Determining Your College Budget: Affordability vs. What You’re Willing to Pay

Teen walking on a college campus looking back at the camera

Determining Your College Budget: Affordability vs. What You’re Willing to Pay

Published June 8, 2023

Teen walking on a college campus looking back at the camera

This article is sponsored by College Ave Student Loans, dedicated to helping students and families pay for higher education. 

One of the most important steps to take before researching and applying to colleges is to determine your family’s college budget. Why? You don’t want your student to fall in love with a school that’s too expensive for them to attend.

We asked parents in our Paying for College 101 Facebook group about their own experiences with coming up with a budget and sticking to it.

Determine a College Budget

The key to finding an affordable school is to figure out how much money you can contribute to college costs through income, savings, or other resources. In a recent survey, College Ave Student Loans found that 67% of students said that the cost of college was higher than they anticipated.

Susan E. said their mortgage was a big part of their plan. “Our house is almost paid off so we know we can afford that much in our budget for paying each year. Our daughter is only a sophomore in high school, so she will be expected to contribute money from savings and part time jobs.” 

Other parents talked about the difference between what they can do, and what they’re willing to do:

“We looked at what we had in 529 savings. We also considered what we could actually afford vs. what we WANTED to afford vs. cost of an in-state school. We determined our budget was the cost of an in-state school or less.” —Jhana W.

“We had a general budget when we started the college search. Initially, we determined our budget based on how much we had in our 529 and what we could pay in cash. We decided we shouldn’t spend as much on undergrad so our budget shrank during the process. We decided not to touch our daughter’s 529 and to save it for her grad school.” —Jennifer S.

Look for Scholarships

Once you know how much you can contribute, you and your student should look for schools that award merit scholarships, which can help bring the sticker price of the school down to fit your budget. 

“We chose schools that offered enough merit to keep costs within our budget. Those schools had low GPA requirements for renewability to keep costs down.” —Carrie B.

For Jennifer S., things turned out better than they expected: “We had several college offers come in way below our budget so it didn’t make sense to choose a more expensive school and waste money.” 

“Our daughter was awarded four total full rides (tuition, room & board), plus each came with some extras,” said Robin H. “Two were full cost of attendance (COA) with stipends. Another included books and fees. The last included a study abroad stipend plus an extra scholarship she won that would cover books.” 

Don’t forget to look into private scholarships as well. These can be used at any school and are a great resource to keep college costs low.

“Our daughter’s a good student, gets good grades and is involved in school activities so we’re hoping she’ll get some sort of merit scholarship. She will also be applying for outside scholarships. Our local town has a few big ones, but applying doesn’t mean they are guaranteed.” —Susan E.

College Ave Student Loans offers a $1,000 scholarship monthly sweepstakes that’s easy for students to enter and doesn’t require any essays.

Decide if There’s Any “Wiggle Room”

Once you know your college budget and research college scholarships, decide if there’s extra room in your budget or if you and your student are comfortable with taking on student loans to cover a portion of the costs, which would allow you to increase the budget.

“We had room in the budget at some schools but not at the one chosen. This means less fun money if needed, less emergency money, and more work on her end to find money either through scholarships or working.” —Jhana W.

Parent Tami B. didn’t leave any wiggle room in her student’s college budget and they were able to keep the costs low enough to use less than half of their student’s 529 plan during their undergraduate years, saving the remaining balance for their graduate degree.

Laura C. shared that they had planned some room in their budget for loans, but ultimately accepted an offer below their budget, so they can save some of their 529 plan and avoid taking student loans.

Borrow Smart

Student loans are an option when creating your paying for college budget, but you still need to consider how much you can borrow. Use College Ave’s student loan calculator to determine what the repayment amount would be and only borrow what you know you and your student can reasonably afford to pay back.

If you do plan to get student loans, follow this advice to help borrow responsibly and to keep debt to a minimum. If your family is borrowing loans, always take out federal loans in the student’s name first, since they offer certain protections and benefits not offered by private lenders. If you still find you have a gap to cover, private student loans are an option. Shop around for the best lender for your family. College Ave offers low rates and a number of repayment options to fit a variety of budgets.  

Plan for the Cost of the Full Degree

A common mistake families make is not considering how much college will cost over four years (or however long it takes your student to graduate). Make sure to include the full cost of the degree when considering how much you can afford to pay.

One community member reminded families to look at cost increases when calculating how much you’ll pay over the course of the degree. Most schools increase their tuition each year, so your costs for freshman year may be lower than costs for senior year. Also, be sure to plan for other costs beyond tuition (like program fees, transportation, health insurance, and more).

To prevent overspending, make sure you and your student plan a budget for non-educational costs as well. College Ave has a college budget planner for families to track monthly expenses.

Choosing a college is a major financial decision for families. By heeding these tips from parents who’ve been there, you’ll be able to set a reasonable budget for your student and find a college that you can afford.


Use R2C Insights to help find merit aid and schools that fit the criteria most important to your student. You’ll not only save precious time, but your student will avoid the heartache of applying to schools they aren’t likely to get into or can’t afford to attend.  




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