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How much can your family afford to pay for college?

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How much can you contribute to your child's college fund?

Nov. 13, 2018

It’s a talk parents need to have with their teenaged children: The college talk, where you sit down and tell them how much money you can realistically contribute toward their tuition.

That amount is based on savings, and possibly payments from current income or education loans you take out. With the staggering cost of higher education these days, most families need to take on some debt to pay for the kid's college education.

Typically, the least-expensive option will be an in-state public school.

What’s affordable?

You’re comparing colleges to see which ones your family can afford. So, how do you narrow down the field?

Here’s one way: Use the four-year price calculators available on most college websites.

If your total financial resources – scholarships, savings and possibly some ongoing parental help – exceed the four-year net price of that college, it's affordable.

If not, and you need to borrow an unreasonable amount of money, you might want to think about going to a different school.

When it comes to student loan debt, what’s reasonable?

The experts at savingforcollege.com say it should be less than the student’s annual starting salary at graduation.

If that total debt is less than their annual income, your son or daughter can afford to repay those student loans in 10 years or less, which is a reasonable amount of time.

More Info: Should you save for your retirement or your kids' college? Here's the math

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