20 High School Seniors Ask: How to Prepare for College Financially

I remember my college search process, the campus visits, and final choice like it was yesterday... my thought process went something likes this: I deserve to go anywhere that accepts me. Cost barely registered in my decision-making - and certainly not because my parents could afford it. My mom just kept telling me "we would figure it out," while my Dad kept telling me it wasn't that simple. I had no idea how to prepare for college financially, and my parents, having both gone to college while mostly living at home two decades prior were ill-prepared to guide me.

When I think back on how risky the decision I made was... I had zero college savings, and extremely limited financial support from my parents for school - a few $100s for books and the occasional plane ticket home. I signed up for $10,000s of student loans without even blinking, asking extended family members to co-sign, without fully grasping what I was asking of them. I never weighed what my future earnings potential would be or if I could even afford it. Thinking back - I got lucky, unbelievably lucky. Following the same path today, the math would not work out in my favor.

This guide will help high school students:

1. Evaluate college like an investment decision
* The Initial Cost & How to Pay For It
* Vs. Expected Future Earnings

2. Address Specific Questions from High School Seniors

3. Lessons Learned & Experiences from Family Finance Moms

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How to Prepare for College Financially

About a month ago, one of my followers, a high school teacher in Utah, reached out to me with questions directly from her and her students as to how they could better prepare for college financially. Many of these can be addressed by understanding that the cost of college today, and the rate at which it is growing, makes going to college much more of a critical financial decision, that it may have been for your parents and grandparents.

The rapidly growing cost of college - which has grown at 1.5-2.0x the rate of income growth and the growth of the broader economy for decades - has changed the decision-making process for college significantly. College, at any cost, is no longer the guaranteed path to prosperity that it once was, particularly when students graduate saddled with student loans they took out to pay for it.

Given these extremely elevated costs relative to median incomes, it is critical to think of your college choice in conjunction with the cost, your career choice, and its future earnings potential.

Evaluating College as an Investment Decision

As a teenager, you dream big... but often fail to dream beyond just the immediate next step. You may see limiting your college choice based on finances as "crushing your dreams." But what is truly dream-crushing for decades beyond college is making an ill-advised college choice given your future earnings potential, and graduating with student loans you can never afford to pay off. That choice will impact your ability to comfortably start a family, buy a home, comfortably change jobs or careers, and even save for retirement.

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There are three elements to evaluating college as an investment decision:

1. The initial cost

2. How that cost is funded

3. The expected future return

When evaluating your college decision, these three elements have varying components, and I'll talk about each of them in more detail below, before going on to address more specific individual questions submitted by high school students, as well as sharing feedback from my followers about their own college decisions.

The Initial Cost

First, let's talk about the initial investment cost. You can't know how to prepare for college financially without a key understanding of the total cost, as well as how families pay for that cost.

The Annual Cost of an Undergraduate Degree

The cost of college is made up of tuition, room and board, which is factored in the data I will share with you, but there are also other costs, like books, travel costs, and spending money that you should budget for as well.

Based on the most recent data from Sallie Mae, the average one-year cost of college for the 2019-2020 school year, across all school types (2-year, 4-year public and private) is a little over $30,000. That's for one year. And that amount can vary greatly based on the school you choose. Many elite private schools now cost over $70,000 a year.

Any school you are looking at should provide a clear outline of the estimated cost for the upcoming school year, broken down by these categories. Keep in mind as you plan for your education beyond your Freshman year that these costs go up every year, by over 6% annually.

Two Key Drivers of Unforeseen Costs

There are two critical elements many high school students and their families fail to account for when evaluating school options and how to prepare for college financially.

• Will you graduate on time?
• Does your degree choice or career path require a graduate degree?

Will You Graduate on Time?

