How Much is Too Much to Pay for College?

costs of college

When determining whether college costs are an exorbitant investment, remember three things. First, consider the long-term financial implications of earning your college degree. See if the cost of college is worth the ROI in terms of future career opportunities. Second, explore scholarships, grants, and work-study programs. Third, prioritize value over prestige. You have to focus on finding a college that offers the best value for your money.


College tuition in private and public universities have skyrocketed between 38% and 56% over the last 20 years. Even with financial aid, many college students and their families still struggle with college costs. Indirect costs like room and board, books and supplies, and transportation are an added expense.

With that said, we cannot overemphasize the importance of considering the financial costs of earning a college degree for the following reasons.

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  • Ensure financial sustainability. You want to ensure financial sustainability over the four years of your college studies and after graduation in terms of good income.
  • Focus on your studies. Being constantly worried about college finances has a negative impact on your well-being and academic performance. By being realistic about the costs of college education, you can plan accordingly and minimize money-related stress.
  • Maximize your financial aid options. You’re more motivated to look for as many financial aid programs as possible and maximize them. You won’t have to pay too much for college in this manner. You can also avoid excessive student loan debt when a significant amount of your total cost of attendance is covered by financial aid. 

When you’re choosing a college, you must also understand the true cost of attendance instead of just looking at the sticker price. You will be in a better position to determine the ROI of a college education when you know how much you will pay for it and how much you can earn from it.

Factors to Consider When Determining How Much to Pay for College

When you’re a prospective college student, you and your parents will understandably be concerned about college affordability, particularly if you’re considering elite schools. Here are the most important factors when determining whether you can afford a college education or not in your preferred schools.

Tuition and Fees

The first and foremost consideration when paying for college is tuition and required fees. Both can take as much as 69% of the total cost of attendance. You must also consider the technology fees, student services fees, and facilities fees.

Your residency status will also have an impact on your total tuition and fees, particularly if you’re planning on attending a public institution. Note that private institutions usually have the same tuition for in-state and out-of-state students.

Room and Board

Depending on your preferred college, you may or may not be required to stay in an on-campus residence hall, apartment, or other types of housing during your freshman year. Regardless of your room and board costs, you must include them in your college budget.

Scholarships and Financial Aid

Many of the best colleges and universities meet 100% of their students’ demonstrated financial need. These include Columbia University, Dartmouth College, and Harvard University. But if your preferred college doesn’t, you will likely find generous financial aid options that can cover a significant amount of your direct and indirect costs.

Examples include:

  • Federal and state aid
  • Need-based grants and merit-based scholarships offered by your college and third-party organizations
  • Work-study programs

Return on Investment (ROI) of the Degree

Be sure to research the career opportunities after graduation, including:

  • Average annual salary
  • Projected job growth
  • Industries where your college degree is in high demand

Check the Bureau of Labor Statistics (BLS) and its Occupational Outlook Handbook for information and guidance.

Future Career Prospects

While there are 100% guarantees, you can evaluate the demand for your preferred profession or occupation. You can read industry journals, talk to current professionals, and listen to the news. You should also take advantage of networking opportunities that can result in good job leads.

Setting a Realistic Budget

Even when in an affordable college, you must embrace effective college budgeting tips. Otherwise, you’re still at risk of paying too much for college.

Here are the basic steps for reducing the risk of overpaying for college.

Assessing Financial Resources

  • Make a list of your current income (e.g., wages, financial aid, and gifts) and expenses (e.g., direct and indirect costs).
  • Consider savings and investments that can be used for college expenses.
  • Factor in possible family contributions, such as a college fund, monetary gifts, and college-related federal loans (e.g., PLUS loans).

Exploring Different Payment Options

  • Maximize your eligibility for scholarships and grants.
  • Ask about payment plans that allow students to pay their tuition and fees on an installment basis.
  • Look into work-study programs, such as being a student administrative or research assistant, which can pay for part of your direct costs.
  • Consider your parents’ or guardians’ eligibility for military and veterans educational benefits that will provide coverage for your college education as a dependent.

Considering Student Loan Debt

Be careful about taking out student loans lest you find yourself with nearly $40,000 in debt, on average, after earning your bachelor’s degree. You must consider all ways and means of paying for your college education before considering student loans.

But, if you must take out student loans, you must always understand their terms and conditions – eligibility criteria, repayment options, interest rates, and default consequences. You want to be an informed borrower, not an impulsive one.

Balancing Cost and Quality

The best way to avoid overpaying for college and getting the best value for your college education is by balancing cost and quality. Yes, a college education requires substantial monetary investment, but you can enjoy excellent returns on your investment, too. Earn a well-recognized degree from a regionally accredited university. Leverage it for great employment or entrepreneurial opportunities.

Understanding the Value of Education

Individuals with a bachelor’s degree earn higher weekly income than those with an associate degree or a high school diploma. However, the value of education isn’t merely in the monetary rewards. The non-monetary benefits are valid reasons. These include college education being your ticket to social mobility and civic engagement, good health, and a good quality of life.

Comparing Costs Across Different Institutions

Even when you already have a preferred school, consider other affordable colleges and universities. You will be surprised at the possibility of enrolling in a Public Ivy instead of an Ivy League school with hidden costs.

You should also compare the costs among colleges and universities based on your geographical location and mode of delivery. Being an in-state student means more cost savings, for example, than enrolling in an out-of-state school. You may also consider an online program to save on indirect costs.

Looking Beyond Prestige

Most importantly, being a prestigious university doesn’t necessarily mean that you will enjoy the best college experience! You must look beyond prestige and pomp and consider if you’re a good fit. You may, for example, thrive in a small liberal arts school than in a large research university.

Making an Informed Decision

You and your parents/guardians should ideally become involved in financial planning for college as a team. With your personal preferences and their life experiences, you’re in a better position to make informed decisions about your college costs and experiences.

Researching Financial Aid Opportunities

Start as early as possible researching your financial aid options, preferably during your junior year in high school. You can use online scholarship websites, ask about the scholarships offered in your preferred schools, and learn about federal and state aid (i.e., FAFSA).

Seeking Guidance from Financial Aid Advisors

Even before you have been accepted into college, you should communicate with the financial aid advisors of the colleges and universities you’re interested in. You can discuss your academic goals, financial situation, and concerns about paying for college. You can ask for guidance about the available resources and effective strategies related to financial aid.

Evaluating Long-Term Financial Implications

As a prospective college student, you may be tempted to consider the short-term period only, say, getting into a competitive college and finding funding to pay for your first year. You shouldn’t be because earning a college degree without overpaying for it means thinking over the long haul. You must discuss with your parents, financial aid advisors, and trusted professionals about the long-term financial changes and challenges that can threaten your studies.


In conclusion, making smart college financial decisions requires careful planning and budgeting as early as your high school years. You and your parents must be proactive in planning for college to minimize financial stress.