If your kid would have to pay $9,000 more per year to go to UChicago than you could currently pay and was also accepted to a large but high quality state school that you could afford, would you borrow or have your kid take some loans in order to make it possible? Seems like over a 40 year career that would be $1,000/year and that seems crazy to turn down.
It depends. Are you taking out loans or accessing retirement funds or emergency funds already? Are you already using maximum federal loans? Will work study or any other deferred payment plan be used.
If the answer is no to all questions. Sure it can be justified. Remember It’s not nine thousand. It’s 36 thousand plus interest.
Also if they are going to be a social worker, school teacher or work in the not for profit sector it might be a another analysis involved too.
It’s also always about the student more than the school over time.
But Chicago is awesome, no doubt. It also matters what the alternative school is as well. Some compete at the same level and carry the same level of excellence over time as UChicago.
But sure. It can work.
Depends on how much you value education. If you want the best education available then its A if you want a college degree for the best price its B.
agree with private banker. A top private school has so much more to offer than a top instate public. So, to me, its definitely worth $9k/yr. But then I can afford the cover the payments without a hit to retirement plans.
If the kid has to assume all of the debt, then I would vote ‘No’ as I’m not a fan of any more debt than the federal loan limits.
There’s no one size fits all answer. In addition to your personal financial situation and the degree your kid is interested in, your kid’s “fit” at both places is important, too. I have a son just finishing his first year at UChicago. It was more than I wanted to pay, especially considering our in-state flagship would have been virtually free. But… it has been an amazing experience in more ways than we could have imagined and I will happily say that I was totally and completely wrong to be concerned it might not be worth it. It has been worth it and more for what my son has gotten out of it and I can’t wait to see how he continues to grow and benefit in the next three years.
I have a close friend whose daughter made the other decision - virtually free to the state flagship and she has also thrived. It’s been the right choice for her.
Only you know your kid and your financial situation enough to make this choice.
First, the kid probably can’t take $9000/year in loans. Second, if you are paying for it, will you make him pay you back? Otherwise, that 40 year horizon is yours, not his. It’s a bad ROI for you. But, you asked what I would do…and if the program was much stronger at UChicago, then I would pony-up the money somehow. BUT, I wouldn’t do it just because it was UChicago. That’s how they get you.
How important is that “could”? is the 9K on top of other debt?
I don’t agree that the choice is that binary. No matter how amazing the resources and brand, each individual student only has a small slice of what’s available- because you can only take so many classes, you can only go to so many events, you can only have so many internships, etc. Plenty of students go to tippy-top colleges and universities and come out with an education that they could have gotten at dozens of good but not tippy-top colleges- and vice-versa.
Moreover, as some posters have pointed out, the field of study matters. There are state universities who have programs that are as strong- or stronger- than some UChic programs. And that doesn’t even touch the question of fit: UChicago is a definitely not for everyone.
So, back to the original question: if my finances were such that taking out a $36,000 car loan for a non-essential car (or an upgrade to Mercedes) then yes, I would take out a $36K loan for my kid to go to a school that they loved. But if I was still driving my 10 year old, 100K mile Toyota b/c taking out a car loan was not an economically smart decision, then no.
If the parent could afford (net price - $9,000), then the student could do a stretch with a $5,500 federal direct loan plus $3,500 summer and part-time-during-school-year work earnings. But that leaves little room for error (e.g. are there reasonable part-time jobs available during the school year, or are they all taken up by work-study students?). The student could get some financial breathing room if s/he can be more frugal with the personal and transportation costs than Chicago assumes (about $5,500).
However, if the parent and student are $9,000 short after the student takes a federal direct loan and assumes some work earnings, that heads into more financially risky territory, with cosigned student loans or parent loans.
Other factors, as some have mentioned above, to consider are:
- Strength of program in intended or possible major(s) at Chicago and the unnamed other school?
- Career goals? If the career goal is a lower income one, or one what requires additional professional school debt to enter, the disadvantage of additional undergraduate debt becomes greater.
Top private colleges tend to have a much higher 4-year graduation rate than the state U. You might have to figure on 4+ years and the extra tuition associated with it if your DC goes the state U route. That’s not true for every student so worth looking into. Some state schools make it impossible to take the required load without a summer term or at least one extra quarter/semester.
Also, if you are going off the online NPC to arrive at that $9k, it tends to be a tad “conservative”. You might find that actual aid is higher than the NPC is calculating, and that’ll close the gap a bit more. For instance, if you can get if to $5k a year ($20 k over four years), that’s worth a Stafford, IMHO.
Another way to look at the gap is that Stafford will fund approximately $5500-7500 per year (increases with each year of college) and summer earnings can take care of the rest. A Metcalf in a city where your DC can stay with relatives or friends will net something close to $4k for the upcoming year, and that’s the low-end of what can be available.
This is true in absolute terms- but for a student who is achieving at this calibre it is exceptionally unlikely.
There are so many state schools that I know nothing about for which I suppose this could be true? it seems unlikely though, and I don’t know of any of the ones usually considered “high quality” which “make it impossible” to complete in fours years. There are some courses (highly impacted subjects at some of the UC’s for example, and some engineering programs with work placement terms) that I could see it being hard to get done in 4 years. For example, I know engineers at Georgia Tech who took 5 years- but that included a year of paid work placement.
I’m not commenting on the money, since $36k per year isn’t that much and can be managed by federal loans and work. What I would focus on, however, is fit. UC is one of a few schools that can be very wrong for some kids and I caution families to hyper-focus on fit for those schools. I know several recent students that went for the prestige who really struggled and were not happy with their choice. For the right kid, however, it’s awesome. Really spend some time figuring out which camp your student is likely to fall into.
“and I don’t know of any of the ones usually considered “high quality” which “make it impossible” to complete in fours years.”