Most students assume college is 4-years and make financial plans accordingly. You may choose a college you can afford based on graduating in 4-years. But what you may not know is that according to the U.S. Department of Education, National Center for Education Statistics, for students entering college in 2012 (the most recent year for which data is available), only 44% of students graduated in 4-years, as intended. Only 62% graduated in 6 years. Taking an extra year or two to graduate can cost you 30-50%+ more than you may financially prepare for.

The worst case scenario? Taking out 4-6 years worth of student loan debt and having no degree to show for it or turn into a higher earning job to pay for those loans.

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Graduation rates vary significantly - by race, by type of college, and most especially by the selectivity of the school. For-profit colleges have the worst graduation rates, while private, nonprofit colleges with a low-rate of admission graduate 93% of their students in 4 years. A more competitive private school that graduates 90%+ of its students in 4 years may be less expensive in the long-run than a for-profit or public institution that takes you 6 years or that you never end up graduating from.

Will You Need to go to Grad School?

The more people who go to college, the more grad school is becoming a career requirement, as opposed to just a way to boost your earnings or switch careers. Some degree paths and intended careers are more likely to require a graduate degree than others.

When evaluating college as an investment decision and determining how to prepare for college financially, be sure you know whether a graduate degree is a likely requirement for your intended career path or not. A graduate degree can increase the cost of your education by 50% or more, and those with the heaviest student loan burdens are those with graduate degrees.

It is important to note that several of the degree areas more likely to require a graduate degree - like social work, education and liberal arts - are not high earning potential careers either. While you should not choose your degree or career path based solely on its earnings potential, you also can't ignore it, particularly if you are funding your education with debt you will have to ultimately repay.

How College is Funded

You can't just stop at the headline cost when determining how to prepare for college financially. It should not come as a surprise to anyone that the advertised price vs. what many students end up paying is vastly different.

Each year, Sallie Mae, a leading provider of private student loans, conducts a survey to gain insights into How America Pays for College. Many of the charts below are based on data from the latest survey.

For the 2019-2020 school year, the average family reported spending over $30,000 for higher education, with 27% paid for by scholarships and grants, and more than half paid for by parent contributions, leaving 21% to come from student contributions.

Remember, individual experiences can vary dramatically from the average. This isn't what funding for my college education looked like at all. Half of my college costs were funded by student loans I took out, both federal and private, while the other half was paid for by grants and scholarships. Here's what the breakdown looks like when different variables, like family income, race, college choice and if you borrow, are taken into account.

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Those who borrow, spend more.

Meghan | Family Finance Mom

One of the things that stands out most to me is that those who borrow money spend more overall. This is true in so many personal finance scenarios - from holiday spending to home buying, and even here in spending for college. Those who borrow, spend more. It's almost as if there is a financial disconnect when you spend borrowed money, despite the fact that borrowing money is still money you will have to pay for - and pay for many times over once interest is accounted for.

Sources of Funds

To help you know how to prepare for college financially, it may be instructive to better understand where families get their funds for these various funding sources. The diagrams below further break down each funding category specifically for those families who borrowed to pay for college.

A few general rules of thumb:

• Always exhaust federal loan options before pursuing private options - they are typically lower cost, do not require a co-signer for students, and have more lenient repayment options post-graduation
• Do not let your parents borrow from their retirement. It is the most expensive option there is - particularly when you take into account the foregone investment returns
• Limit your total student loans for the entirety of your education to less than your first year's salary. This will ensure you can afford to repay them without leaving yourself financially stressed post-graduation

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Many ask about the difference between grants and scholarships. Typically, grants are need-based and often awarded as part of your federal financial aid package, while scholarships tend to be merit-based and are awarded by the college or specific organizations you apply to for scholarships.

Student Loan Repayment Statistics

Not all debt is bad. It is more than okay to borrow to fund your college education - and the reality is that it's the only way many of us could ever have afforded to go to college. But, you have to be smart about it... and you can't borrow $10,000s (or $100,000s for many who go on to graduate or medical school) with no thought as to how you will repay the money.

