A college education represents a major investment of time and money – a powerful investment in your future. The basic costs every student faces can be broken into two categories: direct and indirect costs. Direct costs are comprised of your tuition, student fees and books. Indirect costs are made up of what you pay for room and board, supplies, transportation, telephone, health care, entertainment and incidentals.

You’ll need to build several budgetary estimates for both types of costs. Let’s start with the education essentials:

Average college tuition costs
The College Board, a non-profit organization, reports that from 2001 to 2010 tuition at four-year colleges and universities increased by as much as 28 percent, depending on the institution. The good news from the Board is that “half of all full-time public and private nonprofit four-year college students attend institutions charging tuition and fees less than $9,418.

Costs vary by school and regional location. For example, average tuition and fees for public four-year colleges in the South averaged $6,428 in 2010-2011, while New England colleges averaged an annual tuition fee of $9,857. Average tuition and fees cost an estimated 27 percent less at bachelor’s colleges than at doctorate-awarding universities.

At the higher end of the educational scale are the private colleges and universities that charge students an average $33,679 a year or more. Fees are not the same for all students. You may pay less if you enroll in fewer courses or units.

Other tuition variables
Another key financial component is the in-state or out-of-state tuition cost. At public colleges and universities the average annual tuition is $7,605 for full-time in-state students, while out-of-state students are charged $11,990. College fees, typically included in the overall tuition outlay, pay for student union activities, clubs, athletic activity fees, and parking.

Many students who are strapped for finances, or who don’t yet know their majors, often enroll in two-year schools and community colleges where annual tuition averages $2,713. During the two years, they complete basic college requirements and may transfer to four-year schools for the balance of their undergraduate degree.

Of course, your overall fees can be reduced, supplemented or supported by the type of financial aid for which you qualify. These can be from Federal or state loans, scholarships and grants. The College Board reports that full-time students received an estimated 2010-2011 average of $6,100 in financial aid at public four-year schools, $16,000 at private institutions, and $3,400 at two-year colleges.

Indirect college education costs
After the cost of tuition, one of the largest group of expenses–also variable based on the student, the location of the school, and other factors – comprise incidentals. Incidentals are the costs where students actually have a say in how much they’ll spend. Not everyone needs to have their own apartment, a car and top-shelf electronics. Not all students need to eat out every night. And not everyone needs to run up a credit card account.

The College Board estimates that for 2010-2011, students spent an average $1,137 a year on textbooks, $1,989 on personal expenses (laundry, cell phone, etc.), and $1,073 for transportation a year for family visits.

In assembling an incidentals estimate, consider the U.S. Department of Education’s breakdowns:

• Housing: dormitories, apartments, shared housing, live at home
• Meals: dormitory meal packages, weekly food bills, dining out budget, snacks
• Clothing: Laundry, new clothing allowance
• Transportation: Car and parking, insurance, bus and rail passes, bicycle
• Medical/dental: Parent’s plan, college health center costs, no current plan or insurance
• Entertainment: movies, concerts, sporting events, travel, pizza, coffee
• Existing debt: Current loans, car payments, insurance, credit card balances

Only you, as a student, or your parents, have a reasonable expectation of how you save or spend money. Away from home, students can inflate their needs to keep pace with other students who have the financial advantage to live extravagantly. Always consider a larger budget for incidentals than your original estimate. The rest is up to you.

Ways to lower your college tuition costs
Your own frugality and careful planning can keep down the incidentals, but how can you lower your tuition? The Department of Education suggests that you can reduce college costs by taking a number of actions, including enrolling in a community college for the first two years. Another way to cut tuition is to establish residency if you’re planning on attending an out-of-state school. You can take a year off and work in your target state, or enroll in a community college there. Either way, you’ll enter at the in-state level.

A college education isn’t cheap, but building a reliable budget plan can help make it affordable. Look at it this way: can you afford to miss out on college?

This article was originally published in our free, 42 page ebook titled Paying for College: An Essential Guide for Students And Parents.