<p>Imagine getting a Bachelor's degree with zero debt. </p>
<p>OR imagine 4 years undergraduate work at your dream school, getting a degree, but coming out of it with debt.</p>
<p>DD is trying to decide between Smith and our big state university (which is one of the top public universities but it's big). She loves Smith, but is torn between going to her dream school Smith; or getting her Bachelor's at Big State U and having the freedom not to have to take a job right away to pay off student loans or the freedom to pursue a Master's.</p>
<p>Smith is definitely a school that fits her, but isn't deciding on college a business decision as well? Any thoughts to help her decide would be welcome. Thanks.</p>
<p>I have no real advice to give. I’m a student who is in the same predicament as your D, and from what I’ve seen on CC, everyone would advise you to go to school debt free.</p>
<p>Sure. Nobody wants debt. That said, you are talking about two different worlds to choose from. Large State U vs. Smith College? No comparison. If you want to look at it as a business decision, remember you get what you pay for. The quality of education she would receive at Smith would be life-changing. Especially if she can keep the debt to 10,000 a year, I can’t think of a more worthwhile investment.</p>
<p>Have you and your daughter discussed the loan repayment specifics? Being responsible for a decade of monthly payments of $400.00-$600.00++ will most likely become very dispiriting. On the other hand, if your daughter will receive family assistance with the loan payments, attending Smith becomes more realistic.</p>
<p>Thanks so much for your post. D is on her own for the loan payments since we are paying for most of her tuition (and the fact that we have 3 other kids who will be going to college after her). She also needs to have some skin in the game. She’s only 17 so does she really understand paying $600 a month for student loans for 10 years? Or is she just thinking about how wonderful her 4 years of college will be?</p>
<p>And then there’s this I heard today on NPR: </p>
<p>"People with outstanding student debt who’ve graduated from a four-year college have about 60 percent less net worth [than those without debt]. They have about 40 percent less equity in their homes, and they have about 52 percent less in retirement savings. They’re better off than if they didn’t go to college, but they’re not doing nearly as well as they could be, and as their peers are doing, if they have no debt. …</p>
<p>[Demos, a think tank, and] Robert Hiltonsmith did a study on post-college outcomes around debt. And [they] found that while students with … and without college debt start off at similar levels of income, by the time they’re 40 they have less income if they have student debt. …</p>
<p>[That’s because] these people aren’t investing in the kinds of assets that also produce income in the long run. So they’re not buying real estate, they’re not buying stocks, they’re not buying bonds — all kinds of things that not only produce asset wealth, but income wealth. And so you have this large divide now between those who have debt and those who don’t have debt."</p>
<p>At Smith, students don’t declare their major until they register for junior year classes. Were your daughter flirting with the idea of majoring in CS, the decision would become more complicated—at least in my opinion.
If you feel comfortable, I’m curious to know which state university your daughter is considering.</p>
<p>@P&D: don’t forget that a lot of the students who graduate without debt also have rich parents, which has its own impact on net worth down the road.</p>
<p>But, yes-- it’s all too easy to get on the wrong side of this problem. And while going to the perfect college may well be worth $60,000 more than the second choice, not everyone has that to invest up front.</p>
<p>Our D borrowed $20K to attend Smith and we borrowed another $75K (income but no savings) and none of us have ever looked back. That said, D pretty much has hit the jackpot from Smith onward but it was all <em>because</em> of Smith. </p>
<p>Just one example: in a terrible, crappy job market, she interviewed for exactly one job as a senior. Got it. Said job was instrumental at getting her into a Top 5 PhD program. </p>
<p>Obviously, no guarantees this can happen. (But the reason she got the one job offer had to do with Smith, etc.)</p>
<p>@OP - How would your D fare at a large school? Would she confidently and independently navigate to find her way or would she feel a bit lost and in need of more guidance? IMO, if you have a child who knows how to seek out help and avoid becoming a number, then a highly rated state school is the way to go. Save money for a top notch grad school (or a house). </p>
