Is it wrong to not want to overpay?

Parents Forum
1

The costs of college have risen so much since I went to school; we will have over 40K in EFC and it just seems like so much money to me - $160-$180K+ for an undergraduate degree.

I went to law school and I keep coming back to the fact that my class included kids from all different kinds of undergraduate schools - Ivy, T20, Private, Big State, Little State, Commuter - literally everywhere. And we did fine and we all got the same degree. I just know from experience that when I went to get my first job, people looked to where I went to law school, not undergrad. And after that, when I went for my second job, they weren’t interested in my education at all, just my experience.

My daughter is bright, works hard and takes pride in her grades. She wants to be a doctor. Even if that doesn’t come into fruition, I’m guessing graduate school is in her future.

Based on my experience, I want to steer her away from the Duke’s of the spectrum and onto the honors colleges at State schools (including OOS) that would provide merit aid and bring the cost down from our EFC.

I just can’t figure out if this is unfair to her. I want her to have a great college experience, one where she will be happy and successful. But in general, I am the type of person that purchases things in the “better” category - in the “good” “better” “best” categories. We don’t need the latest and greatest. My car is a Honda, not a Mercedes. We live in a median priced home in our town. My phone is 4 iterations behind, etc. We obviously have a good income (hence the EFC), but is it wrong to not want to overspend on an undergraduate education when graduate or professional school is in the future?

2

Considering how expensive medical and other professional school is, some financial evaluation about whether she can reasonably pay off the debt on the pay level after completing professional school is in order. Amount spent on undergraduate can matter in this context.

3

If your Dd wants to attend med school, she should keep her costs for UG as low as possible. Med school admissions are not going to be based on where she attended UG.

In terms of is it fair? Our family does not accept the premise that expensive schools are the only place where top students thrive. We have had extremely competitive kids attend very avg Us on full or large scholarships. They have gone on to careers they have desired or accepted to the grad schools they want to attend. No one cared where they attended UG. They cared what they did with their time there.

Last yr a young lady graduated from Bama and is now one of a handful of MD-PhD students at Harvard. Her accomplishments speak for themselves.https://www.ua.edu/news/2017/04/four-ua-students-named-goldwater-scholars-in-2017/

It is completely bogus that affordable Us don’t offer excellent opportunities. So, no, it is not failing your daughter. It is being prudent bc 4 yrs of school is not a dream. It is an education and what they do during those yrs as adults fall on them to pursue.

(Fwiw, my ds was close friends with that young lady during his yrs at Bama. He is now at at top grad school in his desired field. Bama and its below 100 rank did not hold him back at all.)

4

It is not wrong at all. Moreover, for the vast majority of majors, there are absolutely amazing colleges out there which are extremely affordable. Honors programs at public universities, “lower ranked” LACs and other private colleges who will provide substantial merit, etc, will all provide the same quality education that the “Dukes of the spectrum”. Ignore all the people here who worship at the alter of prestige and treat the USANews and other rankings as their Gospel.

An undergraduate from an honors program at a state university will provide all the opportunities that your daughter will need to be the success you know that she can be.

Remember, the less you pay on her college, the more you will be able to help her financially otherwise, and the less likely it will be that she will need to help you when you are older.

You have spent your life as a parent teaching you D about being smart with her money. All you are doing is putting your money where your mouth is (almost literally). As you wrote - you own a Honda. Do you feel badly because you did not buy a more expensive car which wasn’t any better?

PS. My kid was accepted to the honors program at UIUC, and likely would have attended, but, because of a scholarship, she will end up paying a lot less at Midd.

5

How you spend your money is entirely your business. For the super wealthy, I think being tight on tuition, education , that sort of thing, is telling of priorities if Money is lavishly spent on things I think are far more frivolous. For those who have to watch their money to be ready for emergencies and retirement, I think it’s outright foolhardy to overspend on college. I’m constantly on the side of not borrowing large amounts of money for college.

