Cost vs. Top School

jake,
I know I cannot answer the questions.
One, it isn't clear...are you referencing $20,000 per year and upwards of $80,000 total or a total of $12,000 to $20,000 after 4 years.
What I could and will say is I really respect your Father and you for getting into this discussion.
Even if you are talking $20,000, but especially $80,000 in debt, with government loans for students, that could be a big deal.
Recent changes on these loans establish that the interest may not be paid by the Government after July 1, 2012, depending on your loan, even a subsidized loan.
The interest rates can be 7-8% on the Government loans.
If this is the loan vehicle, those rates and paying interest beginning while you are in school can be a big, big number.
It can be a huge number if the discussion is loans of $20,000 for 4 or so years.
Again, all I can say is your Father appears to be someone to go and hug. In this economy, he clearly is trying to balance short term and long term issues and how best to navigate a situation which is so unpredictable.
If the loans to finance the education are Federal, the recent changes are so important for you to fully know and understand. If you are borrowing $5,000 per year, but especially $20,000 per year, at 7% or greater, with interest payments due and payable beginning July 1, 2012, my view is your Dad is being a great Dad.

jakewestphal,

In addition to infielddad's very practical points, I will add that much may depend on your major and intentions on an advanced degree. Will your major allow you to find work easily with an undergraduate degree that pays well? Do you see grad school in your future? Just a couple things to think about.

You can expect tuition to go up at both schools. I would look at the tuitiion historicals at each school so there are no surprises. When I was in college a "hundred years" ago, my first year was $4K in 1980. By 1984, tuition had doubled to $8K. I was at the same school with the same professors, and I studying the same major. Nothing had changed except the tuition. I was less than pleased, and it took me a while to make up the difference.

Another way to look at it is.....what are you getting for that $8K differential between school A and school B? If you can come up with $8K of VALUE per year that will last you a lifetime then write them down to see what you come up with. It is your list, so anything goes including intangibles.

Best of luck and Happy Holidays!

jakewestphal,

There are calculators on-line that you can use to determine what your monthly payments would be. You also need to research your chosen field to find out what the expected job opportunities will be and the average starting salary.

I recently went through this with my son when he was doing his senior Economics project (a Virginia graduation requirement). He had to chose his profession (engineering) and then complete a detailed budget which included rent, car payments, utilities, food, insurance, loan payments (well, you get the idea). Probably the best thing he could have done because he keeps telling us that $120,000 debt would be no big deal (his #1 school choice) compared to $22,000 debt (his #2 school choice). He chose the smaller debt for his project.

By the way, if you would like to go through the same exercise to be able to make a better informed decision, a copy of the Virginia Senior Econmics Project is at Senior Econ Project

My opinion, after 30 years in the business world, is that a very expensive college degree is no more valuable than a modestly expensive public degree. There are exceptions to be sure, Ivy League, Stanford, NWstern, etc...but a degree from good ole U of State, State U or directional state U will get you in the door just the same. Your father is wise about not wanting to go into debt!!!

I would say, don't let the baseball aspect be a determining factor. Unless you are lucky enough to have the skills to be drafted, whether your baseball program was a good one or not probably isn't going to change where you are in life in 10 years.

You really have to be brutally honest with yourself on this decision. Will the better school provide me the better opportunity career wise? It may or may not depending on your major. You have to really sit down and examine this factor. If it will provide better opportunities - do they offset the greater cost?

Jake - First thing that comes to mind is what are looking for? Do both schools offer the major you are seeking, and do both baseball programs have interst in you? Second thing that comes to mind is your last question. The ammount of debt that is managable is determinded by your debt to income ratio... no income and you cannot afford any debt. Like fenwaysouth said, much will depend on your major determining your "worth" upon graduation.

You only mention the two schools. Do you have other options? Is the lower cost school one where you would like to spend the next four years? It is also important that the school be a fit for you like bballdad2016 states. If these are your #1 and #2 choices, then I will second what Elroy wrote based on my personal experience.

