Once the applications are processed and the acceptance letters roll in, it’s easy to get excited, especially if your child got accepted by their dream school. But, acceptance isn’t everything.
Financial aid packages are usually quick to follow, detailing exactly what kind of support your student will receive while they pursue their education. And, just because they got into a school, that doesn’t mean that packages from more than one school will be the same.
Some students will face a tough choice, particularly if their dream school doesn’t offer much in the way of aid. Add to that a second offer from a backup school that will allow your child to graduate debt free, and they’re in a real pickle.
So, how should your child decide between attending their top choice college and the ability to graduate debt free?
Here are some tips for weighing their options.
- Ways to Analyze the Top Choice College
- How to Compare Graduating Debt-Free
- Benefits of Graduating Debt-Free
- Comparing the School Experience
- Comparing the Career Opportunities
- Making the Decision
Analyze the Top Choice College Aid Package
How much of their total cost is covered? How much would need to be covered by other means? If student loans are required, what would they need to borrow? What would the monthly payment on the student loans look like once they graduate?
In some cases, you’ll both discover that the amount leftover isn’t too bad.
Maybe it could be covered by working a part-time job or cutting back on certain living expenses that aren’t necessary? Maybe they could reduce the cost by getting an apartment with a roommate instead of a dorm room?
Another key question is, if they do need a student loan, would it be reasonable to expect that they could cover the payment based on their area of study and entry-level jobs in the field? What is the return on investment?
By answering the questions above, your student can gain a complete mental picture of what it would take to attend their top choice college, including any debt burden that may follow them after graduation.
Have your child thoroughly explore their options. After all, it’s their top choice school for a reason, so don’t automatically discount it. Plus, there might be a reasonable way to make it work.
For example, did you know that there is still time to apply for scholarships for the fall semester? It’s true! Students can apply through the entire summer before heading to college. In fact, we offer our own scholarship that has a deadline at the end of July (and we are just one example!)
If you and your student would like more information about how to find scholarships that can make their top choice college more affordable, sign up for our free college scholarship webinar! It’s an excellent way to receive some free training about locating scholarships and the rest of the process!
However, it’s possible they’ll discover that their top choice college is completely unaffordable, and that realization, albeit a tough one, can ultimately make the decision easier.
Discuss the Option to Graduate Debt Free
Once they’ve reviewed the financial implications of attending their top choice college, it’s time to explore what comes along with being able to graduate debt free.
At this point, your child should have a reasonably accurate idea of what it would take to make their top choice college a possibility, including any associated burdens (like having to work while in school, if they could avoid it by choosing a backup college).
Next, have them consider all of the benefits of graduating debt free, particularly being able to avoid a potentially costly student loan payment. Still, there are many other opportunities that arise when graduating debt-free.
Benefits of Graduating Debt-free
In addition to calculating the loan payment and comparing it to their expected salary upon graduation, you will want to review the impact a student loan can have on their credit and other financial goals.
For example, a large student loan payment can make it harder to buy a house or afford to start a family. Even if your student isn’t concerned about those things today, they might feel differently in five or 10 years. And, if they have a student loan, they could be wrestling with that debt for at least that long (and most likely longer).
Many graduates have to move back home after college to be able to pay off the debt. Is that something they are open to? Are you open to it?
Having graduated debt-free myself, I personally lean to this side because I know the opportunities I’ve had due to no loan payment taking my paycheck each month. First, I was able to purchase a rental property only 2 months out of college where I lived for free while my roommates covered my mortgage. Then that freed up money to invest in my retirement. I paid off my car, traveled the world, and of course I was eventually able to focus on The Scholarship System full-time.
My peers with student debt haven’t had near the amount of opportunities as I have (and certainly not as quickly) because they are still focusing on paying off their student loans.
Compare the School Experience
Usually, there’s a reason your child considers a specific school their top choice, and that needs to be a part of the conversation.
In some cases, the culture is a better fit, giving them additional opportunities beyond academics. At times, the quality of the education itself may be better, and that’s valid too.
Your student needs to consider what it is that their top choice college offers and decide how important it is to them and their future.
Compare the Career Opportunities
Occasionally, a degree from a particular school will give your child a chance at a stronger start to their career, which can be valuable.
If you want my most sincere suggestion, I always tell families to keep in mind that college is ultimately to get into the career of their choice; therefore, the career opportunities should be heavily considered when making this decision. In my opinion, and yes I know I am taking a risk by sharing this, going into debt because of the ‘culture’ should not trump a school that can be debt free AND can lead to a successful career of their choice because there is often times another school with just as good of a cultural fit out there.
Furthermore, many argue that the name of the school does not have a major impact on the likelihood of hiring a student. In fact, according to this Time article, the correlation between school and success is minimal. Ultimately, we believe that students can make a successful career for themselves without going to a school that costs 6-figures in student debt.
Making a Decision
After reviewing the points above, your child should be well-positioned to make a decision.
While the decision does have a financial factor, we do realize there’s more to it than money alone. So, if the school that allows them to graduate debt free can’t provide something that their dream school can, it’s worth taking a closer look at the issue.
In some cases, the choice will be made for them. If their dream school is genuinely unaffordable, such as if it isn’t possible to get enough in loans to cover the remaining cost or the anticipated monthly payment can’t be managed on their projected salary, then it is better for them to choose the school that enables them graduate debt free.
But, if their top choice college could be affordable, even if it means taking on some debt, then it could be the right decision, especially if it offers something that their back up school simply can’t provide.While watching your child take on student loan debt is hard, it isn’t always the end of the world. We still suggest trying to keep the borrowing to the minimum amount possible. Plus, it’s important to remember that there is still time to save up some extra funds or reduce expenses. Here are some articles that cover those topics:
- 75 Easy Ways to Save Money in College
- 7 Things You Can Do to Pay for College
- How to Save Thousands on Student Housing Costs
- 7 Unique Ways to Pay Down Student Loans While in College
In fact, there may even still be time to negotiate tuition with their top choice college. Here’s an article on how to manage that process: 5 Steps to Negotiate College Tuition and Save Thousands of Dollars
And lastly, if your child is still torn, then making a double deposit is an option. This approach allows them to reserve a place at multiple schools, giving them a little more time to negotiate tuition, save up some money, or land scholarships before finalizing their choice.
Ultimately, there is no inherently right or wrong choice here as long as it’s made after considering all these points. Your child needs to examine their unique situation using the tips above and make the decision that makes the most sense based on their finances and goals.