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Which College Can I Afford? 

How to choose the right college with the best value - when the time comes

Key Takeaways:

  • College is a great investment on average, but no one is average.
  • Compare how much you will pay at different colleges, after aid and scholarships and including any interest on loans.
  • Research majors and what degrees will be valuable to employers - even if you aren't 100% sure what you'll do.
  • Take the right amount of student debt, proportional to your career expectations and plans.
  • College fit also means finding a place where you will thrive and graduate on-time.

Choosing a college is a big decision, one that encompasses your values and your future goals. It’s where critical reasoning and life skills are developed, career paths are forged, and lifelong friendships established. It’s also a big financial decision, one that could lead to a good return on investment--or, in case of student loan debt, potentially a long-term struggle. While research shows that college is worth it for the majority of students, there are too many students who find they are not better off after graduation.

As such, students and families will want to approach the college decision in as level-headed a manner as possible, incorporating the question of finances into your college planning and decision-making.

What is a college education worth? How much college can you afford? How do you know if you’ve chosen the right college? Of course, the answer will differ for everyone.

The Edmit team recommends considering the following questions to determine which college is the best choice for you from a financial fit perspective. 

What's the value of a college education?

According to the Pew Research Center, getting a college education “is a good deal for graduates on almost any measure--from higher earnings to lower unemployment rates.” However, the return on investment for a college degree may take a little while: Research from the College Board shows it typically takes 12 years for a college degree to pay off, meaning that by their early to mid-thirties, the average graduate has earned enough to recoup what they paid for college degree and the lost income for the years they were out of the workforce while studying. Many other studies agree that college is a great investment in general, including those from the New York Federal Reserve and the Georgetown Center for Education and the Workforce.

While the return on investment for four-year college is favorable, the value of a college education also depends on many subjective and unique factors, specific to you as a potential student and your unique education and career goals. These factors include academic quality, covering specific academic departments, curriculum, faculty, and research facilities. Financial aid packages, including scholarships or  grants. What you actually pay for college, and the full cost of loans you take including interest. Internship and work-study programs, encompassing opportunities for hands-on experience, career training, and professional development. Your major.

Here are the key points to consider to figure out what colleges you can afford and what colleges are worth it for you. Your insights, coupling general higher education data with the specifics of what you’re looking for from your college experience, will enable you to personally answer: What is college worth to me?

What will I pay for college?

The most obvious calculation in college affordability and value is what you actually pay for college. Your college costs will include more than tuition, but probably less than the full published cost of attendance. When looking at your cost of college, estimate your personal net price for colleges using tools like net price calculators, Edmit, or averages from the College Scorecard. Your net price will take into account any scholarships or financial aid that can help you pay for college. If you will need to take loans for college, consider the full cost of the loan, including interest, since you'll need to pay that back. The larger the loan, the higher your overall cost to get your degree.

What should I major in?

Choosing a college major may be as stressful a decision as the one to choose a college, but don’t panic! Inside Higher Ed reports as many as 80 percent of students change majors at some point during their time in college. And you have time to make up your mind: The Education Advisory Board reports students who change their major, even as late as during their senior year, have a higher likelihood of graduating than students who declare their major from day one.

So what should you major in? Again, it goes back to your values and goals, the specifics of your college or university, and your career plans after graduation. Which classes do you find most engaging? Which majors have a strong post-graduation hiring rate? What do you hope to earn? Where do you hope to live--and which industries/careers are strong in that given region?

The only certainty is you don’t have to decide right away. Take your first year or two at college to research as many academic tracks and career paths as you can, and do some soul searching at the same time. Ideally, you’ll find a major that meets your academic, career, and personal goals.

Again, remember: You have time to decide--and in fact, your major may not be as important as your degree itself. Back in 2013, the Washington Post reported on a study from the Federal Reserve Bank of New York that showed only 27 percent of college graduates had a job closely related to their major

What is a good salary after college and what degrees are in demand?

As you’re considering colleges, majors, and potential career paths, your starting salary should be part of the decision-making process. When looking at entry-level salaries, consider region, sought-after degrees, and market demand, all of which will impact your earning potential. To start your research, Payscale puts together an annual college salary report, ranking colleges, universities, and courses of study by future earning potential. The National Association of Colleges and Employers has also followed salary trends for new college graduates through historical survey data collected since 1960. Additionally, Salary.com provides data on average salaries, searchable by job title, region, and industry.

Does the college have good outcomes?

Research the data for post-graduate success to determine the potential value of a given school. Consider on-time graduation rates, hiring rates, starting salaries after graduation, and active alumni networks, both for the college or university itself and its specific academic departments.

Edmit has earnings estimates by college and by major.

How much debt will you take?

Debt tolerance, also known as financial risk tolerance, is knowing how much debt you can take on without jeopardizing your ability to make payments and not compromise your credit score (and a healthy financial future). It’s knowing your debt-to-income ratio (e.g., your monthly debt payments divided by your monthly gross income). Experts recommend having a debt-to-income ratio no higher than 43 percent.

Edmit's rule of thumb: borrow no more in total than your starting salary after graduation so that your payments are manageable. If you aren't sure what that salary will be, not to worry - but then you should err on the side of less. 

Borrow only what you need to cover the cost of college, and once that’s determined, to carefully select the type of student loan and stick to a strict budget.

So, as you’re determining your debt tolerance, look at your financial outlook, the colleges you compared, and how each will impact your debt-to-income ratio, both now and in the coming years. Based on your expected contributions and student loan debt amounts, which schools fit your budget?

How do I know I’ve chosen the right school?

Of course, money is not the only consideration. You need to be happy and thrive at the college you choose!!

Martha O’Connell, director of Colleges that Change Lives, an organization that helps high school students find good college matches, says the most important factor in choosing the right college is fit. Determining fit requires careful research of a school’s offerings and on-campus experience, alongside consideration of your own values and long-term goals.

When considering fit, do a deep dive into the academics and student life of the colleges and universities that interest you. Ask the admissions office to connect you with potential school ambassadors, and reach out via email or video chat. Take a tour of campus, and ask both staff and student guides as many questions as you can. Speak to current students and alumni about their experiences, especially those in the academic department you may major in. See if there are programs for prospective students to spend a night on campus, sit in on a class (or several), and have a meal at a dining hall, all in the service of getting a sense of campus life. Do these experiences appeal to you? Can you envision yourself at this school, as part of the student body?

Don’t focus on US News and World Report rankings, where your friends may be going to college, or other distractions. Always remember: You have to attend the school, you have to do the work. Your interactions will give you insight on which college or university is a good fit for you.

Finally, it’s always wise to manage expectations and keep the long view--remember, it may take more than a decade to see that return on investment of your college education.