Dream school or no debt

[Pollyanna]

Can you tell there are a lot of college discussions happening in our house? For us Dh will be finishing fellowship the same year dd graduates from high school. Needless to say we have very little money saved for her tuition. She is likely to get a full ride to any of the State schools (truth be told, she will likely make money on the deal). While she is completely open to staying in state (even staying home) she also has some dream colleges that could open doors for her for graduate education, yet leave her with significant debt.

The question becomes, do you encourage your children to go for their dream school knowing that it would be a poor financial decision? Our plan was to let her apply everywhere, look at the acceptances and financial offerings and let her make the decision from there. The hesitation is that an 18 year old really does not have the foresight to see how a pile of debt will affect their future. Dh and I just go back and forth on how to proceed and cannot even believe we have a child so close to college.

It will be interesting to see what everyone else thinks.

[scrub-jay]

Before I went off to college, my parents educated me on financial responsibility and debt (books, talks, etc). I ended up doing 2 years at a community college and then transferred to a private school. The private college actually made the cost the same as if I were to have attended the state schools. Private schools offer an amazing amount of financial aid. That being said, the one thing my parents taught me that has always stuck with me is that: investing in your education is never a mistake. I have never taken a loan for a car and have already paid off my undergrad student loans. I'd say at this point - start by giving her the tools to understand debt and finances. Taking out student loans taught me good financial habits for life. My credit card never carries a balance, etc.

Good luck - this will always be a difficult decision.

I like your approach of apply and then compare packages. I do think the debt can be a burden (obviously). Perhaps you can approach it with a state school for undergrad, dream school if you decide on graduate school kind of thing? (or are the dream schools unattainable unless you've gone to an exclusive private school).

[JaneDoe]

I voted for stay debt-free. Dh and I were fortunate enough to have our undergraduate college education paid for by our respective families. We both went to a 4 year state school. Go Oregon Ducks! However, we each had to take loans to pay for law school and medical school. Our student debt load at it's peak totaled around $140,000 or so. While we absolutely value our education and are grateful for the standard of living it has afforded us, paying back that student debt is burdensome. Even at our income level. I can't imagine if we had student debt from undergraduate school.

I believe a state school can get you a quality education and enable you do achieve the career you desire. At least, it did for Dh and I.

[Sheherezade]

I say keep your options open. I did the private school with family help and partial scholarship. (Ditto DH - no scholarship, one year state school then transferred.) The name does open doors. That said, we were lucky to have the family support.

Could she go for the a great state school?

[oceanchild]

I definitely recommend applying broadly. A lot of private colleges, especially the smaller ones, offer very generous financial aid packages - you may be surprised. (Applications are expensive though, so you might set her a limit. My parents agreed to pay for, I think, 7 or 8 applications, and if I wanted to apply to more I had to pay for them.)

I know you're not a huge fan of the "University of Spoiled Children", but they definitely spoiled me - full tuition academic scholarship for all four years.

I was kind of a high school superstar, so I applied for colleges with an eye toward those that might give me money. After the PSATs, you start getting a lot of mail. They're quick to brag about their academic scholarships if you fit their profile. Once I was a National Merit finalist, I got a letter from USC saying they would guarantee me at least half tuition scholarship, with the potential for full. That jumped them WAY up on the list of schools I was considering. (This all was like 10 years ago now, so obviously YMMV.)

Anyway, I have nothing against state schools, although I think they're kind of lacking in my home state. AZ has some really solid options. One of my best HS friends went to U of A and really loved it. Apply broadly, see what happens.

Also, have fun. Applying for college is a lot of work, but I look back on it really fondly. We had a great spring break trip my junior year visiting colleges in California, and another fun one with my dad touring the Pacific Northwest for interviews and auditions.

[NYCHoosier]

I'd definitely encourage her to avoid student loan debt. I went to a private undergrad and have a little; DH went to a private undergrad and medical school and has a ton. It really stresses him out.

I voted to apply everywhere she wants and to see about financial aid packages. Has the PSAT happened yet? She should take it in her junior year to be considered for National Merit. I received $8k that way ($2k each year). My alma mater doesn't have the greatest endowment, but I was still able to get $10k/year through a combo merit/need based scholarship.
Also, I didn't have great luck with it, but she should look into Fastweb - they have a ton of scholarships.

Basically... I think going to my undergrad was a very positive experience. And through an inheritance, scholarships, and my parents, I was able to leave with only $20k in student loan debt.

I think a good goal is to aim to have no more student loan debt than the annual starting salary of an average graduate of that institution. For example, the average starting salary of a new grad from my undergrad was $40k at the time I started college. So, a reasonable amount of loans would be $40k or less. Just a good benchmark, but obviously you have to consider things like... is she going in as a journalism or music major when most graduates are I-bankers and/or engineers?

In retrospect, DH really should have gone to a public undergrad. This is why, as I think about law school, I will take financial aid very seriously, weighing any offers I may receive against the impact on my career. Of course, there is one school that, should it accept me, I could not turn down. (And I think the debt would be worth it).

[houseelf]

We have been talking A LOT about this lately as we are trying to get a grasp on our finances. I can tell you that this:

Our student debt load at it's peak totaled around $140,000 or so. While we absolutely value our education and are grateful for the standard of living it has afforded us, paying back that student debt is burdensome.

is true for us but even more so. Our student loans dictate (and dictated) a lot of decisions, like me not staying home with the kids during residency. I know that BOTH DH and I are not working in our original field of study (Him--Mechanical engineering, Me--Accounting). Because our undergrad loads were minimized we were free to pursue grad schools and have a change of heart. I think that this is a gift in itself.