I attended a top ten national liberal arts college where I was a below average student compared to those I was competing against academically. I could have gone to a less "prestigious" school and received higher grades but I wanted the challenge. I will say that I enjoyed all four years playing on the tennis team and in the jazz band. Senior year was when I found out that employers are looking at your GPA and class rank. They really don't care about the "name" of your school. I was fortunate enough to receive an offer for the one job that I really wanted but I was ready to paper my dorm room with the rejection letters. My major was math with a computer science concentration, so I even had a marketable degree.

After your first job, no one (except you) will really care where you went to college or what your GPA was.

I graduated from a second tier public university. People who have worked from me graduated from Cornell, Penn, Duke, Northeastern, Boston College...you get the picture.

That being said, I am encouraging my son to look at some excellent academic schools as that can open doors, and we can work it into our budget.

So here I go again...there's no one answer.

Short answer - come out of school with as little debt as possible. There will be other things that will put you into debt when you graduate.

I completely disagree with the philosophy that you should almost always choose the cheaper higher education alternative. When I was choosing between graduate schools I was thinking about what would give me the best opportunities in the long run, and would I eventually regret not going to a certain school. I had a great scholarship offer to a top 25 school, but I also had opportunities at a couple of top 5 schools, (but it cost more). I ultimately went to one of the schools that cost more because I thought it would give me the best chance to succeed in the long run with job offers and contacts, which it did. Who cares if you owe an extra $20,000 or so dollars when you graduate, especially if you have a chance to be more succesful and make substantially more money in the long run. I made payments on my school debt for years, but I guarantee my overall take home pay after making these payments was higher as a result of going to this school. Don't be short sighted, think long-term and have no regrets.

That being said, you can still go to a cheaper/less-prestigious school and do well and have the same opportunities, it just depends on the school. And--if you plan to go to graduate school--you could delay your dream to go to better school as long as you make excellant grades and do well on graduate school admissions tests.

I, firmly, believe that you need a seperator. About 20% of my graduating high school class went to college. That was thirty years ago. Now, I would venture to say that it's closer to 80 plus percent. Further, there are about three times as many people in the world now than there were when I was born. Baseball is a seperator. So is the college you chose. Althouth I'm in the same situation as Twotex, I think the world has changed. It sounds cruel and unfair but there is a perceived difference in those that graduate from a a top university / college and those that graduate from a lesser university / college. Again, I tell kids all the time, find a seperator in your life. A better college (if you can squeeze it out financially) is, absolutely, a seperator.

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Originally posted by Aleebaba:
...I guarantee my overall take home pay after making these payments was higher as a result of going to this school.

How can you really know this for sure though? Did your first employer tell you specifically "If you'd gone to your other school choice, we'd be paying you a lot less"?

Our family isn't sold on the "Better school = better jobs/salary" theory. In many cases, it's what you made of yourself at a school, who you know come interview time and how you sell yourself. Besides, unless you stay at the same job your entire career, your performance at your first job can mean more to future employers than how much you spent on your education.

I am encouraging my son to shoot for Yale or Harvard. If you fall short, you still do OK. I will worry about the $ and we will make the decision together when the time comes. He has enough to worry about trying to do well in school. I happen to be in the educational field and one thing that I can say for sure is that these kids work SO MUCH HARDER in both school and athletics than we ever did.

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Originally posted by Sandman:

quote:

Originally posted by Aleebaba:
...I guarantee my overall take home pay after making these payments was higher as a result of going to this school.

How can you really know this for sure though? Did your first employer tell you specifically "If you'd gone to your other school choice, we'd be paying you a lot less"?

Our family isn't sold on the "Better school = better jobs/salary" theory. In many cases, it's what you made of yourself at a school, who you know come interview time and how you sell yourself. Besides, unless you stay at the same job your entire career, your performance at your first job can mean more to future employers than how much you spent on your education.

(At least, that was my experience.)

IMHO, being in the business world for the past 30 years, your undergraduate college choice does not amount to a whole hill of beans. You need the degree, not the name, for most career pursuits, whether that be teaching or business or being an entrepreneur.