If you are somewhere in between those situations, it’s entirely up to you and anyone, like me, who might make these pronouncements can’t really place financial gateposts up as to when you are in this area. I think most of us are in agreement on the extreme cases.

The argument for going to a school like Duke or HYP, or other expensive school is that there is no certainty that any given person will go for another degree. And if they do, there is no guarantee, they would be accepted into a “name” school at that time. I know so many of my classmates were rubbing wish sticks for med school acceptances back in the day, any acceptance to any school, much of the time. An acceptance to a highly selective , well known, revered undergraduate school is a bird in the hand. Really who cares where you get the the next degree in a lot of situations, one can argue.

Going to one of the most selective schools, the “name” schools means being with the majority of peers just as accomplished or more than you are. Also, you meet people often way out of social and economic spheres. Much more likely for that to happen than at the large state schools and smaller local not well known schools.

Many years later, my class reunions are often a Who’s WHo of semi celebrities as well as the occasional well known person or two. And, yes, it has made a bit of a difference at times. I can’t deny that certain school names do open some doors, though just a bit, you can’t count on it, and you don’t know for sure.

Other than providing security in terms of savings for future necessities, I can’t think of on much else I wanted to spend my money than the college my kids preferred. I wasn’t selfless enough to donate it to charity. I travel enough as do they without racking that up a notch. If it came down not being able to swing grad school or prof school if choosing a pricier college, that would be one thing. But my kids were ambivalent about that.

It all comes down to how you want to spend your extra money, and if you can bring the budget down so you have that extra money for college choice.

6

Over the years, many CC parents have said they limited their target contribution to the cost of their in-state flagship. Any extra, their child had to figure out merit. And a surprising number have ways they save on routine expenses (older car, etc.)

You’re in good company, I think. When one of ours asked about the perfect school, we said something like, “Perfect is one we can reasonably afford.” The rest varies by what you truly can pay.

7

Unfair is children starving in Africa, losing limbs from bombings in Syria, suffering in cages on the southern border, getting sick because people aren’t vaccinated. Get a perspective and get on with it. Send the D to a great affordable place. It’s up to her to make the most of it. Or not as the case may be.

8

Not unfair at all. It has to be dependent on your own situation. Also, I know many families whose kids are going to medical schools or have graduated from them, and I can honestly say it doesn’t really matter which college you go to if you plan to go to a medical school. Many of relatively rich families I know sent their kids to undergraduates for free, so they can use the money for medical schools.

9

Kids can do very well at a wide range of universities. Our kids can get a great education and great opportunities at schools that cost $75,000 per year, or in most cases can get a great education and great opportunities at a school that is a lot less expensive (probably including your in-state public university, but probably also including other options).

My oldest did very well at a university that we could afford. My youngest is still in university, and has a great research internship over the summer and is getting a great education at an affordable school. Both will be very well prepared for graduate school (or medical or veterinary school, if that is what they choose).

“I went to law school and I keep coming back to the fact that my class included kids from all different kinds of undergraduate schools”

I went to a very highly ranked graduate school and discovered the same thing.

I think that we need to see what is available to us and to our kids and use some common sense. However, I think that the lesson that money is not available in unlimited supply is a very important lesson for kids to learn.

10

OP, it seems you are talking about two different things, one a personal philosophy that tends towards “better” rather than “best” and the other the reality of higher education costs these days. Setting aside your personal philosophy, your intuition that no one will care about the undergraduate school once your daughter pursues a graduate degree is spot on, so it really does not make sense to spend money now that you may need to spend later for graduate school. Even if she does not go to graduate school, it really will not matter much what school your daughter attends, so long as she is happy and challenged and does well. There’s so much pressure to believe otherwise these days, but it is nonetheless the truth.

11

My personal experience is that once you are out in the work world, for the most part, where you went to school is fairly irrelevant.

