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When is college tuition too expensive?

We are all well aware that student loan debt is creating significant hardship for a large portion of adults in our country.  Even so, we still have the tendency to focus on a top school as the end goal of high school.  What parents and teens often forget are the bigger picture considerations necessary to choosing well when choosing how, when and where to invest in an education.   As I discuss in my college planning workshops, it is important to consider what the expense of college will mean to the student 5, 10, 50 years down the line.  In adulthood, student loan debt can have a significant impact on relationships, as well as the ability to purchase a home, educate future generations and even retire.   Based on what I’m seeing I'm hoping that parents and teens will begin to shift their thinking towards a more discerning, consumer based approach to college selection.  

Debt load and savings rates have been shown to have a significant impact on the emotional well-being of adults.  Sadly, according a recent study, almost half of millennials are concerned about debt as well as concerned about their ability to set aside money to pay for their children’s education.  While most of us are aware that money can cause marital strain,  it’s debt that is often at the root of that strain.  So starting out as a young adult with minimal debt can be an important aspect of laying the groundwork for a healthy future.

While higher education can be important to future success, it is equally important to pay close attention to the return on investment.  Doing so may not be as simple as we believe it to be.  Here are some key ideas to consider:

  • The projected income for the student’s major versus debt load
  • Strategic use of college savings
  • Timing and use of gifts from extended family
  • The actual return on investment for a highly ranked school

While politicians are talking large about debt forgiveness, it’s important that our students understand the challenges this type of legislation may face within our government.   As we head into the season of college applications, acceptance letters and final decisions, we will be doing our teens a favor by encouraging them to plan beyond the ideal college experience to an understanding of cost of living and their life goals.


https://www.fidelity.com/about-fidelity/individual-investing/til-debt-do-us-part

https://www.nber.org/papers/w7322