True cost of college

[disneysteve]

I know a couple of others here have college looming in the near future. As we are currently in the midst of the search and application process, I thought I'd share something that was a bit of a surprise to me.

The costs that are so often publicized are really fantasy numbers, kind of like the sticker price on a car but even more so.

Merit scholarships are abundant and substantial (assuming your student qualifies of course).

For example, we visited one school yesterday. They offer 5 scholarships ranging from $8,000 to $21,000 per year. I'm not sure if DD qualifies for the top award but I'm almost positive she meets the guidelines for the second one which is $18,000 per year. That's pretty substantial when you consider that tuition, room, and board is just over $48,000. Almost 38% comes off the top and she doesn't have to do anything to get that money. It is awarded automatically if she gets accepted. No special application. No essay to write. Nothing. They will just give her $18,000 off the "list" price. Other schools we have visited so far have very similar plans.

So when you read that the average cost of private schools is $50,000/year, don't get too freaked out about that number. The reality is that hardly anybody actually pays that price. At this particular school, 96% of students receive some level of gift aid (not loans) so that leaves just 4% potentially paying full price and that's only if they didn't get any aid from other sources.

If you have younger kids, make sure they're working hard in school. That's the best advice I can give you.

[QuarterMillionMan]

In my opinion, colleges are way overpriced and those merit based scholarships are used by the colleges as bait to try to lure prospective students away from the completion whose tuition may be much cheaper. Take this private university called Chaminade Hawaii for example (see the actually website link below),

http://www.chaminade.edu/ug/scholarships.php

Their regular in-state tuition for undergrad programs runs about $20,000 a year but with the merit based scholarship it drops to about $12,000 a year. Their competition at the flagship University of Hawaii (UH) in-state tuition for undergrad programs runs about $10,000 a year, no merit based scholarship needed at UH. See the website link below;

http://www.hawaii.edu/finaid/tuition.html

I would rather go to UH and pay the regular tuition without the need for a merit based tuition and obtain a degree from a better recognized school, which is what I did.

[moneybags]

In my opinion, colleges are way overpriced and those merit based scholarships are used by the colleges as bait to try to lure prospective students away from the completion whose tuition may be much cheaper.

IMO, merit based scholarships are used to lure prospective students away from elite schools that don't give merit based scholarships. Ivy league schools, the top liberal arts colleges, and other top schools give no merit based scholarships. These schools run $50,000+/year. If you have a top student that can gain admission to one of the top schools, they will also qualify for merit based scholarships at schools that are not as high in the rankings.

The schools want to improve their numbers. To do this, most merit based scholarships are offered to students who are in the top 25% (or less) of the incoming class. Thus, you can improve your odds of getting a scholarship by attending a school where your ACT/SAT fall in the top 25%. If my ACT is 29, and merit aid is important, I might apply to schools with an average ACT of 20-25 (this info is available for most schools, search "freshman profile" on the college site). Not necessarily the best school I can get into, but it might end up a good financial choice. I would also research which schools give scholarships, how many the give, criteria to qualify, etc.

[disneysteve]

those merit based scholarships are used by the colleges as bait to try to lure prospective students away from the completion whose tuition may be much cheaper.

What's wrong with that? If my kid can attend a good private school for about the same or a little more than a state school, I don't see a problem. We're going to pick the private school for sure, especially since my daughter doesn't want a big school. She's looking at schools with 3,000-5,000 students, not 30,000+ like the state schools have.

[disneysteve]

I would also research which schools give scholarships, how many the give, criteria to qualify, etc.

Also pay attention to appication deadlines. The deadline to qualify for scholarships is often earlier than the regular application deadline. For example, at one school DD is applying to, the "scholarship deadline" is December 1 which is pretty early as admission deadlines go.

[cardtrick]

Private schools are such a ripoff. The quality of education isn't all that great. I did my undergrad at a state university and went to The University of Chicago for grad school. This year, it's ranked #5 overall, by US News. I think the quality of education was better at the state university although the class size was bigger. Kids who are interested and want to learn will learn. The idea of being spoon fed at some exclusive private school doesn't appeal to me and doesn't prepare one for the real world, IMO. Besides, not sure what the advantage of having a smaller class size is? I was in classes that had 200 students and still never had an issue with asking questions or having the professors repeat something I didn't understand. Most people never asked questions. And the professors were always available outside of class, to answer questions.

Now, would I do anything differently, if I had to do it all over again? No, because UofC makes my resume stand out. The brand is so well recognized that I never really worry about losing my job. I know I can find one in no time. I know plenty of people who went to expensive no-name private schools and they can't get jobs in their field. If it's a recognized brand name, there is definitely value there, but most are ripoffs.

Curious, what schools are you guys considering?

I did things differently, when I was an undergrad. The sticker price was the price I paid (minus merit scholarships). I paid for everything else with a job. I also frequented the financial aid office and kept annoying the staff there asking for free money. And I got some! One semester, I got $6K off my tuition bill and another semester, I got $4K off. Just some obscure scholarships that were not advertised so I was the only one who applied for them.

[cardtrick]

Oh and I got a nice surprise. Didn't know when I applied for my undergrad that my school was doing the merit scholarships. I got the maximum amount, so my tuition bill was only about $5-6K a semester. The semester I got the $6K scholarship, I had another scholarship, so I ended up with a negative balance. Got a check for $1.5K that I didn't have to pay back! I partied a little too much that sem. Thinking back, I should have opened a Roth IRA and made a contribution.