I went to a brand new law school that became accredited the year I graduated. I had no interest in the type of work done at what used to be called “white shoe” firms and is now referred to as "Big Law,’ so I never applied at the “top” firms. I wanted to do civil trial work (an oxymoron if there ever was one, on occasion). When I got my first real job, an older, snootier attorney asked me (in front of many co-workers in the lunchroom) where I had graduated from. I said I did my UG at a CUNY and then attended a brand new LS, where I had been awarded a full tuition scholarship (I didn’t disclose that fact). He hhummphed and said that he had attended an Ivy for UG and a T20 law school. I took a beat and then said (loudly enough for all of the listening co-workers to hear) “Imagine that. And we both work here together now!” It’s 30+ years later and he’s one of my best friends.

My point is, it doesn’t matter where you go to UG. Do well and you will get into grad school. Do well there (I was second in my class) and you can wind up working with Ivy Leaguers.

With my own children, I am one of those parents who said that I would pay the equivalent of an in state education, which in my case is SUNY. All of my kids took this option. They weren’t Ivy bound and I didn’t see the reason to go into debt for anything else (maybe U of Chicago, but the one child who could have gotten in there had no interest).

12

No need to overpay. However, there has got to be some differences between schools in quality of teaching and opportunities for undergraduates. Even though it has turned into a marketing group, the impetus behind the original Colleges That Change Lives book was to point to schools that actually did a better job at educating than other schools, including schools with more selective admissions. Finding a good fit and figuring out which schools do a better job is the tricky part.

Both the honors programs at big universities and the LACs are touted because these programs make it easier for students to connect with professors at mentors. This was one of the primary characteristics touted in the CTCL book that made a difference in boosting the level of accomplishment of the students. As an Austinite familiar with what is going on at UT Austin, I know that the college of natural sciences is putting a lot of effort into undergraduate teaching and mentoring in order to increase student success (and graduation rates for the statistics keepers). Big universities add honors and other special programs in order to compete with attention given to undergrads at LACs.

13

OP - Lots of families have struggled with this same question, especially those that CAN afford the higher expenses. When you can afford more but make the choice to limit the budget there is a lot of doubt. I will say that as parents we struggled some with your exact feelings. We could afford to send our DD to dream schools but it made no sense to us at all. We are now struggling through this same situation with our second right now.

We landed in the camp of we will provide you with the amount of our state flagship + expenses every year and will extend that by the amount of the federal loan limits. We will loan you the extension money (up to federal loan limits) and you will pay it back to us after you are employed. Our state flagships are on the upper end of most expensive in the country lists so we felt that this provided a wide range of options, especially with merit stacked on top for our ‘average excellent’ children.

Even after we decided that this was reasonable, we struggled with the fact that we technically could afford to fund the dream schools. It would mean slowly draining our emergency fund, or pulling from Roth retirement accounts, or remortgaging our home to give all 3 kids the dream school choice. It would mean limiting the experiences or opportunities for the younger siblings at home to finance the dream of the one away. It just doesn’t seem logical or financially prudent to spend wealth accumulated over decades for 4 years of an experience to yield basically the same outcome. We have no way of knowing the future of our own employment or health. If we felt that we were putting our children at any disadvantage or that they could not get an outstanding education at a lower priced school, we would have chosen differently. It in no way indicated that our priorities were not with our children or with education as others like to suggest. It is like every other financial decision that we made through our lives where we try to find the sweet spots of wants/needs/value/cost/outcomes.

