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BUSINESS Tuesday 5 March 2019
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3 reasons to choose a college based on price

By ANNA HELHOSKI look Handbook . It includes
Associated Press job descriptions, schooling
Many prospective students required and potential job
choose a college for its growth. Sites like PayScale,
location, its reputation or Salary.com and Glassdoor
even its campus vibe. Here also have information on
are three reasons to choose salary potential.
a college based on price. Using that salary informa-
YOU CAN AVOID HIGH STU- tion, aim to keep your pay-
DENT DEBT ments under 10 percent of
If you pick an affordable projected after-tax month-
college, you’re less likely ly income in your first year
to be burdened with high out of school.
debt. Borrowing less now Say you think you’ll earn
will leave you with more $45,000 in your first year out
money for other things you of college and you have
might want to do eventu- only federal loans with the
ally, like buy a home, take standard 10-year repay-
the vacation of a lifetime ment term and 5.05 per-
or start a family. It also frees cent interest rate. Limiting
up money for you to make payments to 10 percent
smart financial decisions of your income means a
like build an emergency In this May 10, 2018, file photo, students walk past Sather Gate on the University of California at monthly payment of about
fund or save for retirement. Berkeley campus in Berkeley, Calif. $250, which would allow
The sticker price of a school Associated Press you to borrow no more than
will show you tuition, fees, aid and scholarships to at- choosing a less expen- debt. It also leaves your $23,600. A student loan af-
room and board. But the tend a private school with sive school can help them parents’ savings intact. fordability calculator can
net price is the best indica- a sticker price of $50,000. It avoid tapping their savings, YOU’LL GET A BETTER RETURN show more estimates.
tor of affordability - it’s how would be more affordable home equity or retirement. ON YOUR INVESTMENT Remember to factor in total
much you’ll pay after fac- than a $20,000-per-year Along with using income The lower your college costs for at least four years
toring in free financial aid. public college that offers and savings for college costs, the better the of school, too. At Making
“In California, if you were you nothing. costs, parents might take chance you’ll get a satis- Waves College and Alumni
looking only at sticker price, Before you apply, use the on private loans or federal fying return on your invest- Program, a nonprofit pro-
I would say, ‘Go to a com- net price calculator avail- PLUS loans. Parent PLUS ment. That means earning gram geared toward low-
munity college,’” says Jes- able on a prospective col- borrowers take an average enough after graduating income high school gradu-
sica Thompson, director of lege’s site. $16,100 per year, accord- to justify the expense of at- ates in the San Francisco
policy and planning at the Then when you get your ing to The Brookings Insti- tending school. Bay Area, Director of Finan-
Institute for College Access college acceptances, tution, a nonprofit public It has key details including cial Services Ivette Chavez
and Success. But because compare financial aid policy organization. average net price, gradua- says she talks to students
of how the state grant award letters to see how PLUS loans have higher in- tion rates and typical sala- about the impact of taking
aid system works, the net much free financial aid you terest rates and fewer re- ries after attending. It also out loans year after year.
price for attending a four- qualify for, such as grants, payment plans available shows you popular majors, “We break it down to them:
year University of California scholarships and work- compared to federal direct which you can use as a If it’s $5,000 this year, but
school is often less, Thomp- study, along with federal loans, which undergradu- starting point to learn more your financial profile stays
son says. loans. ates take. about possible careers. the same, it will translate to
In general, public colleges YOU’LL GIVE YOUR PARENTS That means it’s cheaper for Next, research potential this much after four years,”
and universities are cheap- A BREAK you to borrow than your careers and earnings us- Chavez says. “Do you really
er than private ones. But If your parents plan to help parents, and you’ll have ing the U.S. Department of want to start life after col-
say you get $35,000 in grant you with college costs, more time to repay the Labor’s Occupational Out- lege in a deficit?”q