How Much College Can You (and Your Kid) Afford?


When I first noticed headlines spreading the distressing news that money might influence college choices in this post-recession era, I was surprised to learn of the possibility that college-bound students and their parents might not consider the cost. (See also: Financial To-Do's for College Freshmen)

Comparing options for such an enormous purchase seems to be a sensible approach. College tuition, fees, books, and other expenses can consume tens of thousands of dollars if not well over $100,000. While college graduates as a group enjoy greater incomes than those with less education, they may not reap more from an investment in a pricey college than one with a much lower price tag. How to decide how much to spend?

Start by Assessing Educational and Career Goals

Start the decision-making process by examining the reasons for attending college, which may include the opportunities to:

  • Prepare for the workforce through specialized studies as well as hone skills in communications, critical thinking, and problem solving
  • Garner a higher starting salary and/or greater considerations for advancement in the workforce
  • Prepare for graduate-level studies
  • Get the college experience, which could range from living with peers in a residence hall on campus, forming bonds with people of different backgrounds, and studying abroad
  • Develop a professional and social network that extends beyond your local area

Financial Aid, Loans, and Work-Study Aren't Free

Getting a financial aid package can make college seem affordable, at least in the short term. But if you have to incur loads of debt, then a choice made in your teens could have long-term, lifelong consequences. In fact, many recent grads are delaying milestone moves such as getting married, buying a house, and having children because of the burden of student loans. Higher income after graduation may not offset the costs associated with paying off balances on student loans. (See also: Ways to Pay Back Student Loans Faster)

Opting for work-study programs or simply getting a job may also help pay the bills, but it can detract from the college experience. According to a survey by Citi and Seventeen magazine, nearly 4 out of 5 students are working during college and the average student is working 19 hours per week during the school year. For many, going to a more expensive college may not make as much sense if you don't have time to study, collaborate with peers on projects, and develop your network.

And, if there is a slight change in your financial situation, then you may not be able to afford to continue. An abrupt move can be difficult if you must restart studies at another university, losing the momentum in earning your degree especially if certain course credits don't transfer.

So, a Cheaper College Is Better?

Still, choosing a less expensive college over a more expensive one may not be as simple as it looks. Sure, if you have to pay full sticker price, then the comparison is relatively easy. However, many colleges and universities use published costs as a starting point for offering financial aid, which may include grants, scholarships, work-study programs, and loans.

Matching Budget and College

Based on my experiences with a college-age son and a conversation with the folks at Citi's Financial Education-Personal Wealth Management group, here is what many students do to get the best deal:

  • Determine which colleges and universities are most likely to fit your professional and personal aspirations.
  • Before applying to schools, show interest in desired colleges and universities by communicating with admissions officers, taking campus tours, etc. as schools tend to be more interested in admitting students who are likely to accept offers (and you must be admitted before you can get school-based scholarships).
  • Complete applications to multiple colleges and universities.
  • Apply by deadlines for regular admission or early action, but don't choose the early-decision option because if you are bound to attend a particular college, you can't compare and negotiate aid packages. Note that you might consider applying for early action to be eligible for all school-specific scholarships.
  • Apply for scholarships and financial aid at all colleges and universities after being admitted.
  • Compare financial aid packages, paying attention to the mix of loans, scholarships, and other assistance.
  • Consider making an appeal if you think the financial aid office could make a better offer based on your unique circumstances.

At this point, use the package deal (not sticker prices or published costs) to make an informed decision about your actual cost and the debt you'll incur (if any) to get a degree at each institution. (See also: 6 Ways to Save on Tuition)

Manage Non-Tuition Expenses, Too

Don't forget to calculate extra expenses that often surprise students and their parents.

According to Jonathan Clements, Director of Financial Education at Citi's Personal Wealth Management, parents and their college-bound students can easily predict certain expenses (such as tuition, fees, housing, and dining plans) but become blindsided by other costs, such as travel to and from the university, sorority and fraternity fees, books, and entertainment. (See also: How to Score Free Textbooks)

To control these costs, plan travel ahead of time to get the best deals, take advantage of cheap entertainment, and find frugal friends who can give you tips on controlling expenses. In addition, you might take odd jobs on campus that don't require an ongoing commitment. For example, you could enter essay contests with cash prizes, work at ballgames, or become a test subject in psychology experiments.

When my youngest son started to contemplate colleges, he was perplexed and frustrated that I was encouraging him to apply to in-state institutions, although I have since agreed to work with him to pursue other affordable possibilities. He began to understand my concerns when he started comparing costs among colleges and universities on

My high school student determined that a high-priced school was unlikely to provide an advantage worth $100,000 more than a moderately-priced one. Certainly, there may be situations when the extra money would be worth the cost. For this decision, though, my husband, my son, and I would rather pay less now. Differences in the quality of education, networking, etc. could be overcome through internships and other types of experiences.

Did money influence your college choice? How did you make your decision?

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Guest's picture

Money has to be a big factor in selecting a school. It is obvious that student loan debt is out of control. It is up to parents to guide their children to pursue a debt free education. This includes going to a junior college for a couple of years while working to help pay for their education. I provide financial coaching to singles and families and find that student loan debt is killing them, so is it really worth it?

Julie Rains's picture

I think that money should play a role also. Studies show that student debt is increasing so it makes sense to be creative when funding the college bill. College can be a great experience independent of money considerations but a decision you make in your teens shouldn't rule your life for years or even decades later.

Guest's picture

My oldest daughter is scheduled to graduate high school this year, and cost was a definite factor in the college decision process. However, the greatest lesson we've both learned is to look beyond the "sticker price" of tuition, R&B, etc and check to see how the school is endowed and what cost-saving opportunities are available through the financial aid office. By doing this, I am pleased to report that my daughter will be attending Barnard College in NYC (a pretty expensive college), on a full scholarship that includes books, travel, and R&B because she and our family meet the criteria for a program geared toward out-of-state minority students. She also applied for 12 outside scholarships, and has so far been awarded an additional $1500 to cover any other expenses. LESSON: Do your research and don't count expensive schools out if they provide the education experience your child wants/needs.

Julie Rains's picture

Thanks for sharing your story. Congratulations to your daughter!