Why Your Choice of School Matters
December 12, 2014I read this article about parents shouldering a massive burden for student loan debts for their children.This is currently a huge problem in the middle class. Lower income families receive significant financial aid. Higher income families can support the cost of college out of cash flow. It’s the middle class that is getting hammered with this and it’s creating some ripple effects into other areas of life. I have talked with countless couples who are delaying retirement for 5-10 years in order to pay down student loan debt. They all hope that their employers keep them around that long and that they don’t get caught up in a downsizing or have serious medical bills like the family in the article.
I have also talked with a lot of parents who want their children to go to any school that they really have their heart set on attending. And post-graduation, I’ve talked to many recent graduates who wish they hadn’t gone to their “dream school” after they are confronted with the student loan payments that will be hitting them once the deferment period ends. The parents want to do “the right thing” by not limiting their kids’ choices in colleges. The kids want to do “the right thing” by going to a school that they feel gives them the best chance at being happy during their college years. Far too often, this ends up being a situation where two rights actually can make a wrong.
Having experienced these conversations and seeing what motivated both sides, I decided that I didn’t want to fall into this trap with my kids. I remember a very important conversation I had with my daughter one afternoon. She was a junior in high school then (a college sophomore now) and she knew that she wanted to be an education major. Since age four, she’s wanted to be a teacher at the elementary school level. She was getting marketing packets from dozens of colleges all over the country because her PSAT and SAT scores were quite good. And during her sophomore year in high school, one of her best friends was the valedictorian of the senior class and he ended up attending an Ivy League school. My daughter told me it would be really cool if she attended the same school with her friend. That’s when we had a “teachable moment.”
Since she knew what she wanted as far as a career path, we talked about letting that knowledge guide the school selection process. She wants to stay in our local area for the long term so we wanted to consider that factor as well. (OK, maybe not “we.” That could’ve been just me.)
I asked her how much more she thought our local school system would pay her for an Ivy League degree than they would for our local state university, which has an excellent reputation for producing elementary education majors. She thought about it for a minute and said that the salary for an Ivy League grad should be much higher because of the cost of the education. We went to collegeboard.org to look at the cost of the Ivy League vs. the local school. The cost of the education was ~$150,000 higher over 4 years, so she was hoping that there would be some nice “bang for the buck” for her more expensive hypothetical degree.
I have friends who teach so we called one of them and put her on speakerphone. I told her that my daughter and I were doing college planning and asked how much more she would get paid if she went to an expensive private school vs. a quality state university. What we heard was about 30 seconds of hysterical laughter, followed by “Not a single dime!”
That answer puzzled my daughter so she asked again, and my friend said that all teachers in our county start at the same pay rate. My daughter looked at me quizzically and asked “then why would we pay that much more for college?” I opened my arms wide, said “you ARE my daughter!” and gave her a hug. That whole exchange took maybe 15 minutes from start to finish, but it was the best 15 minutes of the entire college selection process. I know that she will now graduate without massive debt burdening her and the costs are manageable on an annual basis.
My advice to anyone who is considering college choices or has a child who is doing that, is to let the financial reality be a part of the conversation. Look at any school that generates significant interest. You can always apply to them and see what kind of financial aid package is offered. (My daughter applied to some very expensive private schools, got accepted, and the financial aid packages were less than generous but at least we gave it a serious look.)
Also, let the career path help guide college choice. For something like education, a local state university with a reputation as a teaching college could be an excellent choice. For engineering or law or other more specialized degrees, maybe a higher-priced school can provide career benefits that will outweigh the added cost.
Don’t make the mistake of wanting your child to go to their dream school even when it isn’t completely practical given that their major/career choice would suggest that a less pricey school would be a better option over the long term. The people in this article, given the choice to do it again, would most certainly re-think their decisions. Your choice of school matters!