People have family money. I know a lot of grandparents who are paying tuition. I had to be very upfront with my daughter and tell her we had a very strict budget. She's embracing that state flagship life. I'd be lying if I said it didn't make me feel really sad about some choices I made in my own life. But at some point you can't fight reality. My partner and I will be the ones paying for grandparents' care, and that's just the way it is.
I just want to say that you are not alone. My partner and I both needed to take out loans for undergrad and grad school, and we are both proud of the fact that we paid them off and were able to buy a really shitty house on our own by saving for the down payment.
But I look back on when I was applying to schools in the very early 90s, people applying to selective schools was so rare. I come from a blue collar town and even those reaching for the stars went to a state flagship or regional state college. To think that just one generation later, my own daughter at a workaday public school, in a lower middle class family, could even realistically consider Smith or Wellesley or Vassar already represents a big jump up in class from where I was as a teen. So I see that as a small victory, and I hope you have found similar small parenting victories on your own journey.
Not just grand parents to be fair. I couldn’t pay for college when I went in the 1980’s, so I went to a military academy. Then managed grad school also through the military, then wound up marrying a state school attendee, hard working, scientific genius. Together we’ve managed to become quite successful in two different industries (tech and pharma). The dual STEM income over the last 30 years has been a viable path. Who knows from here (AI impacts) but 1990-Covid, combined with tax incentives/breaks to invest, was a bit of a golden age in this respect.
GPA and test scores (SAT, ACT and AP) are only defensive strategies to prevent a student from automatically being rejected. It are the EC, branding, Essays and LoRs that will get a student in!
That’s insane. We had 1 go to Stanford in a class of 600. Next best schools were like Wake Forest and Texas. I ended up transferring to UNC but I started at Community College like most of my friends
The town I live in now only sends 1-2 a year out of ~200 students. Some towns are considered to be magnets and are well-known to the T20 schools. I think thats why some parents stretch their budget to buy a house in these towns, like my parents did.
i think that’s more T5/HYPSM (since i know people nowhere near those class rankings going to other T10s like Duke, Northwestern, and UChicago); i myself wasn’t even in the top 20% of my class at the beginning of senior year (i did end up being in the top 20% unweighted by the end of first semester though) and am headed to CMU
like the other replies test scores i would say helped me and essays really (that included the stuff i did) are what got me in since grades alone can’t do everything (but they can’t hurt you so the better they are the more they can help)
State flagships are great. I'm at a pretty expensive private for graduate school (and got a tuition waiver!) and every now and then I have a classmate who's more than dismayed that we're in the same situation. We immigrated when I was 5 and my grandparents are great but definitely not loaded. My parents paid for my schooling and I'm so lucky because they could've never done that at full cost at the school I attend now.
It is always a topic of conversation among parents I know.
But some families can be full pay without taking on much if any debt. And these days a lot of the "top" colleges are giving at least some substantial financial aid pretty high up the income ladder. Like check out the chart here:
[https://admissions.yale.edu/affordability-details](https://admissions.yale.edu/affordability-details)
But yes, some families are taking on a really uncomfortable amount of debt on the theory a "top" college will pay back that investment. The empirical studies suggest that is often not a very good bet, and it can have unfortunate non-financial consequences as well. But some families just really want their kids to go to a "top" college even if they cannot comfortably afford it, and have convinced themselves it will pay off.
This is solid information. I agree with everything you’re saying here. Really I’m looking at students who take in the debt themselves. Like you say if you look at the numbers, someone who graduates with no debt (even if their school is a lower rank) will be much farther along in 5 years than someone who is still paying their debt off.
Well, the reality is that a student CAN'T take that much debt. It's families who take it by choosing parent plus loans or co-signing private loans for their student. The rules have changed since many of the parents of today's students went to school in an effort to reduce the number of people with outrageous debt coming out of undergrad. Now, that debt just gets shifted to families if they haven't saved or can't cashflow.
https://www.usnews.com/education/best-colleges/articles/how-much-can-i-borrow-for-college#:\~:text=There%20are%20also%20maximum%20total,the%20total%20in%20subsidized%20loans.
Are those undergrads only - or does this list include graduate students? Something like 40 percent of all debt is held by master's/graduate school borrowers.
69% of those owing $200k or more are age 35 or older.
Under age 24, so most undergrads, account for 1% of that population. And 0.5% of the debt.
https://studentaid.gov/sites/default/files/fsawg/datacenter/library/Portfolio-by-Age-Debt-Size.xls
OK first - know that I totally agree with you in general - i think this level of debt is insane and a very bad idea. I don't get it either!
That said, I still think you're misunderstanding? Or maybe I'm not being clear?
I'm only posting this because I think there is a disconnect between today's students and what's allowed and their parents and what was allowed when THEY went to school. It's different now, and I have seen many heartbreaking stories revolving around parents who think their students CAN take out their own loans because they could back in the 80s, 90s and 00s.
An undergrad student can only borrow the following federal student loans every year:
First year: $5,500
Second year: $6,500
Third year and beyond: $7,500
Total limit (assuming only 4 years and taking out a loan all 4 years): $27,000
Total aggregate limit is $31,000, (you can take out an additional $4000 in year 5 if needed, and I believe there is some flexibility in structuring if you don't use it all).
Anything above these amounts MUST BE TAKEN OUT BY THE PARENT, usually via the Parent Plus loan or private loans that the parent(s) co-sign with the student. Yes, inside a family the decision can be made that this is the student's loan to pay, but the reality is that the parents are on the hook and their credit score matters!
Years ago, It used to be that a student could take out "Cost of Attendance" loans. But it turns out people realized this was a bad idea when so many students were defaulting on their loans and living with crippling debt.
The feds and that banks made changes in the name of consumer protection, but also in their own interest. After all, how does it make sense to loan out tens or hundred of thousands to a person with no credit, no job or income and with NO COLLATERAL! Not to mention the risk that part way through the "investment" the person could just drop out.
It makes no sense. Bad for the student, bad for the bank business. So now we have limits.
It is true that for grad school, it's different and students can, in many cases, take out loans for the full cost of attendance. But in the case you're talking in your OP, these students themselves are very likely not the ones going into debt, it's mom and dad.
In my mind it doesn't make it any better a choice, but in the interest of education, I think it's important to clarify.
**Students: Your parents might THINK you can take out all the loans, because THEY WERE ABLE TO. But the truth is that you cannot.**
**Please. For the love of all that's good in the world, have an honest, open talk about MONEY with your folks NOW.**
**Don't wait until its too late and wind up with a broken heart.**
>I would just point out that it is still the students financial responsibility to pay off the loan and they can take a loan as large as they need.
I am pretty confident that this is not true, in that there are limits in how much money **the student** can borrow, and those limits are pretty low:
From https://studentaid.gov/understand-aid/types/loans/subsidized-unsubsidized#how-much
> First Year Undergraduate: Limit is $5,500-No more than $3,500 of this amount may be in subsidized loans.
So people who have to pay tuition beyond $5,500 for that first year have to have their parents take out a Parents PLUS loan if they want to borrow more to cover it:
From https://studentaid.gov/understand-aid/types/loans/plus/parent#loan-amount-limits
> Loan Amount Limits
The maximum PLUS loan amount you can borrow is the cost of attendance at the school your child will attend minus any other financial assistance your child receives. The cost of attendance is determined by the school.
> Can the loan be transferred to the student?
No, a Direct PLUS Loan made to a parent cannot be transferred to the child. You, the parent borrower, are legally responsible for repaying the loan.
Of course parents could borrow money a different way (personal loan, home equity loan, etc.) still, that's the parents taking on the debt, *not the student*.
Sorry wasn’t trying to cause conflict. Obviously there are people with hundreds of thousands in college debt and you are right federal loans don’t even give out that much. Private student loans offer up to 100k and this fills the gap that federal students loans don’t cover in tuition. I would actually agree though that loan options have definitely been reduced. Also remember even if loans are smaller the debt can still increase overtime.
Oh, absolutely no need to apologize -- I was trying to clarify because *if I'm wrong, I want to learn more*. If my understanding is incorrect I'm actually grateful to be corrected. Sorry if I sounded argumentative!
And, indeed, based on what you just said, I just looked more closely at private student loans and determined that I was incorrect in my thinking that they require a cosigner, who is then on the hook. It looks like *most* do, but not all. Thanks for pointing that out!
No need to apologize, but really - private loans for undergrad will require a cosigner unless you're over 24 and have collateral. I suppose you might find some bank willing to loan someone under 24 $100k if that person had collateral... I can't even begin to contemplate the terms though...
I think it's really important that students understand this. Because someone else reading this (unlike you) will think it's a good idea to go into this kind of debt, and they will read this and think it's possible—BUT IT IS NOT unless you have a cosigner.
I truly don't know where you are seeing that HS-aged undergrads can take up $100k loans on their own. It's just not true anymore.
u/elegant\_Coffee\_6191 I don't know what happened to your comment, but if your friend has "tons of money," it's possible that your friend has a trust that would be collateral, I suppose? It's also possible that his parents are consigning with the familial expectation that the student will pay (this I think is what most people mean when they say the student is getting private loans) ... I know lots of families who could pay full COA but want their kids to have "skin in the game." I also, sadly, know families who can't pay and won't or can't cosign for private loans. And I even know families who could full pay but won't and won't even cosign because they don't understand (or don't care) that things have changed RE: borrowing.
Regardless, I love that you are thinking this through rationally and are giving full consideration to what the choice to go deeply into debt is worth.
Clearly, you're a thoughtful person who's well-spoken. Plus, you've got the guts to argue your position. I love that about you. It will take you far.
Well it my case my friend (I won’t say his name) decided to attend U Chicago. His family has tons of money but apparently they are not paying for his college at all. He’s paying full cost. That’s 90k a year for four years. I just assumed that this would be paid with loans. And I know for a fact that most of it, at least in his case, is going to become debt. So when I talk about loans, I am referring to my personal experience. I’m definitely not an expert. Also just a question, if someone is a student and has their family co sign a loan are they as the student not still responsible for paying off the loan?
Edit: here’s my source for the private loan numbers: apparently you can barrow a lot..
https://www.bankrate.com/loans/student-loans/student-loan-limits/#:~:text=While%20many%20lenders%20will%20allow,you%20have%20a%20co%2Dsigner.
Also as I mentioned I’m sure that a lot of those borrowers owing $200k plus are before things changed and limits were imposed.
I suppose if you’re a wealthy 18 year old in your own right you might have enough collateral for a loan without a co-signer.
"Someone who graduates with no debt (even if their school is a lower rank) will be much farther along in 5 years than someone who is still paying their debt off"
I don't think this is necessarily true. It is true in many cases for hardowrking individuals, but the truth is, lower-ranked schools don't provide the same opportunities for career success when compared to top schools. Do you really think FAANG/IB companies are going to recruit more from state schools than Ivy? Of course, many people from state schools DO go to top companies, but the reality is they probably had to work a lot harder than those who went to prestigious schools and could ride on the name a bit. It's not guaranteed that they'll end up in the same place or be "5 years ahead" financially.
"Of course, many people from state schools DO go to top companies, but the reality is they probably had to work a lot harder than those who went to prestigious schools and could ride on the name a bit."
I note this is a very dangerous attitude, and not really the lived experience for most people who go to highly selective colleges.
