a question regarding the cost of higher education

Lora sent an email and asked the following question:

“My younger sister is approaching the time to apply to college. She is mainly thinking of applying to Ivy League schools. She is doing extremely well in school but our family is not rich. I have tried to talk her out of it but so far peer pressure (she attends a very competitive high school) is stronger than her family’s opinion. I say that she should consider those schools only if she gets scholarships and even then I am not sure.

How else can I explain to her that it is not really worth taking out student loans for private colleges?”

First of all, I’m not sure I would say that taking out a student loan to attend a private college is NEVER worth it. If the private school has a particular speciality not commonly offered at most universities, it might be worth it. Maybe your sister has a strong desire to study Sanskrit or nanotechnology. In those cases, attending a public university might not provide the program she needs to pursue her goals. Also, people who move about in the world of politics or diplomacy or international affairs are often graduates of the Ivy League. If she wants to be in the highly-connected world of politics, attending an Ivy League or other big-time private school is probably more useful than attending State U. (However, if she is more interested in state politics, the opposite might be true. I attended a large Southern state university, and in that state I can assure you a degree from State U was a LOT more helpful than a degree from any of the Ivys would have been.)

Having said that, I am a HUGE proponent of public education and public colleges in particular. I was accepted to an Ivy League school (Harvard) and declined in favor of attending a state university. Why? I had little interest in what Harvard could offer me. I was able to attend a state school with massive scholarships that not only allowed me to graduate debt-free, but even leave college having made a PROFIT. I was heavily involved in activites beyond academics; I played a varsity sport, I was active in a fraternity, I was involved in a dozen different clubs and organizations and I even had time to work doing something I love (teaching middle school). I was in an honors program, which meant my freshman English literature course had eight students and was taught by a full professor in a roundtable setting, something you would never see in many big private school’s English lit 101 course (I know from friends who attended Ivies).

From the first day on campus, I was a big fish in a big pond and I grew tremendously from the experience. The first day I started I was one of a dozen students invited to dinner with the school president. At an Ivy I have no doubt I would have done alright, but I would have been one overachiever among many, and I would have graduated much poorer. That to me is the key. From day one in my working life I have been debt-free. I work side-by-side with people who attended expensive private schools who are STILL laboring to get out of debt.

Your sister needs first to understand her goals. If her goal is to attend an Ivy League and go on from there to be an investment banker, a $160,000 loan will probably be relatively easy to pay off if she does well in the business world (that’s a big IF, though). If her goal is to attend an Ivy League school and major in Art History, she may find that debt crippling. My father attended a very prestigious school in Boston and was still paying his student loans off when I was a teenager. So if her goals are fame, fortune and caviar dreams, then she can risk it all on an expensive school. If her goals are happiness and success and doing what she loves regardless of the compensation, starting life out heavily in debt could cripple her chances of doing that.

So to answer your question, maybe you should ask your sister what she would like to do when she graduates. Go to salary.com and find out what a person makes in that profession. Calculate the cost of a student loan. Take the salary and then back out taxes and the loan, and ask her if she’s prepared to live off of that for 10-15 years until the loan is paid off. Ask her if she’s prepared to live with the financial choices she makes now for decades to come, or if she wants to graduate debt-free and that much closer to financial freedom. Ask her if the field she studies has famous professors, and if so where do they teach? Many of the best professors in America teach at public universities.

And finally, be prepared to let her make her own decisions…and her own mistakes or successes. That’s part of the lifelong learning process just as surely as History 101 is.