It is well known that social origin affects educational decision making among students and their families. To explore the mechanisms of educational inequality, this study investigates the role of a family’s economic condition in determining educational choices. In particular, this study examines the influences of subjective measures of educational costs and attitude toward educational loans on high school choices, using data from the “Panel Survey of Junior High School Students and their Mothers (JLPS-J)” conducted in Japan. First, I explored whether educational debt aversion was widespread, and found that about a half of all mothers and students were reluctant to borrow money to finance their education. Second, family income and savings affected high school choices of students and parents. The children from higher socio-economic background attend selective high schools, while those from lower socio-economic backgrounds do not. Third, after controlling for socioeconomic variables, it was found that a mother’s perception of college cost and her attitude toward educational loans affected high school choices of students. The students whose mothers were averse to take out an educational loan were more likely to attend a vocational high school as compared to the students whose mothers were willing to do so. These findings confirm that both family’s socioeconomic status and subjective assessment of educational cost and debt affected educational decision making.