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The cost of college is exorbitant and deserves reform. But until colleges are pressured to lower their costs, there are ways to help you cope financially within the system. We have long advocated 529 plans as a sound college savings strategy and have discussed other strategies.��

The fact is, even with a 529 plan, the cost of college can be daunting. But we‘ve got five rules to follow that can help make sending your child to college more affordable while keeping you on track with your own financial goals.��

Rule #1: Tie cost to benefits

You want any investment to yield an attractive return. That means the cost of your child’s college degree should not leave your child with crippling debt and drain your savings. You and your child also should consider whether they will earn a salary early in their career that justifies the cost of their undergraduate degree. Of course, an “investment return” in this context can be more than monetary. For example, the fulfillment your child receives from working at a nonprofit could help justify the cost of college.��  

Salary vs. Tuition

The median annual salary for recent college graduates is around $60,000, though the median range is broadly between $41,000 and $77,000, with computer sciences majors not surprisingly earning in the upper end. Regardless of their major, perhaps your college grad will seek independence and use their entry-level salary to pay rent, transportation, food, clothing, etc. Will they also have to make student loan payments?  

Let’s see what that debt looks like. Bachelor’s degree recipients who borrow to attend public or private college had average student loan debt of $29,400, based on a recent study from The College Board. Before you think that figure appears on the low end, remember that’s the average.��

Student debt may be higher for those who attended the number of private universities with annual costs that run north of $90,000 (that’s before aid but includes basics like room and board and other fees). The cost of a public university in state can be less than half the cost of a private one, making a public, in-state option appear to be a more attractive investment.

College: Is it worth it?

Let’s go a step further: Is it even worth getting a B.A.? The data says “yes.” 

The Bureau of Labor Statistics states that those who are 25 and older and who have a bachelor’s degree are earning more than 65% more on a weekly basis versus those with just a high school degree. Similarly, the National Center for Education Statistics found that those who are 25 to 34 years old with a college degree are earning almost 60% more than those with just a high school degree.��

There is more data along the same lines, but you get the picture: Having a bachelor’s degree gives you a salary edge versus not having one. But does a B.A. from a private college give you a salary edge over one from a public institution? There is evidence that graduates of elite, private universities end up earning more, on average, than those who didn’t graduate from them. However, it’s debatable that where they went to school was the deciding factor. Hard work, skill and networking in one’s industry are other critical factors, to name a few.��

Warren Buffett, Google founder Larry Page, Dell Computer founder Michael Dell and BlackRock founder Larry Fink are among many of today’s titans of industry who attended state universities.��

Ultimately, there are ways for your child to get a solid college education that positions them to start accumulating wealth soon after getting their degree while also leaving you to accumulate yours.��

Rule #2: Ask if your child is planning to go to graduate school

When your high school senior is already considering graduate school, it becomes another reason to keep down undergraduate costs. Your child may end up choosing a private or out-of-state public school and feel freer to spring for a pricey graduate school. This could result in both of you spending six figures on higher education and amassing big debt. Instead, tell your child how much of their college and graduate education you will pay for, leaving your child to seek ways to get the best value for every dollar spent on their education.��

Rule #3: Include your child in the decision-making process

For some, going to college is the start of becoming an adult. Think of ways your child can take responsibility for the plan to pay for their degree. The ways each of you participate in the plan and how much may depend on your financial situation, your child and other factors. The alternative may be that your child tells you which colleges they’re interested in attending, leaving you to figure out the rest.

Determine the amount you can afford to spend. If you’re concerned about revealing too much about your finances, remember that your child will learn about them if they need to fill out financial aid forms. Conduct due diligence with them by breaking down and comparing the costs of the colleges they want to attend. Be open about the need to manage costs, including whatever new expenses they will need to shoulder. This may lead them to suggest a college that will cost less. If it doesn’t, educate them about the serious downsides of graduating with heavy debt.

Rule #4: Alternative ways of attending college

Who says your child must live at college or attend the same college for the full four years?  There are other ways of experiencing college and getting an undergraduate degree.

• Living at home. About 30% of the total cost of attending a private university or public university out of state is room and board. A lot of money can be saved by living at home (of course, it can crimp your overall college experience).
• Community colleges. A two-year community college can be the way to go for your child in their first two years. They can always transfer to a four-year institution if they have the ambition and financial means to do so. You both may save a lot of money in the process and a bachelor’s degree from a school they transferred to is worth just as much as one from a school they attended all four years.
• Accelerated programs. Some schools offer the ability to get a degree in three years versus four years. If this fits your child’s goals and drive, it could make an undergraduate degree 25% cheaper and enable them to be fully employed a year earlier.
• Employer assistance. Plenty of us have earned a degree while also working. Some employers have college tuition reimbursement programs.
• Military service. This may be the ultimate employer assistance program if your child is so inclined.

Rule #5: If you have other children, keep them in mind

If you have more than one child and this is your first child going to college, it’s easy to get caught up in the excitement and forget that costs may soon rise exponentially depending on the college plans of your other children.

We hope you find these rules helpful. Remember, refusing to be held hostage by college costs doesn’t mean you’re a bad parent. On the contrary, in the long run, you’re setting your children up for success.