In today’s marketplace, having a college degree can make one more competitive for jobs and serve as a key to upward mobility. The value of a college education goes beyond dollars and cents and building competency in a chosen discipline: there is an intrinsic value as well.

Perhaps this partially explains why millions of Americans forego common sense when picking college.

New Study Says Cost of College Is Not a Factor

According to a recent study by Sallie Mae, the country’s leading education lender, cost is often not a factor when picking college. “40 percent of families do not limit their search based on total expense.” Now, this would be fine if 40% of families were financially solvent enough to truly bear the costs of any school their students chose. However, students are increasingly being burdened with record levels of debts.

In fact, two-thirds of students graduate with some debt, with the average debt being $19,237. One-fourth of students will graduate with nearly $25,000, and 10% will graduate with greater than 35,000.

The primary reason attending school has become so much more expensive over the last decade is that school-related expenses (including tuition and fees) rise at rates that far outpace inflation.

According to the College Board, tuition and fees have risen in 2007 at more than double the rate of inflation for both public and private schools. Notwithstanding the fact that the inflation estimate is based on the consumer price index, which historically underestimates inflation by excluding gas and energy (too volatile), the cost of going to school can still be staggering.

While the annual costs for a public school (including tuition, room, and board) averages $13,589, the costs for a private school averages $32,307.

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An Emotional Decision With Financial Implications

Although it is true that selecting a college is at least partly an emotional decision, to not do a cost-benefit analysis for one of life’s biggest expenses is not only careless, it can have tremendous financial implications for the family and the student. Because of student loan debt, graduates sometimes delay starting families, have depression, fail to adequately contribute to investments, and unfortunately go bankrupt, etc. Young adults account for the second fastest growing group filing for bankruptcy.

Moreover, the debt makes setting a good financial foundation all the more difficult for graduates in careers with low incomes, such as teachers and social workers.

To “cope” with the higher costs of schools, more students placing tuition and school-related expenses onto credit cards. Currently, credit cards account for about 18% of tuition payments. Unfortunately, due the student loan crunch, this is only expected to increase as more private lenders get out of the market.

Do Your Own Cost-Benefit Analysis When Selecting A School

College can be a fabulous investment, but like any investment, one should make sure that he or she is getting a good deal. Just because a student can go to a private school that costs 3-4 times more than the local public university does not mean that it’s 3-4 times better than the public school nor does it mean that the career and income will be 3-4 times better for the privately- educated graduate.

Some schools, such as the University of Arizona, have designed programs teaching students about the costs and benefits of taking out student loans and the long-term impact borrowing has on life decisions. However, if one’s school does not and he or she is one of the two-thirds of students without enough money to cover school, help him or her make a wise choice. Carefully consider the financial impact of school selection. An excessive debt burden may change the course of one’s life just as much as the anticipated degree.

Roshawn Watson is creator of Watson Inc, a personal finance site dedicated to empowering its readers to become debt-free, increase their financial literacy, and aggressively build wealth. Now, an avid investor and debt-free, Roshawn is sharing his insights and his journey to build tremendous wealth.