Like other decisions in life, when choosing a college, a portion of the decision is logical, but much of it is emotional.
As parents, we want to do the best for our kids, but giving them the best in a college education means spending money and potentially impacting our long-term finances.
So how do you decide what is best for your child and family?
You need to strike the right balance between logic and emotion, consider the key factors in choosing a college, and make a truly informed decision.
Here are 10 things every family should consider before choosing a college.
As a parent, you might love to say your child is enrolled at Yale or Harvard. Going to an elite college may be great for personal pride and bragging at the water cooler, but for some it’s going to come with a big price tag.
I have worked with many families trying to decide if paying big money for a name brand school is worth it. For the right student, that elite school may open doors, provide great contacts, and get them on their path to big goals.
On the flipside, students that are strong enough to be accepted at the elite institutions should do well with an education from any college.
The important thing to know is that name brand schools are not necessarily going to cost more than the alternatives. Since they are so expensive, elite schools usually offer financial aid, and sometimes they use their endowments and generous scholarships to lower the cost dramatically for an ideal student, especially if there is high financial need or your family has under $100,000 of income.
This means these schools might be the lowest cost in some cases, but they may be the highest cost for students from wealthier families.
In the end, only your family can decide if paying extra for a prestigious school is worth it. In addition, you won’t know how much of a premium you may have to pay for a particular college until you’ve done your research and you can see the numbers.
2. COLLEGE FIT
Finding a college that’s a good fit for your student will save you money and heartache. Dropping out or changing schools is often costly in both time and lost credits.
Going with a good fit may be less expensive in the long run because your student might be more motivated and have a better chance at success. Going with the wrong fit could lead to a costly transfer or dropout.
Sometimes your child falls in love with a particular college and might say, “I know it’s expensive, but I love it so much! It’s the perfect fit!”
In the vast majority of cases, there are multiple schools that would be a good fit for your student. There are usually several good options at different price points.
Ideally, you don’t want to fall in love with a particular school, especially if you don’t know the final price. You won’t know this until May of your senior year, after the schools provide a financial aid package.
So it’s best to look at multiple options, find several good fits at different prices, and avoid focusing too much on any single school. When it comes time to make your decision, you won’t feel forced into anything.
3. The COLLEGE EXPERIENCE
I’ve had many parents tell me, “College was one of the best times of my life! I want my child to have the same experience.”
Many parents want their kids to live in a dorm, be away from home, and gain some independence, even if it may cost more.
Other parents worked very hard to put themselves through school and feel like it was a struggle and a lot of work. So they want to make it easier for their children by paying for everything and sending them to a better school than they could afford.
In either case, you may want to spend more money to provide that true college experience. But living at home or starting at a community college are great strategies to save money.
Before you choose a college based on the experience it will provide, consider the costs, the fit, and whether that experience is truly in the best interests of your child and family finances.
4. RETURN ON INVESTMENT
College graduates earn more! We’ve all heard about the studies that claim college is the path to good jobs and good wages. Based on the statistics, the higher lifetime income makes college well worth the cost.
Forbes and other major publications are now calculating the return on investment for particular colleges.
However, study results on college ROI can be misleading. They’re based on large groups and averages. In reality, most kids are not average. They are above-average or below-average.
As much as we would like one, there is no formula that will help us calculate which college is the best investment for our student.
In reality, a highly motivated, highly skilled student could make more money regardless of college choice, or even by not going to college. A less motivated student may not be successful, even with a chance to attend a prestigious school.
When looking at ROI, one way to save costs is to start at a local community college or a local four-year state school and then transfer to a more expensive target school later. That keeps your costs down while still giving you a high-powered degree. However, it sometimes conflicts with the factors above, such as prestige, fit, and the college experience.
5. NET COST
The real cost of college is the net price, which is the total cost minus financial aid. It’s important to keep this in mind when evaluating and choosing schools.
Some schools are more generous than others, and sometimes you can go to a private school for less than a public school—if you do your homework, choose the right school, and you’re the right student.
Your family income will be the biggest driver of potential financial aid, but the desirability of your student can lead to some schools offering you more aid.
