It seems like lately every financial article that isn’t about cryptocurrencies is about the growing student loan problem and the rising cost of college, which is growing much faster than inflation. Some people point a finger at universities and their rampant spending, others blame high schools, teachers, and guidance counselors for not educating students on how expensive college can be. I think it’s a pretty large order to have 17 year olds running a cost-benefit analysis to determine which college they should attend (if any) and which major.
Like with most things, I don’t think there is one right answer, but I began reflecting back on my teenage years to understand what I did – right or wrong, why I made those decisions, and what information I wish I had known.
When I started looking at colleges at 15 or 16, I had my Mom buy me a US News college ranking guidebook that ranks schools by major, lists how much they cost for in-state and out of state tuition, and discloses how much their graduates earned on average. I went through the guidebook with a highlighter to try and narrow down the best options.
Things I knew:
College was something I wanted to pursue – I somehow, luckily, fell into a group of friends in high school that took academics seriously. We challenged each other to take AP courses and do well. This proved valuable when applying for college.
College costs money – I knew my parents would help as much as they could with paying for college, but I’d be on the hook for the majority of the bill. My parents didn’t beat around the bush with this, so I understood this while I was applying to schools.
I was going to college to get a degree and make money – Don’t get me wrong I was excited about going to college to make friends, party, and meet girls, but my main goal was to be the first one in my immediate family to graduate from college so I could get a good job and make some decent money.
Certain majors lead to higher income – This was hard to miss in the US News college guidebooks. There were sections on which majors paid more, and luckily the two areas I was most interested in appeared to be high up on the list – engineering and finance.
State schools were cheaper than private schools (at first glance) – Luckily I lived in a state that had a public university that was fairly well ranked and gave a big tuition discount to residents. My peers thought highly of this school, so I never thought I was underachieving by going to a public school. I’m glad I didn’t have a stigma about not attending a private school.
Things I wish I knew:
Private schools have more leeway to offer aide – I had friends that applied to private colleges and received huge financial aide packages. They have more leeway than public schools to extend sweeter offers to students they want. I didn’t know this was a thing so I didn’t even try to apply to these schools. The sticker shock scared me away.
You can negotiate your financial aide – I didn’t learn this until I was a couple years out of college. If you receive two offers with different financial aide packages, you could use them to negotiate better aide at each school. If the university really wants you, they’ll extend more aide to get you to come. This works better at private universities.
Community college is cheap and many credits transfer to bigger universities – The public university I attended had a program with the state’s community college network. If you attended community college for two years, maintained a 3.0 GPA, then you would get into the public university no questions asked. You’d graduate with that public university’s name on your diploma and save up to 40 or 50% compared to someone that attended the university all four years.
In the end, the fact that I was prepared at 17 years old when I applied to college came down in large part to good parents and luck. Unfortunately, I don’t have an explicit answer to prepare teenagers in making smarter decisions when choosing a college and major. It needs to be a team effort from family, teachers, and guidance counselors to instill this wisdom when and where they can. Some students will listen and others will make decisions that aren’t in their best interest. But hey, what can you expect from a 17 year old?