Get A Jump On Your College Journey, Determine Your Four-Year College Budget

Get A Jump On Your College Journey, Determine Your Four-Year College Budget

by Chuck Bates, CCFC on Aug 19, 2021

Education, College, College Admissions, Financial Aid

Do you have a rising senior? If so, the summer is a great time to get a head start on your college journey. Once you know your EFC, it is time to determine what you can afford to pay for college and/or set your budget.

If you were going to buy a home or a car, you would typically need to get approval for the loan. I want to encourage you to shop for college in a similar way, knowing the maximum you can afford in advance. The goal is to go to college, graduate in four years, and leave school with as little debt as possible.

Where to start?
We need to determine all available resources. Resources will include parent resources, student resources, loans, and outside help such as grandparents, aunts, and uncles.

Parent resources include:

  • 529 savings
  • Other assets
  • Cash Flow
  • Dollars redirected from past activities like dance, travel sports, etc.
  • Tax Credits

Student resources include:

  • Savings & UTMA accounts
  • Work-study or Part-time Job
  • Other


  • Parent Plus or private loans
  • Student Federal Direct Loans or private loans

Other Help:

  • Wealthy or generous relatives

Take the sum of all these assets, accounting for the maximum you are willing to borrow in loans, and that is your four-year college budget amount. When thinking of borrowing, I recommend two reference points.

  1. Do not borrow more through four years of college than you expect to make in the first year of your career. For example, if you expect to make $70,000 as a computer programmer, DO NOT borrow more than $70,000 in total.
  2. You can estimate a $100 payment for every $10,000 you borrow on a ten-year repayment schedule. So if you borrow $40,000 over four years, your payment will be approximately $400 a month when payments begin.


For help determining your pre-approval budget, connect with Chuck Bates, CCFC here.