Our comparison below of the cost of buying a property near campus, renting a comparable apartment or living in the dorms is based on a number of assumptions. All figures are from August 1998, when this story first ran.

We chose a three-year term because many colleges and universities restrict freshmen from living off campus. Also, our student is coming from a family with an adjusted gross income of $90,000 a year, which falls in the 28 percent federal tax bracket. The college is the University of Illinois at Urbana-Champaign.

The ownership calculations are based on a $75,000 2-bedroom house in Champaign that is 10 years old. The buyer put 20 percent down and has a $60,000, 3/1 adjustable rate mortgage with an initial rate of 6.5 percent from National City Corp, which has branches in the region. (In August 1999, 3/1 mortgages carry an initial rate of about 7 percent.)

Closing costs come to about 3 percent of the loan or $1,800, according to John Bollman, the bank's vice president and mortgage product manager.

Homeowner's insurance on such a property would be $247 a year, says Mary Vail's State Farm Insurance office in Champaign. Yearly property taxes, based on Champaign's 8.0242 percent rate and a 1/3 assessment, would be $2,006. The maintenance figure comes from the National Association of Home Builders, which estimates costs based on government census data and other information.

Rent is calculated based on the student paying $250 a month to a landlord, or a $250 rent payment from the roommate in the case of the parent-owned property.

As for the rental property, its figure is based on a sampling of area listings and interviews with local real estate professionals, including Dave Barr of Barr Real Estate and Cindy Schmitt of Coldwell Banker Devonshire Realty. Renter's insurance costs were provided by Vail's office. Rent increases were not factored into the equation.

Dorm rates for the 1998/99 school year come from the University of Illinois' public affairs and housing information offices.

Buy
Expenses	Principal payments (after 20 percent, $15,000 down payment)				$2,141
	Interest payments				$11,503
	Property taxes				$6,018
	Homeowner's insurance				$741
	Routine maintenance				$1,473
	Total expenses over three years:				$21,876
Tax deductible items	Interest				$11,503
	Property Taxes		$6,018
	Total deductions				$17,521
Income	Rent from roommate		$9,000
	Total income		$9,000
Basis for tax deduction			$8,521
Total tax saving			$2,386
Total cost			$10,490
If the home were sold at the end of the three-year period for the same price paid at purchase, the parents would have $16,448 left after paying off the mortgage allowing them to recoup the $15,000 down payment. Unfortunately, there is no profit, as housing expenses of $10,490 must be deducted. But, all total this housing cost the family only $9,042 or about $3,015 per year. These calculations assume that the house did not appreciate. If it did, the costs would go down and the family may even enjoy a profit.
Rent
Expenses		Rent		$9,000
		Renter's Insurance		$144
		Total expenses		$9,144
Dormitory
Expenses		Rent		$6,276
		Residence hall dues		$48
		Total expenses		$6,324
But dorm expenses cover only 9 months of living each year (27 total months). To allow for an even comparison with the 12-month costs of renting and buying, we extend the dorm costs out for another 3 months each year (or 9 months total) and we find that the bill for 36 full months in a dorm would be $8,368.

Check out other reports in our 'Off to College' series