Important Questions to Ask When Choosing a College

It's Important to Consider Financial Matters Before Making this Big Decision

college grad

If you’ve got a teen thinking about college, chances are they’re more focused on details like dorm room size and meal plan options than the cost of tuition and fees. Of course, you want your kids to choose a college experience that they’re excited about, but it’s important to remember the financial impact, too. If you’ll be helping with college costs, you certainly have a stake in the discussion. If your child will be relying on student loans, start a conversation about the realities of debt so that they truly understand how much college costs could affect them many years after graduation. While cost certainly isn’t the only factor to consider when choosing a college, it’s not one that can be ignored either.

As the college search begins, here are three financial questions worth asking:

Question #1: Will attending a more expensive school translate to a higher salary after graduation?

The prestige of going to a well-known school is important to many people, but a fancy name will always come with a bigger price tag. Sometimes, the pedigree is worth it, other times it’s not. Much of it has to do with the field of study. For example, teachers will end up earning roughly the same salary regardless of where they achieved their degree. On the other hand, someone with dreams of working on Wall Street may find that an Ivy League school with a powerhouse alumni network truly does translate to a higher salary right out of school. You can research pay comparisons through a few resources: PayScale’s 2019-20 College Salary Report and the U.S. Department of Education’s College Scorecard.


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Question #2: What will a monthly student loan payment look like post-graduation?

Student loans are a fact of life for many college students, but that’s not necessarily a bad thing. Loans can lead to a valuable education that will increase lifetime earnings. The concern here is that so many students think of repaying their loans as something to worry about in the future, and they don’t take the time beforehand to examine what those payments will look like. Make sure to do some number-crunching before taking out student loans so that your student will understand the reality of what they’ll be paying each month after graduation.

To that end, FinAid offers a useful loan calculator to help you estimate monthly payments. You simply plug in loan balance and interest rate to see the reality of how much a student loan might impact life after graduation. For example, using this loan calculator, you’ll see that a $50,000 loan with a 6 percent interest rate and a 10-year term equals a $555.10 monthly payment. If you’re considering both public and private student loans, CollegeBoard provides a student loan comparison calculator that can help you make this decision, too.

Once you see how all the numbers add up, you’ll be able to determine whether repayment seems manageable, or whether you should be investigating a more cost-effective college option. Sometimes, more costly schools simply aren’t worth the financial burden they’ll bring for many years after graduation.


SEE ALSO: You Don’t Need to Write a Book to Teach Your Child About Finances


Question #3: Can you afford the cost of living?

It’s one thing to quantify known costs like tuition, room and board, and books, but what about those less-predictable costs? Participating in campus life can cost money – think Greek organizations – and smaller expenses like last-night pizza runs during a study session can add up, too. You’ll also need to take into account things like plane tickets or tanks of gas needed to make visits home. A college’s location should be considered, as well – living in a city will cost considerably more than in a suburban area or in a small town.

Your student will need more than student loans to cover living expenses, so you should have a plan in place. Will you chip in with a monthly “allowance” or will your child work a campus job during the school year? Some students save money working all summer so they can focus on their studies during the semester, while still having money to pay for incidentals. There are lots of ways to make it work, but it’s important to plan ahead for budgeting your student can realistically stick to.

Making the Big Decision

Choosing a college is an exciting decision and one that many parents and children end up making together. If you or your student have concerns about the financial impact of one or more schools on your list, you’ll have to broach the topic of compromise. Sometimes it’s necessary to forego attending a “dream” school in favor of one that is closer to home and offers a more favorable financial aid package. Or, it may be financially savvy to take required courses at a community college before transferring to that dream school for coursework in a student’s intended field of study. Both of these options have the benefit of helping to keep college costs more manageable.

In the end, choosing a college is about more than money – often, it comes down to intuition about the place that just feels right – but it’s crucial to ask financial questions, nonetheless. Doing so will allow both you and your student to feel confident that their college experience will set them up for both financial and career success.

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