is their dream school. We banished my daughter from saying that. In our household, there is no such thing as a "dream school." It's one thing for a student to fall in love with a certain school, and it's another thing for the school to show the love right back. The way a school shows you the love is by showing you the money. When a school really wants you, they will demonstrate that by making it financially feasible for you to attend.

Q: Your daughter is applying to colleges now. How has going through this with your own family affected your understanding of the college process and savings?

A: It's driven home a lot of the secrets I tried to share in terms of understanding that college is a business first and foremost. As parents, a lot of what happens is that our heartstrings get tugged. It made me realize it's not just about dollars and cents — it's about my own thoughts and feelings about wanting my child to succeed and my own ideas about the value of an education. There are many more emotional sides to this rather than just the financial side.

7 ways to keep college room and board expenses under control:

• Do weigh the pros and cons of living at home
• Do remember the No. 1 rule of real estate: location, location, location
• Don't try to upgrade your lifestyle
• Don't live solo
• Don't forgo all-you-can-eat meal plans
• Don't forget to strive for housing scholarships
• Do consider becoming a resident adviser

Source: College Secrets