DH and I are not completely on the same page about this issue at all. I'm all for minimizing future debt. I can't imagine having six figure debt for too many majors. Also, does your DD want to go to grad school too? This certainly ups the ante.

I do know that if your DH takes a job at a select few certain academic locations, tuition is free. As of today, our kids can go to undergrad tuition-free at DH's college. We found out that this absolutely is not the norm anymore. We are not on the same page because DH wants them to be able to go anywhere they want, regardless of cost. I would rather entice them with stuff like a car, a year abroad, or a downpayment for a house when school is free. But I digress.

With five kids' college educations to fund, would an academic post be a possibility for you? I know that his subspecialty is highly sought after.

Best of luck,

Kelly

[scrub-jay]

I think the point about what does she want to study does make a big difference. I was able to get a good job and tackle my student loans immediately, but many of my friends with less lucrative degrees (mine was biochem/molec bio) have had more difficulty.

ETA: I'd just like to note that as a group, I think we could write a book (or several) on the student loan benefit/cost.

[madeintaiwan]

I know you're not a huge fan of the "University of Spoiled Children", but they definitely spoiled me - full tuition academic scholarship for all four years.

I was kind of a high school superstar, so I applied for colleges with an eye toward those that might give me money. After the PSATs, you start getting a lot of mail. They're quick to brag about their academic scholarships if you fit their profile. Once I was a National Merit finalist, I got a letter from USC saying they would guarantee me at least half tuition scholarship, with the potential for full. That jumped them WAY up on the list of schools I was considering. (This all was like 10 years ago now, so obviously YMMV.)

DH didn't even apply to USC and they offered him 20k a year in scholarships. He ended up going to a UC for various reasons but mainly because it was less expensive and he really wanted to move away from where he went to HS. I think if you live in a state that has great public universities then there is less to worry about in terms of graduate admissions. DH's little cousin just started at Brown and there were big discussions about finances and what not prior to him attending. I'd definitely keep your options open. Apply and then discuss options when you have acceptances and financial packages to compare. So exciting. I always knew that I wanted to go to UC Davis ever since I was 8 years old but I still applied to 6 or 7 universities. Very exciting times!!!!

[Ladybug]

I went to a large state university, and my parents didn't let me apply anywhere else. My dad was an alumni there. I went from a very small town and tiny public school to a large university with 300+ freshmen in all my classes. Although I did well on the multiple choice test, I didn't learn as well as we could have in a smaller classroom, discussion-oriented environment. I wouldn't dream of asking a question with 300 kids, or even approaching a busy, busy professor. It caught up with me later. Some kids did fine with it, but it's still very different experience than a small college. I'm sure I'll keep size in mind when my children are looking at schools. I'm counting on scholarships. She might be surprised at what they offer her, so I vote throwing a wide net with the understanding that scholarships and finances will play into the final decision.

[SoonerTexan]

Has the PSAT happened yet? She should take it in her junior year to be considered for National Merit. I received $8k that way ($2k each year). My alma mater doesn't have the greatest endowment, but I was still able to get $10k/year through a combo merit/need based scholarship.

The PSAT is the best kept secret out there. OU, Florida, and Arizona State all offer (very close to) full rides. My HS enrolled me in PSAT classes automatically based on my sophomore year score, but DF studied on his own and we both made it.

Seriously--it's great. I enroll before everyone else, and at this point I am basically making money off going to college.

If your child can get in on it--it's worth it!

[MissCrabette]

I voted to apply broadly and weigh the options later. As Julia said, lots of small private schools offer really generous financial aid packages. I got 12.5k/year plus a small state grant and I ended up with only 16k in student loans (which I'm in no rush to pay off considering the low, low interest rate). This may not be the case for your daughter, but I felt really comfortable at my school and probably wouldn't have done as well at a large state school. In retrospect, I wish I'd known more about the financial implications of choosing a college over another, so definitely sit down and talk to her about this.

[NYCHoosier]

DH didn't even apply to USC and they offered him 20k a year in scholarships. He ended up going to a UC for various reasons but mainly because it was less expensive and he really wanted to move away from where he went to HS. I think if you live in a state that has great public universities then there is less to worry about in terms of graduate admissions. DH's little cousin just started at Brown and there were big discussions about finances and what not prior to him attending. I'd definitely keep your options open. Apply and then discuss options when you have acceptances and financial packages to compare. So exciting. I always knew that I wanted to go to UC Davis ever since I was 8 years old but I still applied to 6 or 7 universities. Very exciting times!!!!

Man. I was a NM Scholar, why didn't USC contact me?? It was my #2 choice. Sad day. The most memorable letters were from Purdue (free, plus stipend) and Oklahoma. One of the NM scholars from my high school apparently took up Oklahoma on its offer, and he's now at a top tier law school. Another took Purdue's offer. The Purdue campus just makes me too miserable, though. They literally couldn't pay me to go there. (Luckily, both of my parents are IU alumni, so they didn't push too hard for Purdue! haha)

[SoonerTexan]

PS--I have one more thing to add...

Is your daughter thinking about graduate school of any sort? I think a lot of kids worry they wont get into med/law/grad school if they don't go to a big name place. DF was a little worried about this until he got to his UTSW interview and realized he was right up there with all the Harvard/Yale, etc. grads, but he had done it for a heck of a lot less money.

Also two of my roommates had hopes for east coast private schools and ended up at OU. They were really bummed our freshman year about it, but now they say they're happy they are here.