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College of Your Dreams or College of Your Means?

By Anita Thomas

April 21, 2021

jar of coins with label that says education in front of books with glasses on top of them

A courageous conversation more families should have ahead of time

How do you go about choosing between the college of your dreams and the college of your means? As students approach the end of their high school journey, many set their sights on college. It’s an exciting time. A rite of passage. But the decision of which college to choose can be emotionally charged, especially once costs are factored into the equation.

It is a much-needed conversation between parents and students. Parents may have made commitments long ago to help their son or daughter pay for college without realizing what they were signing up for. After all, when your kids are young and you tell them the sky is the limit, you truly believe it. So, when it comes time to celebrate the accomplishment of being accepted into college—and getting into one’s dream school, at that—parents can find themselves teetering between joy and panic. Do you even have enough saved up? Maybe the pandemic disrupted your finances. Many parents try to live up to the somewhat naïve promises they made years ago and go into debt that rivals a second mortgage. Instead of doing that, perhaps it’s time for a moment of reckoning.

Should Parents Pay for College?

It should not be a foregone conclusion that parents pay for college. There. We got that out of the way. Look, I know it’s hard to imagine saddling your kids with debt before they even start a life for themselves. But who said it made sense to choose a college where the financial pieces don’t fall into place? Given the rising costs of higher education in the United States, it is important to do the math ahead of time. During the 2020-21 academic year, the average tuition for an undergraduate attending a 4-year college or university ranged from $26,820 to $54,880 per year. PER YEAR. That deserves emphasis. If scholarships and grants are not enough to cover the costs, or if savings will only cover a portion of the costs, then it is a reasonable expectation that student loans may be needed. And for some parents, it’s not only a choice of them borrowing or the student borrowing, it’s a question of saving for one’s retirement versus paying for a college degree. And if you need to put more than one child through school, you need to take into consideration the overall costs for all your children.

Fortunately, parents can borrow reasonably low-interest loans, such as a Parent PLUS Loan or a private loan outside of the federal program. But the federal government has some rather unwise provisions in their loan program, including no loan limits and no ability-to-repay standards. This means they will not help parents save themselves by ensuring they only borrow what they can reasonably afford to repay. And before you know it, some families end up in a situation similar to the 2008 housing bubble; the ability to borrow large amounts of money without regard to ability to repay the debt.

This brings us back to the main point. When deciding on which college makes sense, cost should be a primary consideration if it means avoiding racking up debt that would be burdensome on the student or the family. And parents should rid themselves of the guilt that often comes with having to admit they cannot pay the full freight. Families need to have an honest conversation that explores alternatives to achieving the college dream…where the main goal should be preparing for a great career in the first place.

How to Choose the Right College

Choosing the right college when it comes to your dreams versus your means boils down to a few factors. Of course, you should do your homework and put some lists together. Here are some primary things to consider when getting started:

Your major and career field – When you narrow down your choices, is your exact major offered? Are there accelerated programs available which may help with affordability, assuming you could graduate in a shorter period? Does the school help with internships or have an active alumni association that could help with career opportunities and networking?
Location – A lot of students like to go away to college, but in-state tuition is more affordable than out-of-state tuition.
Learning environment – “To thine own self be true.” If you are honestly better with smaller class sizes and lower student-to-teacher ratios, a large university may not be your top pick. But if you’re looking to branch out more and be part of a larger student body, you may want to consider something other than a private school.
Selectivity – Getting into college is no easy task these days. And if you get into that dream school that is known to be “exclusive” it may feel like a dream come true. You’re one of the chosen few! For some families, the price may be a non-issue. But for the average American family, a high price tag certainly presents a challenge. If scholarships and gift aid come to the rescue, Hallelujah! But be careful. Some schools front-load gift aid in the freshman year to help get you in the door, but the same discounts are not offered year two and beyond. Add up the cost for all 4 years. And don’t be overly swayed by the elimination of SAT and ACT requirements at a lot of schools this year. It doesn’t mean prices are being lowered.
Transfer options – Attending a community college to power through general education courses can be a smart, money saving move. Taking CLEP exams can also help save time and money. Just make sure the school you want to transfer to accepts all the course credits or CLEP test credits you would enroll in. An admissions counselor can help with this.
Cost – Yep, the price tag must have a say. And you should look at the total cost for all 4 or 5 years of college. This includes living expenses. For some individuals, it may make more sense to wait to attend an Ivy League for graduate school vs. undergraduate studies.

Why Go to College?

No discussion about college selection would be complete without revisiting why people should go to college in the first place. It is true that college graduates have more earning potential than those who choose not to attend college. Beyond that, there are also longstanding arguments for college attendance that include everything from “discovering yourself” and “making lifelong friends” to “exploring different career options” and “expanding your potential earnings.” These all apply depending on what you put into your experience and the expectations you place on outcomes. There are also family pressures and cultural dynamics that come into play for many students. Some students are simply told they will go to college and here is where we expect you to get accepted.

If you put those considerations aside, it is important for students to be honest about what they want to focus on and the direction they want for their lives. And having conversations with mentors, other family members, and professionals that work in your field of interest can go a long way. Find out what they like and dislike most about their careers. They can give you truthful information about what you may be up against and what you should take into account, which could help you decide not only which college to attend, but what you can do with the degree you earn. There could be options you had not thought about previously.

At the end of the day, college is supposed to help prepare you for life. And the dreams you have for your life should always be bigger than a dream college you have your eyes on. If you can get into your dream school and afford it, great. Go for it. But if it will create hardships and won’t ultimately give you clear advantages in your career, you may be better off with an alternative (lower cost) school. Focus on building your financial independence and network, which ultimately determines your net worth.