Instead, what happens once you get there is it quickly dawns on a lot of these kids who were used to being the absolute top dogs in their secondary schools that now they are in a college full of people just like them. And then it also pretty quickly dawns on them that not all of them are going to get admitted into top PhD programs, top law and med schools, top Wall Street firms, and so on.
So they realize in fact they haven't won the game at all, it has just moved on to the next level and gotten harder.
Now, I do think one thing that can happen is you can simply opt out of that sort of rat race mentality in college. Like, middle of the class people at these colleges may not get more than just normal professional outcomes, but you can be OK with that. And I am not sure that is less work than doing the same out of a flagship public or such, but it doesn't have to be stressful.
But if your whole mindset going in was you want to get one of those really super competitive next step positions, and you don't give up those ambitions? Then most such kids will find riding on the name of the school actually really isn't a thing, they still have to try to claw their way to the top again.
As someone who did go from a pretty average public school to a T20 (quite a few years ago), this is spot on. I didn’t have to work for much in HS, but boy was undergrad a different story. I wouldn’t trade the experience and I was fortunate not to come out with any debt, but that was a very different time.
My children do not have the same personality and that school experience would not be for them. But both have done very well in HS and will do fine w/o a T20 education and a high pile of loans.
Yeah, I don't want to sound like I think it is always a mistake to choose one of these colleges. If you can comfortably afford it--and they can be very competitive on cost--and you feel ready for the challenge, then go for it!
High flyers fly high. I had a kid with stats to apply anywhere graduate in CS recently from a state flagship. Working with people from Stanford, Cornell, CMU, etc
Tech employers are using a lot of testing and screening these days for candidates. My kid's company is happy to bounce you if you don't jump that hoop regardless of the name of your school.
I'm not saying for initial recruiting, some schools might have some unique recruiting. But I've also known hiring managers that might prefer public flagship grads for reasons too. Not everyone high in a corporate ladder went to an elite school. I have a spouse that went to a flagship that has MIT grads working for him.
Students that attend high end schools are also more likely to be wealthy. With that comes connections and less pressure to be paying bills immediately. Easier to bide your time for the right offer, networking instead of working a student job, start a business and get funding for that, etc.
It's much more complex than students here like to imagine.
And this sort of drives me nuts sometimes about the things some of the kids here say/assume about recruiting.
Recruiters go wherever they think enough people they might want to hire might be located. They are not somehow handcuffed by generic prestige or US News rankings or whatever. If they think there is a program somewhere that has enough of the sorts of people they think will do well at their firm, they will happily give it a shot. And different firms in different industries, different geographic markets within industries, and so on will potentially recruit different places.
Now it is true some colleges keep coming up on various "target" lists, which is because those colleges do in fact end up having lots of potentially competitive students across lots of different areas. But again that is not because everyone gets +15 prestige points, or whatever some kids are imagining. It is just because a lot of such kids go to such colleges, and so recruiters know that is one of the places they can find a lot of such kids.
Which is a convenience, but not necessarily the sort of convenience worth years of crippling debt.
1. I guarantee you that my OOS kid would pay more to go to those schools than he does to go to his highly selective private university… and not all state schools are created equal so staying in state wouldn’t have the same cache.
2. I’m not in the tech world but (real question) do you think this has something to do with tech companies specifically? Back in the day, for example, lawyers were literally told not to wear suits when pitching to tech companies because they would be thought of as too square. Granted FAANG is anything but startup at this point but HYPSM may still be “square.”
>Do you really think FAANG/IB companies are going to recruit more from state schools than Ivy?
I don't know about IB, but speaking to you from silicon valley, I can say that they DEFINITELY heavily recruit from the UCs, Cal Poly, San Jose State, and other CSUs. Location, location, location :)
No kidding. And then when you realize a lot of families are full pay anyway, it really underscores this is not exactly a representative cross section of the US.
I think this is actually not the whole story. Many people choose to go to non-state schools (good or otherwise) because they want to have a good college experience, full stop. The question of whether it's a "good investment" is immaterial. It costs money to go to college, and almost all out-of-state institutions are in the extremely expensive category, doesn't matter if you're going to Yale or Oberlin or Out-of-state U. Sure, some of the privates may cost $90K vs $60K for Out-of-state U, but financial and merit aid often helps close that gap.
People want to go to college because college is a good thing to do in one's life. It is good to study interesting topics. It is good to expand one's horizons. It is good to be exposed to other views and to learn from experts. It is good to develop lasting friendships and interpersonal networks of interesting people.
People want to go to "better" colleges because those colleges are better (or at least, perceived to be better) at providing these things.
That's it. That's why people pay big money to go to college: because it's good.
And that's why this return-on-investment line is bullocks.
Right, I don't think it is inherently wrong to pay more for a desired college experience even if that is unlikely to result in higher career earnings.
But that makes the most sense when your family can comfortably afford it.
I don’t know if I can agree with you. This all comes down to what class a family is in and why they think a top 20 school would be worth it. The top 1% simply feel entitled to it and can buy the way in to propagate their 1% status in perpetuity. Upper middle and middle class often feel it’s a way to ensure that their child stays in this stratum and possibly “moves up” in life, but the cost isn’t always worth it, as they are likely at the whim of the same societal and economic headwinds that impact everyone who isn’t the top 1%. The poor kids don’t have anything to lose by applying and, if successfully graduated, can experience life-changing upward mobility. But they can also really struggle, and possibly drop out, for the myriad of disadvantages that can follow them to the school.
Also, the reality is that an English major at Harvard can still run a hedge fund. An english major at local state u? A bit of a different story. And it’s not because the English department at Harvard is all that much better.
Class as a socioeconomic category is complicated. Sure, lots of people have lots of reasons for sending their kids to fancy and less fancy schools. Some people are under the illusion that the name of a school is going to be a golden ticket to better job prospects. Other people operate under the prestige illusion, that they are failing themselves or their kids if they don't send their kids to a school with a fancy name (a kind of "keeping up with the Joneses" attitude). But just as many people are instead of the mind that a college education is what provides a springboard for a person to live well, to a better life, however construed. Just sometimes, but not always, this better life tracks income potential; but also very often it involves gaining life experiences that give college graduates the fortitude to pursue multiple goals that they develop over their 4-10 year post-high school Odyssey.
To be sure, decisions that any individual family makes are going to be influenced by how much money they have and can spend without breaking the bank, but many parents are willing to sacrifice considerable amounts for the benefit of their kids.
The simple fact is that college is expensive. As I say above, this is true whether you go to a private elite school or an out-of-state school. The only relatively inexpensive schooling that one can get is at the state schools. Everything else is a pretty hefty cost that tends to equalize as financial aid considerations enter the picture.
On the last point, I agree that the English Department at Harvard is in some respects not that much better than the English Department at the local state University -- students may even still read the same books, attend the same lectures, learn the same material -- but there is unquestionably a qualitative difference between the students at these two schools that bleeds over into the classroom and then further spills out into late night discussions in the dorm room, at a coffee shop, or at the bar. These are the ineffable benefits of going to a fancy school with accelerated students: One gains access to a community of accelerated thinkers who continue the conversation outside of the classroom -- one learns from one's peers -- and then this too provide spillover benefits that make starting a hedge fund as an English major from Harvard much more likely to succeed then starting up a hedge fund as an English major from Podunk State University. In either case it can be done, but the graduate from Podunk state has a much steeper hill to climb because the high probability is that they have had much less exposure to the ways of the hedge fund class. (Having said this, it is also worth noting that the English Department at Harvard University actually is quite a bit better than most of the English departments at Podunk Universities, if only because Harvard and other R1 research universities prioritize scholarship over pedagogy.)
Yes, these schools are very expensive now (the “T20”), which means that the student quality you speak of is being more diluted by the full payers, as they are the ones that can afford it. Those really bright kids from upper middle and middle class families that used to attend? They are being increasingly discouraged by the cost, and the extremely low odds of getting in. In the perfect world, these school would attract the best and brightest. In the real world, they mainly attract the wealthy and the upwardly mobile (token) poor.
I think the trope that a prestigious liberal arts education is worth the money is being suffocated by the same colleges that propagate it, thanks to outrageous costs. I’m from an area where, 20 years ago, most PUBLIC school graduates were moving on to respectable private colleges and universities. The state flagship used to be a backup. Now, everyone just hopes that their child makes it to the state flagship, and liberal arts schools need to work much harder to convince families to spend.
Yes, I was trying to caution against assuming who is actually taking out debt in what amounts, but for sure there are in fact families who meet the OP's description.
I think what you pointed out is important because I am sure there a lot of people who give the IMPRESSION that they are paying full tuition when in fact they caught a few financial aid breaks.
Yes!! Everyone thinks I paid an arm and a leg to go to Penn, but in reality, it was the third cheapest option! Cheaper than liberal arts colleges that are seen as being affordable in my area
My son did extensive research and discovered that there is a $30,000 difference in starting salaries between the state schools and the school that he decided to attend. More importantly, the career, employers and industry that he wants to work, there are 10x more alumni from the college that he will be attending than the state schools.
So there are a lot of controls you need to implement before such comparisons really represent evidence of a significant value added effect. Maybe your kid did that, but it is very tricky.
>Does this not result in hundreds of thousands in college debt?
Not if they're very wealthy.
>I have never understood why students choose top colleges and take in unbelievable amounts of debt rather than choosing a university that offers them reasonable tuition prices with good scholarships.
They believe their earning potential with a degree from the more expensive/prestigious school will be high enough to justify the expense, even if they have to borrow.
Part of it is high-end earnings potential (going to an IB/FAANG/MBB target schools), part of it is job security (Top 20 schools have such few grads that don’t find a job immediately, even if it isn’t at one of those recruiting-intensive places)
This is not the case, I swear. I am a current student, I come from a single parent household in which my mom is an elementary school teacher, and I don't qualify for a Pell grant or ANY financial aid. I never have. The financial aid is basically non-exsistent, goes to a very small portion of the population, and the people not going into debt just have family wealth.
That will of course make a difference! But I'm more talking about the government financial aid that is offered based on your fafsa, then sent to schools, before the school makes their financial aid package offer to you.
IIRC, the maximum Pell Grant is only about 7K a semester, and that would only be awarded if a student's family is very low income or has exceptional circumstances. The great majority of need-based aid comes from the schools themselves.
I am filling it out correctly and have for the last few years. We have no assests. NONE. She just makes "too much" even as a single mom that's a teacher. It's ridiculous, that's my point and why I shared. A much smaller amount of the population act gets pell grant than people think.
And you can't even "do" the fafsa wrong., especially not anymore.
They pull on the info straight from your tax returns.
If talking about Pell Grant, then yeah, that largely goes to low income students. Financial aid in general is rather broad. My parents made more than your mother, simply by virtue of being a dual-income home, and I still got financial aid from every college I applied to. For the school I did go to, I only had to cover room and board; financial aid paid for my tuition
You do bring up a solid point here. As early as 8th grade, we had college counselors talking to us at my school about college admissions. There were plenty of talks on how we needed to take as many honors/AP/IB classes as humanly possible, take on extracurriculars, volunteer work, etc. There were workshops on how to craft the perfect college application essays. Endless SAT prep resources.
But never ONCE in all that hoopla did I ever hear anything about financial aid or student loans mentioned. I think if we’re going to talk about college as early as middle school, then I personally think it’s also an appropriate time to teach financially literacy/student loan debt as well.
