You certainly can put a price on a college education

Pink piggy bank in mortarboard

A generation of parents and kids has been taken in by academia's big lie: "You can't put a price on a college education."

You most certainly can put a price on a college education -- and here's how to do it.

You shouldn't spend, and you absolutely shouldn't borrow, more than the career you're preparing for can justify.

You don't have to look far to find grads with $50,000 in student loans and a job that pays so little they can barely keep up with the monthly payments.

Student debt increased from $80 billion in 1999 to $550 billion in 2011, and 11.2% of all student loans are now deliquent.

Graduating with a mountain of debt into a career that doesn't pay nearly enough to support it can make you a financial cripple for the rest of your life.

Things are getting worse because college tuition has been rising faster than health care costs and good jobs are getting tougher and tougher to find right out of college.

We understand that college is about more than just getting a job and making money. It’s about learning, self-development and personal growth.

But your college education should make a positive contribution to your net worth, not send you to the poorhouse.

You need to consider what you plan to study, how marketable your degree is, the cost of tuition and what you can expect to make.

Start by taking a look at the U.S. Department of Education's College Navigator, which allows you to see the full cost of attending virtually every college and university in the country.

If you're not sure how the tuition at the schools you're considering stacks up, the
new College Affordability and Transparency Center ranks the cheapest and most costly colleges for you.

You shouldn’t choose a school solely based on how much it costs, but price should be a major factor in your decision. You need to look for value in a university.

Now check the National Occupational Employment and Wage Estimates report by the U.S. Department of Labor.

This will provide a rough estimate of how much you can expect to make after you graduate and land a job in your chosen profession.

Want to be an elementary school teacher? They earn an average of $54,330 a year. Family social workers make much less, with an average annual salary of $43,850, while mechanical engineers earn much more, taking home an average $82,480.

Now you need to weigh the costs of your education against how much you're going to borrow and how much you can expect to make out of college.

A common rule of thumb is that you shouldn't take on more debt than you can expect to earn in your first year out of college.

If you can reasonably expect to make $40,000 your first year out of school, you should not take on more than $40,000 in student loans.

But in this day and age, you should probably take on less debt than that. We don't have to tell you that the job market is bad. You can get three degrees and still not have a job.

You need to be prepared for not being able to get a job in your field. And even if you graduate in the top of your class, you may very well make a lot less than you expect to.

But let's assume for a minute that you will get a job immediately when you graduate.

According to the "Winter 2011 Salary Survey" by the National Association of Colleges and Employers, the average offer to a 2011 bachelor's degree graduate is $50,034.

This survey is skewed because the data come from university career services that place graduates in jobs. The best jobs. It doesn't account for the tens of thousands of students that got jobs outside of the system or didn't even get jobs.

If you do manage to get a decent job straight out of school, you might realistically end up with an average salary of $35,000 to $40,000 per year. Possibly less.

Now let's say you took on $120,000 of student debt to attend that prestigious private university, get out of school and make $40,000 per year.

Even if you extend the terms to 30 years, you'd still have to make payments of $720 a month if your interest rate is the current 6%.

That's a whopping 21% of your gross salary that you'd have to put toward your student loans.

And even if you get a better job in a few years and make $60,000, you'd still be dedicating 14.4% of your income to paying back those loans.

Having to allocate that much of what you make to paying off student debt is going to affect everything else in your life. It’s going to be a financial ball and chain.

It is highly unlikely that you'll be able to buy a home or save much for retirement if you're carrying this debt and income. Your life will be set back years, if not decades.

Think this scenario is far fetched?

One thing the Occupy Wall Street movement has brought to light is that there are an abundance of college grads that are struggling with their student debt.

Your financial life is a marathon, not a sprint. You need to be thinking about where you're going to be 10, 20, 30 years from now.

The cost and benefit of your education determines where you'll start the race.

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