Intended for parent and student, but
addressed to the high school student
especially the student who is likely to apply for financial aid
drafted 2004-2011, Bob Komives
Making The Right Choice
o The array of choices among colleges is unique in the United States compared to other countries. This makes life more complicated and stressful, but also more exciting. Parent and student should try as best they can to enjoy this adventure. In the end, there may be schools you cannot get into and schools you cannot afford, but you do not know the details on either until after you have applied. There is nothing right nor wrong with applying to one college or twelve colleges, but it is better to error on the side of applying to whichever colleges you are interested in –provided you are willing to accept that you might not be admitted and you and your family may not be able to afford it. Choice and responsibility go hand in hand into adulthood. The more we acknowledge and explore our choices, the more we accept responsibility for our life.
o I believe the following contradictory statements to be true: (1) Your choice of college will be one of the most significant decisions of your life; it is important that you explore your options carefully. Yet, (2) because you are going to be a successful, happy person whatever your college decision, you will look back on it as the right choice ––even if you do not wind up going to your present “first-or-second-choice” college. So, do your best to be at once relaxed, diligent, and excited.
Finances
o No matter the financial situation of your family and the cost of college, there is a surprising way in which, as a college student, you and your parents will be more financially enmeshed than while you are in high school. Getting money from a rich home is no less trying than dealing with the financial aid papers and a tight budget every year. Both parent and child want to feel growing independence, but, alas, they are quite interdependent. There are good strategies for minimizing the stress in this, but those are a future challenge. The point here is for both parent and child to recognize that the stress lies as much on one as on the other, and that, while you have quite different roles to play, you both sincerely want to reduce the stress on the other. This is a partnership you cannot avoid.
o When comparing college costs, make sure you compare apples and apples. This is especially hard-but-important if you are comparing public and private schools, and local versus out-of-town. The best way to do this is to think of college expenses the way financial aid offices in private colleges consider them. What does it cost a student from your town to attend the college from September though May? (It should be assumed you will work summers, a time of increasing assets.) That nine-month cost includes tuition, room, board, books, fees, a reasonable social life, travel to and from school including a trip home between terms, insurance, etcetera. This is the total cost that parent and student combined must cover for the student to attend for the school year. Also, don’t assume 30 hours of work a week for one school and 10 per week at another school without adjusting your comparison.
o If you apply for and receive financial aid, there are two things to look at. First, what will be the resulting annual draw on student and parent resources during the college years? Second, what obligations will the student have after completing four years? The following exercise deals with the first.
Exercise, part one:
1) Spread a line of peas, or beans, or peanuts on a table extending from you to the middle of the table. The closet pea to you is the least expensive (total expenses, remember) college, the furthest, the most expensive. Don’t worry about assigning each pea to be a real college now. This exercise is just an illustration of how we can think about the problem.
2) The closest pea may be your local, public university which you attend while living at home, neither owning nor having near-exclusive access to an automobile. Remember, however, at-home students eat food and use utilities.
3) The next two, close together, would be the same local university, either living on campus and having no car, or living at home and having a car.
4) The fourth pea away from you is likely again (but not necessarily) your local state university, with you living on campus and owning a car.
5) The fifth pea away from you might be the least expensive in-state-but-not-local public college –you must live there and will likely need an automobile.
6) Subsequent peas are other in-state public universities and then private colleges ––whether in-state or out of state. For the time being, ignore out of state public universities unless one is high on your priority list.
7) What’s the range in dollars? I am not sure, but the furthest one out might be a private college with a total nine-month expense of, perhaps, $50,000. The closest-in pea (total nine-month cost for attending the local college from home with no car) may represent $10,000-$12,000. These are guesses. I haven’t done any homework. Eventually, you will.
Now, assume you will decide to apply for financial aid.
o The private colleges to which you apply are likely to say they have need-blind admissions, or, more precisely: if they offer you admission they will also offer you a financial aid package that covers all costs above what they think you and your family can afford.
o If you apply for financial aid at several such private colleges the amount that they say you can afford to pay is going to be remarkable similar ––so similar that, while you are in the application process, you might as well assume the net amount you and your family must cover will be the same for all the private colleges.
o It is difficult to estimate what will be the colleges’ calculation of the “amount you can afford” ––especially your first year in the process. (The amount can go up or down over your four years according to changes in your family’s income and expenses. You reapply for financial aid each year.) However, there is no reason to assume that they are more likely to over estimate your ability to pay than under estimate it. Thus …
o Once you decide that you will apply for financial aid, there is no reason to restrict your applications based on cost, because the annual cost to you is going to be similar in all the schools that offer you financial aid. What will change is the size and character of the financial aid package. More expensive schools will necessarily give more aid.
o Public universities do not have the resources in general to administer financial aid in this way. You must look at their generosity on a case-by-case basis.