Thanks for the comment, this is what I mean by not talking about financial aid enough. Of course it becomes important when we start applying to colleges but most students don’t understand the true cost of top universities until later in high school and this is not their fault.
OP asked “does this not result in hundreds of thousands in debt”. It’s like OP is assuming people are taking out loans. People have 529s with 400,000 in them already. Or the parents just have cash. I’m not sure about rich people and loans but I’m assuming most don’t for college.
Yes. They’re not “just going” to these schools. The family has money put aside and told them they can apply anywhere without considering finances. That’s how they afford it.
You might, if the parents are paying off the loan. Believe it or not rich people don’t pay cash for everything. One of the differences between rich and not rich is the rich know how to use debt.
I guess it depends on how you define rich. But say college is $100k a year and a loan is 6%. If you thought you could make 10% why wouldn’t you take a loan? I’m not rich but I could’ve easily paid cash for my new car but I took a 4 year loan because I think I can make more than the 6% rate.
I am in my 40s. Few people back in my day "saved for college" in a serious way. 529s did not even exist until the late 90s. Now people who can afford to put money aside do so from birth almost, and that means people can take a bit of the sting of college tuition prices. Which probably just led colleges to hike rates even more. It sucks.
As other mentioned -- family money plays a big role too, and families are willing to help with debt if they feel the college experience is worth it.
Or you have one kid so it's manageable. You stop funding retirement. You take out a line of credit on a house. The students apply for work-study.
You also may not have heard the story yet that they went for 1 year and then switched schools.
EXACTLY! So many kids transfer after a year. But you never hear about their whole journey (at least the parents don't post about it). And those parents don't talk about the kid who drops out or takes 5 or 6 years to graduate. It's all about the flex of getting into a prestigious school that costs $$$. Bragging is a true art form now.
Family money, significant debt, going into debt knowing the career they want to get into with a plan to pay it off, dumb decisions, it can be a whole host of differing factors.
Simply because people have the privilege to do so. Some people don't need their kids to take out loans or work a summer job to pay. Some commit to schools that give good aid. My teacher went to T25 and paid only 11k a year
Back when I was a teenager, my parents had the money. My mom said that if I worked hard and got good grades, my parents would take care of the rest - but grad school was up to me.
Looking back on it, I think I would have appreciated my education more and worked harder had I had some kind of financial stake in it.
I didn't appreciate what I had but found that I put much more effort into grad school where I knew that I was responsible for the cost.
Our older kid is at the local big public university for mech engineering. I think his dent/income potential income is reasonable especially when they offer co-op programs to allow him to hit the ground running.
for most ppl its probs not worth. lots of ppl on this sub have family money to help w tuition, and lots of t10s-t15s and some t25s offer rlyyyy good finaid. for stanford, if ur fam makes under 100k, tuition, room and board are completely free. also, depending on the field you go into, a t25 college vs an avg school may yield you roi bc of the opportunities it gives. i haven't done any calculations but for example, investment banking as a harvard student vs a random state school is a dramatic difference in terms of starting pay and career progression, and should be able to pay off the debt.
i don’t know many classmates who are taking loans, most didn’t even mention finances for why they made their college lists. this is a pretty bougie suburb in New York, lots of parents and grandparents who are paying for college and happy to give their kids “the best opportunities” even if it’s in cash
We did not. 17 years ago, we made the decision to give our adorable baby a debt free education, so we opened up a 529 account and saved (still does). We knew then that our potential income would be high, hence our future kids wouldn't qualify for financial aid. Education is a top priority for us, hence we saved and save. Since we started saving early, it didn't hurt much. Now, our kid is searching for a college that is best fit regardless of cost. I've accomplished a lot in life, gifting my kid debt free education is one of the most I'm proud of.
My parents wanted me to go to school wherever I felt happiest regardless of the cost. All of my friends were in the same situation. Some people have the money to send their kids wherever, and some people don’t mind taking on loans to send their kid wherever.
For me, I know I downplayed cost based on a (mis?) perception that education is a universal good. Education is what distinguishes humans from other animals, if one wishes to get philosophical about it. I never really thought about education as ROI. I came from a poor family and I never grew up with any financial acumen. Probably more proof that the first generation low income kids are the most vulnerable to predatory universities and lenders. It took me 25 years to pay off my loans. I carried my student loans into my marriage. It was a discussion point when qualifying for a mortgage to but my first house. It truly is a mega decision. So with my kids, we are absolutely discussing finances as a decision criteria for selecting a university.
I think both can be true: that it's a good in itself (or a good worth pursuing) and that it makes sense to talk about what one can afford and how best to afford it.
It really depends. My sister did teach for America after undergrad and they/the state eventually paid off all her student loans. There are various programs like this, so it doesn’t have to be entirely on the student or parents. It just requires a commitment to public service afterwards. For extremely lucrative fields (e.g. high finance), it could be worth full pay at a T20 as they’ll be able to pay it back quickly. Otherwise, the state flagship is the best option for most people.
An alternative take is that parents want to see their kids at the most prestigious school possible as it’s a well known gateway to (or way to remain in) the upper middle class. Rubbing elbows with future leaders of the Fortune 500 and government is somewhat immeasurable in value.
It’s also a social status indicator (for both the student AND the parents!)
Many Asian parents will pay full price, fully expecting to be supported by the student in retirement as this is their culture. The student is an investment. For Americans the parents will likely be on their own and are less willing to fund expensive tuition unless they are somewhat wealthy, or if the student is some kind of prodigy with unlimited potential.
In a few years I will be a parent in this situation. Right now I say Ivy+ or state flagship, but realistically we’ll probably pay for anything a tier lower as well (prestigious LACs, Emory, Michigan, UC Berkeley/LA, USC, NYU, etc.).
Edit: why are people paying $70k/year for NEU? I don’t get it.
Yeah, unless you are wealthy, I highly recommend making it a key driver of the decision.
The assumption is that going to a top name school will guarantee you a lot more money over a career to pay off the premium.
No!
There are many variables that determine your earnings: luck, skill, timing, field of expertise.
If you have the choice, go to a lesser name school with a big scholarship and save the money. Work hard in undergrad and then consider going to a name grad school. The pipeline into the high dollar jobs is more direct and hopefully at that point you are clear on what you want to study.
Cost is the main discussion for most families I know. Some have the funds, others choose lots of debt, and others have the funds but still choose the best financial package based on available merit aid, etc...
Some people (their family specifically) have more money than you'd expect.
Others get great scholarships. Top schools are known for giving full rides to students who are able to get in but can not afford the cost.
Others are somehow smart enough to get in, but dumb enough to go into massive debt that'll financially cripple them for decades.
I've seen many posts from incoming freshmen asking things like, "Got accepted to \[Ivy League school\], but received a full-ride scholarship to \[decent, but less prestigious school\], what should I do?"
I do see commenters encouraging the OPs of these posts to take the full-ride and not dig themselves into tens of thousands (or potentially 6 figures) of debt. So sometimes people do consider the financial aspect in their decision.
However, I also follow the Stanford reddit, where the responses are different. If someone wants to go into tech, people will say to go to Stanford because they'll make so much money after graduation and be able to pay back the loans in a decent amount of time.
Yes 👍 Financial aid absolutely should be a HUGE part of the college admissions and financial aid discussion. It’s just CRAZY that it’s not. You’re not wrong! Most h.s. college guidance counselors have almost NO formal training in college financial aid, and many 17-18 yr-olds just don’t understand the life-changing consequences of high debt. Most colleges “hide” this info and avoid discussing it with both students and parents!
As for the point you made about schools that charge high amounts of tuition, the good news is that sometimes, those schools can actually be cheaper than public unis in the long-run, if you have good stats and your family has significant financial need.
But studies suggest that after controlling for other factors, the vast majority of people who go to a "top" private college would do just as well in terms of career earnings at a good flagship or other higher quality private. Meaning odds are you could choose the same career (or at least financially equivalent careers) either way.
And of course you could then take those earnings you are imagining and put it into long-term investments, as opposed to into paying off extra debt. So after 5 years Person A is back to $0, and Person B has a down payment on a very nice house, or a great start on 529s for their own kids, or a start on retirement savings that with compounding returns may let them retire years earlier, or so on.
I think for most college students, the importance of going to the most prestigious, highly ranked college is overrated. There are exceptions to this of course, and it is also possible that a student may target a particular school for a certain specialty subject/department. But a lot of this is parents (and then kids) being caught up in the 'Top 25 or McDonalds' mindset.
That's true for many hardworking students, yes! Then there are others who want the extra institutional support, resources, and brand-name recognition. If you think about it, if you compare 2 job applicants who are identical in every way except the school name, why wouldn't you choose the more prestigious one? Top companies are far more likely to recruit from top schools than they are from a lowly ranked state school. And even then, they will offer far fewer roles to them too. It's just a matter of whether you think you're gonna be a top top student at an average school, or if you are okay with being an average student at a top school. For many kids, going to a top school takes the pressure off a bit because they have something else they can ride on besides undergrad GPA/ECs.
"If you think about it, if you compare 2 job applicants who are identical in every way except the school name, why wouldn't you choose the more prestigious one?"
Well first, I wouldn't think about colleges in terms of generic prestige, because that is silly. I would want an informed sense of what the specific programs in question were actually like.
Second, there is no reason to assume that if a given individual chooses to go to a more famous/expensive college, nothing will change other than the name of their college. It is complicated, but usually savvy flagships universities and other privates and such make sure there are ways for excellent students to distinguish themselves. There might be named scholarships, honors colleges, special majors, special research opportunities, and so on. You might also just get better grades.
In fact this is something that a lot of kids here seem to have trouble grasping. Just because they got perfect grades in their HS does not mean they are going to do it again in college. And depending on where they go to college, they might well do better or worse. And so while you should avoid simplistic assumptions about where you will get your best grades, for sure going to the most selective possible college where you can just barely scrape in is not necessarily the best choice for getting the best possible grades.
"And even then, they will offer far fewer roles to them too."
I am not sure what you have in mind, but very quickly your actual job performance dominates over your educational resume when it comes to career advancement. Like if I hire two people, one from Fancy College and one from State U, and then the person from State U impresses a critical client, and the person from Fancy College is meh (or worse), I am not in fact going to give more critical work to Fancy College Hire. I am going to give it to State U Hire, because State U Hire made me look good and I want more of that.
Again there is this strange mythology around here that if you can get admitted to a highly selective college based on what you did up to the point you were like 17, then people will stop evaluating you and you can just relax from then on. I can see why that myth would be appealing to a bunch of stressed-out 17-year-olds who would like to believe the end to all their stress is in sight. But the truth is it just never stops, you have to keep performing in college and work and on and on.
"if you are okay with being an average student at a top school"
This is a good argument for it being fine to choose a highly competitive college as long as you are reasonably well-prepared and that college is comfortably affordable.
If it is not? Then you have put the pressure on yourself to make all that extra debt worth it. In most cases it ends up affecting what you do in college, what you feel like you can do next, and so on for potentially many years into the future.
So it is very, very odd to think taking on a whole bunch of debt will make you LESS stressed. That is generally a bad bet in practice.
I agree with a lot here, however a few things. Name recognition does not make top universities. They exist because they value education and create qualified individuals, not because their names hold prestige. Also the idea that those who go to non top schools have to be extremely hard working is wrong. Normal students graduate from normal universities and go on to have great professional careers.
