LOS ANGELES — With the cost of tuition on the rise, more people are taking out student loans to pay for their college. According to the Federal Reserve Bank of New York, Americans owe $1.34 trillion in student loan debt. But there is another way to finance higher education and that is to pay for it outright.
Personal finance news and features website GOBankingRates recently conducted a study to uncover how much money parents in each state would need to make annually to live comfortably and pay for their child’s tuition at a four-year institution.
Researchers used College Board data to uncover the average price of tuition and fees at public four-year institutions, and then factored in the cost of living in each state by identifying the dollar amounts required to cover necessities like a mortgage, groceries, utilities and more. Additionally, researchers calculated what parents would spend on splurges and savings using the 50-30-20 budgeting role, in which 50 percent of income covers necessities, 30 percent covers discretionary items and 20 percent is reserved for savings.
The 10 states where parents must make the most and least money annually to live comfortably and pay for their child’s in-state tuition are listed below. You can view the full methodology and study results here.
States Where Parents Must Make the Most Money to Live Comfortably and Pay for College
- Hawaii: $126,454.40
- California: $106,770.82
- Massachusetts: $96,573.07
- Colorado: $91,700.33
- Connecticut: $91,140.89
States Where Parents Must Make the Least Money to Live Comfortably and Pay for College
- Indiana: $62,091.05
- Arkansas: $62,596.15
- Ohio: $62,931.10
- Missouri: $63,618.01
- Kentucky: $64,110.64
GOBankingRates.com is a personal finance news and features website dedicated to helping visitors live a richer life. From tips on saving money, to investing for retirement or finding a good interest rate, GOBankingRates helps turn financial goals into milestones and money dreams into realities. Its content is regularly featured on top-tier media outlets, including MSN, MONEY, AOL Finance, CBS MoneyWatch, Business Insider and dozens of others. GOBankingRates specializes in connecting consumers with the financial institutions and products that best match their needs. Start your journey toward a rich mind and full wallet with us here.