Interesting Rolling Stone article on college debt

[mnrose]

Actually, they were probably just relaying advice they believe predicts/influences academic success. There have been plenty of studies showing that working and commuting both increase the chances a student will drop out before finishing their degree. Whether those studies convincingly establish causation, rather than just reporting a common-sense correlation between financial stress and educational choices, is up for debate. But plenty of academic advisers and school counselors do put stock in them. And frankly, having done it both ways, I get it - it is a lot easier to haul your butt to class on a snowy winter morning when it is as simple as walking across campus vs. when it involves digging out the car and dealing with a long, slow, accident filled commute over slick roads, and a lot easier to focus on school when you're not worried about a midnight closing shift the night before an early class or having to work extra holiday hours at the same time as finals.



We're in a similar position with DD16, currently a junior, and she's going for the elite schools because that actually makes more sense financially. Our income is pretty average, low by DIS standards, so the need-based aid from the private "brand name" universities she's looking at give us a lower net cost than anything offered at public unis. I don't think she should be taking the long-shot academic awards at the one state university that offers something close enough to her intended undergrad program into consideration in making her school choices, because the odds of getting one are low. Merit aid is absurdly difficult to get at both the state schools we've looked at so far - a handful of large awards, either full cost or full tuition, at schools with 5000-6000 incoming freshmen. If she can get in, she's better off (will need us to pay/borrow less) at the $70K/year private uni than at the $28K/year state flagship. The way I see it, even with a 16% acceptance rate she's got a better chance at acceptance than of being one of the 10-15 students in 6,000 to get significant merit aid from the public school.

I assume, since you always have seemed pretty savvy to me, that you've filled out the "net cost calculators" on these college websites to see that first hand? I've been consistently shocked that we qualify for nothing in needs based aid, even though our "income" (as measured by our tax returns over the last decade) is pretty low. We do have assets outside our 401K though, and that's what kills us in the financial aid department. This is the "*" they put in there sometimes....that they will consider assets as well as income, even though a lot of those down and dirty calculators only put in income. For example, Stanford and Harvard both talk about how they "guarantee" to meet 100% of need for people who "earn" less than 100,000 (or something close to that). Sounds good until you dig into the details and see that this only applies to people making less than that amount AND with a "net worth" of less than $300K....which sounds like a lot, but not so much for people in their 50's as we are.

 

[Colleen27]

I assume, since you always have seemed pretty savvy to me, that you've filled out the "net cost calculators" on these college websites to see that first hand? I've been consistently shocked that we qualify for nothing in needs based aid, even though our "income" (as measured by our tax returns over the last decade) is pretty low. We do have assets outside our 401K though, and that's what kills us in the financial aid department. This is the "*" they put in there sometimes....that they will consider assets as well as income, even though a lot of those down and dirty calculators only put in income. For example, Stanford and Harvard both talk about how they "guarantee" to meet 100% of need for people who "earn" less than 100,000 (or something close to that). Sounds good until you dig into the details and see that this only applies to people making less than that amount AND with a "net worth" of less than $300K....which sounds like a lot, but not so much for people in their 50's as we are.

Yes, we have, and we've walked through the financial aid policies at her top two choices with on-campus reps as well. We have an advantage (of sorts) that a lot of DISers don't, in that we live in a very low cost housing market so our home equity doesn't end up disqualifying us on the net worth metric. I've posted about this before - we paid cash for it in '09, when a house in our town could be had for less than a new minivan, and while it has appreciated considerably since then the value has only recently hit six figures. Between that and being younger parents (I'll be 40 when she starts college) who haven't saved quite as much as we'd like for retirement, our net worth isn't enough to disqualify us from most economic diversity programs. It also helps that she's looking at CSS schools, which take private K-12 tuition into account too, since we'll still be paying tuition for DD9 through DD16's college years.

Her top choice is particularly straightforward - rather than having cutoffs, their policy is to meet full need minus a modest required student contribution. Since our EFC is very close to what we're paying for DD's high school tuition we're comfortable with that picture - we'd be kicking in about $5000/yr, maybe a little less in the first year because we might still have DS19 in college as well, and she'll need to earn or borrow about $3000/year. Our state flagship, for comparisons' sake, returns a net price that is 50% higher; they did recently roll out a low-income incentive that we make *just* too much to qualify for. They are also, from what I hear from other parents, less accommodating about outside scholarships, crediting them against total need before calculating the institutional aid offer rather than applying them directly to the student/family contribution as her top schools do.