Exercise, part two:
8) Take a pen and a pencil and put them beside your line of peas, pointing at the peas.
9) The pen is what you as a family believe you can afford in total cost.
10) The pencil is what private colleges think you can afford to pay.
11) Put the pen closer to you than the pencil. If you assume that this is the final result, your college choices will be among those that you can afford to attend while you and your family cover 100% of your expenses. If this turns out to be the result, you can still feel good about having applied to and being admitted to the other institutions.
12) Put the pencil closer to you than the pen –or exactly on line with it. If this is the final result, you may be able to afford to attend every college to which you apply. Of course, those closer to you than the pen and pencil will cost you less. Those beyond will all cost you about the same amount in annual cash outlay ––no matter the stated cost of their tuition, etc..
13) Is this exercise a simplification? Yes. However, it is hard to improve much upon this simplification until all the results are in from your applications and requests for financial aid. Right now you are just trying to sort out where to apply. The exercise illustrates why comparative cost is better considered after you have been admitted. The school that appeared too expensive may become your most affordable alternative if you apply for and receive financial aid (and perhaps enjoy an auto-free less expensive lifestyle at that school).
Other issues:
o This exercise assumes all financial aid packages are created equal. This is remarkably true in regards to how likely you and your family are to be able to afford the cash outlay for your annual college expenses. It is less true with regard to the components of the package. Your rankings of schools may change slightly or radically once you evaluate the mix of assistance in the financial aid package.
o Most aid packages will include some loan. Different colleges will have different approaches to loans, so it is important to estimate and compare how much debt you will have after four years. Obviously, the more that is grant and the less that is loan the better. Your ideas about a career and your graduate school plans may affect how you evaluate the difference in post-college loan burden.
o Most aid packages will include on-campus work. How do these compare? In general, financial aid offices will not expect you to work more than 10 to 15 hours a week.
Final Thoughts:
o Don’t assume that the less expensive schools are inferior, nor that the more expensive schools are elitist. Judge each on its merits as they relate to you. You can live at home, bicycle to the local public university, and go on to win a Nobel Prize. You can go far away to an expensive school and come home to live your life tending to the poor in your home community. There is likely to be outstanding faculty at every college to which you apply.
o If you are on financial aid at a private college and have a younger sibling who will enter college before you have finished, your financial aid will be adjusted accordingly ––allowing for the increase in family expenses for a second college student (and, yes, the slight decrease in family expenses with one fewer high school students).
o I see little reason to apply to an out-of-state public university unless it offers a unique program that attracts you. The out-of-state public university may wind up being more expensive than a comparable private college, and it will be more expensive than a comparable in-state public university. This might not be apparent at first but rather when a sibling goes to college, or when your family has a tough financial year.
o You and your parents should consider carefully your personal need for an automobile. There is no such thing as a free car nor an inexpensive one. Resources put into a car (by you or your parents) at one college can be put into books and tuition at a college where most students do not find cars to be necessary. A school where you feel you must have a car may be an excellent choice, but it is also more expensive than it first appears to you. Make sure you have its pea in the right place!
o Expensive and inexpensive colleges each have an advantage with regard to study abroad. Study abroad from an inexpensive state university will likely be a substantial extra expense for that year abroad. However, if you and your family have enough cushion, you may have an opportunity to set aside money during your first two years for a semester or year abroad. If you are determined to study abroad during your college years, then be sure to add that expense to your ranking of the inexpensive peas/colleges. The study-abroad advantage of a more expensive college is that there may be no increase in charges to the student, because, on-average, terms abroad may cost the college no more than a term at home. This is true whether or not you are on financial aid.
o You may intend to apply for an independent, targeted scholarship ––be it academic, extracurricular, or other. If you do receive such a scholarship you can still apply to the college for financial aid. The financial aid office will include the scholarship in its calculation of what you can afford. If your resources are still less than you need to attend the college, you will receive an offer for supplemental financial aid to make up the difference.
o If you will not apply for financial aid, do careful study and apply to colleges you believe you and your parents can afford.
o If you will apply for financial aid, apply to every college that interests you enough to complete the application. However, assure yourself and your parents that you understand that (once your peas are lined up) you may not be able to afford to attend every college to which you are admitted; plan to go enthusiastically to a college you can afford. Also, ask your parents to keep an open mind about the possibilities for admission and affordability at the seemingly-too-expensive colleges if you are willing to put earnest effort into making the application.
