It is OK to choose the cheaper, In-State over the more expensive

Parents Forum
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<p>school when trying to make a decision about where to go to college.</p>

<p>There are smart kids at every school. You will find people interested in academics at every school.
There are good professors at every school.</p>

<p>Saving over $100,000 in after tax dollars is huge.</p>

<p>With that money you can live overseas after college and meet people from around the world, or work in poorer communities for almost nothing, pay for grad school, live in different areas of the country like NYC and not have to concentrate on school work, make a down payment on a house, choose a job that doesn't pay well just because you like the work, invest in securities, real estate, etc.</p>

<p>There are too many people on this board that are giving very poor financial advice. When some kid or parent comes on the board and says my family can't afford a school and will have to go in debt, instead of saying go to the more expensive school, step back and think for a moment. Listen to what the kid or parent is saying. The family has come to the conclusion they can't afford the more expensive school. Maybe, the family has thought this through, and guess what, they really can't afford it. Maybe the ability of the family to make money isn't large. Maybe, the family has future financial obligations that prevent them from going into debt to pay for a college.</p>

<p>Most seventeen year-old kids who say they have a dream school don't know what they are talking about and will get a fine education and be very happy at many places.</p>

<p>It is very easy to tell somebody else to spend their money, to tell somebody else to go into debt. After all, we don't have to live with any repercussions.</p>

<p>Many people on this board say "Hey! It worked for me. I went into debt. I went to the more expensive school. And it worked great for me".
Well guess what. The financials have changed. College costs have gone up astronomically over the last 25 years.... over twice the inflation rate. There are more smart kids, spread out at more schools, than ever before. What might have made sense 25 years ago may make no sense today. To tell somebody to do something today because it worked 25 years ago may be exactly the wrong thing to do.</p>

<p>People on this board say the money is important to me, then ask..."Chicago or Berkeley" ? "UVA honors or Duke?" And some of the answers that are given blow me away. "Spend the extra $100,000+ and go to Chicago or Duke".
I don't know how anyone can give that kind of advice without really knowing the financial situations of the questioners. I don't know how anybody can give that advice without knowing that Chicago and Duke are really better than Berkeley and UVA for the student.</p>

<p>When people talk about experiences at various schools or the admission process, this board is fantastic. When it goes into financials.... It is one thing for a student or parent to ask, "Has anybody had any experience at AAA?" "Can you tell me about it?" Then have people respond. It is another thing for people to start giving financial advice and suggest people go into debt based on perceptions that may not be accurate. That is flat out wrong. That is dangerous.</p>

<p>I have been on this board for a couple of years and have never been more disappointed with the financial advice given to students. Potentially, it is financially damaging to the student. It ignores the parent's concerns. And who knows more about these situations, the parents or a bunch of anonymous people on a BB.</p>

<p>When giving advice on this board the number one rule should be, "Do no harm". The number two rule should be, "If you make the most of your opportunity wherever you go, you will be in excellent shape". After all, that is the truth.</p>

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<p>Boy do I agree with you Dstark. Sure, if a family really has $40,000 a year available for higher education, that is great, but when it becomes a question of debt then it is kind of scary. Especially when it is the young adult who is being encouraged to take on the debt. It is easy to fall in love with a well respected private school with select students and professors in a lovely setting. In fact, it is easy to fall in love with all kinds of luxurious things. But sometimes what we earn by our own efforts and can pay for with money that we really have is the most valuable. Even if it is an education at an in- state nonflagship regional college. I taught at such an institution for 9 years and some of the students there were getting a great education. I now teach at one of those $40,000 a year places and the classes are smaller, the buildings are nicer and the IT support is great. However, unless I had a spare $40,000 a year I would not pay for my own children to go here.</p>

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<p>It's always about alternative uses of $ if you have them, or whether it's worth scraping them together if you don't.</p>

<p>$100k (if you have it) can buy (for your kid):
-- Two years living in Paris studying modern dance or ballet;
-- Two years living in Rome or Florence at art school;
-- Two years of medical school or law school (or almost);
-- Five years chasing butterflies in Madagascar or Costa Rica;
-- Ten years building houses with poor folks in Sri Lanka or India, and learning to run an international NGO;
-- Twelve years running AIDS hospices in Cambodia;
-- Four years working in the basement on computer software (that's how Bill Gates go his start.)</p>

<p>All of these are based on real people.</p>

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<p>Other than buying a house, a college education is probably the biggest investment anyone will make -- parent or child. I really relate to the question, because it's a huge issue in our house right now. Has anyone read Caroline Hoxby's paper on the subject? Sorry, but I don't know how to make it a link. (<a href="http://post.economics.harvard.edu/faculty/hoxby/papers.html%5B/url%5D"&gt;http://post.economics.harvard.edu/faculty/hoxby/papers.html&lt;/a&gt;)&lt;/p>

