
The average student takes on approximately $16,498 in debt over the course of their degree. This equates to approximately 30% of their overall cost. It seems that the highest levels of borrowing are among students whose parents are in the second-to-highest income quintile (an income of $66,705-$108,872). This shows that much of the levels of borrowing are coming from school choice rather than necessity; those who come from a higher income bracket have options other than debt for paying for college (New America).
It is no surprise that paying for college is a huge issue to consider. But, how do you know what colleges are affordable for you? The Lumina Foundation published an affordability benchmark in 2015, this benchmark is called “the Rule of 10.” The Rule of 10 says that students and families should not pay more for college than the total of 10% of their discretionary income for 10 years and the amount of earnings the student can make working 10 hours a week while enrolled in school. This Rule of 10 looks at the cash the student and family have on hand and does NOT rely on borrowing money for school. This may not be the ideal way to determine the affordability of school but it can serve as an instrument to guide you. This particular method can also address issues of equity in access to higher education; this topic will need to be examined in more detail (New America), but it has been found that approximately two-thirds of all students in the low-income bracket pay more than the recommended benchmark and just over half of the upper-income students do so (New America).

The Rule of 10 is a starting point to determine the affordability of college but remember it is a price-based benchmark, when examining the affordability of college you need to also take into account the value-based notion of affordability. You need to ask yourself if the long-term financial gains from consistent employment and higher earnings after graduation are worth the money you pay for your education. A college degree that does not lead to a future job or opportunity is not affordable, no matter the cost (New America).
In order to navigate this maze and decide what is affordable for you, reach out to see how I can be of assistance (info@atozeducationalconsulting.com) or 612-735-1261. I firmly believe that the price of education should not get in the way of you pursuing your dream and I love to help find solutions to the financial puzzle.
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