The US Department of Education studied student loan borrowers beginning college in 1995-1996 and 2003-2004. They collected data on how much they borrowed and where they stood 12 years later, and for the earlier cohort, 20 years later as well. Here are some of the findings.

More students borrowed in 2003-2004 than 1995-1996 - at every level of family income. The biggest segment with increased borrowing? Students attending for-profit schools. What are these? These are private schools that operate with the aim of achieving a profit, as opposed to non-profit, private universities. They are typically willing to accept any student willing to pay, and historically have demonstrated the worst graduation rates and subsequently, the highest levels of student loan defaults.

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The overall higher levels of borrowing in the 2003-2004 cohort has resulted in longer repayment periods, as well as a 66% increase in default rate (also thanks to the Great Recession). Who is most likely to default?

Those who go to for-profit private schools and those who don't graduate.

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The Expected Future Return

Last but not least, you spend all this money to go to college to secure your future. Especially if you are taking on debt to fund your education, it is critical to weigh the cost and potential loan balances against your potential future return: your earnings potential!

It is irresponsible to go to college at any cost with no regard for your future earnings potential.

Meghan | Family Finance mom

It is irresponsible to go to college at any cost with no regard for what your choice of degree and future career path will earn you... and frankly, unless your parents can afford to pay for your college outright, you can't afford to make this mistake.

Not All Degrees Have Equal Earnings Potential...

Degrees have varied future earnings potential, with STEM and business degrees out earning other majors. This is true both upon immediate entry to the workforce...

... as well as further along into your career.

For a more detailed breakdown of earnings in each degree area, check out the complete study on The Economic Value of Majors from Georgetown here. For more career-specific earnings information, click the image below to see a summary of 2019 wages by occupation from the Bureau of Labor Statistics.

And Neither Do All Colleges

Just as all degress do not have the same earnings potential, neither do all colleges. It is critical to make sure your choice of college supports your intended degree and career path, at a cost you can afford and earnings that justify the cost.

Payscale puts out a College Salary Report that includes early career pay and mid-career pay for each school's graduates, as well as the percentage of graduates with STEM degrees, as that often drives a higher median wage. I then went to each school's website and looked up their current year's cost of attendance. Last, I looked at what earnings in 10-years generated relative to 4-years at the given cost of attendance.

Below are the top-earning colleges overall, and following it are the top-earning schools in my state.

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A few things that stand out...

• Military schools cover your entire cost of attendance, while also providing living stipends while in school, in exchange for service after you graduate - a built-in job upon graduation. They are also among the top earners long-term
• Public schools may have lower absolute earnings potential than some private ones, but they generate a higher return on investment given their lower initial cost

I would encourage every student to create a table like this for the schools they are looking at. Many schools will also disclose the earnings potential for various degree programs at the school, so use that data in your table. Adjust the cost column for what it will actually cost you once you receive your financial aid award.

Then choose the best fit for you - weighing the quality of degree programs you plan to pursue, the cost, and your future earnings potential. You don't have to pursue a future based solely on what earns the most money. You should absolutely follow your interests and passions - but you have to adjust your school choice and investment spend according to the future earnings it will generate.

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Select Questions From High School Seniors

Many high school seniors' questions on how to prepare for college financially are covered above. By viewing your college choice as the first major investment decision you make in life and treating it as such - comparing the costs, including how you fund it, with your future expected earnings potential - you will go a long way towards setting yourself up for long-term financial success.

Here are a few more pointed financial questions about college and additional resources to help guide you.

How can I save money in college?

