Should the Cost of College Affect Your Decision to Go?

debts of college education

The debts of college education have never been more burdensome. A college education is having an unprecedented impact on the financial ecosystems of families, communities, and our nation, as a whole.

With the cost of education on the rise, many individuals and families are questioning whether or not the debts of college education present too much trouble to even bother. Many are facing this pressing question: are the costs such an impediment that you should reconsider even going at all?

What are the costs?

When it comes to discussing the debts of college education, it is important that we have a nuanced conversation about the word “cost”. Understanding the complexities of “cost” is crucial to making an educated and well-researched decision about attending university. When people talk about “cost” they often consider it as the upfront money required to attend any given school.

This upfront cost is certainly important to weigh in your decision-making process. However, it can be more useful to examine the “transaction cost” of attending a given school. Although “transaction cost” can be more difficult to calculate and surmise; ultimately, it is crucial that we incorporate it into our conversations regarding the debts of a college education. Without adequately addressing “transaction cost”, we run the risk of making financially irresponsible decision making. 

So, what does “transaction cost” really mean? 

You might be wondering what separates “cost” from “transaction cost”. At its core, transaction cost analysis takes into account the costs and benefits across both short and long-term periods of time.

First, take the time to research a range of schools with different avenues for transaction cost benefits. Then, you should be able to craft a college list that provides different options for debt relief, both during and after your college education. When it comes down to it, the cost of college should not hinder your decision to go. Therefore, the transaction cost of a college should be the primary criteria by which you evaluate where you decide to go to school. 

What to research to determine transaction cost?

  1. In the researching phase of your application process, it is important to look into the financial aid and scholarship opportunities that your school might offer. These initiatives can offer debt-free alternatives to your education. Even if you haven’t been accepted to a school, you should call the financial aid office. You can then gather information about your most probable financial aid package. You’ll also learn about work study opportunities that a given school offers. 
  2. In addition to researching financial aid, it is crucial that you research what you would likely earn after graduating from a given school. This can help you calculate the returns on your investment in the longer term. Reach out to the career office of each school on your list. Most schools conduct alumni research and have data on average income one, five, ten, and twenty years after graduation. Although a school might be more expensive upfront, in the longer-term, it could offer more years debt-free. You can also read our post, How Your Major Translates to Financial Success.
  3. Finally, the context of a school is important. Where would you be studying? What is the cost of living, of transportation to and from that school? If you want to attend a school in an urban location, how does that affect your cost of living? What work opportunities are offered during the summer or part-time during the semester? 

Overall, calculating the debts of a college education is a multi-tiered process. It doesn’t depend on school ranking, public or private standing, or location alone. These factors must be weighed in conversation with one another. The good news is that there are so many schools across the country that offer different combinations of costs and benefits. In the end, the key is not to find the “best” school; the key is to find the best school for you! Determining that school will rely on evaluating both short-term and long-term value. Rest assured, even in this debt-ridden landscape, you have the power to choose and determine a higher education that works best for you! 

About the Author

A. T.

A. T.

A.T. is an experienced tutor at Gooroo, a tutoring membership that matches students to tutors perfect for them based on their unique learning needs. Gooroo offers math, English, ESL, Spanish tutoring, and more.