Keep College Debt Manageable

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According to The College Board, the 2011-12 tuition and fees for California public four-year institutions rose 21%, the highest in the nation.*

While college graduates continue to out-earn those with only a high school diploma, the estimated $31,200 annual bill at University of California campuses ($22,577 at California State University schools) for in-state residents** has led more and more families to ask – is college worth the cost?

The answer is often still yes. Statistics show that the benefits of higher education remain significant – lower unemployment rates, better chance of having health insurance and job satisfaction, and higher lifetime earnings (nearly $20,000 per year higher according to the U.S. Census Bureau). But students and their parents must use caution when taking on college debt.

  • Calculate how much a degree will cost based on current costs, inflation and your child’s age. Compare that to how much a school’s graduates can expect to earn ( keeps a list of “colleges worth your investment”) and the amount of debt the average student graduates with (’s list of “best college values” can help).
  • Keep in mind that a field of study with typically low earnings and limited job prospects may warrant a smaller investment.
  • Look for aid. The federal government awarded $132 billion in grants, work-study funds and low-interest loans in the 2010-2011 school year, and the average student received $12,400 to help pay for college.*** Complete the Free Application for Federal Student Aid (FAFSA) and ask school counselors and financial aid staff for help to ensure you take full advantage of the financing options.
  • Consider private schools. The average cost for California independent colleges for the 2011-2012 school year is $45,147, according to Private institutions may offer bigger financial aid packages that may result in costs more in line with public schools. In addition, some small private colleges are offering four-year degree guarantees. With these guarantees, as long as a student meets with and follows the advice of a school counselor and keeps up with academic work, the school guarantees he or she will graduate in four years.† With about half of today’s students taking at least five years to graduate, saving a year of tuition, fees, room and board can be significant.

Save Rather Than Borrow

Saving for higher education – whether you start when a child is in diapers or drivers’ ed – may be the best way to avoid or minimize college debt. Learn more about college savings plans here.

* Source: The College Board,

** Source: Costs are estimates for fees, tuition, books, supplies, room and board, and miscellaneous expenses for the 2011-12 school year at CSU and UC schools. The costs at each school in the system may vary.

*** Source: The College Board,

† Source: “The Rise of the Five-Year Four-Year Degree,” New York Times, May 20, 2011.

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