There are lots of strategies to save money when it comes to getting your college education. The important thing is to choose the methods that best align with your personal goals for your education, financial means and future career aspirations. The chart below summarizes the methods used by families in the annual Sallie Mae Study. My best recommendations are:

• Start college with as many college credits as you can
  • AP / Dual Credit courses in high school
  • Community college credits - just make sure they transfer
• Complete your FAFSA every year, no matter your financial situation
• After your own sources, leverage funding sources in this order:
  • Free money: grants and scholarships
  • Cheap money: federal loans
  • Last resort: Private loans
  • Avoid your parents borrowing, especially from their retirement, if at all possible. This is YOUR education - not theirs
• Focus on your education and graduate on time
  • It may mean more sacrifices in the short-term, but it will ultimately cost you less and earn you more in the long-term, while also saving you on debt interest cost
  • Most schools charge tuition based on full-time enrollment - whether you take 12, 15, 18 or 21 credit hours a semester. Load up.
  • A part-time job may help with spending money (a few $1,000s a year), but it will not offset the cost of an extra year or two of college ($10,000s annually)
  • Know your plan for your major and career before you start - or wait to start until you do

What are the best scholarships to apply to?

This is a great resource for scholarships, both how to find them, as well as guiding you through how to apply for them as well. There are workbook-like pages throughout to help you brainstorm, gather and leverage existing materials, as well as where to go to find scholarships.

There are so many sources for scholarships, from your local community and high school, to the specific college you choose, to organizations that support your fiend of study or even hobbies. This book will guide you through how to find ones that are a fit for you, and leverage material you already have created - like school essays - to apply to as many as are a fit.

How much money can I expect from FAFSA?

Everyone should complete a Free Application for Federal Student Aid (FAFSA) every single year. There is literally no viable excuse for not completing it - no matter your family's income. And even if you don't qualify for your first year, you should still complete it every year, especially if your family's financial circumstances change or if you have siblings who also start college.

To complete the FAFSA, you will need the following for yourself as well as your parents if you are their dependent:

• Your Social Security Number or Alien Registration Number (if you are not a U.S. citizen)
• Your federal income tax returns, W-2s, and other records of money earned
• Bank statements and records of investments (if applicable)

It is not only used to determine your eligibility for federal student aid, but it is also used by most schools to determine their allocation of scholarships as well. This is also why you should never rule out private schools simply on the face of their headline costs. They typically grant larger scholarship awards than public schools, based on your FAFSA. My personal experience? It cost me less out of pocket to go to Notre Dame than it would have to go to the University of Texas because of the scholarship package I got from ND.

The most recent data available I could find on the specifics around awards is over a decade old. When you receive your financial aid award letter from each school, it will be a combination of both Federal awards, as well as school-specific ones, and will also include a mixture of "free money", like grants, as well as both Federal and private loans, and work-study programs. It is still up to you what loans you choose to take out, and you have to work the recommended hours to earn the work-study amount. Note: it is not all pure aid, free and clear.

Based on this data, financial aid awards overall do not vary substantially based on your family's income, though the composition - what is given as grants vs. loans - may vary more.

What are the pros and cons of taking out student loans?

The single biggest pro of taking out student loans is it allows you to start your education before you have the money to pay for it. It can be a great equalizer of opportunity - making college attainable for students who could never have afforded it otherwise. It certainly was for me. I never would have been able to go to Notre Dame, and never would have worked on Wall Street without my degree and the network I had from there.

The biggest con of student loan debt is the same issue with all forms of leverage. Leverage magnifies outcomes - both good and bad. If you don't finish your degree and never generate the earnings potential that comes with it, you will struggle financially under the burden of your student loans.

A good rule of thumb? Borrow less than your first year's expected salary.

- Meghan | Family finance mom

Similarly, if you spend too much on your education, and borrow more than your earnings potential can ever afford, you will also struggle. This is why it is so important to evaluate your college choice carefully, alongside your career aspirations, earnings potential, and how you will pay for it. A good rule of thumb? Borrow less than your first year's expected salary.

What is the best strategy to pay off student loans?

First, do not borrow more than you can conceivably ever pay off. Follow the rule of thumb above - do not borrow more in total than your first year's expected salary.

