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April 18, 2008

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When you're selecting a college you want the best fit you can find at a price that you can afford. If the fancy private college might offer you a scholarship, maybe that will turn out to be affordable after all.

My College was small and expensive, and I have over 25k in debt from it. And it is the best investment I could have made. If you take advantage of it properly that "fancy private school" can propel you forward in your understanding of yourself and the world. It puts you in a network of people that you can draw on your entire life.

The comparison to a wedding really bothers me. You don't really gain anything from an expensive wedding, but the difference between a good college fit, and a poor one can dramatically change your life.

No matter what you choose, being in school should not be a party. You have more resources around you than you can ever use, so get out there and use them! I figured that every class cost $45. Think of that next time you want to skip class.

"choose your major wisely". Sage advice, that. My sister (really smart girl, but truly flaky) got a degree in archeology. Not sure why she did that, but now she has 40K to pay back and a job at an amusement park. She is not digging bones, and probably never will. I'm not saying you shouldn't follow your dreams, but... Well, yeah, I guess if your dream is to enter a field that's already packed with job-hunters, and that's in low demand, and if you're not well-off enough to pay for the education out of pocket and not mind the waste, then you should probably not follow your dreams.

I chose my MBA program based on ROI. This is a little outdated, but here's a list from Forbes that allows you to stack rank in terms of gain (new income in dollars) and years to pay back. I went to one of the schools near the top of this list for just this reason.

http://www.forbes.com/static/bschool2003/years.html?passListId=95&passYear=2003&passListType=Misc&resultsSortProperties=%252Bnumberfield8%252C%252Bstringfield1&resultsSortCategoryName=yrs+to+break+even&searchParameter1=unset&searchParameter2=unset&resultsStart=1&resultsHowMany=25&category1=category&category2=category&passKeyword=

Although I personally struggled to figure out exactly what I wanted to do, career-wise, during my last years of college, I still do frown upon those students who major in something for the sake of being in college, with no clear understanding of what careers are available or what they really have an interest in. Those cases are ones in which I think the importance of college is overstated. That is to say: I definitely encountered a lot of students who were in college because you were supposed to go to college, and not because they were pursuing a particular career path. I don't see anything wrong with taking a year to get a general education and figure things out, but still switching your major around as a senior? That's a waste of money.

Still, I get a little uncomfortable when the issue of "picking your major wisely" is raised. If we all went for the big-paying jobs there would be nobody working in the arts or education, areas that suffer enough as it is. I don't agree, either, with the notion that you should weigh your student loan debt against what you'll be making. It might be a financially sound notion, but it's idealistic. I make about $34,000 a year (working as a performance librarian in a mid-sized performing arts institution) and graduated with about $20,000 in student loan debt. (I got a Bachelor's and Master's in Music Performance, with my Master's paid for through an assistantship). But I locked in a 2.8% interest rate, and I never feel burdened by my payment. Sure, it'd be nice to pay it off, but in my mind it's the same as a mortgage: a good investment.

In the meantime, I get to watch opera being produced every day; I edit sheet music, interact with musicians, and watch costumes being built. Keeping that in mind, my student loan payment doesn't bother me at all!


I generally agree with FMF's post here. People at least need to go into college with a full understanding of what their salary expectations will be for their chosen field. Also don't overestimate the impact of a more expensive school.

A friend of mine went to a private school for a history degree and ended up with $30k debt and a retail clerk job. He honestly thought that simply going to the private liberal arts school would get him a good paying job regardless of his degree choice.

Also consider combining a lower paid field with a higher paid option in a dual/double degree. Another friend of mine was a dual music & engineering degree. He enjoyed music but realized it wasn't as practical so he went to school for both fields doing the engineering as a means to pay the bills and the music mainly because he enjoyed it.

Jim

I'm going to be starting my senior year at a small private school, which recently has been increased a little to 25,130 annually. I have mediocre scholarship. My dad has taken loans for a significant portion of it, and I take the other part. When I graduate, it seems I personally will have around 46,000 dollars of debt (11,600 of it government loans) with an undergraduate degree in music management and a minor in business administration.

Had I known what I know now (after becoming obsessively interested in finance and accounting this year), there's no way in hell I'd choose this school over a nearly free state school.

Now I really want to go to grad school for accounting, but I have to figure out some strategy for deciding if I'd gain an advantage from a graduate degree in accounting (assuming I'd have to borrow at least a little no matter what) or if I should just try to find a job.

wooooo!

I'm going to be starting my senior year at a small private school, which recently has been increased a little to 25,130 annually. I have mediocre scholarship. My dad has taken loans for a significant portion of it, and I take the other part. When I graduate, it seems I personally will have around 46,000 dollars of debt (11,600 of it government loans) with an undergraduate degree in music management and a minor in business administration.

Had I known what I know now (after becoming obsessively interested in finance and accounting this year), there's no way in hell I'd choose this school over a nearly free state school.

