Probably the most important article you’ll read relating to borrowing for college, written by the daughter of the woman who writes the “Color of Money” financial advice column for the Washington Post. The young woman is now 28, and is very happy that she wound up going to her in-state flagship state U, instead of her OOS “dream” flagship state U, which would have cost her much more.
Parents and students, consider this! Your in-state flagship state U is very probably your best option, unless you are low income AND get accepted by a private college that offers an enormous amount of merit or financial aid, so much that it brings your cost of attendance down to lower than at your in-state flagship state U.
I have said this in other threads, but both daughters were similarly very glad to have graduated with no debt.
One daughter got a “dream job” after getting her bachelor’s degree. The dream job was very enjoyable, in a beautiful location, and allowed her to gain residency in a state that in turn allowed her later to be able to pay in-state costs for her doctorate (a DVM). It also gave her valuable experience and helped her get a second job in the same area, both of which were very helpful in terms of relevant experience again to help her get accepted to good DVM programs. However, the dream job paid badly (it could because it was that attractive of a job). She could only take it because she had no debt.
Similarly our other daughter found it much easier to be able to support herself living on her own because she graduated with no debt. Also, because of the combination of no college debt, plus some money saved up from internships, she was able to travel in Europe for 3 months before starting that first job after graduation.
In both cases no debt turned out to be a big deal.
There is another potential advantage in staying in-state, which did not come up for our daughters. Sometimes students take more than 4 years to graduate. If you attend an expensive private university with financial aid (whether need based or merit based), in most cases the aid will end after four years. However, if you attend an in-state public university, then you will still be in-state for a fifth or even sixth year just in case this is necessary.
Students sometimes under-appreciate the benefits of attending an in-state public university.
The author attended the University of Maryland; her dream school was the University of North Carolina where she would have been required to pay non-resident tuition.
Being debt free grants one a greater number of options regarding where one lives & works.
Taking on a reasonable amount of debt can be a rational choice. I took out some loans when I got my undergrad. I took out more loans when I went to med school. I was able to pay them all back quickly through a combo of a strong salary, a government loan repayment program, and frugal living. It was an investment that paid off. Of course there are other options that would have paid off as well, some with and some without loans.
What isn’t a good strategy is something like taking on huge loans to attend an expensive dream school for a major that doesn’t have a clear path forward. Taking on Parent Plus loans to attend NYU for an Art History degree is not a safe investment.
It’s hard to help kids (and adults!) understand — in the moment of disappointment — that a closed door is sometimes a tremendous gift. It’s always great when they’re able to appreciate it down the road.
Unfortunately, in some states, the in-state flagship may be unaffordable to many students. A student from a low income family in NH or PA may find state flagship affordability to be significantly worse than one in UT, NM, CA, NV, HI, WA, or FL.
Yes, Penn State tuition, not including room and board, is over $20,000 per year. That is a lot more than many other in state tuitions in surrounding states.
My kids’ in state publics were $16,000 and $17,000 a year. What our state is missing are merit scholarships for in state students. There are programs for low income, but not high stats, with the exception of free CC for the top 15%. CC is $10,000 a year.
Our kids’ private schools were much more affordable than our state U but the guidance counselor kept pushing public. You don’t have to be “low income” for aid at schools that are generous. The ceiling for income that qualifies is relatively high (at least in our world).
Our three kids have all thanked us for making sure they graduated debt free. We could have afforded tuition at our state university, or room and board, but not both. Our kids got merit scholarships covering tuition and went out of state and we paid room and board. Had we lived in a state like PA, this would have been our cheapest option, even cheaper than commuting to the local university, and it still cost us $15-20k per year, per kid. Generous need based aid was not helpful in our case. I find it sad that so many lower income students can’t manage tuition anywhere without debt, let alone room and board.
Debt free was important to us since we were also funding veterinary school. His OOS public safety ended up cheaper than our in-state because of scholarships, COL and being able to only spend 3 years undergrad. I think that looking at the cheapest option doesn’t hurt at all. He loves his school and is still there almost 7 years later (graduates in May with a DVM). State schools that some people say are settling can set you up for great things. He is now VERY competitive for internships and residencies at great schools! It all depends on your student, program, and what you can comfortably afford without debt!
For many career and income goals, a college education is better than no college education. In those cases, if you cannot afford college without loans, take out loans but take out the absolute minimum required.
But otherwise: heed the advice of this article. Do not go into debt just to attach a name to your diploma that carries more prestige in your view. It won’t open all the doors that you think it will. And whatever doors it does open will be adversely affected by the counterweight of that debt.
I don’t know that the state flagship is always going to be the best debt-free alternative for everyone. There are lots of financial aid variables related to state of residence, household income, intended major, academic and personal profile, etc., etc. But I think the state flagship should be on nearly every student’s application list and given a long, hard look.
But wherever a student attends, graduating debt-free creates a freedom that produces huge benefits. That student has freedom to consider more jobs in more places, more freedom to consider advanced degrees, and a leg up in saving for a house/retirement/start-up/you name it.
Debt is a tool. Demonizing a tool is crazy…should we ban hammers because every week someone shows up in the ER with a broken toe because he didn’t know how to use a hammer?
I’m a proud member of the “paid off my debt” club. My career and earnings and financial security ( including being full pay for my kids) is due to my student loans. I had cheaper options…none of which would have launched me the way my education did.
Not every college bound student has a realistic chance of admission to their home state flagship(s). And not every state’s flagship will have sufficient financial aid to be affordable to in-state students from low income families.
Nonetheless, most state schools have programs targeting low-income students, although they might not turn out to be the least affordable option particularly for high achievers. And a large number of students who might not be able to be admitted to a flagship would still qualify for a community-college-transfer-to-flagship program. But I probably should have said most students should take a long hard look at their state schools generally; I didn’t really mean to limit it to flagships.
As a general rule I do think most students should look seriously at what is available in state and include a state school on the list.
That said, when I posted I was thinking in particular of middle-to-upper-income students who look down on or overlook state schools because they think they are too easy to get into and yearn for a “dream school” that is more selective and expensive.
Edited to add: I say this as a person who took out student loans myself, in the interests of full disclosure.
Agree 100% with this. Student loans have their place but must be carefully considered in light of future earning potential. I took out significant loans for law school and it was the best investment I ever made. But too many kids take on huge amounts of debt not knowing what they want to do, and agreeing to debt at 18 years old with zero comprehension of what it means in terms of future impact on their life. I love Michelle Singletary’s writing in the Washington Post for this reason (her daughter wrote the article that this post is about), as she shines a light on the issue for people who might not have this information otherwise.