[sblatner]

We have a freshman at Berkeley. He was accepted to Carnegie Mellon and was offered $10k in merit based aid. Made the cost of attendance drop to $50k. Berkeley is $30k and involves no travel...we are grateful he picked Berkeley. He prefers a large school so we were lucky he didn't apply to many private schools.

[asdf]

To me, the "true" cost of college varies wildly for each person, and what they do with their higher education. For someone who takes out numerous loans and never finishes their degree or puts it to use, the cost is quite significant. For someone who is able to complete a degree at a low expense institution and immediately parlay it into lucrative employment, it turns from a cost into an investment. As such, the answer really depends on what a person wants to do with their life and career, and what type of higher education is appropriate and capable of achieving,

[jIM_Ohio]

The issue with college should not focus on the cost, that is just a tree. Problem solving should see the tree, and also the forest the tree is in. It should focus on the return of the cost as well (ROI). plus consider the life experience which someone won't get if they commute or go somewhere else.


Spending $200k over 4 years to get a teaching job which pays $30k per year is bad
spending that same amount on an accounting or engineering degree will have a much higher initial salary and career progression.

In addition, consider most teachers need a masters degree, and it is my opinion that the masters takes the ROI out of teaching more than low salaries or high undergrad tuition.

[disneysteve]

Private schools are such a ripoff. The quality of education isn't all that great.

That's an awfully broad generalization. Surely not all private schools are great; neither are all state schools. Some private schools are a pretty good value; some are not. The same goes for state schools.

As Jim said, there is a lot more to the discussion than just the cost. The field of study matters. The campus environment matters. The extracurricular activities matter. The distance from home matters. There are a lot of variables to consider when choosing a school and the wants and needs of the individual student are an important part of that evaluation.

[moneybags]

Private schools are such a ripoff. The quality of education isn't all that great. I did my undergrad at a state university and went to The University of Chicago for grad school. This year, it's ranked #5 overall, by US News. I think the quality of education was better at the state university although the class size was bigger. Kids who are interested and want to learn will learn. The idea of being spoon fed at some exclusive private school doesn't appeal to me and doesn't prepare one for the real world, IMO. Besides, not sure what the advantage of having a smaller class size is? I was in classes that had 200 students and still never had an issue with asking questions or having the professors repeat something I didn't understand. Most people never asked questions. And the professors were always available outside of class, to answer questions.

Now, would I do anything differently, if I had to do it all over again? No, because UofC makes my resume stand out. The brand is so well recognized that I never really worry about losing my job. I know I can find one in no time. I know plenty of people who went to expensive no-name private schools and they can't get jobs in their field. If it's a recognized brand name, there is definitely value there, but most are ripoffs.

Curious, what schools are you guys considering?

I did things differently, when I was an undergrad. The sticker price was the price I paid (minus merit scholarships). I paid for everything else with a job. I also frequented the financial aid office and kept annoying the staff there asking for free money. And I got some! One semester, I got $6K off my tuition bill and another semester, I got $4K off. Just some obscure scholarships that were not advertised so I was the only one who applied for them.

So you are saying it's good to pay the high price for a name brand school? There is definitely value in being able to get a job, especially these days.

I think there is great value in a small private school, for my kids. I have one in college, one will be in college in a few years. If they are in a class of 200, they will fall in the category of "most people never ask questions". If they are in a class of 15 students, they will be active participants. I can't put a price on that.

[feh]

So when you read that the average cost of private schools is $50,000/year, don't get too freaked out about that number. The reality is that hardly anybody actually pays that price. At this particular school, 96% of students receive some level of gift aid (not loans) so that leaves just 4% potentially paying full price and that's only if they didn't get any aid from other sources.

This seems to be much more common at private schools, from what I can tell.

It would be interesting to see what the average cost is of private schools vs. top-tier public schools after scholarships/discounts have been factored in.

[TheKayla]

You can't think of the sticker price like that though -- think of all of the students that have to live in the dorms (some schools even require that) - extra $10-$15k/year, have to have meal plans (most schools require one if you live on campus) - $7k+/year, textbooks, having to retake courses if necessary (I tried as hard as I could and still had to for a few, most people I know do for university level) $1k+/ class, interest that is collecting on Parent Plus loans, unsubsidized loans, and private loans while still in school, and of course, the interest post-graduation. Higher education is far from a baseline sticker price, especially for kids that come from parents who could not or would not save up for their education ahead of time.

Then on top of all that, you have the challenge of many students moving out for the first time and managing personal finance, I know I had to put groceries on a CC more than a few times, even living as frugally as I could. Top that with a few personal finance life lessons and you don't have that cheap of living.

The only students who truly get 'the sticker price' at a university are those who have the luxury to live cheap on their own/with parents all four+ years (often times helpful with location), don't have to take out a single student loan, and finally, have the skills, knowledge, and resources to pay for books, lab fees, supplies, and living costs efficiently right off the bat.

I also went to a state school, and it does average at $50k 'sticker price' -- college costs have risen that much just in the last 5 or so years. I took out closer to $69k. :/ Of course, we didn't realize it until after school when we tallied everything up.

[snafu]

DS, I'm certain DD won't be silly with spending. I'm guessing she will develop a budget for herself and stick to it. I'll wager gran will be so proud, she'll slip her DGD $$$ for extras.

Our DSs [now part time grad students] worked with a budget and managed part time work after 1st semester. Our system is different but there are thousands of awards, grants, scholarships available that are rarely even applied for.

Kayla made a terrific point. In spite of all the loan calculators available, students just stick their head in the sand and 'forget' to track their borrowing. I'm not going to think what will happen when interest rates return to more typical levels!