Do the benefits of college outweigh the costs? How to find out

When submitting college applications, you obviously want to focus on the strength of the academic program of any school you are considering. But for most people, that’s not the only important factor. You also need to think about the cost of school.

College is undoubtedly expensive, and unless you have a robust college fund or enough family income to pay for tuition, student loans will almost always be necessary. And that means that whether you’re a parent or a student in need of a loan, you need to consider how much student loan debt you’d have to take on to attend a particular institution.

When evaluating student loan debt during the college application process, following these four steps can help you balance cost and benefit to make the best choice.

Use a net price calculator
Budget for monthly payments
Compare financial aid award letters
Consider the change in your earning potential

Some schools charge higher tuition than others — especially when choosing between a community college or a four-year institution.

The cost of living can also vary, especially if a school is in a very expensive area and you need to pay more for rent and food while attending school. You’ll want to look at the total estimated cost of attending each institution you’re interested in so you can make a head-to-head comparison. A net price calculator can help you better understand the value you’re looking at.

When you take out a loan to study, you also increase the cost of attendance, as you have to pay the monthly fee. Use a student loan calculator to determine how much interest you would have to pay based on how much you borrowed for each program.

THE TRICK TO REDUCE YOUR STUDENT LOAN INTEREST RATE

When you commit to taking out student loans, you will need to make payments after graduation until you are debt-free.

You may have to take out federal student loans and private student loans, as it’s common to max out eligibility for federal aid and still need more money. In this case, you will need to know the total monthly payments you want to assess to assess how they will affect your postgraduate budget.

WHAT QUALIFIES YOU FOR STUDENT LOAN FORGIVENESS?

There are many sources of financial aid offered by different colleges. And while student loans need to be repaid, other types of financial aid, like grants and scholarships, don’t need to be repaid. If you can qualify for a lot of that free money to attend a specific school, it may be a better deal for you, even if the tuition price initially seems higher.

The schools to which you have been accepted must send you a financial aid letter detailing all the different types of grants, scholarships, loans, and work-study programs for which you have been approved. Reviewing your financial aid letter will help you see what your final cost is and how much you need to borrow.

WILL STUDENT LOANS BE FORGIVEN IN 2021?

Sometimes attending a specific school will open more doors for you in terms of job opportunities or maximize your chances of earning a higher salary. If this is the case, the money you could earn could help cover any extra tuition payments.

Consider the field you’re interested in, the potential salary range for it, and the school’s statistics on graduate employment to decide whether it might be worth incurring extra costs to attend a more prestigious university or program.