Decisions, Decisions……..

For high school seniors who have applied regular decision to college and are lucky enough to be weighing multiple offers of acceptance, April is a month of deliberation. Selecting a college is a big deal, arguably one of the most pivotal moves an individual will make in his/her lifetime. There are so many considerations – school size, reputation, location, choice of major, and the really tough factor –  how to pay the bill. A small percentage of students are in the fortuitous position of being able to choose a college regardless of the cost. However, for the vast majority – sticker price matters a lot. Recently the New York Times published an excellent piece entitled “Measuring College Prestige vs. the Cost of Enrollment”  http://www.nytimes.com/2013/04/20/your-money/measuring-college-prestige-vs-price.html?pagewanted=all and did a great job discussing the emotional aspect which is so inextricably linked to this process – unfortunately at times leading to irrational conclusions for many students and families. I’d like to add my thoughts to the mix of how cost plays out in the final decision of where to enroll.

Taking on an onerous amount of debt in order to attend a private, non-elite college seems hard to justify given today’s uncertain economy. In my practice I advise against borrowing heavily when students are not sure about what they will study in college or for those who are leaning toward the liberal arts where career paths are less defined than with the STEM (science, technology, engineering, math) majors. Unfortunately, only a handful of schools – the Ivies and a few other super selective campuses – offer generous financial aid packages that require little or no borrowing on the part of families who qualify. The frustrating conundrum – getting admitted to these schools is next to impossible. Harvard’s admit rate this year was 5.8%, Princeton accepted slightly over 7%. Even at the flagship state universities with their more affordable tuitions for in-state residents, i.e. UCLA and the University of Michigan –   admission rates are relatively low. UCLA only accepted 20.1% of all applicants this year. Compounding matters even further, often the financial aid award letters that accompany the letters of acceptance can be confusing and difficult to read and decipher. Therefore, it is essential to read the fine print. What initially may appear to be a very generous award “covering” the full cost of attendance may actually be only a small amount of grant money with the rest of the “package” comprised of loans and work-study aid.

So what’s a student to do? Remember, financial aid awards are not always final. College financial aid staff members are there to help you and typically they are reasonably approachable. Most schools have an established mechanism in place where you can appeal aid amounts. Be sure to take advantage of this process particularly if you’ve had a change in circumstances, i.e. parental loss of a job, or family illness. Also, if you’ve re-taken the SAT and your scores have improved, it’s worth a shot to re-apply for merit awards which use academics in the criteria for selection. Finally, if the numbers still don’t add up try to remove the emotion from the equation and look objectively at your circumstances.  Studentaid.gov  http://studentaid.ed.gov/repay-loans/understand/plans/standard/comparison-calculator is the site for federal student loans and provides an excellent calculator enabling you to determine what your loan re-payment schedule and monthly costs will be over the lifetime of the loan. If you’re sure you’ll have that job lined up on Wall Street after you graduate then go for the expensive college because more than likely you won’t have too much difficulty paying back your loans. However, if you’re not clear about your college plans it might make more sense to go with a more affordable option.