It’s no secret that college is extremely expensive, forcing many students to take out student loans at an early age. However, is bearing the burden of student loans just a part of life, or has college gotten too expensive? What is the price cap that makes one realize that college is too much?

Americans admit that college is too expensive. Approximately 38% of undergraduates are forced to fall into debt, struggling to repay their loans years later. This causes major life events, such as buying a house or starting a family, to be delayed.

College prices are only going up; in the last 40 years, prices have increased by 170%. In response, federal and state governments have raised the value of financial aid they provide to public colleges. However, even with financial aid, the net tuition has still gone up. It has gotten to the point where America’s higher education system spends more per student than any other well-developed country. 

One reason college prices are escalating is that colleges themselves are spending more money than ever on expenses such as instruction, administration, athletic programs, student healthcare, food services, housing, etc. In fact, college spending is rising faster than tuition rates. Between 2009-2010 and 2020-2021, public institutions’ spending increased by 49%, while private institutions’ increased by 54%. In between those same years, public tuition fees rose by around 27% and private tuition fees rose by around 16%.

With all these increases in spending, one would think funding for colleges would be on the rise. However, funding has declined over the past few decades. A report by the National Education Association concluded that, in 2020, 32 states spent less on public colleges than they did in 2008. 

One-third of developed countries offer free higher education, while another third caps tuition at a low price. However, college prices in the U.S. are not regulated. There is no limit on what the tuition price can and should be, allowing colleges and universities to easily raise their rates.

So, when is the degree not worth it? An average college student pays about $30,000 out of pocket for four years of college. A typical graduate sees a return on investment (ROI) of about 12.5%. However, living on campus raises the price of tuition, which lowers the ROI to 11%. This mere 1.5% could lead to a loss of thousands of dollars. Even among graduates, 25% actually see little ROI. 

Another aspect of college to take into consideration is how long the degree takes to obtain. A typical bachelor’s degree takes four years to complete, but with varying circumstances, those four years can be extended, creating financial burdens. Students will have to pay for additional tuition and higher opportunity costs because they decided to start their career later, missing out on years of working experience. Graduating in five years raises the cost to about $272,000, while six years costs about $364,000. 

One must also consider if college is the right choice for their intended major. One can do this by reviewing how much they would make after college.  A computer engineering major would have a median wage of  $122,000 mid-career, compared to the $55,000 that an education major would make. The fields of study with the highest returns tend to be engineering, business, and health sciences. The lowest returns tend to be in fine arts, liberal arts, leisure, hospitality, and education, which ranks last. 

The total national student loan debt is a staggering $1.75 billion. That is no small chunk of change. What one can consider when taking out a student loan is borrowing less than their expected salary and paying less than 10% of their gross income. It is also critical to consider the difference between federal and private student loans. 

To figure out eligibility for federal student loans, students must fill out the Free Application for Federal Student Aid (FAFSA). If one requires money for school, filing through federal loans is the first stop. They offer lower interest rates and flexible repayment options. If one qualifies for FAFSA, the loans will be incorporated into their financial aid package. 

On the other hand, private student loans come from banks or other credit-based organizations. This means that the lender checks the applicant’s credit. Private student loans also tend to have stricter repayment terms, do not automatically offer payment deferment, and are typically not eligible for income-driven repayment (IDR) 

Student loans can impact a student for years after they graduate. If one doesn’t pay their debt on time, they are charged a late fee, causing them to have to pay more. These late payments will negatively affect one’s credit score, which is important because a good credit score makes getting a credit card, car loan, or mortgage much easier. 

Defaulting, which means failing to make the required payments, can damage credits scores even further. Defaulting on a loan can even lead to wage garnishment, where one’s employer is legally required to withhold a portion of an employee’s paycheck to cover the loan payment. 

With the trouble of student loans hanging over many young Americans’ heads, they live unsurprisingly stressful lives. With less money, many won’t get the chance to spend nights out, go on extravagant vacations, or even start a family. For high school students, in particular, the thought of preparing to combat student loan debt before even starting college can feel overwhelming.

There are many things one can do to prepare for the expenses of college, such as opening a 529 college savings account. This is a tax-advantaged account that allows adults to save for college for themselves, their children, or their grandchildren. As time goes on, the money grows and can be withdrawn tax-free if used for educational purposes. 

Facing an expensive future, college-bound seniors should apply for as many scholarships as they can. From academic scholarships to religious ones to the less competitive local ones, over 350 are listed on Naviance at present. 

Also, a public or community college can present significant cost savings to students. These colleges might not be as renowned as highly selective universities, but students can receive a quality education and experience for a fraction of the price. The College Board reported for the 2023-2024 school year that the average cost of tuition for a public in-state college was $11,260 for one academic year, while a private college averaged $41,540 for one year. 

All in all, no set price makes a college too expensive. However, there are ways to combat the high prices of a college education, and the time to start is now. If you find smart ways now to afford college, mid-twenties you will be thanking high school you.