“That’s out of our budget” doesn’t come up often enough when having a family conversation around the cost of college. It may seem like a difficult conversation to have, after all, education is an investment for the future. However, the best fit schools are not only the best fit for their next four years, but also won’t create a burden as your child launches their career postgrad.
We call this college budget conversation the “college money talk”. It’s about putting the financials of each school in perspective. There’s no right answer to how much you can borrow, but what is most important is that your child is educated on the impact of taking out loans. It can be the difference of putting your child in a position where they’ll be forced to live at home, delay savings toward a house / retirement, and even starting a family… all because they have more in student loans than they can handle.
Let’s start with a rule of thumb from college student aid expert, Mark Kantrowitz: “If total debt is less than annual income, you should be able to repay your student loans in 10 years or less.”1 If, after running the numbers, this won’t be the case at a school on your child’s list, it’s critically important that you know the risk of attending.
To help analyze your situation, utilize this occupational outlook search tool from the U.S. Bureau of Labor Statistics2 to get a feel for anticipated starting salaries based on job types.
Here's a look at ranges of average starting salaries with a bachelor's degree for different majors:
With the families that we work with, we think of college in terms of your return on investment. It’s not about choosing a major based on starting salary, especially if it’s not a good fit, but it’s about thinking about the major economically in terms of the impact that it will have on your child’s debt repayment after graduation. We sit down with you and your child to start this conversation and analyze the value of each school on their list. We’re looking to not only find the best fit for the next few years, but also plan for what will help them succeed financially after they’ve crossed that stage at graduation.
Need help having the college money talk with your child? Reach out and see how we may be able to help.
All the best,
Andrew Holmes, Certified College Planning Specialist™
Check out my recent whitepaper: 5 College Planning Mistakes to Avoid
Financial Planning Solutions, LLC (FPS) is a Registered Investment Advisor. Financial Planning Solutions, LLC (FPS) provides this blog for informational and educational purposes only. Nothing in this blog should be considered investment, tax, or legal advice. FPS only renders personalized advice to each client. Information herein includes opinions and source information that is believed to be reliable. However, such information may not be independently verified by FPS. Please see important disclosures link at the bottom of this page.
1. Selingo, Jeffrey J. “Perspective | How Much Is Too Much to Pay for College?” The Washington Post, WP Company, 27 Oct. 2021,
2. US Bureau of Labor Statistics: Occupational Outlook Handbook