Choosing between...

<p>So…we are going through this for the second time. My son 3 years ago and now with our HS senior D… She is almost 18 and is, unfortunately, tasked with making a tremendously difficult financial decision that is similar to buying a house but with a heck of a lot more uncertainty about how much of a return she can expect to make off of this investment …even in light of the housing boom and crash…I am going to stand by the analogy.</p>

<p>LIke the OP and others on CC my son had full tuition paid at state school versus big name, big bucks school. So about $32 K vs >$200K for 4 years. </p>

<p>We are in the very fortunate position to be able to pay full freight at big name school so he can get out without debt BUT we told him he had XX dollars available and if he chose big bucks U he would effectively be finished with education money from us and grandparents. If he chose the state school, that money could be used for grad school and if he decided eventually not to go to grad school we would offer the funds to set up a studio/business or even as a deposit on a house/condo–heck he could just buy a house for cash in most markets with this money.</p>

<p>His money, his choice. He chose megabucks-U and gave us some solid reasoning behind it…he doesn’t want grad school, the bigbucks U offered a unique program, peers and faculty much more challenging…yadayada… Each semester I ask if he is still happy with his choice (can still transfer) and he says he is fine with his choice.</p>

<p>Now D is in a similar position but not as stark…state flagship vs big-name-school–big bucks2. State flagship will cost about 1/2 of the big name school over 4 years. She may go to grad school. We told her she has the exact same amount available for education as her brother. SHe is agonizing over the decision. Do you “invest” >$200K in undergrad degree or $100K and save $100 K for something else? We have emphasized that we will not let her “live like a princess” in the state school…money can’t be used for a BMW, sorority dues or even a nice apartment. She is still expected to pay for her own entertainment and clothing and books via summer work. BUT, as she asked the other day, if she doesn’t go to grad school can she use the $100k for something else? I told her she could use it to set up a business, buy a home or even invest in a well diversified portfolio…but it is the only “inheritance” she will get so she should use it for long term investment of some kind. She is really, really torn. Emotion says go to Bigbucks2…levelheaded says state U. Keep in mind the overall “status” and “quality” of her choices are not miles apart. </p>

<p>Whether you have the money saved, have high income or are considering taking on debt to pay for college …this is the financial decision your kid is making. They have to decide if the expected payout (over a lifetime) is going to be worth making the choice for megabucks U. How on earth can they know? I emphasize that picking based on “fit” or “happy” factor is only relevant if they think they will thrive at BigbucksU and be mediocre/fail at state U. More importantly, they have to figure out whether the particular programs/alumni network/faculty/resources at big bucks will give them a long term ‘advantage’ in their careers over the long term. I think that they can’t possibly assess this accurately, but they can sit down and articulate as much as possible why they think it may give them a long term boost. IF they can’t do that…then I would advise them to pick state U. That’s it. It’s a ridiculous decision to make at any age with so little information to assess which investment will have higher returns. I recognize that they may make a mistake in judgement and remind them that “transfer” student is not a four letter word.</p>

<p>fineartsmajormom ~ you are providing yourself with a gift. The gift is “no guilt, I did my best” No worries. The gift is costing you already, you’ve earned the right to enjoy it - enjoy the peace-of-mind that should come with it. </p>

<p>You are also giving each child a tremendous gift, in that you are saying, “I respect you and the choices you make”. You are conveying faith and optimism they they will have a satisfying and happy life - not derailed by a single choice - of one school vs another.</p>

<p>If either is (in your judgment) affordable for him and for you, DON’T try to steer him in an way. He’ll then blame you if he has regrets down the road.</p>

<p>If it isn’t really affordable, or is seen as a hardship, that’s another matter.</p>

<p>“The loan amount would be substantial over 4 years for School 1. (We’re guessing maybe $30,000 or so)”</p>

<p>I agree that this amount should be manageable. I’d take the top-5 dream school at this debt level. It’s a very good deal.</p>

<p>To me the top-5 dream school comes with a not unreasonable debt level. If there are any strings attached to the scholarship, such as a minimum GPA, he could be in trouble. Things happen sometimes where a good student through no fault of their own can’t maintain an expected GPA.</p>

<p>As you can tell from my online name, my S who chose the expensive option is at Megabucks_U pursuing a fine arts degree. I will confess that given his expected return (financial not emotional or spiritual) from this degree I have some real heartburn sometimes about his choice. He has convinced me that can (will?) realize above average income as an artist and far beyond the “expected return” so OK… but if there had been loans involved…I think I would have said NO or at least strongly advised him NO DEBT for art student. Remember that you can’t get rid of student debt in bankruptcy…it is almost like debtor’s prison…it will trap you and limit your choices and lifestyle in a way that no other type of debt does. Saying “30K is a reasonable” amount of debt really depends on what the course of study is…$30K of debt for an art student with average income 5 years after graduation of $20K would be a very heavy burden…so sadly, kids who have to borrow to go to school really don’t face the same choice as those who pay full freight. Low income students with good financial aid packets may pay a fraction of full cost during their studies but taking on debt to complete a degree has very different long term implications than spending your inheritance from grandpa. I do not subscribe to thethe “moderate debt” judgement since the meaning of “moderate” depends on where you are sitting and what your future job market looks like. My son faces a grim job market and low expected future earnings, but he will be debt free and, if he chooses to go live in a commune and live off of twigs, berries and the occasional sale of a sculpture…well, he can do so without fearing that banks and gov’t will be hounding him to repay student loans. His peers with student debt are now panicking and picking up some business classes and perhaps will go into marketing so as to have a job…that may be fine, but are they choosing that because of the debt or because they really want to be Mad Men? You only live once and you are only young once so take on student debt with a real assessment of whether you will be able to pay it back without compromising your dreams (twigs, berries and sculptures, for example)</p>

<p>Thanks for the suggestions, I appreciate that most are here to help and it helps to know others have had the same issue. We are leaving the decision to him but suggesting that he forget about money and go where his heart leads him. Good Luck all.</p>

<p>You need to visit both schools.</p>