How to determine the ROI on a college education

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As our nation's student loan debt figure continues to rise, some parents and students are wondering if a traditional four-year college degree is really worth the cost. On average, today's college graduates leave school with over $37,000 in student loan debt. And earning enough money to live comfortably and keep up with loan repayment can be challenging when you're new to the job market.

What's more, a lot of students don't realize the impact student loans can have on their future. The truth is that it can limit their ability to move out on their own, buy a car, or even get married. So, is college worth it? We say yes, as long as the investment is made wisely.

As a parent, you can help your child understand a college degree's return on investment (ROI) and help minimize the future burden of student loan debt. Below are three factors to discuss before choosing a school and area of study.

1. Cost of Attendance

For students who enrolled in college in 2015, four-year tuition costs ranged from about $39,000 for a public university to over $134,000 for a private school. But tuition only makes up part of the total cost of attendance. Other costs, such as room and board, books and transportation can add significantly to the total.

Once your child has narrowed down their school choices, contact the financial aid offices to find out the total cost of attendance. You'll also want an idea about how much financial aid students typically receive, and what portion is made up of loans that will need to be paid back. And don't forget to subtract the amount of any grants or scholarships your child expects to receive.

You'll also want to find out what percentage of students graduate within four years. If the school typically requires more time to complete a degree program, make sure it fits in your budget.

If you're looking to cut costs and the schools you are considering are nearby, discuss the possibility of living at home. While the dorm experience may sound appealing, your child could save over $10,000 a year by commuting.

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2. Necessity

In recent years, a four-your degree has been touted as a necessity. But a four-year degree is not always essential for success, and a bachelor's degree may not be the right route for everyone.

In fact, there are some fields that don't require a college degree but still provide lucrative salaries. For example, according to the Bureau of Labor Statistics, the median pay for an electrician is $51,880 and only a high school diploma, followed by an apprenticeship, is needed.

Talk to your children about their career goals and research what type of education is necessary for them to get a job. In some lines of work, an associate's degree from a community college is just as effective as an expensive four-year degree.

3. Salary

According to the U.S. Census Bureau, average earnings for a high school graduate is $25,900. The average income for a college graduate is $45,500. Over the course of their careers, someone with a bachelor's degree would earn approximately $1.2 million more than someone with only a high school diploma.

It's also important to consider your child's major and expected future salary relative to their tuition costs. Going to an expensive private university might make sense for an engineering major, but someone interested in a career path with a more modest income could be better off at an in-state public school.

The majority of college students will end up taking out student loans to pay for all or a portion of the costs. If that's the case for your child, a good rule of thumb is to borrow no more than half of their expected starting salary. PayScale is a great resource to calculate potential salaries in your child's selected field and location.

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About the author: Student Loan Hero is a website that combines easy-to-use tools with financial education to help the millions of Americans living with student loan debt manage their student loans smarter. They've helped over 100,000 borrowers manage and eliminate over $2 billion in student loan debt since 2012.