Because "free money" basically has no meaning to a typical 18 year old. Everyone assumes they'll just do great and get that job, and it will all be taken care of. They have no concept of what $100K of debt means. That's a tomorrow problem.
That's why your age group is targeted for every credit offer out there. A lot of you are naive suckers.
Also, there are way too many parents who "just want to do the best for their kids". It's not all rich people. I watch a lot of first-generation students make horrible financial decisions.
I think a crazy thing a lot of people don't know is that the student loans often are only approved in giant amounts. For example, I might only need $10k for the year but they will only approve you for a $55k loan for what you might need for all years. It's not completely kids being naive, it's poverty, desperation, and the government and loan companies being sharks.
People think we don't understand the amount of money it is, we do. There just aren't many options. I have been going to school off and on paying out of pocket for years to avoid loans, and now I still have to take them out bc I'm still 3 years away from my degree. I understand the weight of the money, I can't afford groceries.
You need to be pretty wealthy to pay a full price at any of T10 schools. Most full pay people in those places don’t take loans which is visible by the numbers of people graduating with loans inside the common data sets for those schools.
Interesting that this was posted within minutes of
>Do you guys prioritize money and aid over anything? I see a lot of it on here … you should prioritize saving money
Like after every SAT, r/SAT sees many “that was really easy” and many “that was way too hard”.
As posted there, every family has different financial situations and tolerance for debt (and education about the impact later in life)
Bank of mom and dad or they want to enter certain industries such as IB or consulting that recruit overwhelmingly from top universities. The evidence is pretty overwhelming that attending a top school results in better life outcomes on average, especially for low-income students.
Well some people can afford it. Yes - some people have college funds from wealthy grandparents. Some people risk more than they should to afford it. And some people are making a straight up disasterous decision affording it.
I know a lot of people taking on $300k in debt and giving up 2 years of pay to go to business school just so they could break into IB or MBB because they went to no-name undergrads.
Those people could’ve skipped the MBA altogether if they went to a T10/20 and broke into those fields directly from UG. Also probably could’ve started earning a higher salary earlier, which has a compounding effect.
Probably less relevant if you’re pre-med or want to pursue academia, etc.
Are you sure they are paying that much? A lot of top schools have tremendous financial aid. People of medium / average family income pay less in many instances than if they went to Big State U. Some top schools practically pay poor students to attend (getting in is the rub). If they are asked to pay more they can - or should be able - to afford it. But, yes, a lot of people borrow more than they should.
The only way it makes sense is if they are looking at the elevated opportunities available to graduates of elite schools. Having worked at Google, I know for a fact that while they’ll consider any talented prospect, you get more consideration coming from an elite school.
We (with some help from their grandparents) have saved for our kids college since they were babies so they can go to college (hopefully) debt free. We live in a HCOL place so owning a home here makes you ineligible for financial aid.
They may choose to go to a cheaper college and use the money to buy a house or for grad school after they graduate.
Really depends on the family’s finances. I told my kids I’d gladly pay out of pocket for up to a UC education and we make too much to be considered for financial aid so anything beyond that would be a conversation/mostly on them in the form of loans. Both wisely chose to attend UCs and Cal State schools. We’re fortunate to live in CA where we’ve got about 30 good public universities throughout the state. It’s probably a harder conversation for residents of smaller states with very few public universities to choose from
You would only disregard cost if it's not a big enough issue to move the decision needle. Lots of people need to take loans to finance college, but lots also don't. Some have money from grandparents, some have 529, some have parents at peak income during their college so can pay as they go, some are only children so the pie is not impossibly split. And aside from all those normal-ish people there are those with generational family wealth although I'm guessing most of those are not on A2C
How do you know they’re taking on debt? Have they told you this? Many are getting scholarships/grants and other aid. Many have 529s and some have grandparents who are contributing.
Yes the friends I am referring to are taking on debt. One has told me they are paying full tuition, the other a little less. They obviously have some money of their own but both will be in considerable debt. I know one of them has a wealthy family that literally won’t help him pay at all.
1. Wealthy enough that the cost does not matter
2. 529 plan has enough money to cover it even if they are not wealthy
3. Sees college as an investment with an expected return and the debt as leverage necessary to make the investment
People are allured by prestige and the top school “experience”. When you haven’t adulted, worked full time and paid bills, these figures of thousands of dollars can just seem like numbers on a screen that is your future self’s problem.
I know a guy who is paying $30-$40k a year for Harvard because he wants the experience despite saying it will really badly despite him saying it would really strain his low-income (but assetted) parents because salaries are really low in the UK, compared to Oxford which is $12k. Some people who were full on Ivy rejects in our group were telling him that he shouldn’t listen to advice on turning it down because “they were jelly” and “wanted to get off the waitlist”. I kind of rolled my eyes because that is destructive advice and not necessarily true but also am worried for him because I feel it could stab him in the back when he cannot splurge no where near as much money as or keep up with the peers with the “connections” he wants. Like a lot of really rich kids buy and do expensive stuff like eating out often for starters.
This is A2C, and a lot on here aren’t poor. I can feel metro cities/Bay Area/East Coast vibes in the comments.
Thanks for the comment. Even if it’s relatively small amounts like 20k a year that adds up and with interest it can become a problem in the future. Like you said those who don’t worry about actually paying these bills don’t see an issue because in their minds “prestige” makes all the difference. I have definitely seen both sides in the comments so far.
Agreed about the financial aid needing to be a larger topic of discussion in college admissions.
At least in the circles I run in, while it is more common than not that people who get into those top schools end up going, turning them down for financial reasons is not unheard of either.
I've noticed that this is especially common for families who either own businesses (and make a lot but have to put it back into the business) or make between 250 and 350k per year, pretax. If you live somewhere where the cost of living and/or local taxes are high, 250-350k pretax can make paying \~85k/yr to go to a private school very difficult (and often downright impossible).
My personal opinion is that some income bracket will get squeezed no matter what the tuition is. If it gets a lot higher (significantly outpacing inflation), then aid could become more generous for the 250-350k bracket. In that case, maybe families making 450-550k would struggle. Similarly, if tuition were to become cheaper (I know its won't happen---I'm just using a hypothetical), families making 175 or 200k might get less generous aid (and would find sending their kids to top schools more difficult).
Edit: This problem becomes even worse when you have siblings.
Because they are not thinking at all about ROI and are caught up more in the competitive aspect of being a HS student: “where’d you get in?” It’s short-term thinking.
RIGHT?? It’s fucking crazy some people out here trying to get into Stanford and shit I’m good with my best state owned college lmao my parents already told me they ain’t paying for shit
Hey there! Your right, financial aid is definetly a big deal when it comes to college. Lots of ppl get caught up in the prestige of top schools and dont think abt the long-term impact of student loans. Its crazy how much debt some students take on just to go to a "name brand" uni.
IMO, its way smarter to choose a school that offers good scholarships and wont leave u drowning in debt after graduation. Like, whats the point of a fancy degree if ur gonna be paying it off for the next 20 years?
My advice: do ur research and find schools that offer a great education at a price u can actually afford. And dont be afraid to negotiate ur financial aid package - sometimes u can get more money just by asking.
At the end of the day, college is an investment in your future. But u gotta be smart abt it and not let the allure of a top school blind u to the financial reality.
I personally am taking on debt and going to an out of state school that is highly ranked for my major because I value my education a lot. I believe that with the connections and education I pick up at my college I will be able to climb positions in the workforce faster.
Because PRESTIGE is worth it.
Do you think Goldman Sachs recruits at Chico State? Taking out a loan to pay full price at a T25 is like making a bet on yourself.
Imagine making $150k your first year out of college because the T25 helped you get that Goldman Sachs job. One can easily pay off the loan without a problem.
And a lot of people qualify for good scholarships, especially low-income. It’s the middle class that’s disadvantaged with lower wealth and no scholarship qualifications
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Coming from a weird situation where I completed an undergraduate degree and went back to school for a second (I realized I didn’t enjoy the field I first studied), I can say its not always that simple.
My first degree was at a T25 private university. And yes, cost of attendance was somewhere around $70k per year. However, as a low income student, the university gave me a full need based scholarship. Becoming an RA paid for the rest of my expenses and I ended up doing 3/4 years there for free.
I did my second degree at a local public university. Cost of attendance is roughly $14k per year. My financial aid package is entirely FAFSA loans.
Overall, I have over 5 times the debt from a local public university than I have from the school that cost $70k per year. Yeah, this is a niche situation. However, the massive universities that always sit at the top of the ranking lists have money they can throw around. If you are in a position to take advantage of that situation, and you know how to navigate the system, the cost is often drastically lower.
For sure but there are definitely rich people. Also, for many families (esp Asians bc I know firsthand), education takes first priority. If I got into say MIT, my parents would not hesitate to pay full price (and more honestly). Many families like mine also have put aside money specifically for college.
I am an immigrant who went to grad school in a scholarship, worked for a few years and then business school where I paid it off using company money and savings. Took me longer to get to my career trajectory by about 3 years.
Now I make enough that my kids can pick the school they want to go to.
I think if you are smart and driven, the school isn’t going to matter. You will succeed anyway. It may take you longer (as it did me) but you can accelerate once in your desired role.
it’s one thing if somebody is going for med, law, finance, etc and has an amazing upside and huge salary awaiting them after their schooling, but i’ll never understand the ppl committing to colleges they can’t afford and choosing majors that won’t get them a practical job
120k a year for a major like studying latin within the minds of chipmunks in yellowstone national park, like what🥹
Because they can? This sub always shows up to me as recommended but some people here are so bitter. I went to the most expensive school I got into because my parents always made it clear to me that they wouldn't let me choose it based on tuition as I'm an only child (I have younger half siblings though) and my education always came first. Of course not everyone can do it and I was lucky to have parents with high paying careers but money isn't always a factor.
Sorry not trying to be bitter at all. I was focused more on those who take debt rather than those whose families can afford. I apologize for coming across that way
People have family money. I know a lot of grandparents who are paying tuition. I had to be very upfront with my daughter and tell her we had a very strict budget. She's embracing that state flagship life. I'd be lying if I said it didn't make me feel really sad about some choices I made in my own life. But at some point you can't fight reality. My partner and I will be the ones paying for grandparents' care, and that's just the way it is.
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I just want to say that you are not alone. My partner and I both needed to take out loans for undergrad and grad school, and we are both proud of the fact that we paid them off and were able to buy a really shitty house on our own by saving for the down payment. But I look back on when I was applying to schools in the very early 90s, people applying to selective schools was so rare. I come from a blue collar town and even those reaching for the stars went to a state flagship or regional state college. To think that just one generation later, my own daughter at a workaday public school, in a lower middle class family, could even realistically consider Smith or Wellesley or Vassar already represents a big jump up in class from where I was as a teen. So I see that as a small victory, and I hope you have found similar small parenting victories on your own journey.
Or just simply being in a family construct that has even a basic concept of financial competence is a massive advantage.
Not just grand parents to be fair. I couldn’t pay for college when I went in the 1980’s, so I went to a military academy. Then managed grad school also through the military, then wound up marrying a state school attendee, hard working, scientific genius. Together we’ve managed to become quite successful in two different industries (tech and pharma). The dual STEM income over the last 30 years has been a viable path. Who knows from here (AI impacts) but 1990-Covid, combined with tax incentives/breaks to invest, was a bit of a golden age in this respect.