 

[NotUrsula]

We're in a similar position with DD16, currently a junior, and she's going for the elite schools because that actually makes more sense financially. Our income is pretty average, low by DIS standards, so the need-based aid from the private "brand name" universities she's looking at give us a lower net cost than anything offered at public unis. I don't think she should be taking the long-shot academic awards at the one state university that offers something close enough to her intended undergrad program into consideration in making her school choices, because the odds of getting one are low. Merit aid is absurdly difficult to get at both the state schools we've looked at so far - a handful of large awards, either full cost or full tuition, at schools with 5000-6000 incoming freshmen. If she can get in, she's better off (will need us to pay/borrow less) at the $70K/year private uni than at the $28K/year state flagship. The way I see it, even with a 16% acceptance rate she's got a better chance at acceptance than of being one of the 10-15 students in 6,000 to get significant merit aid from the public school.

And that's the rub: getting in. Those schools pay lip-service to the idea of SES diversity by offering these programs, but in reality a very miniscule number of people get to take advantage of them, because so few who who would qualify will get in. At most of the schools who grant such aid, fewer than 200 of each year's freshmen class will qualify. (Meanwhile, the application fees pile up nicely: last year Yale collected over $2.5M in application fees.)

Don't get me wrong: if it works for your DD, then that's wonderful, but I would be very honest with her that it's a major long shot, and also submit applications to financial safety schools. (Also, do be aware that if she is good enough to have a fighting chance of admission to an Ivy-class school, she is also probably good enough to be a contender for an out-of-state waiver scholarship at a public school. Many schools offer them to diversify the geographical mix of their student bodies.)

 

[Colleen27]

And that's the rub: getting in. Those schools pay lip-service to the idea of SES diversity by offering these programs, but in reality a very miniscule number of people get to take advantage of them, because so few who who would qualify will get in. At most of the schools who grant such aid, fewer than 200 of each year's freshmen class will qualify. (Meanwhile, the application fees pile up nicely: last year Yale collected over $2.5M in application fees.)

Don't get me wrong: if it works for your DD, then that's wonderful, but I would be very honest with her that it's a major long shot, and also submit applications to financial safety schools. (Also, do be aware that if she is good enough to have a fighting chance of admission to an Ivy-class school, she is also probably good enough to be a contender for an out-of-state waiver scholarship at a public school. Many schools offer them to diversify the geographical mix of their student bodies.)

I'm hoping that she won't face such tough odds because her top choice isn't one with a specific economic diversity program she'd be shooting for - they do need blind admissions and meet full need (Georgetown). Same with her second choice. Somewhere along the line, she crossed Stanford and the one actual Ivy she was thinking about off of her list.

Fortunately she does have one safety school she really likes, a smallish Jesuit university with very generous need and merit aid policies that is merely selective rather than highly selective, and her stats put her in the upper-middle of their published test score/GPA/class rank stats. Class rank is the metric that worries her the most, because she goes to a super competitive private high school with a super small class. Georgetown talks a lot about most of their students being in the top 5% of their graduating classes - the top 5% of DD's class is just the valedictorian, and she won't be it.

Unfortunately we haven't found a public school, in state or out, that has quite what she's looking for. Smaller schools don't offer her program or a the kind of no-car-needed campus environment she's hoping for, and she's uncomfortable with the size of the flagships (which I suppose I shouldn't be surprised by - her 8th grade graduating class was 8 kids and there are 27 in her HS class, so jumping into a college freshman class of 6000-8000 is understandably intimidating).

 

[DisneyOma]

Oh no there are many ways you can lessen your burden. Moving to another state is just one of them. And my point was consider what goes along with that. For each option someone chooses they should be looking at what goes along with it. Just like they should if they are choosing to go with strictly the student loan path.

But are you adding the cost of moving and living in another state for two years, and the wasted two years of not having the degree into the cost equation? How much would two years of life be worth, BTW?

Yes in state in Florida. He is a National Merit Semi Finalist with scores higher than needed for Florida and good activities and honors so he will most likely make it to Scholar level. Florida has the Beniquisto Family Scholarship that gives cost of attendance to five different State Universities in Florida for National Merit Scholars.