Our DD17 chose her safety out of the gate. She is thriving and we have seen no downside at all. She is getting the classes she needs, taught by outstanding professors, and learning so much. She has continued to thrive in her ECs and has grown so much better. She has joined exclusive social, academic, and professional organizations. She has landed well paying internships where she is working beside peers from top tier schools. She was all in on her decision but we had discussed if it wasn’t the right fit or she felt she was not being challenged that she could transfer to a more rigorous school after a year or two. We figured that with the full tuition scholarship she was awarded she could take her lower level courses for free and transfer to a “better” school and graduate with a 25% or 50% discount since the first year or two did not cost anything. There was no need to go that route. Instead, she will graduate and she will have her college fund intact and growing to begin her life (graduate school, wedding, home, her retirement
)

We worried for nothing. From where we sit she has not been denied any experience or opportunity. She has not sacrificed any academics and she is sitting in classes with others who are just like her. We confirmed what we were told and expected: These state school honors classes are filled with students who were competitive for Ivy level and other top schools - some by choice, some by financial constraints, some by bad luck in the application cycle. She is surrounded by amazing talent in and out of the classroom AND by the “riffraff” of NOT top 0.5% on some academic standards — and she is learning and growing from everyone she encounters. She is building valuable connections and will be part of a huge, dedicated alumni network.

Good luck deciding what is right for your family. To your original question - No, it is not wrong to not want to overpay. You may be surprised that the outcomes are often better or just as good as the higher priced school. The higher COA does not correlate with a better outcome when similar students are put side by side.

14

What @cptofthehouse said. Very thoughtful post.

15

@3kids2dogs Back in the day, I opted for state flagship + honors for reasons of cost. It positioned me very well for grad school and I had the good fortune of choosing among a number of fully funded offers. One of my daughter’s good friends, who currently is pre-med, is getting a great low-cost education at a public + honors, including faculty sponsored research opportunities.

Remember that with public+honors+merit your child will have classmates who are similarly capable and similarly constrained financially. She will not suffer socially, academically, or professionally by seeking out affordable options. Great professors can be found anywhere and they will be eager to work with students of your daughter’s caliber. Honors programs often come with very nice perks (early class registration, university-sponsored field trips or cultural events, etc.). And don’t discount the bragging rights of being able to say, “I worked so hard in HS, that I was able to attend college tuition-free.”

16

What one chooses to spend their money on is up to them. Colleges and cars is a great comparison. Most folks look carefully choosing a car - esp if new - and go with the one that is the best fit for them providing what they want in a car at a cost they are content with, sometimes financing part of it and sometimes not. Do the same with a college.

Visit those that look good on paper (test drive), then contemplate what is important to you (your daughter) and see what ends up being the best fit for her/you. On paper consider the possibilities for merit aid that can make some nicer schools less expensive. Otherwise consider the “usual” fit aspects like large/medium/small, Greek/non, urban/suburban/rural, etc. For med school take a look at whether the school supports all applicants (often a lower acceptance rate) or screens their applicants with a pretty high bar (often an impressive acceptance rate, but note that some who could have made it in don’t get a chance to apply).

I’ll add my usual note from what I’ve seen in 19 years of teaching
 Those who want to go to med school do the best when they attend a school where they are in the top 25% of entering stats, both for GPA and SAT/ACT. This doesn’t matter for super high ACT/SAT scores where “everyone” at the school has high scores, but matters a bit with 1400, 1300, 1200, etc scores. Often those scores are a testament to how good of an academic foundation the school provided. It doesn’t really say how intelligent the student is, esp if the 1200 student has a UW 3.8+ GPA at their school. When kids get to college they are in the pre-med classes with their competition. If the competition has a stronger, deeper foundation the student without it will usually feel “dumb” and get demoralized. They end up assuming they aren’t good enough. Put a similar stat student in a situation where they are starting at par with their peers and they often do well.

Many students will find something they like better than pre-med or just realize it isn’t what they like, but there’s no reason to put them in a situation where they are likely to fail due to perceived (vs real) matters.