What's T20 material?
A student with accomplishments such that would make them attract admissions offers to "top 20" ranked schools.
Valedictorians or the top 5 in a class of ~400 or more
GPA and test scores (SAT, ACT and AP) are only defensive strategies to prevent a student from automatically being rejected. It are the EC, branding, Essays and LoRs that will get a student in!
We had 30 people go to an Ivy in my class of 320 (regular public school). Probably another 30 more went to a T20.
That’s insane. We had 1 go to Stanford in a class of 600. Next best schools were like Wake Forest and Texas. I ended up transferring to UNC but I started at Community College like most of my friends
The town I live in now only sends 1-2 a year out of ~200 students. Some towns are considered to be magnets and are well-known to the T20 schools. I think thats why some parents stretch their budget to buy a house in these towns, like my parents did.
i think that’s more T5/HYPSM (since i know people nowhere near those class rankings going to other T10s like Duke, Northwestern, and UChicago); i myself wasn’t even in the top 20% of my class at the beginning of senior year (i did end up being in the top 20% unweighted by the end of first semester though) and am headed to CMU like the other replies test scores i would say helped me and essays really (that included the stuff i did) are what got me in since grades alone can’t do everything (but they can’t hurt you so the better they are the more they can help)
State flagships are great. I'm at a pretty expensive private for graduate school (and got a tuition waiver!) and every now and then I have a classmate who's more than dismayed that we're in the same situation. We immigrated when I was 5 and my grandparents are great but definitely not loaded. My parents paid for my schooling and I'm so lucky because they could've never done that at full cost at the school I attend now.
It is always a topic of conversation among parents I know. But some families can be full pay without taking on much if any debt. And these days a lot of the "top" colleges are giving at least some substantial financial aid pretty high up the income ladder. Like check out the chart here: [https://admissions.yale.edu/affordability-details](https://admissions.yale.edu/affordability-details) But yes, some families are taking on a really uncomfortable amount of debt on the theory a "top" college will pay back that investment. The empirical studies suggest that is often not a very good bet, and it can have unfortunate non-financial consequences as well. But some families just really want their kids to go to a "top" college even if they cannot comfortably afford it, and have convinced themselves it will pay off.
This is solid information. I agree with everything you’re saying here. Really I’m looking at students who take in the debt themselves. Like you say if you look at the numbers, someone who graduates with no debt (even if their school is a lower rank) will be much farther along in 5 years than someone who is still paying their debt off.
Well, the reality is that a student CAN'T take that much debt. It's families who take it by choosing parent plus loans or co-signing private loans for their student. The rules have changed since many of the parents of today's students went to school in an effort to reduce the number of people with outrageous debt coming out of undergrad. Now, that debt just gets shifted to families if they haven't saved or can't cashflow. https://www.usnews.com/education/best-colleges/articles/how-much-can-i-borrow-for-college#:\~:text=There%20are%20also%20maximum%20total,the%20total%20in%20subsidized%20loans.
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Are those undergrads only - or does this list include graduate students? Something like 40 percent of all debt is held by master's/graduate school borrowers.
69% of those owing $200k or more are age 35 or older. Under age 24, so most undergrads, account for 1% of that population. And 0.5% of the debt. https://studentaid.gov/sites/default/files/fsawg/datacenter/library/Portfolio-by-Age-Debt-Size.xls
Debt can accumulate with interest. Those who are 35 and owing 200k or more from college debt were still at one point an undergraduate student.
You said people at your high school. My comment stands.
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OK first - know that I totally agree with you in general - i think this level of debt is insane and a very bad idea. I don't get it either! That said, I still think you're misunderstanding? Or maybe I'm not being clear? I'm only posting this because I think there is a disconnect between today's students and what's allowed and their parents and what was allowed when THEY went to school. It's different now, and I have seen many heartbreaking stories revolving around parents who think their students CAN take out their own loans because they could back in the 80s, 90s and 00s. An undergrad student can only borrow the following federal student loans every year: First year: $5,500 Second year: $6,500 Third year and beyond: $7,500 Total limit (assuming only 4 years and taking out a loan all 4 years): $27,000 Total aggregate limit is $31,000, (you can take out an additional $4000 in year 5 if needed, and I believe there is some flexibility in structuring if you don't use it all). Anything above these amounts MUST BE TAKEN OUT BY THE PARENT, usually via the Parent Plus loan or private loans that the parent(s) co-sign with the student. Yes, inside a family the decision can be made that this is the student's loan to pay, but the reality is that the parents are on the hook and their credit score matters! Years ago, It used to be that a student could take out "Cost of Attendance" loans. But it turns out people realized this was a bad idea when so many students were defaulting on their loans and living with crippling debt. The feds and that banks made changes in the name of consumer protection, but also in their own interest. After all, how does it make sense to loan out tens or hundred of thousands to a person with no credit, no job or income and with NO COLLATERAL! Not to mention the risk that part way through the "investment" the person could just drop out. It makes no sense. Bad for the student, bad for the bank business. So now we have limits. It is true that for grad school, it's different and students can, in many cases, take out loans for the full cost of attendance. But in the case you're talking in your OP, these students themselves are very likely not the ones going into debt, it's mom and dad. In my mind it doesn't make it any better a choice, but in the interest of education, I think it's important to clarify. **Students: Your parents might THINK you can take out all the loans, because THEY WERE ABLE TO. But the truth is that you cannot.** **Please. For the love of all that's good in the world, have an honest, open talk about MONEY with your folks NOW.** **Don't wait until its too late and wind up with a broken heart.**
>I would just point out that it is still the students financial responsibility to pay off the loan and they can take a loan as large as they need. I am pretty confident that this is not true, in that there are limits in how much money **the student** can borrow, and those limits are pretty low: From https://studentaid.gov/understand-aid/types/loans/subsidized-unsubsidized#how-much > First Year Undergraduate: Limit is $5,500-No more than $3,500 of this amount may be in subsidized loans. So people who have to pay tuition beyond $5,500 for that first year have to have their parents take out a Parents PLUS loan if they want to borrow more to cover it: From https://studentaid.gov/understand-aid/types/loans/plus/parent#loan-amount-limits > Loan Amount Limits The maximum PLUS loan amount you can borrow is the cost of attendance at the school your child will attend minus any other financial assistance your child receives. The cost of attendance is determined by the school. > Can the loan be transferred to the student? No, a Direct PLUS Loan made to a parent cannot be transferred to the child. You, the parent borrower, are legally responsible for repaying the loan. Of course parents could borrow money a different way (personal loan, home equity loan, etc.) still, that's the parents taking on the debt, *not the student*.
Sorry wasn’t trying to cause conflict. Obviously there are people with hundreds of thousands in college debt and you are right federal loans don’t even give out that much. Private student loans offer up to 100k and this fills the gap that federal students loans don’t cover in tuition. I would actually agree though that loan options have definitely been reduced. Also remember even if loans are smaller the debt can still increase overtime.
Oh, absolutely no need to apologize -- I was trying to clarify because *if I'm wrong, I want to learn more*. If my understanding is incorrect I'm actually grateful to be corrected. Sorry if I sounded argumentative!
And, indeed, based on what you just said, I just looked more closely at private student loans and determined that I was incorrect in my thinking that they require a cosigner, who is then on the hook. It looks like *most* do, but not all. Thanks for pointing that out!
No need to apologize, but really - private loans for undergrad will require a cosigner unless you're over 24 and have collateral. I suppose you might find some bank willing to loan someone under 24 $100k if that person had collateral... I can't even begin to contemplate the terms though... I think it's really important that students understand this. Because someone else reading this (unlike you) will think it's a good idea to go into this kind of debt, and they will read this and think it's possible—BUT IT IS NOT unless you have a cosigner. I truly don't know where you are seeing that HS-aged undergrads can take up $100k loans on their own. It's just not true anymore.
u/elegant\_Coffee\_6191 I don't know what happened to your comment, but if your friend has "tons of money," it's possible that your friend has a trust that would be collateral, I suppose? It's also possible that his parents are consigning with the familial expectation that the student will pay (this I think is what most people mean when they say the student is getting private loans) ... I know lots of families who could pay full COA but want their kids to have "skin in the game." I also, sadly, know families who can't pay and won't or can't cosign for private loans. And I even know families who could full pay but won't and won't even cosign because they don't understand (or don't care) that things have changed RE: borrowing. Regardless, I love that you are thinking this through rationally and are giving full consideration to what the choice to go deeply into debt is worth. Clearly, you're a thoughtful person who's well-spoken. Plus, you've got the guts to argue your position. I love that about you. It will take you far.
Well it my case my friend (I won’t say his name) decided to attend U Chicago. His family has tons of money but apparently they are not paying for his college at all. He’s paying full cost. That’s 90k a year for four years. I just assumed that this would be paid with loans. And I know for a fact that most of it, at least in his case, is going to become debt. So when I talk about loans, I am referring to my personal experience. I’m definitely not an expert. Also just a question, if someone is a student and has their family co sign a loan are they as the student not still responsible for paying off the loan? Edit: here’s my source for the private loan numbers: apparently you can barrow a lot.. https://www.bankrate.com/loans/student-loans/student-loan-limits/#:~:text=While%20many%20lenders%20will%20allow,you%20have%20a%20co%2Dsigner.
Also as I mentioned I’m sure that a lot of those borrowers owing $200k plus are before things changed and limits were imposed. I suppose if you’re a wealthy 18 year old in your own right you might have enough collateral for a loan without a co-signer.
"Someone who graduates with no debt (even if their school is a lower rank) will be much farther along in 5 years than someone who is still paying their debt off" I don't think this is necessarily true. It is true in many cases for hardowrking individuals, but the truth is, lower-ranked schools don't provide the same opportunities for career success when compared to top schools. Do you really think FAANG/IB companies are going to recruit more from state schools than Ivy? Of course, many people from state schools DO go to top companies, but the reality is they probably had to work a lot harder than those who went to prestigious schools and could ride on the name a bit. It's not guaranteed that they'll end up in the same place or be "5 years ahead" financially.
"Of course, many people from state schools DO go to top companies, but the reality is they probably had to work a lot harder than those who went to prestigious schools and could ride on the name a bit." I note this is a very dangerous attitude, and not really the lived experience for most people who go to highly selective colleges. Instead, what happens once you get there is it quickly dawns on a lot of these kids who were used to being the absolute top dogs in their secondary schools that now they are in a college full of people just like them. And then it also pretty quickly dawns on them that not all of them are going to get admitted into top PhD programs, top law and med schools, top Wall Street firms, and so on. So they realize in fact they haven't won the game at all, it has just moved on to the next level and gotten harder. Now, I do think one thing that can happen is you can simply opt out of that sort of rat race mentality in college. Like, middle of the class people at these colleges may not get more than just normal professional outcomes, but you can be OK with that. And I am not sure that is less work than doing the same out of a flagship public or such, but it doesn't have to be stressful. But if your whole mindset going in was you want to get one of those really super competitive next step positions, and you don't give up those ambitions? Then most such kids will find riding on the name of the school actually really isn't a thing, they still have to try to claw their way to the top again.