Now having said that, it is the connections you make that helps open doors. When it comes to your first job, then arguably some of the more prestigious, ne arrogant, schools may have alumni that open doors for you. After that, you MUST perform. Connections will quickly shrivel up if you don't perform at a high level.

But bottom line you will be cutting your own path in life. There are multiple highly ethical ways of making connections, and nowadays a whole industry has sprung up around that. Just visit LinkedIn for some ideas.

If we were talking Graduate Schools then that is a different story, but its also related to networking. A Wharton education will get you further than State U at that point but even more so because of it.

But an undergraduate degree from Brown does not get you any further than one from URI on the face of that degree. Perhaps someone able to get into Brown gets further than someone who can get into URI, but I would argue that is about the person not the institution. In effect, the admissions process does offer some level of weeding out, which in turn gets reflected in job success. Graduating from an Ivy does not mean the Ivy made you successful. Again, my opinion, not necessarily fact, but I'm basing it on having worked with many executives at some of the top Fortune 1000 companies out there.

None of this is to say that you should automatically choose the cheaper school. You need to pick a school where you feel you would excel academically, socially, and in your case athletically.

Having had two already go through private colleges, and my third considering one, none of it could have been possible without debt. I don't regret it.

And the good news (OK, this is a little dicey) is that with Federal Loans, when I meet my maker, they will be forgiven if I have not paid them off by then.

I would venture to say that for all but the 1% of the US, getting through a private school without a loan is the equivalent of a virtually extinct animal.

Bottom line, if the cheaper school is one where you think you can excel, then by all means its the one to choose. If not, then welcome to the 99% who are slaves to debt. But that debt can indeed lead to better things, and may infact drive you to accomplish better things in order to pay it off, than you might not otherwise have had. The question remains, can you get to that promised land before the debt gets to you! And know how much you will be giving up in life in the face of having that debt.

quote:

Originally posted by VaRHPmom:

quote:

Originally posted by Sandman:

quote:

Originally posted by Aleebaba:
...I guarantee my overall take home pay after making these payments was higher as a result of going to this school.

How can you really know this for sure though? Did your first employer tell you specifically "If you'd gone to your other school choice, we'd be paying you a lot less"?

Our family isn't sold on the "Better school = better jobs/salary" theory. In many cases, it's what you made of yourself at a school, who you know come interview time and how you sell yourself. Besides, unless you stay at the same job your entire career, your performance at your first job can mean more to future employers than how much you spent on your education.

(At least, that was my experience.)

One way to know this is the companies that come to the top schools to recruit vs the companies that go to State U schools to recruit new grads. Goldman Sachs probably won't be recruiting at most schools but it's a pretty good bet they are at Harvard or Yale.

quote:

Originally posted by Sandman:

quote:

Originally posted by Aleebaba:
...I guarantee my overall take home pay after making these payments was higher as a result of going to this school.

How can you really know this for sure though? Did your first employer tell you specifically "If you'd gone to your other school choice, we'd be paying you a lot less"?

Our family isn't sold on the "Better school = better jobs/salary" theory. In many cases, it's what you made of yourself at a school, who you know come interview time and how you sell yourself. Besides, unless you stay at the same job your entire career, your performance at your first job can mean more to future employers than how much you spent on your education.

Do you really trhink that if you go to an average or below average college that you will have the same opportunities for employment or clients as someone that has a top college on their resume? C'mon. If you are hiring would you choose local community college guy over Ivy league guy in most cases. It is naive to think it does not make a difference.

I find the differences in opinion on this topic very interesting.

Does a lot of it have to do with geography?

I find it ironic when somebody with a ridiculously expensive car gives the whole we don't want to spend too much on college and go into debt when there are cheaper options. Seems like of all the things in life to make an investment in, education is one of the "safer" bets.

that sounded worse than i intended.

