I got my degree paid for with the Illinois Veteran’s Grant, and the GI Bill was a nice paycheck on top of that.
I understand not everyone can join the military. My advice is to not go into debt unless it’s an investment you think will pay off. Going to be a physicist or a nuclear engineer? Go for it. The problem that can arise here is getting talked into going some pricey but substandard University of Phoenix route rather than trying to get into Stanford or MIT.
But don’t make a big bet on an arts degree. Starbucks won’t pay enough to cover that $60k BA, sorry. If you can afford it though, knock yourself out. The world needs more artists.
My nephew is a college sophomore now. He’s at Connecticut College in New London, Connecticut, which he chose over the University of Connecticut, among other places. The net price for Connecticut College was less than for UConn, especially since UConn offered virtually no scholarships or grants. According to my brother, my nephew maxed out on government-guaranteed student loans but that amounted to “only” $5,000 a year or so. That’s actually only about ten percent of the overall cost of his private liberal arts school. So he’s going to have about $20,000 in student loans when he graduates, which seems manageable.
I attended Rensselaer in the late 1980s, and also maxed out on student loans. I also ended up with about $20,000 in loans, which I paid off at the rate of about $200 per month over the next ten years. It was not an excessive burden. At the time, the total cost of attendance was about $15,000, and I received about $5,000 in grants. So I was paying roughly a third, my parents were paying roughly a third (actually a bit more as I wasn’t very careful with spending money) and the school comped me on about a third.
My solution is to get the government out of the business of making or subsidizing college loans. Only for-profit financial institutions like banks or mortgage companies should be making those loans. And *they *will only make the loans if there is a decent chance that the student will be able to pay them back. That is, a good student with a proven track record and a major that has a high probability of landing him in a job with enough pay to pay it back.
Avoiding student loan debt isn’t an end in itself. While the numbers get pretty absurd, federal student loans can have some very generous repayment terms (especially if you are low-income), and in many cases even high student loan debt can be managed with minimal impact on one’s lifestyle.
The real balance is finding a balance between what you are paying for school, what you can realistically expect to earn, AND what the value of said education is to you. That last one is tricky. I went to a stupid-expensive grad school and will take an income hit for the next ten years. BUT, I will get to work in a field that I love, and excel at. It’s a trade-off and a gamble, but one that I expect will work out in the end, even if it wasn’t financially the most obviously intelligent move.
However, what often happens is that the private school does come through with a much better aid package, but because of the low price of the state school, even with the large amount of aid, the private school is more expensive - but now, you have a seventeen or eighteen year old excited because you’ve said “well, we’ll see what kind of aid package we get.”
In year two, the aid package for a private school is sometimes less than in year one, you are in, you aren’t likely to transfer out. So some of the money disappears.
This is absolutely true. Low-tier private schools can be terrible deals. The best deals, often, are the good state honors programs: they give you the networking experience, internships, access to top recruiting, opportunities for research, etc.
However, “cheap state schools” are still very pricey. Hereis UT San Antonio’s price page (it’s a couple ears old). Tuition at a fairly standard second-tier state school is still almost $9K +$1K in books, and if you have to live there, they estimate another $9K. So that’s close to $80K in costs for a diploma from a “cheap state school”.
Honestly, maybe 1/1000 kids even have the option to go to a top-tier, highly expensive private school. The vast, vast majority can’t get in: acceptance rates even among those who apply is less than 10%, and most kids wouldn’t consider applying. Whatever those top 1% of the top 1% kids do isn’t effecting the macro debt issue. I think a lot more of the student loan debt is held by kids who did exactly what the OP suggests.
I assume it happens, but I’ve never heard of anyone having their aid package cut after the first year. (Except for those scholarships that are based on the student keeping up his/her GPA.) In fact, I was told by the financial aid office that they don’t want to see people leaving school midstream for financial reasons and will do their damnedest to make sure you can stay at school.
And yes, if the public school ends up being cheaper than the private school, I can see going to the public school. (But then again, I was able to get more money from my school by mentioning how much Carnegie-Mellon offered.)
One more thing: those 1/1000 kids who will end up accepted at Harvard and MIT are amazing individuals. Those test scores and grades and essay writing/interview skills don’t come from no where: they are very often the products of a combination of drive, intelligence, and maturity that really does tend to set these kids apart. Now, kids like that will end up “ok” wherever they go, but they are most likely to benefit from being in the company of their peers. Over ten years, I’ve sent probably a dozen students to top tier schools, and in every case, they were kids that I honestly had trouble keeping up with intellectually–and I am no slouch. A kid like that needs to be surrounded by and taught by people that can inspire and challenge them. It’s not just about the reputation of the school–it’s about feeling like you came out of it smarter than you went in, as opposed to just paying a bunch of money to get a receipt.
I mean, honestly, most of my kids who went on to the Ivy League had passed so many AP tests that they had basically already finished the first two years of college. Those top schools assume that’s where their kids are starting, and pitch their courses accordingly. And that’s what these kids need.