He wants to major in Physics and is looking at U of Chicago and MIT as well.

For MIT, when you say 'good activities' do you mean school ones or outside ones? MIT wants both, wants a student that goes beyond the education offered at the school, etc. Also, they take into account that National Merit is not truly national - each state has a different 'bar' set, based on the region's test scores. They are also looking for valedictorians, for the most part. Of course he should apply, as the answer is already no if he doesn't, but MIT has a 9% acceptance rate, and they have an international flood of applicants every year.

 

[okeydokey]

But are you adding the cost of moving and living in another state for two years, and the wasted two years of not having the degree into the cost equation? How much would two years of life be worth, BTW?



For MIT, when you say 'good activities' do you mean school ones or outside ones? MIT wants both, wants a student that goes beyond the education offered at the school, etc. Also, they take into account that National Merit is not truly national - each state has a different 'bar' set, based on the region's test scores. They are also looking for valedictorians, for the most part. Of course he should apply, as the answer is already no if he doesn't, but MIT has a 9% acceptance rate, and they have an international flood of applicants every year.

His chances on National Merit Scholar are very good. His PSAT score was higher than needed for Florida eligibility and would meet most states requirements, as they are different from state to state. And that will mean a full in state scholarship.

I think he is a better fit for Chicago than MIT actually. His activities are varied, Band Drum Major, Captain of the Academic Team, Boy Scouts, Church Youth Group. He was the FL DOE Sunshine State STEM scholar for our county (one person chosen per County). Time will tell.

 

[Mackenzie Click-Mickelson]

But are you adding the cost of moving and living in another state for two years, and the wasted two years of not having the degree into the cost equation? How much would two years of life be worth, BTW?

TBH I don't know why you are quoting me especially about the moving thing. I'm not the poster who is dead set on moving just to find a cheaper college. I'm the poster who is saying moving to another state comes with things you need to think about including residency requirements. I'm the one who said it could end up putting the individual in a worse position than before. So TBH I'm confused by your comments directed towards me if you had read my comments.

 

[Pea-n-Me]

Actually, they were probably just relaying advice they believe predicts/influences academic success. There have been plenty of studies showing that working and commuting both increase the chances a student will drop out before finishing their degree. Whether those studies convincingly establish causation, rather than just reporting a common-sense correlation between financial stress and educational choices, is up for debate. But plenty of academic advisers and school counselors do put stock in them. And frankly, having done it both ways, I get it - it is a lot easier to haul your butt to class on a snowy winter morning when it is as simple as walking across campus vs. when it involves digging out the car and dealing with a long, slow, accident filled commute over slick roads, and a lot easier to focus on school when you're not worried about a midnight closing shift the night before an early class or having to work extra holiday hours at the same time as finals.

After I read what you wrote I spent a little time trying to see those studies for myself. Colleges keep a lot of statistics on things, but as you alluded to, those statistics don't always tell the whole story about causation. My guess is that there is a difference between commuting students who *have to* commute, and commuting students who *choose* to commute. I didn't see any studies specifically on the latter.

Let's face it, in this day and age of exorbitant college costs and debt loads, commuting is a choice that many are now making if they're fortunate to have good schools nearby that support their preferred areas of study. Where I live, we have an abundance! So many students around us choose to commute. I have two that are sophomores. Freshman year many of their friends went away to schools and lived on campus to get the "college experience", but this year quite a few of them came home and decided to commute instead. And for many it wasn't simply a matter of costs - they didn't like the atmosphere of lots of drinking and drugs, etc., and decided it just wasn't for them. So I do think that the dynamic of the commuting student may be changing, and therefore some of the statistics might be evolving as well, but we may not see those results for quite a while.

 

[DisneyOma]

TBH I don't know why you are quoting me especially about the moving thing. I'm not the poster who is dead set on moving just to find a cheaper college. I'm the poster who is saying moving to another state comes with things you need to think about including residency requirements. I'm the one who said it could end up putting the individual in a worse position than before. So TBH I'm confused by your comments directed towards me if you had read my comments.

You're right - I'm sorry - I thought I had quoted multiple parts to the 'move to another state' idea, not sure why yours was the only one that showed up! So to that whole idea - are people taking into account two years lost in the field of employment that has to do with the degree earned two years later? And the costs of moving away from home, including rent, insurance, health care?

