If your family is considering cost as a factor in the college process, it is important to understand how loans and debt work.

According to educationdata.org, the average in-state student attending a public four-year institution spends $26,027 for one academic year. (UCs average $42,236, according to the UC website).

The average private, nonprofit university student spends a total of $55,840 per academic year living on campus, $38,768 of it on tuition and fees.

But comparing the average debt reveals unexpected differences:

The average four-year bachelor’s degree debt from a public college is $32,714.

For private nonprofit colleges, the average bachelor’s degree debt is $34,956.

Given that the sticker price of a private college is often double that of a public university, it’s surprising the average debt difference is so small. The reason is, private colleges often have more scholarships to reduce the overall cost.

The UC and CSU campuses have almost no financial aid beyond need-based aid, as determined by the FAFSA. Some private schools offer at least some merit-based (merit is not necessarily based on grades) to virtually every student. This is why the “sticker price” is not a good indication of actual cost.

For California public universities, the UC debt varies by campus. The most recent data I found for 2019-20 ranged from a median of $13,500-$18,000. For CSU, the range was $13,200-$25,000.

For-profit colleges have the highest average debt, lowest completion rates, and students have the most difficulty repaying their debts. I do not recommend for-profit institutions.

However, these numbers do not include loans parents take out to help kids pay. For instance, the maximum government loan a first-year student can borrow is $5,500. This often falls short of what students need to pay the bills, so parents are offered PLUS loans.

Parent PLUS loans are based on credit rating and don’t depend on income. According to a 2023 NerdWallet Household debt survey, that additional amount averages $29,526 per family.

For many families, the big question is how much debt is reasonable. One approach is to think about future career plans.

Using this method, the advice is not to take on more debt than a first-year starting salary. This means social workers should limit themselves to $57,000, whereas a mechanical engineer might go as high as $83,000. Just be careful.

There are a LOT of students who change majors along the way. Don’t take on engineering levels of debt, change majors, and end up in a pinch when you have to take an extra year to get your degree and have a much lower salary to pay back your debt.

Be especially cautious if you’re thinking of additional education. Medical school, dental school, law school, etc., usually require significant debt.

Another way to consider it is to use an online student loan calculator. A student who graduates with $26,207 in debt has a six-month grace period and then starts making loan payments of $279/month for 10 years. With an interest rate of 5.24%, the total loan cost is $33,494.

Parent Plus loans have no grace period. Monthly payments start immediately.

However you decide to manage school costs, ask questions until you fully understand your financial aid offers and obligations. It’s a complicated process and no one expects you to sign papers agreeing to everything blindly.