<p>This paper says that attending a school ranked 2 levels higher is worth an extra $300K in lifetime earnings. If parents can help the student, then it seems to make sense to make the investment, but I think it's really dangerous for a 17 or 18 year old to get into so much debt. As someone suggested before, I think it's reasonable for a kid to take loans equal to what they'd be willing to pay for a car -- just spend it on their education and buy something used when they get that first job! But for our S to attend one of the "best" schools he was admitted to means that we will be paying our part of the cost for at least 10-15 years -- and we're not exactly spring chickens. This is a scary thought!!!</p>

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<p>In all fairness, I don't remember any parent advising a student to go $100,000 in debt. Did I miss something?</p>

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<p>I always feel it's presumptuous to judge anyone's finances, one way or the other. Each family needs to make the decision as to what's best for them. However, when I see a teenager come on here and in effect say "Help me convince my folks to spend 200K on undergraduate education", it does get me annoyed. My dad was a teacher and I didn't even consider applying to private colleges, although I had the stats. I did take out loans to pay for my Ivy League postgraduate education, but I payed them back, not my folks.</p>

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<p>On the other hand, some of posts on the student boards show a pretty callous disregard of parents (let's buy a new lexus and redo the kitchen) for their kids. I've got about zero tolerance for that attitude, and yes, I am biased about it. </p>

<p>Kids shouldn't mire themselves in debt - and I tell them that. If parents elected to spend (during the early years) when they could have saved - then the savings is retroactive - debt in the future. This is the position we are in - scary, yes. But for my kid, I think, the costliest choice is by far the best - the deposit went in the mail on Monday.</p>

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<p>The decision is obviously easier for people who have great state schools, but kids who live where there is no good state option (say, Tennessee) have tougher decisions to make, because out of state tuition for state schools is rising pretty rapidly.</p>

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<p>The parents earned the money and they're free to spend it how they wish. I don't believe in imposing my values on others. If they buy luxuries rather than pay for medical care for their kids, that's another story, but high priced college tuition is not an entitlement.</p>

<p>Whatever happened to "working your way through college"?</p>

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<p>Dstark, as usual, you have given excellent common sense advice that is easy to forget in the thrilling moments of acceptances to various colleges.</p>

<p>The other thing I would add is that I see parnets and kids who are not really accurately analyzing and comparing the financial aid packages they have received from various schools. Why? They are only looking at the total number on that financial aid package. There is a lot of talk of "Johnny got $28K from school A and only $20,000 from school B...obvously Johnny is going to take School A's offer." </p>

<p>Yet, if that $20,000 offer from school B is $18,000 in grants and scholarship, it may actually be a much better deal than that $28,000 from school B that only offers $10,000 in grants and the rest in loans and work study. </p>

<p>Make sure you're separating out the "free money" when comparing offers. And, remember that work study has to be earned over the year - you still have to come up with that initial amount at the start of the year and you should not assume that your child is going to necessarily be able to earn the full amount of work study over the year (I would recommend checking on the average hourly wage for work study jobs on campus). Taking out loans is fine, but any kid who will graduate with more than $30,000 or so in debt is going to start out with an extra burden and far less options in terms of graduate school and maybe pursuing a lower paying first job.</p>

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<p>Dstark, you're right, of course, that no one knows what others can afford. Only the posters know that. But if someone asks, for instance, Chicago or Berkeley, they already know the price differential--it's not a big secret. Yet they're still asking the question, so what they're asking is "given this price differential, what do you think?" I assume they want to hear other people's take on this, not, well Berkeley's cheaper, or State U is cheaper, or whatever. They know that.</p>

<p>They're looking for stories that they can use, adapt, discard, bounce off of, consider, etc. I don't think anyone is looking for a financial advisor.</p>

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<p>momfromtexas, thanks for posting. It's always nice to read something from someone with actual experience. </p>

<p>Sjmom2329, if you make an extra $300,000 in earnings in a lifetime because you go to a higher ranked school, that is one incredibly poor financial investment. You will make way more than that just investing the money conservatively. </p>

<p>Mini, you are right. What are the alternatives and other opportunities? $100,000 buys a young adult many alternatives.</p>

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<p>While I agree that kids asking how to talk their parents into spending what they can not afford is innapropriate, many of the posts here are parents wanting opinions on whether it's a good idea to stretch to allow their child to go to a better college. </p>

