On choosing a college... how to decide

The decision deadline for most colleges is past, and we had quite an experience with Emily, our third child, who is graduating high school this weekend and plans to begin studying pharmacy, (a six year program) in the fall. She was accepted at two well known private schools, including her initial top choice. (Here are a few relevant financial facts for her initial top choice: $43,000/year times six years less $5,000/year scholarship and $3,000 financial aid package = $210,000 before other living expenses) She was also accepted at our state university which has a highly ranked pharmacy program where she received a full tuition merit scholarship where our net cost for 6 years will be about $84,000. That’s still a LOT of money, but less than half of the private school.

I talked to many people asking the question, how to explain to an 18 year old that these are not just numbers written on piece of paper? How can I help my daughter understand this choice will have a huge impact on her long (and our) term finances? In the end, this is how we addressed the issue.

1) We told her she could go wherever she wanted, but if she chose a school that is beyond our means, she would have to take out loans to cover what we are unable to afford, and she would be responsible for paying back the loans.

2) We helped her understand the interest payments on student loans multiply the amount owed. The school’s financial aid offices provided information on typical payment schedules. We also provided her information on the amount of borrowing vs. future expected income from the College Board Workbook for families Meeting College Costs. (The book is discounted if purchased it when completing the CSS Profile).

3) We made it clear that if she took out huge loans, then decided later on to switch majors, say from pharmacy to teaching, resulting in a much lower expected annual income after graduation, she would still be responsible for the loans.

4) We helped her to confirm for herself that there was nothing at the higher cost private schools that she could not do at the less expensive state school.

5) For the field of pharmacy, it doesn’t seem like where you go to school has a huge impact on future career potential. For liberal arts, that may be less true.

6) If she chose the private school, at least part of the money she earned while working summers would have to go to tuition and board expenses, so she would have a lot less spending money while in school, whereas at the more affordable state school, we can cover her tuition and board, and she can use her earnings for her living expenses.

7) Originally, I wasn’t going to include this last point, but in the interest of full disclosure, I thought that I should, because I think that it had some influence on her decision. We have an extra car in the family for our kids to share, and with her two older brothers away for the most of the year at college. Emily had the car pretty much to herself for her senior year at high school. We dropped a few hints that if she chose the state university, she would be able to take the car with her to school, giving her a lot of mobility and freedom. This would have been out of the question at the private school because it’s in the city and none of us would have been able to afford to run it anyway. OK you can call it a bribe if you want. In the end, considering all these factors, we were thrilled when she chose the state school.

I hope that things work out as well for your family.

Best,

Chuck