Interesting story on a ROI study for undergraduate degrees from various universities:

http://www.examiner.com/career...-career-compensation

3gnation,

I have read similar studies, which are flawed IMO because the relationship to IQ to get into any of these schools. To get into Harvey Mudd FE, you need to be in the ~top 1% of your class. If you followed those students regardless where they went you would probably find a similar pattern. Wealth tends to follow IQ. (I know not always don't start throwing rocks)

And then you have guys like Steve Jobs....where do they fit into this equation.

Moral of the story; make the best of your opportunities.

quote:

I, firmly, believe that you need a separator.

If you are referring to a "tie breaker" of sorts... on a resume, i agree. I see this very often as do many others. You always want to find a way to separate yourself from the pack without alienating yourself. Can be a fine line to walk at times. Better school = better jobs/salary... not true, BUT if the better school helps separate your resume from others, well... that's just how the system/world works.

quote:

Originally posted by BOF:
3gnation,

I have read similar studies, which are flawed IMO because the relationship to IQ to get into any of these schools. To get into Harvey Mudd FE, you need to be in the ~top 1% of your class. If you followed those students regardless where they went you would probably find a similar pattern. Wealth tends to follow IQ. (I know not always don't start throwing rocks)

And then you have guys like Steve Jobs....where do they fit into this equation.

Moral of the story; make the best of your opportunities.

I understand your point that the kids getting into high ROI schools are the ones that would most likely have more financial success anyway. I'm also concerned that any study like this is looking at the past and trying to predict the future. That may or may not change. However all in all it seems to address the question of "Cost v. Top School". You can say that the top 1% of HS students that did not go to Harvey Mudd have not done as well as the kids that did. You get an idea if the investment in a particular school has been a good one in the past and is likely to be in the future.

For grins and giggles....what is the intersection of the ROI list and the preseason top 40 list?

Stanford, Rice, Univ of Virginia, Georgia Tech, and Univ of CA Berkeley in D1. None in D2. Johns Hopkins in D3. None in NAIA.

With the cost of college as it is now, when schools are ranked there's a new category called "best deal." Don't be scared off by sticker price. Investigate the school's reputation for financial aid.

To answer a few questions these arent my only options to play at, they are only 2 of about 7. I just mentioned the number 1 and the best value both financially and academically. I am planning to major in accounting and both schools offer good programs. The thing that scares me is the cheap school is located in the middle of a cornfield and has only 600 undergrads living on campus. It just feels like high school again.

The reason why I love this site is because I can get advice from people who have been through this before. I can learn based on the experiences of many successful people in various walks of life. Thanks for anyone who has taken the time to offer input because it is appreciated.

The best accounting firms in the nation hire from the best accounting schools, the next tier usually look the next tier of school. So if your goal is to be an accountant at a top company, then a top accounting program is what you are looking for.

If you are not hooked on working a top major firm then a good school will be fine. A bad school is not worth it. We have colleges in our area that no firm will hire from. If you think that you might change majors, as most all freshmen do, then you want a school that is at least good in fields that you are interested in.

80k is a HUGE debt load. So the question is, is the good school with little debt better than the great school+$80k+interest(could be well over 100k depending on how fast you pay it off).

You have one shot an undergraduate education. Make the best of it. That being said, graduating with ridiculous debt is not a wise way to go, your Pop is right on that.

This is a great discussion and one everyone should have in their family, whether or not baseball is involved.

I often pose it this way. My oldest son went to William & Mary. # 2 son went to Wake Forest. These are two very, very comparable schools in terms of size, curriculum, national rankings and national reputations. Had it not been for baseball, # 2 son would definitely have gone to W&M over WF because, IMHO, there is simply no way to justify the additional $120,000 difference in cost over four years. (Not total cost, mind you, but additional cost. WF runs about 52k/year now, W&M in-state is around 22k/year.)

The question you pose is whether your preferred school is worth the additional $32,000 you project. That's a lot less of a gap than my personal situation with WF and W&M. With all due respect to those who rely on their personal experiences in the business world, I don't think there's any question that where there is a substantial uptick in the caliber of the college, you'll get your $32,000 back and then some.