Next, after you graduate, consider consolidating your student loans, especially if interest rates have moved in your favor. You may be able to get a better rate and remove your co-signer, especially on your private loans, now that you have an income too. It can make it far easier to make 1-2 payments each month vs. dozens, while also saving you a lot of money, especially if you are looking at years of repayment.

I also recommend following a debt avalanche method for debt paydown. List all your debts, ranked by interest rate. Pay the minimum on all of them, and apply any extra funds to the highest cost debt first. This typically means paying credit cards off first, followed by private loans, then federal ones.

Finally, continue to live after college as you did in college. Have a roommate. Keep that second-hand furniture. Keep your living expenses low, so you can aggressively pay off your student loans. I turned down job offers in NYC because I knew I couldn't afford to live there and even make the minimum payments on my student loans. I took a job making the same amount of money and lived in Chicago instead - my rent was half of what it would have been in NYC, which allowed me to pay off my student loans less than 5 years after I graduated.

A regular, full-time paycheck for the first time in your life can make you feel wealthy. But remember, you borrowed from your future income - and now you have to repay it. Don't supersize your lifestyle until you do. It is far easier to live on less right out of college when it is just you and what you've already been doing, than it is once you are married with a family.

If I don't know what I want to major in, what can I do so I'm not wasting my money?

Wait to spend $10,000s until you figure it out. College is too expensive today to go and think you will figure it out once you get there.

Don't pursue an education degree for 3 years, only to find out during your 4th year while student teaching that you hate teaching. Work in high school with children - babysit, be a camp counselor, volunteer, or work part-time at a daycare center or afterschool program.

Don't pursue a nursing or medical degree if you've never set foot in a care facility, or you can't stomach the sight of blood. Don't just get a liberal arts degree, and then plan to spend even more going to grad school or law school, until you "figure it out." All of these are true stories of paths taken by people I know - all very expensive mistakes.

If you think you want to be a lawyer, get a part-time job in a lawyer's office or courthouse. Learn about the different legal fields and areas of practice. If anyone wants to learn more about what you can do with a finance degree, I'm happy to field your questions and share my experiences with anyone.

Whatever you are interested in, reach out to your parents, your parents' friends, your friends' parents, your school guidance counselor, your high school teachers and coaches, your local department of commerce to find mentors - be they official or unofficial - to give you insights into career options. Visit your local library and read books about successful people in the field you plan to pursue: what path did they follow and how did they succeed. Focus on your strengths, your interests, what you are passionate about, and let that guide you.

When high school ends, your education becomes self-directed, whether you go to college or not. You are now in the drivers' seat. You choose what you want to study, what books you want to read, what courses you want to take, what step you want to take next. Never stop learning simply because school ends.

What do you think of gap years?

In other countries, gap years are far more common and even a tradition vs. here in America. I think gap years can be extremely valuable if properly used. You should use a gap year to further your personal education and development - whether that means traveling and/or working in your intended field of study.

You should consider applying to colleges your senior year as you would if you were going the next year and deferring enrollment. Know that some schools may require you to disclose what you plan to do during your gap year. Be sure you don't lose track of time, and stay on top of any enrollment and aid requirements while you are deferred.

What are your thoughts on students going into the armed forces to pay for college?

The Armed Forces and the educational grants, credits, and support they provide are another incredible opportunity equalizer in America. There are several different ways you can pursue these benefits.

Attend a Military Academy

You can attend a military academy directly. There are 5 US military academies - the US Military Academy (West Point), the US Coast Guard Academy, the US Naval Academy, the US Air Force Academy, and the US Merchant Marine Academy - where tuition, room, and board are all free, and not only is cost of attendance free, they also provide living stipends during enrollment. In exchange, you commit to a service obligation post graduation, which start at a minimum of five years. And as evidence by the data tables above, a few of these academies result in some of the highest-earning careers out there.

ROTC Programs

Reserve Officer Training Corps (ROTC) programs exist at more than 1,700 colleges and universities around the country. They prepare young adults to serve as officers in the US Military after graduation. They pay for your education, and like the military academies, often also provide a living stipend, in exchange for a post-college service commitment.