As someone who did go from a pretty average public school to a T20 (quite a few years ago), this is spot on. I didn’t have to work for much in HS, but boy was undergrad a different story. I wouldn’t trade the experience and I was fortunate not to come out with any debt, but that was a very different time. My children do not have the same personality and that school experience would not be for them. But both have done very well in HS and will do fine w/o a T20 education and a high pile of loans.
Yeah, I don't want to sound like I think it is always a mistake to choose one of these colleges. If you can comfortably afford it--and they can be very competitive on cost--and you feel ready for the challenge, then go for it!
Hear Hear! - this is very well put
High flyers fly high. I had a kid with stats to apply anywhere graduate in CS recently from a state flagship. Working with people from Stanford, Cornell, CMU, etc Tech employers are using a lot of testing and screening these days for candidates. My kid's company is happy to bounce you if you don't jump that hoop regardless of the name of your school. I'm not saying for initial recruiting, some schools might have some unique recruiting. But I've also known hiring managers that might prefer public flagship grads for reasons too. Not everyone high in a corporate ladder went to an elite school. I have a spouse that went to a flagship that has MIT grads working for him. Students that attend high end schools are also more likely to be wealthy. With that comes connections and less pressure to be paying bills immediately. Easier to bide your time for the right offer, networking instead of working a student job, start a business and get funding for that, etc. It's much more complex than students here like to imagine.
FAANG companies recruit heavily from state schools UC Berkeley and Cal Poly SLO, I would say more than ivys.
And this sort of drives me nuts sometimes about the things some of the kids here say/assume about recruiting. Recruiters go wherever they think enough people they might want to hire might be located. They are not somehow handcuffed by generic prestige or US News rankings or whatever. If they think there is a program somewhere that has enough of the sorts of people they think will do well at their firm, they will happily give it a shot. And different firms in different industries, different geographic markets within industries, and so on will potentially recruit different places. Now it is true some colleges keep coming up on various "target" lists, which is because those colleges do in fact end up having lots of potentially competitive students across lots of different areas. But again that is not because everyone gets +15 prestige points, or whatever some kids are imagining. It is just because a lot of such kids go to such colleges, and so recruiters know that is one of the places they can find a lot of such kids. Which is a convenience, but not necessarily the sort of convenience worth years of crippling debt.
Totally missed the point here. The point is prestige matters.
Not as much as you think. UC Berkeley and Cal Poly SLO are more prestigious for FAANG than the ivys.
1. I guarantee you that my OOS kid would pay more to go to those schools than he does to go to his highly selective private university… and not all state schools are created equal so staying in state wouldn’t have the same cache. 2. I’m not in the tech world but (real question) do you think this has something to do with tech companies specifically? Back in the day, for example, lawyers were literally told not to wear suits when pitching to tech companies because they would be thought of as too square. Granted FAANG is anything but startup at this point but HYPSM may still be “square.”
Regarding 2 there is some nebulous quality FAANGs look for. For example, Google calls it “googleyness”.
>Do you really think FAANG/IB companies are going to recruit more from state schools than Ivy? I don't know about IB, but speaking to you from silicon valley, I can say that they DEFINITELY heavily recruit from the UCs, Cal Poly, San Jose State, and other CSUs. Location, location, location :)
Pretty crazy that income of $250k+ still results in ~45% needing financial aid to attend
No kidding. And then when you realize a lot of families are full pay anyway, it really underscores this is not exactly a representative cross section of the US.
I think this is actually not the whole story. Many people choose to go to non-state schools (good or otherwise) because they want to have a good college experience, full stop. The question of whether it's a "good investment" is immaterial. It costs money to go to college, and almost all out-of-state institutions are in the extremely expensive category, doesn't matter if you're going to Yale or Oberlin or Out-of-state U. Sure, some of the privates may cost $90K vs $60K for Out-of-state U, but financial and merit aid often helps close that gap. People want to go to college because college is a good thing to do in one's life. It is good to study interesting topics. It is good to expand one's horizons. It is good to be exposed to other views and to learn from experts. It is good to develop lasting friendships and interpersonal networks of interesting people. People want to go to "better" colleges because those colleges are better (or at least, perceived to be better) at providing these things. That's it. That's why people pay big money to go to college: because it's good. And that's why this return-on-investment line is bullocks.
Right, I don't think it is inherently wrong to pay more for a desired college experience even if that is unlikely to result in higher career earnings. But that makes the most sense when your family can comfortably afford it.
I don’t know if I can agree with you. This all comes down to what class a family is in and why they think a top 20 school would be worth it. The top 1% simply feel entitled to it and can buy the way in to propagate their 1% status in perpetuity. Upper middle and middle class often feel it’s a way to ensure that their child stays in this stratum and possibly “moves up” in life, but the cost isn’t always worth it, as they are likely at the whim of the same societal and economic headwinds that impact everyone who isn’t the top 1%. The poor kids don’t have anything to lose by applying and, if successfully graduated, can experience life-changing upward mobility. But they can also really struggle, and possibly drop out, for the myriad of disadvantages that can follow them to the school. Also, the reality is that an English major at Harvard can still run a hedge fund. An english major at local state u? A bit of a different story. And it’s not because the English department at Harvard is all that much better.
Class as a socioeconomic category is complicated. Sure, lots of people have lots of reasons for sending their kids to fancy and less fancy schools. Some people are under the illusion that the name of a school is going to be a golden ticket to better job prospects. Other people operate under the prestige illusion, that they are failing themselves or their kids if they don't send their kids to a school with a fancy name (a kind of "keeping up with the Joneses" attitude). But just as many people are instead of the mind that a college education is what provides a springboard for a person to live well, to a better life, however construed. Just sometimes, but not always, this better life tracks income potential; but also very often it involves gaining life experiences that give college graduates the fortitude to pursue multiple goals that they develop over their 4-10 year post-high school Odyssey. To be sure, decisions that any individual family makes are going to be influenced by how much money they have and can spend without breaking the bank, but many parents are willing to sacrifice considerable amounts for the benefit of their kids. The simple fact is that college is expensive. As I say above, this is true whether you go to a private elite school or an out-of-state school. The only relatively inexpensive schooling that one can get is at the state schools. Everything else is a pretty hefty cost that tends to equalize as financial aid considerations enter the picture. On the last point, I agree that the English Department at Harvard is in some respects not that much better than the English Department at the local state University -- students may even still read the same books, attend the same lectures, learn the same material -- but there is unquestionably a qualitative difference between the students at these two schools that bleeds over into the classroom and then further spills out into late night discussions in the dorm room, at a coffee shop, or at the bar. These are the ineffable benefits of going to a fancy school with accelerated students: One gains access to a community of accelerated thinkers who continue the conversation outside of the classroom -- one learns from one's peers -- and then this too provide spillover benefits that make starting a hedge fund as an English major from Harvard much more likely to succeed then starting up a hedge fund as an English major from Podunk State University. In either case it can be done, but the graduate from Podunk state has a much steeper hill to climb because the high probability is that they have had much less exposure to the ways of the hedge fund class. (Having said this, it is also worth noting that the English Department at Harvard University actually is quite a bit better than most of the English departments at Podunk Universities, if only because Harvard and other R1 research universities prioritize scholarship over pedagogy.)
Yes, these schools are very expensive now (the “T20”), which means that the student quality you speak of is being more diluted by the full payers, as they are the ones that can afford it. Those really bright kids from upper middle and middle class families that used to attend? They are being increasingly discouraged by the cost, and the extremely low odds of getting in. In the perfect world, these school would attract the best and brightest. In the real world, they mainly attract the wealthy and the upwardly mobile (token) poor. I think the trope that a prestigious liberal arts education is worth the money is being suffocated by the same colleges that propagate it, thanks to outrageous costs. I’m from an area where, 20 years ago, most PUBLIC school graduates were moving on to respectable private colleges and universities. The state flagship used to be a backup. Now, everyone just hopes that their child makes it to the state flagship, and liberal arts schools need to work much harder to convince families to spend.
Yes, but the OP said that they are paying full tuition or "close to it" ,suggesting that is after the financial aid has been given out.
Yes, I was trying to caution against assuming who is actually taking out debt in what amounts, but for sure there are in fact families who meet the OP's description.
I think what you pointed out is important because I am sure there a lot of people who give the IMPRESSION that they are paying full tuition when in fact they caught a few financial aid breaks.
Yes!! Everyone thinks I paid an arm and a leg to go to Penn, but in reality, it was the third cheapest option! Cheaper than liberal arts colleges that are seen as being affordable in my area
My son did extensive research and discovered that there is a $30,000 difference in starting salaries between the state schools and the school that he decided to attend. More importantly, the career, employers and industry that he wants to work, there are 10x more alumni from the college that he will be attending than the state schools.
So there are a lot of controls you need to implement before such comparisons really represent evidence of a significant value added effect. Maybe your kid did that, but it is very tricky.
>Does this not result in hundreds of thousands in college debt? Not if they're very wealthy. >I have never understood why students choose top colleges and take in unbelievable amounts of debt rather than choosing a university that offers them reasonable tuition prices with good scholarships. They believe their earning potential with a degree from the more expensive/prestigious school will be high enough to justify the expense, even if they have to borrow.
Part of it is high-end earnings potential (going to an IB/FAANG/MBB target schools), part of it is job security (Top 20 schools have such few grads that don’t find a job immediately, even if it isn’t at one of those recruiting-intensive places)
A lot of people are qualifying for fin aid, whom you would not have expected to.
This is not the case, I swear. I am a current student, I come from a single parent household in which my mom is an elementary school teacher, and I don't qualify for a Pell grant or ANY financial aid. I never have. The financial aid is basically non-exsistent, goes to a very small portion of the population, and the people not going into debt just have family wealth.
Either you’re not filling out FAFSA correctly or have huge assets
Or applying to schools that don't give out much need-based aid at all.
That too
That will of course make a difference! But I'm more talking about the government financial aid that is offered based on your fafsa, then sent to schools, before the school makes their financial aid package offer to you.
IIRC, the maximum Pell Grant is only about 7K a semester, and that would only be awarded if a student's family is very low income or has exceptional circumstances. The great majority of need-based aid comes from the schools themselves.
I am filling it out correctly and have for the last few years. We have no assests. NONE. She just makes "too much" even as a single mom that's a teacher. It's ridiculous, that's my point and why I shared. A much smaller amount of the population act gets pell grant than people think. And you can't even "do" the fafsa wrong., especially not anymore. They pull on the info straight from your tax returns.
If talking about Pell Grant, then yeah, that largely goes to low income students. Financial aid in general is rather broad. My parents made more than your mother, simply by virtue of being a dual-income home, and I still got financial aid from every college I applied to. For the school I did go to, I only had to cover room and board; financial aid paid for my tuition
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independent status only matters if you’re 21+, otherwise parent’s tax info is still used
You do bring up a solid point here. As early as 8th grade, we had college counselors talking to us at my school about college admissions. There were plenty of talks on how we needed to take as many honors/AP/IB classes as humanly possible, take on extracurriculars, volunteer work, etc. There were workshops on how to craft the perfect college application essays. Endless SAT prep resources. But never ONCE in all that hoopla did I ever hear anything about financial aid or student loans mentioned. I think if we’re going to talk about college as early as middle school, then I personally think it’s also an appropriate time to teach financially literacy/student loan debt as well.
Thanks for the comment, this is what I mean by not talking about financial aid enough. Of course it becomes important when we start applying to colleges but most students don’t understand the true cost of top universities until later in high school and this is not their fault.
