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Dorm vs. Apartment: Which is Cheaper

Home > Students & Debt > Dorm vs. Apartment: Which is Cheaper

Where to live in college is annually one of fiercest arguments in every household, but if you think you’re going to win a debate between dorms and apartments based on financial reasons alone, think again.

SPOILER ALERT: The competition is too close to call.

That might be surprising news to parents who typically favor dorms. They assume splitting a small square room with a stranger and sharing a bathroom with 30 or 40 other people comes at a discount.

Unfortunately, parents aren’t keeping up with today’s marketing.

What you are paying for in a dormitory is convenience, and colleges believe the convenience of living on campus has as much value as getting your own bathroom (and bedroom) off campus.

If you don’t believe me, I’ll run you through the financial comparison exercise using national averages that compare dorm costs to off-campus housing. One thing to keep in mind before we get too far into the debate: check with your financial aid office to be sure whatever grants or loans you have are approved for off-campus living.

Now, on to the debate.

Cost of living in a Dorm

Colleges use the term “room and board” to calculate the cost of housing and what they really mean is food and shelter. Room and board includes the cost of a dorm room plus the average priced meal plan. Utilities are also included in that cost; internet should be covered by the free campus Wi-Fi and cable is usually free, though sometimes with a one-time connection fee of about $50.

Average cost of room and board:

  • $8,887 per school year at public colleges and universities
  • $10,089 per school year at private colleges and universities

Keep in mind that is only for the fall and spring semester. Residence halls are closed for holidays. Thus, average room and board only covers housing costs for about 9 months. That works out to $987/month at public universities and $1,121/month at private universities.

If that cost seems a little high and you still want your son or daughter on campus, have them apply to become a resident assistant (RA). Depending on the university, RA’s can get free room and board and in some cases a monthly stipend. The drawback is that you have to police an entire floor of college students and take on a few other responsibilities that get time consuming.  Check with campus housing for credit and GPA requirements if you are interested.

Cost of living in a college apartment

There are several lifestyle differences between an apartment and the dorm. The most notable is the amount of space. You’ll have an entire bedroom to yourself, a kitchen to cook in, a living area and your own bathroom.

You’ll also have more responsibility, like keeping up with bills. It’s important to know due dates for rent and utilities. The last thing you want is to be three months into the school year and realize no one has paid the electric bill. It’s a common scenario that can really damage your credit score when you’re just getting started financially. You don’t want the first entry on your credit report to read: Late With Utility Payment … 3 months!

Something else to consider is that an apartment is a 12-month commitment whereas a dorm is only nine months. If you plan to take summer classes, apartments would be an advantage over having to pay additional room and board at the dorms. If you’re not going to summer school, there is the option to sublease the apartment using campus Facebook groups, Facebook marketplace or Craigslist.

Average apartment expenses:

  • $1,178/month for a two-bedroom apartment
  • $112/month for the electric bill
  • $50/month for internet

Splitting expenses with a roommate will bring the total to $675/month. Add in the average cost of groceries at about $220/month and room and board for an off-campus apartment equals $895/month.

Now of course an apartment needs furniture, so you would need to budget a few hundred dollars for that. Then there is the application fee and security deposit. And don’t forget transportation costs, cleaning supplies and other incidentals associated with off-campus life.

Those expenses easily could negate the $92/month difference, and now we’re at a stalemate.

The difference in price between a dorm and apartment

It should be pointed out that those numbers were national averages, so it’s within reason to think choosing between a dorm and an apartment at different universities in different cities will help lower your college budget.

A recent study by Trulia found that in 15 of the 20 schools surveyed it was cheaper to live off campus. The five schools where on-campus living was cheaper were in New York, Los Angeles, Boston, Washington D.C. and Palo Alto. Trulia is a real estate listing website, so know that some of those numbers could be tilted in their favor.

The general conclusion is that most colleges are in small college towns with favorable rental markets, which is a big reason why 87% of college students live off campus. But if you are attending school in a large city with expensive apartment rentals, living on campus might actually be a bargain.

Why you Should Live on Campus Freshman Year

Setting cost aside for a moment, there are a number of reasons students should live on campus the first year of college. More than 87 colleges and universities require first-year students to live on campus, mostly for the following benefits:

1. Easy transition to college living

Living on campus eases the transition from living at home to becoming independent. A new city, more responsibility and more advanced courses make for an already difficult academic adjustment. Adding monthly bills like rent and utilities and the task of cooking three meals a day are responsibilities that could make the transition overwhelming.

2. Roommates

Living with random roommates is always a gamble, but it is a safer bet at a dormitory. You have options with campus housing to file a complaint or request a room change if things don’t work out. You’ll be locked into a 12-month lease with an apartment. Another thing to think about, you’re taking a risk on one stranger with a dorm rather than two or even three with most off-campus apartments.

3. Social life

Making new friends is easier in the dorm environment where social functions and events are always in walking distance. Those new friends can turn into roommates if you choose to move off campus later.

4. Getting to know the city

Finding a good area to rent in is difficult when you are new to a city. You’ll find it much easier after a year of visiting friend’s apartments and fielding suggestions from classmates that have lived in the area longer.

5. Proximity to classes

Dorm rooms are close to classes and the library, which will help as you navigate around campus early on. It’s a good idea to walk your course schedule before school starts to get your bearings. Proximity to classes should help you avoid the temptation to skip. That might account for the results of studies that have shown living on campus can boost GPA by nearly a half a letter grade.

Does financial aid cover off-campus housing?

If you plan to live off campus, you’ll need to indicate that when filing your FAFSA. The financial aid calculations are different for students that live in off-campus housing.

You should also check to make sure your financial aid and tuition plans cover off-campus housing. Direct student loans, 529 plans and prepaid tuition plans have certain rules about how the money is allowed to be used.

Direct student loans are deposited directly into a student’s bank account, and the money can be used for any expenses related to education including off-campus living.

A 529 plan can be used for off-campus housing for students that are enrolled in at least half the hours that define a fulltime student. But there is a catch. For off-campus housing, the student can only withdraw up to the amount the college or university budgets for in the room and board section of its cost of attendance.

Some prepaid tuition plans offered by states also have dormitory plans that only cover the cost of living in dorms. Research your tuition plan to see if it covers off-campus housing. If it doesn’t, you should be able to request a refund.

About The Author

Max Fay

Max Fay has been writing about personal finance for for the past five years. His expertise is in student loans, credit cards and mortgages. Max inherited a genetic predisposition to being tight with his money and free with financial advice. He was published in every major newspaper in Florida while working his way through Florida State University. He can be reached at [email protected].


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