The ROTC program was huge at Notre Dame, and I had several friends, men and women both, who participated in it and continue to serve as military officers today, while others served out their service commitment and then left to work in consulting, for the defense industry or become entrepreneurs.

Both the Military Academies and ROTC programs pay for your education entirely in exchange for required military service after. As a college graduate, you enter service as a commissioned officer, and you are paid for your service. The GI Bill works in reverse - you earn benefits you can use towards education the longer you serve active duty.

GI Bill

The Post-9/11 GI Bill is another option to help you pay for your education. GI Bill benefits can cover up to 100% of tuition and fees, provide a housing allowance, money for books and supplies, and even be transferred to family members, spouse or children. Benefit payments are tiered based on the active-duty time served since 9/11. Full benefits are available if you serve for at least 36 months.

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"I Wish I Had Prepared for College Financially..." Lessons Learned from Family Finance Moms

When I first started working on this, I reached out to my followers to get their stories... because often data without context is less meaningful.

More than 100 responses and the summary data is consistent with all I have already shared: the higher your educational attainment, the more you can earn... but earnings vary significantly by degree, and many regret their choices due to the cost and remaining loan burdens.

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Here are some of their stories, advice, what they wish they knew before they started, and how they prepared for college financially... Note how different every path can be, and what people consider as major mistakes.

Masters, Accounting Major:
My first year and a half of college was at a state university. I lived on campus my freshman year and took out student loans. The weight of the loans was already on my mind, so I moved back in with my parents, switched to a community college to finish as many of my undergrad credits as possible and also continued to work part-time. I was able to pay off my student loans and finish my undergrad without debt. I found a paid internship in my field near the end of undergrad. It paid very well and allowed me to continue on to grad school and pay with cash (after scholarships). I applied for every scholarship possible and had a large portion of tuition paid for that way.

My parents were hugely supportive by allowing me to live at home and pay for my groceries, but they never contributed a single dollar toward tuition, fees, books, or other living expenses like clothes, car, gas, medical bills, etc. I wish I had known before college that you can get nearly half of the required credits for a bachelor’s degree at a community college and then transfer (this is such a HUGE money saver).

I had to work really hard but was able to complete both undergrad and grad school in 5.5 years with zero debt (and that included one summer spent backpacking Europe between undergrad and graduate school). I have never once regretted missing the “college experience” and as I grow older and continue to see my peers post about the burden of student loans, I become even more thankful that I am not a slave to that debt.

I share this story, however, with the recognition that I came from a place of privilege with stable parents who allowed me to live at home - that was a major contribution!! Even without that support though, I wish the dominant message wasn’t that you have to leave college saddled with debt that will take years to pay off. Even if scholarships and family support aren’t an option for a young person, there are so many ways to live frugally and choose to work instead of socializing to significantly lessen the amount of debt needed.

Masters, Private College, English/French Major:
I wish I had worked harder to apply for scholarships from private sources. Even $100 here or there would have meant significant savings when you factor in interest rates over the life of the loan.

A degree in English can be worth more than your parents might think. The shortage of young professionals who know how to write is staggering. Communication is foundational for many careers in business management, marketing, law, etc.

I wish I had accepted early on that my parents couldn’t be counted on to file their taxes on-time and proceeded accordingly with financial aid. I often ended up applying very late because of this, and it hurt my access to grants and low-interest loans.

I don’t regret going to a private school, even though I find their tuition practices unethical. My small, Catholic liberal arts education made me the person I am today, healed wounds I didn’t know I had and opened doors I could not have foreseen. Choosing a college is about choosing the kind of person you want to become just as much as it is about developing skills for the workforce. That said, I also have a strong support system that has helped me in moments of financial difficulty (for example, I lived with my grandmother rent-free during grad school).

Debt is risk so think carefully about how much you are willing to take on.