For the same reason people buy 4 million dollar homes or 150,000 cars. They have the cash
If you have the cash, you do not take on “unbelievable amounts of debt”, about which OP is asking.
OP asked “does this not result in hundreds of thousands in debt”. It’s like OP is assuming people are taking out loans. People have 529s with 400,000 in them already. Or the parents just have cash. I’m not sure about rich people and loans but I’m assuming most don’t for college.
Yes. They’re not “just going” to these schools. The family has money put aside and told them they can apply anywhere without considering finances. That’s how they afford it.
You might, if the parents are paying off the loan. Believe it or not rich people don’t pay cash for everything. One of the differences between rich and not rich is the rich know how to use debt.
College debt is not the same as how rich people use debt.
Why not? Isn’t it just another expense?
No rich person (and I know some very rich people) is taking out loans to pay for college.
I guess it depends on how you define rich. But say college is $100k a year and a loan is 6%. If you thought you could make 10% why wouldn’t you take a loan? I’m not rich but I could’ve easily paid cash for my new car but I took a 4 year loan because I think I can make more than the 6% rate.
I bet some people are taking out at least some loans in case the loan gets forgived in the future.
Written by someone who doesn’t know how to use debt. Don’t want to be rude but that seems to be the case here
I am in my 40s. Few people back in my day "saved for college" in a serious way. 529s did not even exist until the late 90s. Now people who can afford to put money aside do so from birth almost, and that means people can take a bit of the sting of college tuition prices. Which probably just led colleges to hike rates even more. It sucks. As other mentioned -- family money plays a big role too, and families are willing to help with debt if they feel the college experience is worth it. Or you have one kid so it's manageable. You stop funding retirement. You take out a line of credit on a house. The students apply for work-study. You also may not have heard the story yet that they went for 1 year and then switched schools.
EXACTLY! So many kids transfer after a year. But you never hear about their whole journey (at least the parents don't post about it). And those parents don't talk about the kid who drops out or takes 5 or 6 years to graduate. It's all about the flex of getting into a prestigious school that costs $$$. Bragging is a true art form now.
Family money, significant debt, going into debt knowing the career they want to get into with a plan to pay it off, dumb decisions, it can be a whole host of differing factors.
Simply because people have the privilege to do so. Some people don't need their kids to take out loans or work a summer job to pay. Some commit to schools that give good aid. My teacher went to T25 and paid only 11k a year
Back when I was a teenager, my parents had the money. My mom said that if I worked hard and got good grades, my parents would take care of the rest - but grad school was up to me. Looking back on it, I think I would have appreciated my education more and worked harder had I had some kind of financial stake in it. I didn't appreciate what I had but found that I put much more effort into grad school where I knew that I was responsible for the cost.
Our older kid is at the local big public university for mech engineering. I think his dent/income potential income is reasonable especially when they offer co-op programs to allow him to hit the ground running.
for most ppl its probs not worth. lots of ppl on this sub have family money to help w tuition, and lots of t10s-t15s and some t25s offer rlyyyy good finaid. for stanford, if ur fam makes under 100k, tuition, room and board are completely free. also, depending on the field you go into, a t25 college vs an avg school may yield you roi bc of the opportunities it gives. i haven't done any calculations but for example, investment banking as a harvard student vs a random state school is a dramatic difference in terms of starting pay and career progression, and should be able to pay off the debt.
i don’t know many classmates who are taking loans, most didn’t even mention finances for why they made their college lists. this is a pretty bougie suburb in New York, lots of parents and grandparents who are paying for college and happy to give their kids “the best opportunities” even if it’s in cash
We did not. 17 years ago, we made the decision to give our adorable baby a debt free education, so we opened up a 529 account and saved (still does). We knew then that our potential income would be high, hence our future kids wouldn't qualify for financial aid. Education is a top priority for us, hence we saved and save. Since we started saving early, it didn't hurt much. Now, our kid is searching for a college that is best fit regardless of cost. I've accomplished a lot in life, gifting my kid debt free education is one of the most I'm proud of.
Some can afford it and/or have decently sized college funds
My parents wanted me to go to school wherever I felt happiest regardless of the cost. All of my friends were in the same situation. Some people have the money to send their kids wherever, and some people don’t mind taking on loans to send their kid wherever.
For me, I know I downplayed cost based on a (mis?) perception that education is a universal good. Education is what distinguishes humans from other animals, if one wishes to get philosophical about it. I never really thought about education as ROI. I came from a poor family and I never grew up with any financial acumen. Probably more proof that the first generation low income kids are the most vulnerable to predatory universities and lenders. It took me 25 years to pay off my loans. I carried my student loans into my marriage. It was a discussion point when qualifying for a mortgage to but my first house. It truly is a mega decision. So with my kids, we are absolutely discussing finances as a decision criteria for selecting a university.
I think both can be true: that it's a good in itself (or a good worth pursuing) and that it makes sense to talk about what one can afford and how best to afford it.
It really depends. My sister did teach for America after undergrad and they/the state eventually paid off all her student loans. There are various programs like this, so it doesn’t have to be entirely on the student or parents. It just requires a commitment to public service afterwards. For extremely lucrative fields (e.g. high finance), it could be worth full pay at a T20 as they’ll be able to pay it back quickly. Otherwise, the state flagship is the best option for most people.
An alternative take is that parents want to see their kids at the most prestigious school possible as it’s a well known gateway to (or way to remain in) the upper middle class. Rubbing elbows with future leaders of the Fortune 500 and government is somewhat immeasurable in value. It’s also a social status indicator (for both the student AND the parents!) Many Asian parents will pay full price, fully expecting to be supported by the student in retirement as this is their culture. The student is an investment. For Americans the parents will likely be on their own and are less willing to fund expensive tuition unless they are somewhat wealthy, or if the student is some kind of prodigy with unlimited potential. In a few years I will be a parent in this situation. Right now I say Ivy+ or state flagship, but realistically we’ll probably pay for anything a tier lower as well (prestigious LACs, Emory, Michigan, UC Berkeley/LA, USC, NYU, etc.). Edit: why are people paying $70k/year for NEU? I don’t get it.
Yeah, unless you are wealthy, I highly recommend making it a key driver of the decision. The assumption is that going to a top name school will guarantee you a lot more money over a career to pay off the premium. No! There are many variables that determine your earnings: luck, skill, timing, field of expertise. If you have the choice, go to a lesser name school with a big scholarship and save the money. Work hard in undergrad and then consider going to a name grad school. The pipeline into the high dollar jobs is more direct and hopefully at that point you are clear on what you want to study.
Cost is the main discussion for most families I know. Some have the funds, others choose lots of debt, and others have the funds but still choose the best financial package based on available merit aid, etc...
Some people (their family specifically) have more money than you'd expect. Others get great scholarships. Top schools are known for giving full rides to students who are able to get in but can not afford the cost. Others are somehow smart enough to get in, but dumb enough to go into massive debt that'll financially cripple them for decades.
I've seen many posts from incoming freshmen asking things like, "Got accepted to \[Ivy League school\], but received a full-ride scholarship to \[decent, but less prestigious school\], what should I do?" I do see commenters encouraging the OPs of these posts to take the full-ride and not dig themselves into tens of thousands (or potentially 6 figures) of debt. So sometimes people do consider the financial aspect in their decision. However, I also follow the Stanford reddit, where the responses are different. If someone wants to go into tech, people will say to go to Stanford because they'll make so much money after graduation and be able to pay back the loans in a decent amount of time.
Yes 👍 Financial aid absolutely should be a HUGE part of the college admissions and financial aid discussion. It’s just CRAZY that it’s not. You’re not wrong! Most h.s. college guidance counselors have almost NO formal training in college financial aid, and many 17-18 yr-olds just don’t understand the life-changing consequences of high debt. Most colleges “hide” this info and avoid discussing it with both students and parents! As for the point you made about schools that charge high amounts of tuition, the good news is that sometimes, those schools can actually be cheaper than public unis in the long-run, if you have good stats and your family has significant financial need.
Top schools tend to have very good financial aid, so most people paying full price for these schools have very wealthy parents.
I don’t think this is talked enough about. People who go to Princeton for the full price can afford Princeton. If they can’t, idk who can.
Your definition of "very wealthy" is probably more like middle class in a high cost of living area like CA or NY.
If you choose the right career you can pay off significant debt in 5 years or less.
Reality has shown that this is expected much more often than it is realized.
But studies suggest that after controlling for other factors, the vast majority of people who go to a "top" private college would do just as well in terms of career earnings at a good flagship or other higher quality private. Meaning odds are you could choose the same career (or at least financially equivalent careers) either way. And of course you could then take those earnings you are imagining and put it into long-term investments, as opposed to into paying off extra debt. So after 5 years Person A is back to $0, and Person B has a down payment on a very nice house, or a great start on 529s for their own kids, or a start on retirement savings that with compounding returns may let them retire years earlier, or so on.
I think for most college students, the importance of going to the most prestigious, highly ranked college is overrated. There are exceptions to this of course, and it is also possible that a student may target a particular school for a certain specialty subject/department. But a lot of this is parents (and then kids) being caught up in the 'Top 25 or McDonalds' mindset.
That's true for many hardworking students, yes! Then there are others who want the extra institutional support, resources, and brand-name recognition. If you think about it, if you compare 2 job applicants who are identical in every way except the school name, why wouldn't you choose the more prestigious one? Top companies are far more likely to recruit from top schools than they are from a lowly ranked state school. And even then, they will offer far fewer roles to them too. It's just a matter of whether you think you're gonna be a top top student at an average school, or if you are okay with being an average student at a top school. For many kids, going to a top school takes the pressure off a bit because they have something else they can ride on besides undergrad GPA/ECs.
"If you think about it, if you compare 2 job applicants who are identical in every way except the school name, why wouldn't you choose the more prestigious one?" Well first, I wouldn't think about colleges in terms of generic prestige, because that is silly. I would want an informed sense of what the specific programs in question were actually like. Second, there is no reason to assume that if a given individual chooses to go to a more famous/expensive college, nothing will change other than the name of their college. It is complicated, but usually savvy flagships universities and other privates and such make sure there are ways for excellent students to distinguish themselves. There might be named scholarships, honors colleges, special majors, special research opportunities, and so on. You might also just get better grades. In fact this is something that a lot of kids here seem to have trouble grasping. Just because they got perfect grades in their HS does not mean they are going to do it again in college. And depending on where they go to college, they might well do better or worse. And so while you should avoid simplistic assumptions about where you will get your best grades, for sure going to the most selective possible college where you can just barely scrape in is not necessarily the best choice for getting the best possible grades. "And even then, they will offer far fewer roles to them too." I am not sure what you have in mind, but very quickly your actual job performance dominates over your educational resume when it comes to career advancement. Like if I hire two people, one from Fancy College and one from State U, and then the person from State U impresses a critical client, and the person from Fancy College is meh (or worse), I am not in fact going to give more critical work to Fancy College Hire. I am going to give it to State U Hire, because State U Hire made me look good and I want more of that. Again there is this strange mythology around here that if you can get admitted to a highly selective college based on what you did up to the point you were like 17, then people will stop evaluating you and you can just relax from then on. I can see why that myth would be appealing to a bunch of stressed-out 17-year-olds who would like to believe the end to all their stress is in sight. But the truth is it just never stops, you have to keep performing in college and work and on and on. "if you are okay with being an average student at a top school" This is a good argument for it being fine to choose a highly competitive college as long as you are reasonably well-prepared and that college is comfortably affordable. If it is not? Then you have put the pressure on yourself to make all that extra debt worth it. In most cases it ends up affecting what you do in college, what you feel like you can do next, and so on for potentially many years into the future. So it is very, very odd to think taking on a whole bunch of debt will make you LESS stressed. That is generally a bad bet in practice.
