If you’ve ever browsed a glossy college brochure, you probably read a lot about intellectual fulfillment, being part of a special community, and life-changing conversations with your professors. How could one ever put a price on such priceless experiences?

Well… it may be easier than you’d think.

From a financial perspective, the most important decision you can make about college is whether or not you go - not whether or not you attend a prestigious school. The next most important decision is your field of study. The financial benefit of attending one college versus another is much more difficult to determine. In fact, there’s solid evidence that even attending an Ivy League institution doesn’t offer more financial benefits in the long run than attending a less prestigious school – assuming a student was admitted to both.

Borrowing Considerations

Especially for those seeking a four-year degree, the amount you and your family are expected to borrow can vary significantly from school to school. When awarding financial aid packages, schools look at a wide variety of factors when determining your eligibility for both merit and need-based aid. Some students may be awarded more financial aid in the form of scholarships or grants that do not need to be repaid, while others may be awarded an aid package consisting of loans that will need to be repaid. Both students receive financial aid, but the long-term consequences will be very different for a student graduating with a large student loan payment.

Student loans may be a smart investment in your future, and it’s hard to go wrong with student debt if you: 

• Non-profit versus for-profit school - For-profit colleges are generally known for charging well above average tuition for degrees that may be seen as less desirable by employers.
• Borrow only federal student loans - With these loans, the maximum amount that can be borrowed for an undergraduate degree is just over $30,000. Even including interest from your time in school, the monthly payment would be just over $300 for the standard 10-year plan or just over $150 a month for a 25 year extended repayment plan (at 3.9% interest). In addition, there are income-based plans that could result in even lower payments if you qualify.

If you choose a school that requires loans beyond the federal maximum, you’ll need to think very carefully about your total debt and your projected income after graduation. Private loans do not offer the same repayment, deferment, forbearance and forgiveness options as federal student loans.

When it comes to earning money, all college majors are not created equal. According to a Georgetown University study, the average mid-career professional with an Early Childhood Education degree earns $39,000 per year. The average professional with a Petroleum Engineering degree earns $136,000. A hypothetical $500 per month student loan payment would affect someone with a $2,500 per month after-tax income very differently than someone with a $8,000 per month income. Of course, an engineer may hate her career while a psychologist may love his - or the opposite could be true. Either way, career choices should always involve more than projected earnings. But if you take on significant education debt, it would be foolish to not consider the realities of high debt and low income.

When thinking critically about financial aid, remember that the job of financial aid administrators is to administer aid programs, not to provide financial advice on what’s best for you. Just because you can qualify for a large student debt doesn’t mean it’s a safe choice for you. It’s your responsibility to be a smart consumer, remembering that the higher student loan payments always result in a trade-off between having attended the more expensive school and everything else you could have done with those student loan payments.

Finally, in addition to choosing to attend college, one of the most important factors for financial success is whether or not you graduate. Imagine taking out thousands of dollars in student loans, but not receiving the potential boost to your income that comes with a degree. It happens to too many students at both community and four-year colleges. If you are a first-generation college student, be sure to explore colleges that offer a program called Student Support Services – a free, federally funded program designed to help students succeed.

Once in college, if you find yourself considering leaving school for any reason, be sure to speak with someone in your school’s financial aid office or with a faculty advisor to review your options. Even students who intend to return to school after a break are much less likely to earn their degree.