Now I really want to go to grad school for accounting, but I have to figure out some strategy for deciding if I'd gain an advantage from a graduate degree in accounting (assuming I'd have to borrow at least a little no matter what) or if I should just try to find a job.

wooooo!

If I had to do it again I would get some sort of technical certification before heading off to college. Being in a collge town means wages are going to be low. Large supply of cheap labor. $7-$8-$9/hr jobs are pretty much standard. My advice to incoming college students is to get certified in something simple. Phlebotomy(so you can work at the local plasma bank instead of being the one donating plasma), EMT, Accounting Technician, Basic programming or computer skills, Veterinary technician. Anything that will you get you over that $10 an hour mark but still allow you to work part time while your going to school. It will pay off in the long run if you get your certification in a field that you want to get your degree in. Say you get certified as an accounting technician, then go go college and major in accounting while working part time as an accounting tech for the college or some local business. This will pay off big time when you graduate cause you have the degree, experience, and less debt b/c of your higher part time wage.

You have to factor things carefully. In choosing schools not only do you need to look at the integrity of a degree from the school but also the networking contacts the school has. I graduated with 120k in debt with a masters in mechanical engineering from a private school. I was fortunate to land a great paying job, making more entry level than I thought I would make after 10 years. Yes, there are people at my work who graduated from state schools and have no debt. But if I had gone to SUNY school for engineering they simply didn't have the same industry contacts and would have ended up working for a lower end company. If you are smart (and motivated) while looking for a college. I suggest looking at the companies who present and attend job fairs at the school for the past few years to get a better idea of how companies and industries view degrees from there.

Choosing a major on the basis of the likely amount of debt one would be leaving school with seems a poor way to make that decision to me.

To use the example in the post - If I were talented at mathematics and was considering becoming an engineeer (for the money), but what I really wanted to do was teach math, would it really serve me to get an engineering degree if there was a high likelihood that I'd burn out and go back to school to get my teacher certification anyway?

As long as you have a good reason for doing what you're doing (money, knowledge, happiness, whatever), and you're not making outright foolish choices-like going an expensive private school without a really good scholarship or reason when a state school would provide the same quality - then I think things will work out in the end.

This is, frankly, terrible advice for lawyers (and so, I suspect, for other professions, as well).

The way the legal profession is set up for young lawyers is that there is basically a U-shaped distribution of salaries: one "leg" of the U is is at about $40K, and the other "leg" is at $160K. Now, if you have aspirations for the $40K-style jobs--which are definitely good jobs, some of them far more rewarding, I think, than those on the other leg--and can manage to find a decent school that will let you graduate with the kind of debt that can be managed on $40K/year, and can do well, great. If you can get into one of the handful of schools that virtually guarantees the $160K/year jobs if you put in a good basic effort but (as these schools do) also require running up $100-$200K of debt, also great. Both have their discomforts, but you'll be able to meet your debt payments. (If you are disciplined and lucky on the $160K leg, you will be able to pay off your loans in 5 years or so.)

If, however, you pick a midrange school that gives you midrange debt and don't happen to be one of the lucky few that snag a $160K job, you are screwed, screwed, screwed beyond the telling of it. The number of "midrange" jobs on entry into the profession is pitifully few, and they are very very competitive, not likely to fall into the lap of someone from a "nonprestigious" school (the hierarchy is stupid piled on stupid, but it is what it is). The most likely result is that you will be struggling to pay off your debts on some $50K insurance-defense job, living with your parents into your thirties. There are thousands of law students out there basically getting ripped off by their law schools, and it's awful to see.

As for your metric as a guide to colleges, well, if you look at college as a certificate to earn because you have to, it works. I know a lot of people look at it that way. I don't. I consider my years at my college to have been an incredible intellectual luxury I am deeply grateful for. There's also no doubt it gave me a leg up in everything else I have applied for since. I think what can go wrong is when people attend a semi-pricey school without really knowing why, don't take advantage of it, and then, because the school is second- or third-tier in the eyes of the world, don't get professional advantages out of it either.

There are a lot of things to consider when advising people on college, career, and the investment involved. There are no one size fits all answers but it is clear that going to college to figure out what you want to become can be a very expensive journey.

My experience in the administrative side of the health care industry suggests that where you got your degree (undergraduate, masters, doctorate, or otherwise) doesn't matter once you've gotten your first job. Employers are looking at performance. They want to know what you can do for them and past results are a strong indication of the future. Going to an elite private school is not necessary. A solid state school with a good program will serve you just fine.

Well, don't forget that "elite" schools can offer much better financing than state schools. The trend, in fact, is to eliminate student loans entirely. (Of course with the endowments these schools have they should be completely free).

With a non-technical degree, though, you'll probably end up having to pay for grad school, and taking out the same amount in loans.

I actually lost track of how much I owe.

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