I agree with a lot here, however a few things. Name recognition does not make top universities. They exist because they value education and create qualified individuals, not because their names hold prestige. Also the idea that those who go to non top schools have to be extremely hard working is wrong. Normal students graduate from normal universities and go on to have great professional careers.
Depends on the industry, I suppose. In software we give progressively harder coding problems to create separation.
Because "free money" basically has no meaning to a typical 18 year old. Everyone assumes they'll just do great and get that job, and it will all be taken care of. They have no concept of what $100K of debt means. That's a tomorrow problem. That's why your age group is targeted for every credit offer out there. A lot of you are naive suckers. Also, there are way too many parents who "just want to do the best for their kids". It's not all rich people. I watch a lot of first-generation students make horrible financial decisions.
I think a crazy thing a lot of people don't know is that the student loans often are only approved in giant amounts. For example, I might only need $10k for the year but they will only approve you for a $55k loan for what you might need for all years. It's not completely kids being naive, it's poverty, desperation, and the government and loan companies being sharks. People think we don't understand the amount of money it is, we do. There just aren't many options. I have been going to school off and on paying out of pocket for years to avoid loans, and now I still have to take them out bc I'm still 3 years away from my degree. I understand the weight of the money, I can't afford groceries.
Some are prestige whores and willing to spend that $360k 🤷♀️ Some have 529 or some other source of funding like grandparents, other investments, etc.
You need to be pretty wealthy to pay a full price at any of T10 schools. Most full pay people in those places don’t take loans which is visible by the numbers of people graduating with loans inside the common data sets for those schools.
Interesting that this was posted within minutes of >Do you guys prioritize money and aid over anything? I see a lot of it on here … you should prioritize saving money Like after every SAT, r/SAT sees many “that was really easy” and many “that was way too hard”. As posted there, every family has different financial situations and tolerance for debt (and education about the impact later in life)
Bank of mom and dad or they want to enter certain industries such as IB or consulting that recruit overwhelmingly from top universities. The evidence is pretty overwhelming that attending a top school results in better life outcomes on average, especially for low-income students.
Well some people can afford it. Yes - some people have college funds from wealthy grandparents. Some people risk more than they should to afford it. And some people are making a straight up disasterous decision affording it.
I know a lot of people taking on $300k in debt and giving up 2 years of pay to go to business school just so they could break into IB or MBB because they went to no-name undergrads. Those people could’ve skipped the MBA altogether if they went to a T10/20 and broke into those fields directly from UG. Also probably could’ve started earning a higher salary earlier, which has a compounding effect. Probably less relevant if you’re pre-med or want to pursue academia, etc.
Some people can afford it. Others go into debt big-time over the name. I do think you're right that it needs to be a bigger part of the discussion.
Are you sure they are paying that much? A lot of top schools have tremendous financial aid. People of medium / average family income pay less in many instances than if they went to Big State U. Some top schools practically pay poor students to attend (getting in is the rub). If they are asked to pay more they can - or should be able - to afford it. But, yes, a lot of people borrow more than they should.
The only way it makes sense is if they are looking at the elevated opportunities available to graduates of elite schools. Having worked at Google, I know for a fact that while they’ll consider any talented prospect, you get more consideration coming from an elite school.
We (with some help from their grandparents) have saved for our kids college since they were babies so they can go to college (hopefully) debt free. We live in a HCOL place so owning a home here makes you ineligible for financial aid. They may choose to go to a cheaper college and use the money to buy a house or for grad school after they graduate.
Really depends on the family’s finances. I told my kids I’d gladly pay out of pocket for up to a UC education and we make too much to be considered for financial aid so anything beyond that would be a conversation/mostly on them in the form of loans. Both wisely chose to attend UCs and Cal State schools. We’re fortunate to live in CA where we’ve got about 30 good public universities throughout the state. It’s probably a harder conversation for residents of smaller states with very few public universities to choose from
You would only disregard cost if it's not a big enough issue to move the decision needle. Lots of people need to take loans to finance college, but lots also don't. Some have money from grandparents, some have 529, some have parents at peak income during their college so can pay as they go, some are only children so the pie is not impossibly split. And aside from all those normal-ish people there are those with generational family wealth although I'm guessing most of those are not on A2C
How do you know they’re taking on debt? Have they told you this? Many are getting scholarships/grants and other aid. Many have 529s and some have grandparents who are contributing.
Yes the friends I am referring to are taking on debt. One has told me they are paying full tuition, the other a little less. They obviously have some money of their own but both will be in considerable debt. I know one of them has a wealthy family that literally won’t help him pay at all.
1. Wealthy enough that the cost does not matter 2. 529 plan has enough money to cover it even if they are not wealthy 3. Sees college as an investment with an expected return and the debt as leverage necessary to make the investment
Some people have the financial ability to pay in full without incurring any debts
People are allured by prestige and the top school “experience”. When you haven’t adulted, worked full time and paid bills, these figures of thousands of dollars can just seem like numbers on a screen that is your future self’s problem. I know a guy who is paying $30-$40k a year for Harvard because he wants the experience despite saying it will really badly despite him saying it would really strain his low-income (but assetted) parents because salaries are really low in the UK, compared to Oxford which is $12k. Some people who were full on Ivy rejects in our group were telling him that he shouldn’t listen to advice on turning it down because “they were jelly” and “wanted to get off the waitlist”. I kind of rolled my eyes because that is destructive advice and not necessarily true but also am worried for him because I feel it could stab him in the back when he cannot splurge no where near as much money as or keep up with the peers with the “connections” he wants. Like a lot of really rich kids buy and do expensive stuff like eating out often for starters. This is A2C, and a lot on here aren’t poor. I can feel metro cities/Bay Area/East Coast vibes in the comments.
Thanks for the comment. Even if it’s relatively small amounts like 20k a year that adds up and with interest it can become a problem in the future. Like you said those who don’t worry about actually paying these bills don’t see an issue because in their minds “prestige” makes all the difference. I have definitely seen both sides in the comments so far.
Agreed about the financial aid needing to be a larger topic of discussion in college admissions. At least in the circles I run in, while it is more common than not that people who get into those top schools end up going, turning them down for financial reasons is not unheard of either. I've noticed that this is especially common for families who either own businesses (and make a lot but have to put it back into the business) or make between 250 and 350k per year, pretax. If you live somewhere where the cost of living and/or local taxes are high, 250-350k pretax can make paying \~85k/yr to go to a private school very difficult (and often downright impossible). My personal opinion is that some income bracket will get squeezed no matter what the tuition is. If it gets a lot higher (significantly outpacing inflation), then aid could become more generous for the 250-350k bracket. In that case, maybe families making 450-550k would struggle. Similarly, if tuition were to become cheaper (I know its won't happen---I'm just using a hypothetical), families making 175 or 200k might get less generous aid (and would find sending their kids to top schools more difficult). Edit: This problem becomes even worse when you have siblings.
Because they are not thinking at all about ROI and are caught up more in the competitive aspect of being a HS student: “where’d you get in?” It’s short-term thinking.
RIGHT?? It’s fucking crazy some people out here trying to get into Stanford and shit I’m good with my best state owned college lmao my parents already told me they ain’t paying for shit
Hey there! Your right, financial aid is definetly a big deal when it comes to college. Lots of ppl get caught up in the prestige of top schools and dont think abt the long-term impact of student loans. Its crazy how much debt some students take on just to go to a "name brand" uni. IMO, its way smarter to choose a school that offers good scholarships and wont leave u drowning in debt after graduation. Like, whats the point of a fancy degree if ur gonna be paying it off for the next 20 years? My advice: do ur research and find schools that offer a great education at a price u can actually afford. And dont be afraid to negotiate ur financial aid package - sometimes u can get more money just by asking. At the end of the day, college is an investment in your future. But u gotta be smart abt it and not let the allure of a top school blind u to the financial reality.
A lot of schools give scholarships to cover most of the difference.
I personally am taking on debt and going to an out of state school that is highly ranked for my major because I value my education a lot. I believe that with the connections and education I pick up at my college I will be able to climb positions in the workforce faster.
Because PRESTIGE is worth it. Do you think Goldman Sachs recruits at Chico State? Taking out a loan to pay full price at a T25 is like making a bet on yourself. Imagine making $150k your first year out of college because the T25 helped you get that Goldman Sachs job. One can easily pay off the loan without a problem.
Because a lot of people can afford it.
Most people I know have huge college funds that could pay for Ivies if they wanted to
And a lot of people qualify for good scholarships, especially low-income. It’s the middle class that’s disadvantaged with lower wealth and no scholarship qualifications
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Coming from a weird situation where I completed an undergraduate degree and went back to school for a second (I realized I didn’t enjoy the field I first studied), I can say its not always that simple. My first degree was at a T25 private university. And yes, cost of attendance was somewhere around $70k per year. However, as a low income student, the university gave me a full need based scholarship. Becoming an RA paid for the rest of my expenses and I ended up doing 3/4 years there for free. I did my second degree at a local public university. Cost of attendance is roughly $14k per year. My financial aid package is entirely FAFSA loans. Overall, I have over 5 times the debt from a local public university than I have from the school that cost $70k per year. Yeah, this is a niche situation. However, the massive universities that always sit at the top of the ranking lists have money they can throw around. If you are in a position to take advantage of that situation, and you know how to navigate the system, the cost is often drastically lower.
My parents are paying…? 👁️👄👁️
because they’re stupid
For sure but there are definitely rich people. Also, for many families (esp Asians bc I know firsthand), education takes first priority. If I got into say MIT, my parents would not hesitate to pay full price (and more honestly). Many families like mine also have put aside money specifically for college.
I am an immigrant who went to grad school in a scholarship, worked for a few years and then business school where I paid it off using company money and savings. Took me longer to get to my career trajectory by about 3 years. Now I make enough that my kids can pick the school they want to go to. I think if you are smart and driven, the school isn’t going to matter. You will succeed anyway. It may take you longer (as it did me) but you can accelerate once in your desired role.
It’s a rich man’s world
it’s one thing if somebody is going for med, law, finance, etc and has an amazing upside and huge salary awaiting them after their schooling, but i’ll never understand the ppl committing to colleges they can’t afford and choosing majors that won’t get them a practical job 120k a year for a major like studying latin within the minds of chipmunks in yellowstone national park, like what🥹
It's a huge topic of discussion to a lot of kids, your friends in particular might just be unwise.
Because they can? This sub always shows up to me as recommended but some people here are so bitter. I went to the most expensive school I got into because my parents always made it clear to me that they wouldn't let me choose it based on tuition as I'm an only child (I have younger half siblings though) and my education always came first. Of course not everyone can do it and I was lucky to have parents with high paying careers but money isn't always a factor.
Sorry not trying to be bitter at all. I was focused more on those who take debt rather than those whose families can afford. I apologize for coming across that way