<p>Mom4, you identify a key difference between schools: we have multiple decades-long connections with UCLA. At the beginning of the process, all of our biases were in favor of the large research universities from which both TheMom and I graduated. LAC’s in general and Smith in particular really turned our heads and for our D, Smith blew UCLA out of the water for all the reasons that Smith advertises: small classes, no TA’s, etc. The counseling at Smith, both formal and informal, is multi-layered and for our D was superb. Wouldn’t have gotten nothing anywhere close at UCLA, nor would she have gotten seven months (vs. 10 weeks) in DC and five months in Budapest.</p>
<p>From my perspective, the notion of “no debt” can’t really be sustained…it’s a question so <em>how much</em> debt. $20K total is a slam dunk for Smith, $100K total (for the student, not counting parents) is a slam dunk for the Big State U. </p>
<p>We are looking at a similar problem. But from all my reading/research the important goal is to graduate. Would D most likely graduate in 4yrs from Smith or BIgSU?</p>
<p>With regard to the 4-year graduation rate, it depends on the school. If you look at the latest common data sets, 82% of Smith students graduate in 4 years. At Michigan, 76% of the students graduate in 4 years, so it’s not that much lower. However, at Ohio State, 58% graduate in 4 years, and at Alabama, it’s 41%.</p>
<p>My daughter has a friend going to a large state university who is having problems fitting all her courses into a 4 year program, and also sometimes has problems getting into required courses. My daughter does not have those problems, despite being in one of the majors with the most required and suggested courses (biochemistry). My daughter has a friend majoring in engineering, which also has a lot of required courses, and she doesn’t have those problems either. </p>
<p>How is your DD even going to get the $10-15K a year in loans for Smith? She can get $5500 a year as a freshman without involving you, but otherwise, you gotta get involved unless she is getting a large Perkins loan as well as the Direct Loan. Bear in mind that the costs will go up each year too. If your back is against the wall, it’s not a good idea to do this. There will be unexpected expenses that come up. My kid just weathered a term of them, and because he is loan free could tap the loans as a resource when that happened. Things happen. Not to mention the annual increase in costs and that upper class opportunities and housing is often more as well. If she can do this with the DIrect loan amounts of $5500/6500/7500/7500 face amounts, go to it, and fine. Beyond that…umm. Even with that schedule she’ be owing a face amount of over $30k when she’s done due to interest accrual. </p>
<p>If you get a slam dunk due to going to Smith, everyone has cheers, but you gotta be an pretty special Smithie to get one of those I know some Smith women who are peddling jewelry while working as a barista part time or folding sweaters at the GAP. I am absolutely confident that 5-10 years, they’ll find a good place for themselves, work and money wise, but right now loan payments with what they have coming in is problematic if parents can’t lend a hand and you’ll have the other kids’ college finances to deal with in front of your face during that time, and won’t be interested in paying for done business. </p>
<p>The Big State U has an 87% graduation rate; Smith is 85%. D’s pre-paid 529 plan covers all tuition and required fees for 4 years, including any and all increases in tuition at Big State U.</p>
<p>We do not qualify for any financial aid, so my D can only get a Stafford loan of $5500 year if she wants to go to Smith. The 529 money will cover about $13,000 a year at Smith, so that leaves us at about $41500 we have to come up with a year. She can get a loan from a family member and she’s calling the Smith FA office to see what else she can do. Beyond that, the rest of the money will be paid for by me and my husband, and we are ready to spend that kind of money if D is going to get an extraordinary education at Smith beyond what Big State U can offer. But is it worth it for D to have debt when she graduates? When graduates with college debt are more likely to be less wealthy in terms of retirement savings and housing even at age 40? Or is Smith really worth it? </p>
<p>D goes to the largest high school in one of the largest cities in America. So she’s used to big and diverse schools. She would like to go abroad and Big State U has a great study-aboard program which I think is one of the largest in the country. But D is much better at discussion-based small classes, which Smith has in spades. And of course, my husband and I want D to be happy. If money wasn’t an issue, she would have already committed to Smith.</p>