Masters in Library and Information Science:
I wish I would have attended a two-year school for basic classes (math, English, etc) and then transferred to a college. I wish I would have actually understood what I was signing and that I could have started to pay the interest right away. I wish I would have known difference between types of loans. I wish I would have lived at home longer so money could have went to school instead of rent/living expenses. I wish I didn't borrow more than I needed (advice from my mother to just take the money... sigh....).

Here I am 40 years old and STILL paying on this loan. I paid low payments that didn't even cover the interest, consolidated, refi all which probably were mistakes and added more cost. It makes me sick that I am paying $700+ a month for a student loan. I think of all the things I could have done with the money. I haven't even been able to save for retirement as I cant afford to. I can't save for my son's college fund; I didn't have a down payment for a house, and in the end I really wish I wouldn't have gone to college in the first place. I am proud that I was the first person in my family to attend a 4 year college, but the price was so high.

Bachelors, Public College, International Studies:
I went back to school to get a bachelor's in Nursing (which I included in my total college and loan cost). My original degree would’ve gotten me nowhere. Any job related to an international studies degree required a decade of experience. If possible, I’d recommend getting a degree that has an actual career path not just a degree for the sake of having a degree.

My parents are divorced and were required to pay what I couldn’t get in loans. I have a good job so I can theoretically pay it off quickly. My husband, on the other hand, has a bachelor's in history and secondary education, $80k in debt, and has worked at a bank with poor career advancement for over a decade. He graduated in ‘09 when teachers weren’t being hired as a result of the recession. He wishes he went to community college to get the basic courses out of the way and had stayed in-state for all 4 years instead of transferring in. He would’ve saved thousands upon thousands of dollars. We’re moving in with my mom to pay off our debt in the next 18 months (we’re 30 and 32 and bought a lemon house), so we can finally get out of the negative.

Bachelor's, Private College, Applied Mathmatics:
All my debt was from attending Notre Dame. It was 100% worth it because I got an amazing education, but also the greatest college experience which you can’t always put a price on. My parents were a huge financial help, and I also received several scholarships and worked on campus.

My husband has a certificate from a community college and had no student debt. I’m able to stay home with our 2 girls because he’s been able to be successful professionally and moved up within his field. I would definitely make the same college choice, but I think it’s important for high school students to realize there are multiple career paths and college isn’t always necessary or worth it if it’s going to end in a large amount of debt. If ND would have cost me $100,000 in debt, I’m not sure it would have been worth it for me. We were lucky enough to to be able to knock out all my debt within my first year out of college. If we hadn’t been able to, life would definitely be a lot more stressful, and we wouldn’t have the same choices we do.

Bachelors, Public College, Child Development:
Sometimes a four-year plan is not the best course. My parents took out the loan for my freshman year. It was out of state tuition, and they were still paying it after I graduated. The first year was so expensive, and I had to come home and work my way through the rest of college.

I paid for 1-2 classes at a time for the next three years. Then I got a job with a company that paid $5,000 a semester toward college. With that, my budget and a small loan, I finished the rest in three semesters. I was able to graduate with very little debt because I:
1. Paid as I went.
2. My parents covered a lot of my living costs until I got married.
3. I qualified for Pell Grant.
4. My husband was very financially conscious and helped me pay off debt while I was in school, which included selling his motorcycle so that it was all paid off 1 month after graduation.

Bachelor's, Public College, Anthropology:
I wish I had really taken time before college to figure out what I wanted to do instead of just going with a major I thought I liked (I did and excelled in it, but didn’t really think about WHAT to do with it after). I did learn some great skills but it’s such an obscure major that I will likely go back to grad school.

Saving money tips - went to a public, state school, lived at home the first year and had roommates the last 3 years. I purchased books used, worked 2 jobs (student worker and a babysitting job). I also borrowed books from the library, instead of buying new for some classes. Go to the financial aid office of your school/college and make an appointment with the people there - they are very helpful and each year they helped me fill out forms and helped me with grants/aids, timelines and such.

