I just had a post in the ‘chance me’ section where i asked about what kind of a college my current record qualified me for. A comment on my post noted that I should base my decisions primarily of financial capabilities and need. My household has an income of about $100,000 and I believe there is about $35,000 already set aside for future education costs. So, this is my question: growing up, I always thought that you want to get into the best university, period. That is, you just try to get into the best school you can and you don’t think twice about loans because the school’s investment will pay for itself in terms of future opportunities exclusive to that school and just the ability to have that school on your resume. Is this evaluation mislead? Is is better to go to a middle of the road school where scholarships will make it very affordable, or a big name prestigious college that will be expensive? I suppose the best way to communicate my question is - do premier colleges with limited scholarships really pay for themselves in the long run, and does having it on your resume and the other benefits attached make up for the difficult financial hole you are putting yourself in right away?
Where did you get the idea that “premier” colleges have limited scholarships?
A better question is where did you get this idea? For instance a company will not pay extra for an engineer from Cornell vs. one from Purdue. There are some professions which are school name aware like IB but for the most part, most are not.
Are you talking about schools that don’t give merit awards…like the Ivies, Stanford, MIT, and some of the more competitive LACs? Some of those don’t give merit awards at all…only need based aid.
I haven’t read your chances thread…but my opinion…you want to go to the best school that you LIKE that you can afford. You don’t just want to go to the top school just because it’s a top school. And if you can’t afford to attend, you need to consider that.
All schools have Net Price Calculators. If your family doesn’t own a business, have self employed oarents, own real estate other than your primary residence…or parents are divorced…the NPC should give you a decent estimate of your net costs at colleges on your application list.
Re: loans…you have a limit on the loans you can take yourself. $5500 for freshman year. Anything above that will either need to be cosigned by your parents…or they will need to take the loans. Will they do that?
Also, think about your debt. Regardless of your college…if you have $100,000 in debt when you graduate, you will have over $1000 a month in loan payments for at least ten years.
“do premier colleges with limited scholarships really pay for themselves in the long run”
no
First of all, as a student you can ONLY borrow a few thousand dollars in loans each year- your parents will have to be the ones borrowing the $. Are you really going to ask them to jeopardize their financial future for a very expensive “status” symbol? The chances are that 2 years down the road they will NOT be able to continue to pay your tuition, and you will have to transfer or drop out. The LOANS taken out will STILL GROW buy 8%/year and will STILL HAVE TO BE PAID OFF.
"and does having it on your resume and the other benefits attached make up for the difficult financial hole you are putting yourself in right away? "
no.
If you can get into a college that will PAY you to attend, you will be FAR better off in both the short and long run, than trying to dig yourself out of an expensive debt hole that CANNOT be written off, ignored, or forgiven, even if you die or your parents go bankrupt. Student loans will be like a heavy ball and chain around both you and your parents neck.
Think of it this way- there are THOUSANDS of colleges in the US, just as there are thousands of CAR models.
Would you even think to ask your parents to buy you a Mercedes or a Tesla, when a far less expensive car is all that you can afford or need?
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talk to your parents about how much they’ll pay each year in addition to the college savings which is about $6k per year.
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Have them run the net price calculators on schools’ websites
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you can only borrow $5500 as a freshman. To borrow more means parents would have to co-sign and that is VERY risky for both students and parents. Most parents will not cosign because of the risk and how it hurts their credit score.
Taking out a bunch of debt for undergrad is often foolish and almost always unnecessary. Deciding to take out a bunch of debt as an incoming freshman is extremely risky because so many kids change their majors and career goals which can make debt even more foolish.
Growing up, I bet you believed in Santa too. I think kids don’t understand much about college, and understand even less about compound interest and loans. I guess you made something up and decided it was a truism. Your income will depend more on your major and what types of jobs you get/take than the college in general. It is great to go to a ‘fancy’ school and there are a lot of luxuries and sure there are connections to be made but there is no guarantee it will not take years and years or a lifetime to repay massive loans. A lot of kids find this out too late. I don’t know why we let them live a fantasy until the hard reality of Sr year.Weren’t you ever told there are things you can’t afford growing up? However if you get into Stanford, you won’t have to pay anything at your income level. A few schools are extremely generous.
I sympathize. I think your assumption was – at one time – the accepted mantra. But that was a time when the costs and debt for college was not so big relative to an expected post-grad compensation. The job market has changed too since then, and many fields have been demonitized. At least this is my impression. I’ve woken up and smelled the coffee, however. It was a shock, but many families and students are finding their way into fabulous opportunities in higher ed while also avoiding unjustified debt. Lots of CC posters can guide you to those wonderful (and prudent) options.
Btw, I do believe most folks (including teens) who think there are only a few “top” colleges are incorrect.
What do you hope to study? Career goals? Must-haves for a college? Grad school?
No school, not even Harvard, is worth 250K+ in debt. Regardless of career, but especially in this economy, there’s just NO WAY to pay that down without severely crippling yourself in terms of lifestyle, life choices, etc. That kind of debt limits your job options (soulless corporate job that pays $$$ vs. job you love… if you can find a job!), where you can live (niceness/safety of neighborhood, by yourself vs. with your parents or with 8 roommates), whether you can afford to get married, have kids, ever own a home. There are those of us with a fraction of that debt who are unsure we can ever afford kids or home ownership–most of my peer group is doubtful of either/having to delay either/both indefinitely until the economy bounces back (if it will! sigh.). No college degree is worth a ton of debt–the name on your resume just doesn’t matter the way it might have twenty, thirty years ago… when those prestigious school cost a teeny fraction of what they cost now (and salaries were… about the same as they are now!). And once you’ve got your first job, where you went to school doesn’t matter at all for career advancement.
I have to assume you’ve gotten this terrible notion from your parents (who likely attended college when you could attend supporting yourself with a summer job, or at worst a nominal loan), as you are far too young to have gotten it from your peers–have you been paying attention for the last decade? (ie: your formative years) College costs have risen exponentially, as has debt… yet we’re in a stagnant job market (everything has risen exponentially except salaries!), and Millennials (the first group to take on astronomical debt for UG degrees) have some of the highest rates of unemployment. As I mentioned, this generation is delaying marriage, having children, home ownership… and we’re the first generation they’re predicting will be worse off than our parents. It’s bleak out there. The smartest thing a current student can do is get the best possible education for the least possible debt. In twenty years, the difference between those who are living well and those who are hopelessly behind/debt ridden/unhappy will be how much education debt they took on, not which school they attended.
Colleges and Universities are businesses with heavy marketing. High schools are invested in bragging about where their students get accepted. Be careful about drinking the Kool-Aid. Those big numbers (college costs & loans) don’t seem real to a lot of people, old & young, but they are very, very real. Opportunity cost. What else could you be doing with that money, and the time & freedom (without heavy loan burden)?