A college education in the U.S. can be incredibly valuable — and many parents are willing to do just about anything to get their children into college. The recent college admissions scandal — which saw a number of actresses, chief executives and college coaches charged for allegedly paying thousands of dollars in bribes to boost their kids’ chances of being admitted into elite universities — further demonstrated the great lengths parents are willing to go to ensure their child receives a high-quality education.
But it’s likely no one is feeling sorry for this wealthy group of individuals who, had they successfully gotten away with gaming the system, would have had little to no trouble paying for the exorbitant costs associated with a four-year degree. For the average American, though, the reality of funding a college education is far more precarious.
With total student loan debt reaching $1.56 trillion as of December 2018 in the U.S., a postsecondary education clearly comes at a cost. And with the cost of tuition on the rise, plenty of American parents might be wondering: What is it going to take for me to put my child through college?
To help you figure out if you can afford college, a study from GOBankingRates estimated how much you’ll need to earn to afford college in every state without taking out student loans or compromising on other necessities.
The study looked at 2017-18 tuition and fees for in- and out-of-state students and then factored in how other basic costs in your state would add up. Then, after applying the 50/30/20 rule of budgeting to the figures — which says 50 percent of your after-tax income should be spent on “needs,” 30 percent on “wants” and 20 percent given to savings and debt repayments — the study determined the minimum household income necessary to pay for college and live a comfortable life.
See the Full Study: The Salary You Need to Afford College in Every State
Find Your State: Here’s the Average Cost of Education in Every State
The results demonstrate that growing tuition costs are clearly making it difficult for middle- and working-class families to send children to college. The lowest estimated salary needed is in Iowa, where you would need just under $65,000 to pay for college without missing mortgage payments or having to cut back elsewhere. However, that’s almost $10,000 more than the median household income in America. Meanwhile, Hawaii residents would need over $130,000 to send someone to college and still make ends meet.
Even more startling: the difference between in-state tuition and household income in the U.S. averages out to just over $22,000. Meaning the average American is about one brand-new Honda Civic short of being able to afford college tuition while maintaining a comfortable life.
Although there’s a clear correlation between tuition costs and the necessary salary, there are also some notable exceptions. In particular, New York and Michigan stand out as bucking the trend. New York is actually one of the states with lower tuition costs — it has the 11th-lowest average in-state tuition and fees at public institutions and the fifth-lowest average out-of-state tuition. Despite this, it ranks among the five worst states in terms of what it requires to afford college due to its sky-high cost of living and housing.
Michigan is similarly interesting — but for opposite reasons. The state has the sixth-highest average in-state tuition costs and the second-highest out-of-state tuition and fees. However, it’s a relative paradise for the thrifty, with the cost of basic necessities and the median list price for a home both among the lowest in the country. Even with pricey colleges, Michigan still had the 11th-lowest necessary salary for living comfortably and sending a child to university.
From Alabama to Wyoming: The Cost of Living Across America
Here’s the full list of the salary you need in every state to afford in-state and out-of-state tuition:
Income Needed to Afford College, by State
|State||2017 Median Household Income||2017-18 Income Needed for In-State Tuition||2017-18 Income Needed for Out-of-State Tuition|
Click through to read more about the salary you need to afford the average home in your state.
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- Watch: Is College Tuition Worth the Cost?
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Chris Jennings contributed to the reporting for this article.
Methodology: GOBankingRates surveyed monthly living expenses in all 50 states. The cost-of-living comparison included the following factors: (1) median mortgage costs by assuming a 20 percent down payment, 30-year fixed loan, the current Zillow interest rate for every state and multiplying that by 12 (1 year), sourced from Zillow’s home price index and determined using Zillow’s Mortgage Calculator; (2) annual groceries costs, taking the Grocery Cost of Living Index and multiplying by $10,139, which is the low-cost monthly grocery cost for family of four with children ages 6-8 and 9-11, sourced from Missouri Economic Research and Information Center’s cost of living index; (3) annual electricity bill, sourced from the U.S. Energy Information Administration’s 2016 average monthly bill data for every state; (4) annual vehicle ownership and usage costs, sourced from GOBankingRates’ Most and Least Expensive States to Own a Car study; and (5) annual healthcare costs, sourced from the Henry J. Kaiser Family Foundation’s 2016 data on the average family premium per enrolled employee for employer-based health insurance. Median income amounts are according to the Census Bureau’s 2017 American Consumer Survey. College tuition and fee costs at in-state public four-year institutions for 2017-2018 are sourced from the College Board.
Monthly costs were totaled and multiplied by 12 to get the annual dollar cost of necessities in each state. This dollar amount for necessities was then doubled to find the actual annual income needed to live comfortably in the city, assuming a person is following the 50-30-20 budgeting guideline, which requires an income double the cost of necessities. The amount of money specified for savings is equal to 20 percent of the total income needed, and the amount specified for discretionary spending is equal to 30 percent of the total income needed.
Disclaimer: All information in this article is accurate at the time the study was originally conducted in May 2018.