Masters, Finance, then Nursing:
I went to 2 big name, “elite” schools and paid out the wazoo for both degrees. I work with people who went to state schools, or community colleges and then transferred to 4-year programs. Same job, probably similar salary, and their education cost less than 1/4 the cost of mine. It does NOT matter all that much *where* you go to school. Focus on getting a great education and new experiences, and the type of environment and opportunities you want - not on the big name.

Also, look at the full amortization schedule of any potential loans. Look at what monthly payments will be to pay them off within X years, and project your salary and expenses to see what payment is reasonable. I was very aggressive and paid off $78K in just over 2 years. It was the most liberating feeling making that final payment!

Masters, Business:
You assume that with a decent job you’ll be able to pay off loans but no one ever talks about how much the cost of living will be, on top of that, and whether it’s reasonable with the salary. Also, I wish someone had told me how long it would take to pay off loans & what my other life goals might be during that time (house, family, etc). Finally, I wish someone had talked to me about the hours and workdays that would be expected, and how it would vary by profession, plus also how different careers would be more versatile & valued than others (e.g., mgmt consulting seems to be highly regarded but typically requires long hours and lots of travel. If you work in IT you may need to frequently work after hours or weekends for system upgrades. Etc)

Bachelor's, Public College, International Studies:
I went to a public school that offered a generous scholarship because that was all my family could afford, and my parents were still paying off their student loans. While I was in college, I felt upset that I didn't have the private school experience some friends had. But then we graduated and I had so much more freedom because I had a reasonable amount of debt: I was able to move to France for 2 years for a low paid teaching job.

And I realized that I learned a lot at the public school, like needing to navigate systems and advocate for myself, which served me well. Did I have a beautiful bathroom in my dorm or delicious meals in the dining hall? No. But I'm so glad that I made the choice I did.

Masters, Private College, History:
Make sure you know exactly what you want to do before you go to college. Spending years changing your degree is so costly. I was more concerned about continuing to play my sport than really thinking about what I wanted to do. Also, if you can get a degree somewhere other than a university, great! There used to be such a stigma with tech schools, trade schools, etc. I pay over $800 per month for my loans, and don't use my degree. Even if you have to take a year or two off to figure yourself out...do it!

Doctorate, Private College, Biology:
I am from what felt like “the middle of nowhere” and as one of the top students in my high school class I was determined to go to the “best” college I could get into to prove to myself that I could. That private college education was an expensive path even with the scholarships I was awarded. If I could go back, I would look more closely at state school programs and see if they would have been a good fit for my interests.

Masters, Public College, Speech Pathology:
Financial aid and scholarships applications take work, lots of effort, and are time-consuming. Working at your job/career to pay off loans is work, lots of effort, and is time-consuming. Front-load your work, apply for all the scholarships even if it seems like the $1000 isn’t worth the time/effort. The $1000 you take from financial aid will be $1200 (estimation) you have to earn to pay off later. Save yourself the post-graduation stress, and do the work upfront.

Masters, Private College, Engineering:
You’re responsible for the decisions you make at 18. That doesn’t mean you have to have everything figured out, but make sure you consider how your decisions will impact your life in 5, 10, 20 years. That includes financial health, mental health, etc.
Don’t spend 6 years and $250k to find yourself. The financial burden will destroy the happiness you think you’ll find for years.

The advice and stories like these go on and on... Thank you so much to all the members of the Family Finance Mom community who shared so openly and honestly, so that the next generation of college students will be more prepared for college financially than we were.

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As you weigh your college decision, I hope you consider the financial implications of your decision as heavily as any others. If you find this guide helpful, please share it with others. Leave a comment to share what helped you the most, or other resources you think your fellow college students or soon to be college parents will find helpful too! For more financial insights every day, be sure to follow me at FamilyFinanceMom on Instagram!

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