How Much Should I Spend on College?

Spending too much or too little can have lasting negative effects on your student’s education.

You see, when applying to college there are a ton of questions, but in most cases no “correct” answers.

There’s only the correct answer for you and your specific set of circumstances. And when it comes to determining how much you should spend on your student’s education, that’s precisely the case.

In today’s report, we’ll go over some pointers on how to make the best decision possible.

– Scott

How Much Should I Spend on College?

It’s natural to want to find the sweetest deal possible. The best education for the cheapest price. That’s because it’s tough to weigh the benefits of a college education (which may not arrive until 4-5 years after the student has graduated) against a hefty tuition bill that’s going to arrive right now.

But consider this: The Wall Street Journal reported just this month that when a family opts for a less expensive school, offering a lesser quality of education, after they’ve qualified for a more selective (and expensive) school, they stand 20% less chance of graduating.

Why? A number of reasons, but not the least of which could be that the student is less motivated, less challenged and doesn’t see the benefit of applying themselves to their work.

On the flip side, sending your student to a higher priced school where they’re forced to work long hours in a part time job or work study program to help supplement their tuition also hands them a worse chance of graduating. Grades can falter and students can burn out quickly because of the heavy workload in and out of the classroom.

How to find out more about your financial aid situation

There are always loans, of course…

The prevailing wisdom on how much student loan debt your future graduate should take on is that the final balance should not exceed the student’s expected income in their first decade out of school. Example: if a student’s expected annual income for those first ten years is $60,000, then they should be carrying no more than $60k when they graduate.

Here’s the math on that… if a student spends those ten years throwing 10% of their gross income at those loans, it’s going to severely inhibit their ability to save for and purchase other things like a car or home. Because if taxes wipe out 25% of that gross income and you’re smartly attempting to save 15% of it for those future needs, that leaves 60% for everything else. Food, shelter, gas, insurance etc… Take away that other 10% for student loans and now they’re left with less than half their income for those living expenses. Not much, right?

That’s why it’s important to try to wipe out those loans in the first ten years out of college, if possible.

And of course this yet another reason why it’s so important to try to rustle up as much “free” money for college as possible… money your student won’t have to pay back.

Scholarships, private grants and federal financial aid all fall into this category. Learning how to go after scholarships correctly as well as get the most financial aid possible out of the government are things College Made Simple can help you with:

In the end, when deciding how much to pay for college, the answer is one that’s wholly specific to your situation. But keep in mind these key questions…

  • How much debt can you realistically expect your child to take on upon graduation?
  • How much of an impact can a higher priced school’s education have on that student’s future as opposed to what’s offered at a lower priced school?
  • And how much can you afford to pay without forcing your student to negatively impact their studies by chipping in too?

If you can determine the answers to these questions, you’ll be on a much clearer path to figuring out what your tuition bottom line truly is.

To Your Family’s Successful College Search,

Scott Weingold

Co-Founder, College Planning Network, LLC

College Made Simple – The Free Educational Resource of the College Planning Network, LLC

Related Articles:

Why the Cost of College is so High

What’s the Value of a College Education Today?

The Actual Cost of College

Return to College Made Simple's Free Reports

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Editor's Note: Scott Weingold has been ranked the #1 “College Financial Aid Expert Worth Knowing About” in the entire country by CollegeStats.org.  He has co-authored the book, “The Real Secret To Paying For College. The Insider’s Guide To Sending Your Child To College – Without Spending Your Life’s Savings.” Scott also publishes a popular free online newsletter, “College Funding Made Simple" which reveals insider’s tips, methods, and strategies for beating the high cost of college.

Scott is the co-founder and a principal of the widely renown College Planning Network, LLC – the nation’s largest and most reputable college admissions and financial aid planning firm. CPN is a proud member of the Better Business Bureau, the National Association of College Funding Advisors, the National Association for College Admission Counseling, the National Association of Student Financial Aid Administrators and the Student Affairs Administrators in Higher Education.

Scott, along with his college funding advisory team, helps thousands of families throughout the country with their college planning needs and offers a series of free educational webinars and workshops on “How To Pay For College Without Going Broke In The Process!” He's been featured or mentioned in The Philadelphia Inquirer, Yahoo News, TheStreet.com, Voice America with Ron Adams, Crains Cleveland Business, and on Cleveland Connection with James McIntyre.  Scott has published numerous articles and is a professional speaker who has addressed thousands of audiences online and offline throughout the United States.  His actionable insights and candid, open approach have earned him & his team numerous media interviews, citations, and speaking opportunities, and his free online video workshop is one of the Internet’s most widely viewed pieces in the college funding space.