Unfortunately, you won’t know the final net cost until you near the end of the process, after aid is offered. However, if you can figure out the likely net cost of schools ahead of time, it might change your shortlist or priorities earlier in the process.
Look for resources on the average net price of schools for families in your income bracket. The National Center for Education Statistics is a good place to start.
A key consideration for some families is how college choice and costs will impact your retirement savings and your lifestyle.
When giving financial advice to families, I often tell them:
“You can afford to send your kid to college. You can afford to retire early. You can afford to have a lake home or vacation home at the beach. You can even take a big vacation every year.. But what you can’t afford is to do ALL of those things. You have to pick and choose.”
Some families are more concerned than others about their lifestyle. Some are willing to sacrifice lifestyle or retirement savings to make college a reality or send their kids to an particular school. Others are not.
To make the best choice for your family, you may have to balance college choice with your preferred lifestyle and future retirement goals.
7. CAREER PLANS
What does your child want to do for a living? This is a fundamental question when it comes to college choice.
I once advised a family with a son who wanted to study jazz. He wanted to attend a college where the trumpet instructors were jazz musicians and didn’t teach classical music.
Also, as musicians with connections in the industry, the instructors might help him launch his future career in jazz. That was a big impact on his school choice, and it narrowed his choices dramatically.
In other cases, career plans might allow you to choose a less expensive college or open up more possibilities.
If your child wants to become a teacher, it may make more sense to attend a good teaching college rather than an expensive private school known more for producing business leaders or researchers.
If you have a student interested in law enforcement or criminal justice, there could be a number of possible options, including going straight from high school to a police academy, or starting at a local community college and landing a job with an associate’s degree.
Whatever your child’s career ambitions, keep them in mind when making your college choice.
8. GRAD SCHOOL
If your child’s ultimate goal is to go to grad school, the choice for an undergraduate degree might be more or less important.
For example, it might be better for your child to complete an undergraduate degree at a lower-cost and less prestigious state school and use the savings to pay for a graduate degree from a more prestigious institution.
If attending a better school for a four-year degree would increase your child’s chances of getting into the right grad school, this might lead you to choose a more prestigious school for undergrad.
Of course, if you don’t plan to pay for grad school, that could also have a big impact on your child’s choice of undergraduate college.
When choosing schools, it’s never too early to think about grad school.
None of the other factors will matter if your family can’t make a particular choice work. Affordability may effectively make the decision for you.
It’s easy to say “no” when it’s the obvious right answer, and it’s easy to say “yes” when it doesn’t cost a lot. The challenge emerges when a college choice is possible, but it’s a financial stretch.
It may come at the expense of another goal, such as an early or comfortable retirement, buying a new home, continuing to go on family vacations, or putting other children through school and giving them a fair choice.
You may have to choose a less expensive school or face some tough choices among your family goals to send your child to a school of choice.
10. WHAT YOUR STUDENT IS WILLING TO DO
When it comes to choosing a particular school, what is your child willing to do to make it possible? What will your student be willing to do to help you manage the costs?
I’ve talked with parents who borrowed money and loaned it to their kids to pay college costs, and their children were expected to pay back the parents so they could pay off the loan. Others co-signed a loan for their child, who was then required to repay the lender.
Is your student willing to work hard during school or over the summer to pay back loans?
When kids are young and they want to borrow 20 dollars, they often have no intention to pay it back. When they borrow 20 dollars, they really mean, “Can I have 20 bucks?”
So be careful about loaning money to your child, particularly if must be repaid promptly. Set terms for the loan, determine what happens if your child doesn’t pay, and talk to your child to find out what he or she is willing to do.
Consider setting rules, such as stipulating that your child must pay off any loan before buying a new car, or share an apartment with roommates until it is paid in full.
Now that you’re familiar with these 10 things, it’s time to figure out which ones apply to you and how they might influence your college choice. Based on the factors that are important to you, it may be time to have a family meeting and start talking about the best course of action.
You can also visit the Resources section of my website, to access more college planning resources and financial advice.
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