NMF Tuition Scholarships vs. Elite Acceptances

Paying for College National Merit Aid
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<p>Faced with this decision in the spring of 2012, my son took the “dream school,” as folks are calling it. He turned down the offer from our state flagship of full tuition, room, board, books, educational stipend + a little bit of extra cash besides to go to the very top tier school.</p>

<p>But it wasn’t a choice of free versus $50K or $60K per year. It seems that the better the school (or, at least, the greater the reputation of the school), the better the financial aid. What I’m paying for my son’s school is an amount that I can afford without loans. Of course, I’ll have to hang on to my car an extra year or two, and there will be (and already is) some deferred maintenance around the house.</p>

<p>As well, as income moves up, aid moves in the other direction, and usually ends at income levels that probably are insufficient to afford without any debt most private schools. At my son’s school, even with two children in college, aid ceases at around $235K per year in family income, or even less. For folks in or near that income bracket, try paying $120K in tuition and room and board after paying your income taxes, your mortgage, your car payment.</p>

<p>But for most folks, the cost of the very top-tier schools is far more modest than the sticker price of $60K per year. So, the choice is not usually between free and $60K per year.</p>

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<p>We took the money. Our son has just started at a state school with a full academic ride - I think we will pay about $70 this year. He will graduate with an engineering degree from a very reputable state university, with no debt, and money in the bank for graduate school (should he choose to attend) which is the determinative credential these days anyway. He will have our support to pursue as many travel abroad opportunities during college as he desires and will not need to get a job during school as so many do to earn tuition/spending money. It was just the logical choice. There was an article in the Wall Street Journal sometime in the past year or so that we found to be very persuasive. The author was a financial planner who advised parents on college investing. Her advice was that anyone who is paying top dollar to attend an elite undergrad university is being foolhardy with their money, as there simply is never going to be a direct correlation between those tuition dollars guaranteeing success, connections, higher salaries. Any Ivy salary advantage lasts approximately 3 years after graduation before that levels off, so there is no lasting edge. If your kid is smart enough to get into a first-tier school, then a second tier school would LOVE to have them, and will give them most likely full ride. Similarly, if your child can get into a second-tier school, a third-tier school would be happy to pay them to attend their school. After graduation, success depends on hard work - and the importance of a degree from an elite school will diminish each year. In the end, this is a business decision and that is how we treated it.</p>

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<p>Jparent,</p>

<p>I wish your son the very best.</p>

<p>I don’t want to suggest that my own son’s decision was the “right” decision. I don’t think the decision has a globally-right answer. Whether to take the full scholarship or go to the more prestigious school isn’t an obvious decision, and it has a lot of moving parts. Some of those parts include family circumstances, educational and career goals, choices of fields of study, and relative availability of funds.</p>

<p>“There was an article in the Wall Street Journal… Her advice was that anyone who is paying top dollar to attend an elite undergrad university is being foolhardy with their money,…”</p>

<p>I see the financial adviser quoted herein, “anyone paying top dollar…” For folks who have to pay full sticker price, that’s a relevant point. But at most top-tier schools, you have to be in a top income bracket to pay full price. My son’s experience was, the better the school, the better the offer, with the exception of our state flagship, which through everything in but the kitchen sink.</p>

<p>So, for very high income families, full tuition at the state school may be relatively more attractive. But median family income in the US is about $60K, and for folks with that sort of family income, the Ivies and similar schools are nearly free.</p>

<p>One’s field of study is also important. In some fields, the school one goes to undergrad is more important than in other fields. </p>

<p>“In the end, this is a business decision and that is how we treated it.”</p>

<p>For us, it wasn’t a business decision. It was an educational decision with business aspects. So, it didn’t all come down to a matter of financial cost/benefit ratio, although that was an important consideration.</p>

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<p>Thank you both for posting! There is no “right” answer to the question this outstanding thread poses. I for one appreciate both of your family’s stances, and bravo to your two well thought out posts. Well done :)</p>