How Much is Too Much to Pay for College?

Unless you’ve been living under Patrick Star’s rock in Bikini Bottom, chances are you’ve heard about the woes of college costs. According to one recent report, the average cost of a college education in the United States is a whopping $35,331 per year.

Looking long term, that number isn’t likely to drop, either. In fact, from 2005 to 2016 the annual price of tuition to a public four-year institution rose by more than 3% per year. 

We’ve already walked you through how to save for college costs and even which savings accounts you can use to make the most of those funds, but how do you know when the price tag is just too high to be worth it? We’ve got you covered.

How Much is Too Much to Pay for College?

When figuring out how much you should pay for that sweet degree, keep this handy rule of thumb in mind:

Your total student loan debt should not exceed the average first year’s salary for the target job you (or your child) would like to get when they graduate. 

That sounds like a mouthful, so let’s break it down. Think about what job you would like to land after you graduate. Want to be a Project Manager? How about a nurse? A rocket scientist? Your dream job can offer some insight into your future finances. 

Whatever the average first year’s salary for that job is serves as a reference point for your college debt limit. If you still haven’t narrowed down that dream profession quite yet (looking at you, undeclared majors), fret not. You can think of your top three professions, crunch the numbers for each, and then average those salaries to find your debt benchmark. 

Let’s see that equation in action, shall we?

Do Your Research, Crunch the Numbers

Put on your imagination cap for a minute – think about what that rule of thumb would look like if you wanted to become a teacher.

The first step would be to research what the average first-year salary for a teacher in the United States is sitting at. According to, that number is $41,388. This website is great because you can also adjust for specific location, additional degrees (such as a Master’s) and even performance. Keep in mind that these aren’t exact numbers, but they give you an idea of what you’d be making that first year out in the “real world.”

With those numbers in mind, you want to aim for a maximum of about $41,000 in total debt. For a four-year degree, that would come out to $10,000 in loans per year.

If you are going to earn your master’s and work your first year teaching in Boston, Massachusetts, the average estimated salary jumps to $46,632. That means a good goal for debt is around $7,600 or less per year (assuming it takes you six years to attain your bachelor and master’s degrees).

That doesn’t mean you necessarily need to limit your tuition costs to that number – just your loans. You’ll likely have other ways to reduce college expenses, like scholarships, family contributions, etc. 

Looking into the Future

You’ll also want to keep in mind the projected job growth for your chosen occupation – AKA the amount of estimated job openings there will be in x amount of time. The U.S. Bureau of Labor and Statistics offers a handy Occupational Outlook Handbook that shows job growth projections for the years 2020-2030. 

Using these projections, we can see that the expected growth for high school teachers in the United States is eight percent – which is on par with the national average. 

College is expensive, and it can be tough to know if the debt is really worth it. Following this rule of thumb can help you keep your eventual debt-to-income ratio at a manageable level and set you up for financial success. 

Fuel Your Education Fund with Lasso

Lasso is the one of a kind financial planning app that lets you customize goals and anonymously connect with financial advisors. Click here to download Lasso and start saving for college today.

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