Its happened to every friend of mine with a college age kid who started at a private school because “the aid package made it affordable.” Four - we’ll see if the fifth gets shafted next year.
I ended up doing quite a bit of research on this whole thing a while ago, and I pretty much came to the same conclusion as the above poster.
As has been mentioned, it would be difficult to see exactly how a situation would occur in which a student would be accepted into Harvard would not be able to get aid if there was a financial need.
There are other benefits to going to Harvard as well. Once a person gets in to Harvard, it is difficult to flunk out, and much easier to get straight A’s there than at many lower ranked schools, so the odds of not making it through are much less.
And once you get through, the benefits certainly do not stop. For one, the social connections and friends you make there can be tremendously helpful. Furthermore you will forever have access to an alumni network consisting of leaders in every field imaginable around the world. You can also have access to social clubs that only admit ivy league alumnus (one exists in my area).
What is true of Harvard is true of maybe 3 or 4 other schools (Stanford,Princeton, Yale, MIT) 7 or 8 other schools after that may offer something sorta similar (Penn, Brown, Columbia, U of Chicago for example), but after that the ROI drops pretty heavily.
In short, a very tiny number schools at the very top are in a league of their own and offer access, prestige and opportunities well beyond anything learned in the classroom.
I think there are probably some people out there that thought their second tier school was worth the top tier tuition and came out disappointed.
IMHO there are 2 good strategies for getting the best ROI on your education 1)Go to Harvard 2)Go to community college, get really good grades and then go to a good state school and get really good grades.
The problem with this is that few kids really know what they want to do when they enter college. They haven’t been exposed to a lot of areas of knowledge yet. It is important that the college have lots of good departments and be flexible enough to let people change.
I know one person who graduated from MIT and wound up as a professor of folklore.
I like how the OP chose several of the few schools in this country that offer loan-free financial aid as examples of schools that will leave you with lots of debt.
I think you’re underemphasizing the role of attendance at a good feeder school such as Boston Latin or Exeter as well as the role of legacy admissions IMHO.
Well, those are kids for whom a cheap state school is really not an option, anyway, and for whom the $120K price tag is not that big of a deal, anyway.
This. If a bank won’t make the (student) loan without government backing, it shouldn’t be made.
I notice no one’s suggesting another way of avoiding this debt. Don’t go to college. There are an amazing number of ways to make a living that don’t involve a degree, and people seem to be ignoring those. I know certain fields are almost a cliche now but I just recently enjoyed a fun outing… on our plumber’s 30 ft yacht. (Seriously)
We steered one of our young-uns away from college and into a trade. Paying for that training was a better investment than sinking money into one of the “soft” degrees. We’re happy to pay for their college, but demand a field of study with a good return on the investment. With government-backed loans, no such wisdom is applied to a youngster’s choices. Forbes makes the same point, but more elegantly than I do.
I went to college for free, except for textbooks. I worked for a company that would reimburse tuition and fees upon successful completion of the course.
Of course, scheduling was a problem, and I ended up having credits from a half dozen different two and four-year institutions, and it took me 15 years and more than 170 undergraduate credits before I had sufficient credits piled up in one place and one curriculum that someone would award me a degree, (B.S. in Chemistry) but the cost was minimal.
The OP specifically mentioned KU as an option. Hereis there in state fee schedule/automatic scholarships. With housing, it works out to about $20k/year for residents and $32k/year for non-residents. Alice’s best scholarship deal would be about $10k/year; if she’s a resident, the only way to get that would be to have had the foresight in October of her junior year to put KU down as her first choice school. Otherwise, she maxes out at $5k/year. As a non-resident, the aid packages are actually a little more generous, but that’s to slightly offset the extra $16k/year in tuition. Assuming her household income is below $160K, she would save money by going to a top tier school. If her household income is below, say, $80K, she’d save tens of thousands of dollars.
KU has 4000 kids in their freshman class. Many of them will graduate (or fail to graduate) with $60-$100,000 in student loans. That’s the cause of the debt problem, not the solution.
Oh, and Eastern Kentucky? They estimate $19k/year for residents and $29K/year for non-residents. So it costs the same at KU. Looking just at resident tuition rates (ignoring housing costs), Eastern Kentucky runs $2k/year cheaper than KU. That’s not nothing, but it’s not dramatically less expensive.
Now, I will say something positive about private schools -
They can be wonderful experiences. They are smaller than state schools with usually a lot of ambiance. If your grandfather left you a trust fund or your parents saved and you can go anywhere you can get into, even if you have to pay full tuition - and you sure aren’t a MIT candidate, a school like St. Olaf can give you an experience that you can’t get at the neighboring Winona State. But you are going for the experience of “small private liberal arts school”- not for the ROI.
I agree with this. Getting an English degree from Harvard is a whole different situation than getting an English degree from an average school. When you get to this level, undergraduate major does not matter in the same way that it does in lesser institutions. For example, Harvard offer all sorts of liberal arts classes but there is no accounting major, in fact there is not even a single undergraduate accounting class offered. A subject like accounting is considered too pedestrian. I don’t think this has held any Harvard grads back from becoming business leaders.