<p>There are conflicting studies as to the future monetary value of doing so, but there are also many other issues--your child's well being, happiness, feeling of accomplishment for achieving a dream and so much more. The concept of a parent giving a child "merit money" for a job well done has been discussed. Studies have shown that kids who achieve dreams become believers who then go on to achieve their dreams throught life.</p>

<p>So when parents pose this question, I take it that they feel able to make the stretch if they think there's good reason to. And many of us are willing to make sacrifices in the name of education. Here in Ca there are a ton of people sitting in million dollar homes telling their kids they can't afford college. There are others who downsize and pay for college. It's a choice we each get to make.</p>

<p>So yes, it's OK to choose the cheaper college, but it's also OK to make some sacrifices and take some risks to achieve the dream school.</p>

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<p>dstark,
I appreciate your post. As one of the parents who initiated just such a discussion (Berkeley or Chicago) this week, I value your perspective. I am not unhappy with the many, many posts that resulted from my query in the least, because they gave me a lot to think about and because the respondants approached the dilemma from angles I had not considered.</p>

<p>I tried to present our family's decision (and yes, it is a family decision, not just S's) with as much context (financial and otherwise) as possible in order to get views from a variety of people, including those who could justify spending an extra $100,000 on a private school and those who could not. Obviously, posters will bring to the table their own biases and personal situations, but I accept those limitations and still find their opinions interesting and valuable.</p>

<p>Receiving such a wide range of opinions has helped me to work through a question that has really been bugging me: At what point does the saving of real, after-tax dollars trump a "perfect fit?" </p>

<p>In otherwords:
1. Is attending Perfect Fit College worth not going to grad school?
2. Is it worth taking out massive ($100,000 plus) loans for grad school because the kid has used up all the education money that is available from the family?
3. Is it worth the kid sacrificing a worthy, idealistic but low-paying career to be able to pay back such loans?
4. Does four years at Perfect Fit Private College change one's life enough to justify the debt that would be incurred? </p>

<p>I still don't know. For us middle-class people, I think it's a lot like buying a house. You have to compromise based on what you can afford and how hard you would need to work to make the mortgage. </p>

<p>Three years ago, when we moved, we had a choice: a new home with some great family ammenities in terms of living space but on a small, plain lot; versus or an old home in need of major repairs and remodeling on an ocean-view lot. We couldn't afford the best possible home: the new house WITH the ocean view, so we had to choose. We are happy with our choice, but are there times when I wish we'd chosen the other way? Yep. I think I am the type of person who will ALWAYS wonder at the road not taken. </p>

<p>Anyhow, I think it might be the same with this college decision. I don't want to give up either school for S. If money was no object, if we could send him to Perfect Fit School and three years of law school so that he would graduate with no loans and be able to afford a career in his beloved public sector, that would be the answer. (Or, darn it, if Perfect Fit School had just selected S for some merit aid).</p>

<p>I know from your OP that you get this, dstark, so this isn't even really addressed to you. This is just the reality that we find ourselves in, and I guess it's just good to use CC as a sounding board for a lot of complex decisions that have to be made in the next couple of weeks. You are right, though, no one can truly advise us what to do... ultimately, it's a personal family decision. And not exactly a dreadful one, at that! Your post helps to keep it in perspective :)</p>

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<p>garland, when somebody asks if a school is worth $100,000 more, they are asking for financial advice.
If somebody says, I can go to Chicago or Berkeley for the same money, what are the pros and cons, that isn't a financial question.</p>

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<p>I disagree, they are asking quality and "fit" advice. If it was merely a question of "no, one is 100,000 more than the other," then why ask the question. They already know that. I think they are asking, given the difference in price, do you think it's worth it. I dont see that as a financial question, but I guess we'll have to agree to differ.</p>

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<p>momof2inca, I guess i am going to go off track here, but this idea of one college being a perfect fit at the exclusion of other schools is a bunch of marketing BS.</p>

<p>But, I will play along. Suppose Chicago is a perfect fit. And maybe, Berkeley as a whole isn't a perfect fit. But maybe, maybe, 33% of Berkeley is a perfect fit and that 33% can be the part of the school your son interacts with. In other words, 33% is a perfect fit, he doesn't deal with the other 67%...so in reality, it is a perfect fit and you just saved over $100,000.</p>

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<p>I agree Garland, they are basically asking how other people value an education, and that's what this whole arguement boild down to. Some people value a certain type of education more than others. Just like some people value the ocean view and others the better house.</p>

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<p>garland, if you read what you wrote, you will see that it is a financial question. "Is it worth it?" is a financial question. For some people, it may be worth it, for others, it definitely isn't. For many, it comes down to money.</p>

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<p>The idea of whether one and only one school is a perfect fit is one thing, but the question of whether a given child will have a better experience at a school like Chicago or a school like Berkeley is another.</p>