If the students are high stats and joining other high stats kids at top schools, no problem. They can be as competitive as their peers and often thrive by being with academic peers (more than one has told me this - they love it). Some of these who have chosen much lower schools (NOT meaning state flagships of any sort, but much lower - think average SAT of 900-1000 and a 1500+ student with no real special honors options for classes) have told me they’re bored and wish they had chosen something that fit them better being envious of those who did. They still made it into med school, though quite frankly, not as “higher ranked” schools as their peers. When becoming a doctor, that really doesn’t matter much TBH. All become doctors. I’m not at all up on the differences in med school. My middle son is in one, but he made his own decisions on where to apply and attend and is super happy with his decision. His undergrad is in the Top 30s, but was also the least expensive school for us beating our state option and even high merit offers (full tuition) like UAlabama. He had high stats and is one who thrived being with his peers. It wasn’t free for us, but we didn’t mind paying our share at that cost. No regrets at all. One of his best friends from school is a lad who chose a free low stat school and is also currently in med school - not the same one, but with regrets about undergrad. In hindsight he tells us he’d have picked a different option (he had options - just went with free).

Pick your own car/college based upon what fits the two of you the best, finances included.

17

My daughter got into her number 1 school for her field and merit was not enough. We gave her the choice. You can go and had “x” dollars to pay off after graduation and we can’t afford to give you anything extra during the year since the other child is going to college in 2 years or you can go to your number 2 affordable school with good merit and you will graduate debt free
in fact we might be able to start a savings plan for you and you will start life that much further ahead.

She chose number 2. Is excelling in college after a major change that would of been disastrous at her first pick college, will graduate next year debt free with some money in the bank.

Read this : many of her friends graduated this year and some are struggling getting jobs right after college and have no clue how their going to be able to start paying on their loans. This is a reality for some. No debt trumps debt everyday!

18

Since you mentioned Duke in your original post, do a little (rounded numbers) comparison between Duke and a fine state university a few miles down the road.

Duke undergrad tuition room and board is now $73,000 per year
Duke medical school tuition and fees is now $63,000 per year
Total (not including room board and extras during medical school) for undergrad plus medical school at Duke would be $544,000

Undergrad In state tuition room and board at UNC Chapel Hill is now $23,000 per year
In state tuition and fees at UNC medical school is now $33,000 per year
Total (not including room and board and extras during medical school) for instate undergrad plus medical school at UNC would be $224,000

That is a $320,000 difference for the same education.

The UNC and Duke grads would be competing for the exact same residencies, would earn the exact same low incomes during residency years, and would have the same earnings potential as a physician.

It would be up to you and your child to decide whether that additional $320,000 for the same education is worth it.

19

Full disclosure: i am a little biased towards UNC. My own kid went to UNC undergrad (out of state), became very involved in UNC summer overseas research with the medical school because he had a business minor and they needed someone with those skills. He spent two grant supported summers in Malawi and one in Nicaragua working with UNC med students and faculty as an undergraduate. He stayed in North Carolina after he graduated, worked and established residency there before applying to medical school. He just finished his second year of medical school at UNC with a full tuition scholarship.

20

Depending on the choices, I do think it matters where one goes to UG and I agree with @cptofthehouse. Also, you honestly don’t know if her undergrad degree will be her terminal degree. Lots of kids start out pre-med and change their minds. We are also a family who buys used iPhones and used cars but we have prioritized education and are spending full tuition for our S19’s undergrad. We have the funds so there won’t be any loans and it won’t affect retirement. It’s still going to sting psychologically since it’s so much money but the connections he will make, the strong alumni who are helpful with job searches, and the experience he will have while at school are worth it to us. Even little things like he’s likely to get all of the classes he wants every semester. Already, he has high school friends going to big universities (yes, in the honors programs) who have their schedules for freshman year and didn’t get some pretty important classes for their intended major. I warn you to look into the honors programs you are interested in. We never found one that really offered all that much. Maybe a little earlier registration, maybe some sections are smaller (but never all), and maybe different housing. Don’t just think “oh state school in honors program” and assume it’s the same as other more elite universities or LACs.

This all being said, if the money is not there, I don’t think big loans are the answer. Or working longer as parents to afford it. But, again, that’s up to the family.

And I don’t think we are “overpaying”, whatever that means. I think it may just be worth every penny.