There are always going to be exceptions to the rule, especially if you are an entrepreneurial sort who is likely to end up running your own business down the road. But for the typical student, your long term income path is going to depend a lot on how high up you start. And that, like it or not, is going to depend in part on where you go to school. Some firms you may be interested in will interview at one school and not another, and they do that because they trust the caliber of the graduates of school A more so than those of school B. This is definitely the case with the nation's major accounting firms, where many CPA's at least start their careers (though some stay and many move elsewhere over time).

I would also be concerned about a very, very small school. In business, there is value to being a part of an alumni network, and a place with only 150 graduates/year is going to provide a mighty small network. Also, if the school's mission focuses on in-state students who are not their class valedictorian types, the recognition of the school and the respect for its diploma will wane the further you get from home. (My daughter currently attends Christopher Newport, she loves it there, and we're happy with how things are going for her. But when she decided on that school, her grandmother in Florida asked me, "Where's that?")

I am a very frugal person by nature. But there's also such a thing as being penny wise and pound foolish. # 1 son got accepted to several in-state schools and W&M was the most expensive of them all, but the additional cost was definitely worth it for him. If your preferred school is truly more highly regarded than the one your dad is pushing, the additional 32k may be the smartest money you ever spend in your life.

The one footnote I would add is, rely on objective information in determining whether your preferred school's diploma is indeed more highly regarded. Check out U.S. News' college guide rankings, and also visit the placement office and find out what kinds of firms and how many firms conduct on-campus interviews every year. Then you can have a man-to-man discussion with your dad that is grounded in fact, as opposed to appearing to be a spoiled brat whining about how you think he should pay more just because you kinda sorta like the other place more.

Kids don't always understand the value of money. When my daughter entered high school I told her I would not pay for a college costing more than Penn State unless it's a substantially better academic college. Penn State is a quality Big Ten school with the largest alumni association in the world.

She came home from a college night freshman year talking about UConn. She said it's only 10 more than Penn State.

I told her w'ere talking about 10K more per year, not just 10 more. I explained the difference over four years was more than the cost of my Cherokee. It turned out she got a significant academic and athletic ride to a private university.

That's a nice post Midlo!

quote:

With all due respect to those who rely on their personal experiences in the business world, I don't think there's any question that where there is a substantial uptick in the caliber of the college, you'll get your $32,000 back and then some.

I will agree that the better the school, the better the initial opportunities will be. But over the course of a 40 year career, so many other factors come into play. As is evident from the posts in this thread, different employers will look at it differently. Some will value it more than others.

I will admit that this is based on my personal experience in the business world, both as an employee and as one who hires and fires. So it is my view, nothing more. There are plenty of statistical analyses which will give you averages, and undoubtedly, on average, graduates from more prestigious schools will make more money than graduates of less prestigious schools. I would say that it is more likely than not that you'll realize a return on the incremental cost. But there's no guaranty.

And more importantly, for those who can't afford to pay top dollar, they are not destined to a mediocre career because they didn't attend a prestigous university.

Maybe it's an East Coast/West Coast thing but I work in the heart of Silicon Valley where the cost of housing is among the highest in the nation. I constantly work with CEO's, CFO's, presidents, VP's of very successful worldwide companies. Many times when talking about education it's interesting to note that many of these successful businessmen did not graduate from top ranked Ivies or other top ranked colleges. They obviously are very bright and hard-working people.

My point- you can be successful in life and the business world with out graduating from a top ranked university. But then again, maybe that's only west coast!

quote:

My point- you can be successful in life and the business world with out graduating from a top ranked university. But then again, maybe that's only west coast!

Certain schools open doors. It doesn't mean people from other schools can't kick down the doors.

I once had a California based software company with partners. I found the tech world to be an entirely different story. Our best programmers dropped out of college out of boredom. They also had a lot of negoitiating leverage. The demand for top programmers was great.

Whether or not technical people become quality executives is another discussion. I now consult to technical people teaching them to explain to potential customers why it's important to know what time it is, rather than how the watch works.