 

[Christine]

You're right - I'm sorry - I thought I had quoted multiple parts to the 'move to another state' idea, not sure why yours was the only one that showed up! So to that whole idea - are people taking into account two years lost in the field of employment that has to do with the degree earned two years later? And the costs of moving away from home, including rent, insurance, health care?

I think if you can actually make that work and move to where tuition is cheap it might be worth it; however, the making it work is quite another matter. I try to imagine either one of my kids coming right out of high school and moving from Virginia to North Carolina at age 18, by themselves, and somehow landing a job that would pay for even a room in a group house. I mean, I can't imagine what that would be and how well it would work. There must be a different sort of reality out there than I am accustomed to where I live. Heck, my college educated daughter has a full time job and has to live with 3 other people and she's making quite a bit more than a high school grad could make.

 

[punkin]

I think if you can actually make that work and move to where tuition is cheap it might be worth it; however, the making it work is quite another matter. I try to imagine either one of my kids coming right out of high school and moving from Virginia to North Carolina at age 18, by themselves, and somehow landing a job that would pay for even a room in a group house. I mean, I can't imagine what that would be and how well it would work. There must be a different sort of reality out there than I am accustomed to where I live. Heck, my college educated daughter has a full time job and has to live with 3 other people and she's making quite a bit more than a high school grad could make.

Yeah. They're children at that point. It's not realistic in my mind.

 

[Hikergirl]

My ds's will be 17 when they graduate HS, they couldn't even sign a lease on their own apartment LOL

 

[Pea-n-Me]

I think if you can actually make that work and move to where tuition is cheap it might be worth it; however, the making it work is quite another matter. I try to imagine either one of my kids coming right out of high school and moving from Virginia to North Carolina at age 18, by themselves, and somehow landing a job that would pay for even a room in a group house. I mean, I can't imagine what that would be and how well it would work. There must be a different sort of reality out there than I am accustomed to where I live. Heck, my college educated daughter has a full time job and has to live with 3 other people and she's making quite a bit more than a high school grad could make.

There was one school that had a program that DS was interested in, and it was only a little farther than some of the other schools around us, but a commute would've been impossible due to location and traffic patterns. We kept working the numbers and no matter how we tried it just didn't make financial sense to go there due to the extra living expenses with our high COL here. (There were no dorms.) And this was even in our home state. I do agree with some of the other points the pp made, though.

 

[palavra]

Community colleges people. They are a great place to start to get the basics out of the way for cheap.

Not only this, but dual enrollment in some states during high school is free. My daughter is in 9th grade and home schools. We live in Florida where dual enrollment is free for students. We plan on her taking several college courses through dual enrollment before she graduates high school. She will then, most likely, go to a local community college where she can live at home. She has a school she hopes to transfer to for her last two years, but not if it means going into debt. We are lucky to live in a city that has at least 4 good universities within driving distance of our house.

 

[Tinijocaro]

This is a topic very near to me. I have a Senior in High School applying to College now. He can most likely get a free ride to a good Public University on Merit Scholarships, but has the desire and the smarts to do well in a top tier University that may offer substantial need based aid. There would be a gap however that he would need to fill with some loans. Would it worth it for his future to graduate from say a Harvard type College with some debt, or a state school without debt? Would the private give him as advantage in future grad school placement or career? Hard to say, but he will need to make that decision.

I can share ds22's experience. Physics major, didn't get into Ivies but got the full ride (room, board, books, tuition) at state flagship. Zero debt for him or us. Had other options that would have left him with debt. Graduated from state flagship. Applied to top universities in the country for astronautical engineering and was accepted but since he applied only to masters programs, zero money was given. He would have come out with almost $100,000 in debt for his masters degree. He decided to stay home for a year, work and is now reapplying for phd programs at the same schools. He has broadened his search to include a couple safeties so he could live home and work on a aerospace eng. degree.

So in our case, state school was not a disadvantage for getting into grad school.

 

[lifesavacation]

After I read what you wrote I spent a little time trying to see those studies for myself. Colleges keep a lot of statistics on things, but as you alluded to, those statistics don't always tell the whole story about causation. My guess is that there is a difference between commuting students who *have to* commute, and commuting students who *choose* to commute. I didn't see any studies specifically on the latter.