IIRC, Florida state schools require you to attend over a summer. This may not require an extra term, of course; however, my D16 was looking into a Florida state school with a very highly-ranked arts program and for her major it was impossible to attend in only four years. YMMV. Highly technical ones will probably at least encourage a longer stay. A liberal arts major will be a different matter.
^^ What @itsgettingreal17 is saying.
The state school with the highest 4-year graduation rate appears to be the University of Virginia, placing it in a tie with UC by this measure.
https://www.usnews.com/best-colleges/rankings/highest-grad-rate
Three things that I would think about:
One is fit. One of the smartest and hardest working students that my daughter knows went to U.Chicago. He found it to be a LOT of work. He complained every time he visited us (“Chicago is were fun goes to die”) but he was up for it. He did well there. However, you have to want to do it. Chicago is not a good fit for every strong student.
Another question is where the extra money is coming from. If you already need to take out federal loans to cover the large state school, then I would not go any further in debt for Chicago. If you can handle the full cost of Chicago without taking on any loans and without impacting your retirement funds, but you would need to stop eating out twice a week and postpone your new car purchase, then I would stop eating out and continue to drive my old car. If only the extra $9,000 per year is debt, then this is a bit tougher and may depend upon your situation. My wife and I are too old to take on debt for a child’s university (we had kids late). If you are young and in a career with great long term potential, then you might be okay taking on the debt. My oldest who graduated a year ago is very glad right now that she did not take on any debt for university. Just living on what she earns is tough enough.
Lastly, what major are we talking about and what large public school? For a computer science student, if you are talking about UIUC or U. of Michigan, they have great computer science programs. For a student studying something that will require a graduate degree, I would tend to save some college $$ for graduate school and avoid debt for undergrad.
In my opinion the largest reason that highly ranked private schools have higher graduation percentages compared to large state schools is the type of students that they accept, not the schools themselves. The type of student who is accepted to Chicago is likely to do well wherever they go IMHO.
I agree with @DadTwoGirls on the graduation rate statement. A great student will graduate in 4 years at a large state school. The large state schools grad rates drop, not because of rigor, but because life happens and some kids just don’t prioritize school. It’s the student’s choice to not graduate in 4 (unless you are in a program like Pharmacy or co-op required engineering, neither of which is an issue of UChicago). I was picking my oldest up at UMD after the first semester and overheard a conversation “I have to break the news to my parents that I flunked every class.” I told my son this and he said that it was his impression that the only way to flunk a class was to never show up to it.
That being said, I think that if your kid has researched UChicago and believes (s)he can be successful there, fit isn’t going to be an issue. My second child attends and he tells me that the same issues my oldest sees at UMD he sees to a lesser extreme at UChicago. Not that kids just don’t go to class and therefore flunk, but they don’t really prioritize studying enough to learn the material, they don’t thoroughly read the material before discussion, they don’t meet with the prof to go over ideas for papers ahead of turning them in… They therefore get Bs instead of As. So, if admissions and your kid did their job, I can only assume the kid knows what they want and that they can be successful there. (and don’t yell at me, I’m not saying every B is because students didn’t try, I’m saying a significant number of Bs are for that reason.)
I have my undergrad from a large midwestern State school. I can tell you that 30 years ago I was taught what to think, how to address certain issues in my field, where to look for answers when I don’t know them. In talking to my son at UMD, he tells me similar things on his education (he is a rising senior). We were/are both STEM majors, so maybe that has more to do with the subject and not the school. My middle son tells me at UChicago he is not told what to think, but how to think. I actually think that might be a better method. Especially in the social science world, but probably applicable everywhere, even STEM.
Is it worth an EXTRA $9k of debt/year, like others have said it depends on each individual situation. To me, an extra $36k (will be more like an extra $40k most likely as tuition and fees continue to rise) is doable and worth the cost for what my middle son wants to do. But for you maybe not. All I can do is tell you some things to understand that it isn’t exactly an apples to apples question.
It is an interesting question. “Is struggling to pay bills 20 years from now worth it if you can properly look at the issue from all angles and provide good points and counterpoints to the situation?” If that is the situation one ends up in, then I’d suggest the answer is no and then go for the less expensive route. But, you never know until you are 20 years from now do you?
OP should clarify whether the $9k per year is after other costs are covered without the student taking any loans or contributing work earnings, or if it is on top of the student taking a federal direct loan and contributing work earnings.
The issue with state schools and grad rates is less about academic ability and more about getting your desired sequence of courses with the desired instructor. THAT is what might stretch out the time to graduation, even for honors kids. Would always recommend looking at prospective time to graduation for your major if doing STEM or Econ. Especially at a gap of $36,000. For instance, even an extra semester or quarter at the state uni. would narrow that gap.
@JBStillFlying I usually agree with you, but if you extend your college career to get a desired professor, than I’d argue that your priorities just aren’t correct. 
If you get accepted into a program, and I assume you don’t have to take remedial classes, you shouldn’t have an issue with sequence unless you change majors 2 or more times, in which case the decision to change should be weighed against the cost of the change. That is a real life lesson. Don’t choose a path that you might not like, and if you do, make a decision if the cost to correct is worth it.
I’ve heard states that used to have free tuition for residents, had an issue with required classes filling up and then taking multiple extra years to graduate. In my time, I think that was a rub against the popular UCs, but I think that has been fixed. I don’t know many good students at Purdue or Indiana or Michigan or MSU or UMD (the large publics I’m familiar with) that take more than 4 years that didn’t change majors, didn’t screw up their priorities, or didn’t co-op/pharmacy program. My son at UMD is taking an extra semester, but that is so he can dual degree. He could have even done that in four if he didn’t study abroad one semester. This is in the most over enrolled and probably one of the hardest programs at UMD, computer science.