The problem of college students graduating with a mountain of loans has been talked about a lot in the past few years. Yet despite all the talk, no solutions are in sight. Every statistic I’ve seen shows the problem still growing despite the increased awareness. Waiting for a political solution seems hopeless given our current crop of leaders. I can’t think of any realistic way to help those who already have massive student loans. However, I think it is possible to help those who haven’t entered college yet to avoid loans, or at least avoid enormous ones.
Don’t go to the most expensive school that will admit you. Go to a cheaper one.
Let’s suppose that Alice is a brilliant student: Straight A’s at an elite high school, National Merit Scholar, plays three musical instruments while competing in four sports, etc… She’s good enough to get into Yale, Johns Hopkins, or Swarthmore. But she doesn’t have to do so. Other universities will be happy to not only admit her, but give her a good education for free. Places such as the University of Kentucky or Kansas University will almost certain give a student like her a free ride.
Now there’s an obvious objection to this problem. “Sure,” someone might say, “Alice will save a few hundred thousand dollars by choosing UK over Swarthmore, but she’ll lose out on tremendous opportunity.” Two things should be considered in response.
First, in everything we purchase, we weigh costs against benefits. In most things, such as cars, houses, clothes, or restaurant meals, we don’t simply assume that we should buy the most expensive thing we can afford. College educations seem to be the only item where there’s an unspoken assumption that many purchasers will spend any amount to maximize benefits without worrying about costs.
Second, I think many people overestimate the benefits of going to an elite college or university as opposed to an ordinary public university. It’s certainly true that Harvard sends more of its student on to graduate school and high-paying careers, when compared to the University of Kentucky. But it’s less clear how much of this is caused by Harvard’s superior education, rather than a self-selecting student body.
Here’s another way to think about it. If Alice attends Harvard or Swarthmore, she’ll most likely graduate in the middle of her class. If she attends UK, she’ll probably be very close to the top of her class. Now graduate schools and employers, if they’re smart, know how to weigh an average Harvard graduate against a top-of-her-class UK graduate, and evaluate either one on her merits.
This logic doesn’t apply only to top students. For example, consider Bob, who can’t get in to any school better than the University of Kentucky. He, too, doesn’t need to attend UK. He could instead look at Eastern Kentucky University. It’s a less prestigious school, to be sure, but it costs less.
In addition, there are options for a great education that don’t cost anything. One example is the military academies. A few years ago, Forbes ranked West Point at #1, in part because of costs. There are also places like Deep Springs College and Berea College, which deserve to get more attention.