Let's face it, in this day and age of exorbitant college costs and debt loads, commuting is a choice that many are now making if they're fortunate to have good schools nearby that support their preferred areas of study. Where I live, we have an abundance! So many students around us choose to commute. I have two that are sophomores. Freshman year many of their friends went away to schools and lived on campus to get the "college experience", but this year quite a few of them came home and decided to commute instead. And for many it wasn't simply a matter of costs - they didn't like the atmosphere of lots of drinking and drugs, etc., and decided it just wasn't for them. So I do think that the dynamic of the commuting student may be changing, and therefore some of the statistics might be evolving as well, but we may not see those results for quite a while.

And there’s always online if one can’t commute to a local college. Out of state students can get an online 4 year degree from several colleges for under 25k.

 

[dosekies]

But so much in that article is suspect. Saying that tuition at a "halfway decent" university costs upwards of $50,000 per year? Add room, board and fees to that, and you have a total college bill of $60,000-$80,000 per year. I know costs vary by state, but that's what the very best private universities here charge. All in, our state universities run $24.000-$27,000 per year. Neighboring states will give us their in state tuition rate with a respectable ACT or SAT score and those run $25,000-$30,000 all in. And that is going to a 4 year university. There is always the cheaper option of a 2 year community college, followed by a university.

Right now, DD's classmates are getting their acceptance letters and scholarship offers. I'm astounded by the number considering private universities which cost $60,000-65,000 total per year, all because they are dazzled by a $60,000 scholarship offer. So what? You'll still owe close to $200,000 for the remainder. Go to a state university which costs $100,000 for all four years and if you get just a $15,000 scholarship, you will only owe $85,000. The math is pretty simple. Unless the more expensive university is going to net you an ENORMOUSLY larger paycheck, it makes more sense to go to the more affordable university.

Something else I've seen is students taking out loans for living expenses....and I'm not talking room and board. Going out to eat with friends gets financed, entertainment, etc. IMHO, loans should be for the bare basics, because who wants to pay off a Saturday night outing five years from now?

The bottom line is, do the math. What will your payments be? Can you afford to pay them off in a timely fashion with the salary you will get? Do you have the discipline to go without luxuries to pay off your loan sooner? Would a community college be a better option for someone with your finances? Is that pricey school really worth it?

Yep. Granted, college still does cost a lot more than it should be that is a whole different argument. When i was looking at schools, I was convinced I wanted to go out of state. My parents were super supportive and my dad took a few road trips with me one summer to look at them all. We live in IL but went to TN, NY, MA, PA, and FL to look at schools. We looked at a few in IL too, but I said they were only going to be my back up school in case all else failed. I absolutely fell IN LOVE with Belmont in Nashville and Northeastern in Boston. I cried when I got my acceptance letters to both of them. However, neither of them were giving me an aide or scholarships even though I was a good student blah blah blah. My state school, ISU, offered me a music scholarship. My 4 years at ISU would cost less than 2 years out of state. It was a tough decision that I didn't want to make, but my parents sat me down and really made me look at the finances. College was all on me and it was still my choice to make, but I needed to know what the cost would be in the end. Now that I'm 2 years out of school, I can't imagine having any more debt than I already have.

Also, I completely agree with loans and living expenses. My parents taught me the same thing - loans are for tuition, room and board, and books if absolutely necessary. Any groceries, going out or fun money had to come out of my pocket from a job I had to get on campus.

 

[tzolkin]

My ds's will be 17 when they graduate HS, they couldn't even sign a lease on their own apartment LOL

Yup. My DD just turned 18 in her second year. When she first started, she had to email me a form to be able to use the facilities at the health center. She was a bit outraged that she could take out student loans but she couldn’t climb on the rock wall.

 

[disykat]

Years ago, my brother learned the hard way (when he made my parents drop him at the curb!) that he couldn't get a key to the outside door of the dorm without a parent signature at 17. When I went, also at 17, I made sure I had all my keys in hand before my parents left!

 

[dish rag]

Years ago, my brother learned the hard way (when he made my parents drop him at the curb!) that he couldn't get a key to the outside door of the dorm without a parent signature at 17. When I went, also at 17, I made sure I had all my keys in hand before my parents left!

I too was 17 when I stared University as were many of my friends and my Son also. It was unheard of to have a 19 year old graduating high school but now seems to be usual.