Make Sure Your College Investment Pays for Itself

This list of the 10 most expensive colleges has me stunned. Can anyone really justify $40,000+ per year in tuition alone (not to mention room and board, books, etc.)? I don't mean it in the "how dare you spend your money in that way?" sort of justification, but in the "do you really expect to find a job that will justify the high costs of these colleges?" sort of justification.

If you really want to get the most financially out of college you'll match up the cost of college with what you expect to earn upon graduation. For instance, if you plan to be a lawyer or doctor, you can justify much higher costs (and usually debts) than if you're going into social work.

I advocate going to the least expensive (or at least a less expensive) university you can that gets you where you want to go. That's what I did -- spending only $5k and turning it into a boatload of money. Of course, that was when dinosaurs roamed the earth and prices have gone up quite a bit, but I also didn't apply most of the ways to save money on college that I now know about. I think I could still go to college today while racking up less than $10k in debt.

What I found interesting about the top ten list is that they didn't include "expected starting salaries" in their list. Having this information would be quite useful and, I'm sure, enlightening.

Comments

[Angie]

I am suprised every year that my college is not on this list. I graduated with 100k+ in student loan debt and all I can say is... How did no one warn me what I was getting into?

The main problem is you are expecting 16-17 year olds to realize this for themselves. 90% of parents, guidance conselors, teachers, and anyone you talk to when applying to colleges tell you "It doesn't matter what it costs."

And by the time you realize what you are paying its too late. Expensive schools purposely make their credits almost impossible to transfer to other universities. Forcing you to finish out what you started for the full 4 years and just accept all the debt.

They also don't make you aware that your college increases tuition yearly, (mine raises 3,000 every year!) Or that interest is accruing while you were in school. Had I known that almost 20k was accrued in interest during school and the grace period I probably would have paid it before it compounded.

Something should be done to increase awaremness before it is too late. Make it a mandatory seminar part of junior year in high school. But that will probably never happen.

[Anne]

Aww, #1 again. Go GW! I'm an alumna who didn't pay anywhere near that to attend. But I knew a lot of people who were there with zero financial aid. For a good chunk of the student body it was either *cough*Georgetown Waitlist*cough* or a status symbol for their parents. Mostly the latter. There was a lot of wealth there which was a very alien experience.

I really loved my 4 years there. But I really loved school. I loved the experience. I (mostly) loved the coursework. I was also 100% certain that college was right for me. I also majored in something the school is recognized for; had I wanted a philosophy degree or to start a career in materials science engineering, I probably would have made a different choice.

That said, I caution almost everyone against doing the same thing that I did :) Hell, I'm not 100% sure that's I'd do the same thing again. I did 2 grad school years at a huge, cheap public university and it is possible to find a similar educational experience, more difficult, but still very possible.

[Anne]

Two additions:

I should have been clearer. I graduated in 2004 when the tuition was similar. I just had great financial aid. I decided to only look at schools interested in my GPA and test scores to pad their numbers and that were willing pony up the money.

I completely agree with Angie - she made a hugely important point. I don't know if it's still happening but the message from like 8th grade on is that you MUST get into The Best School Possible. And that all student loans are Good Debt. If you don't do all of that you are a Failure. Even the mandatory loan counseling sessions are very light on the details and those are, I think, only required for federal loans.

[Eric N.]

This is why public schools are so popular where I am.

[Craig]

A) Status

B) Because you (or your parents) can

C) Potential for higher income after graduation. The rich people you meet there (or people with rich parents), alumni network, school name, and associations with companies can typically put you in a much better place than someone who graduates from a state/public university (not knocking them, I went to one and loved it).

D) A lot of these colleges have a TON of financial assistance. Students who do not have a boatload of money sitting around will not pay anywhere near that amount.

That's my take on it anyway...

[Angie]

Other than meeting my fiance I would not have made the same choice of schools knowing what I do now. I may have gotten a slightly lower paying job, but wouldn't have the bad habits, sleepless nights, and continuous stress I endure day in and day out from the burden of loans.

I would actually be glad if I was going into college in the current economic market. Then when I would go to apply for 15k in private loans yearly I would have been denied!

I am however very thankful that I was lucky enough to find a job and industry that gives me the opportunity to pay them back in a reasonable amount of time.

For the record I had about 40% financial aid, it still just doesn't cut it.

[Hyper]

I am one of the lucky ones. I went to an Ivy Leauge school and in my 5 years and I accumulated $40k in loans (the 5th year was for a Masters), I didn't get much financial aid and my parents sacrificed a lot to help me out.

So far I've been out of school for a little over a year and have payed over half of my loans off, but I worked really hard during school and live frugally now. I'm now making about $80k in an amazing engineering job and I wouldn't be where I am now if it weren't for where I went to school and what I did there. I got my first job at a big defense contractor because of the school I went to. I got my current job because I founded an engineering project team with a couple other guys and spent every waking hour building, designing, fund raising, and whatever else I had to. BTW it's true that the only big salary changes come from changing jobs.

Does a big name school secure your future? No, but it doesn't hurt. I think what you did when you were in school is more important than where you went to school. It all boils down to what is best for you.

[robert]

Colleges have become a scam in many ways.
As an employer , I'm amazed at the debt slavery many go into for a 'pedigree'degree that 10 years after grad that person is no longer working in the field but still has the debt slave master living with them.
Colleges and their education should have a buyer beware discloser statement.
A course on 'ROI' should be manditory.

[KLD]

I went to college for 4 years to get a degree in engineering. Now after working for almost 2 years, I hate my job. I can't leave it though because then I couldn't pay my student loan bills. So I am stuck slaving away until they are paid off and I can save enough money to pursue real interests and careers that are actually fulfilling.

[Sarah]

Sure, go to a diploma mill, spend four years in unsatisfying classes with unchallenging classmates, and then graduate with no alumni network and nothing that looks good on your resume. Whew! You sure dodged a bullet, getting through those four years at minimal cost!

I'm not saying that everyone should go to the most expensive school possible, but there's a value to the college education that goes way beyond a salary ROI. (And frankly I think you're radically underestimating even that for the professions.) College isn't just a credential; it's four years to learn how to think and expand your horizons. Attendance at a good school is a luxury. There isn't a one-to-one correspondence between price and quality, but there sure as heck is a correlation.

[Scott]

What amazes me even more is the people who eagerly pony up several thousands a year to send their kids to K-12 schools. I understand that some can afford it but I think most of it may be a status issue. I'm sure they are excellent schools but there has to be a better alternative. I say put that money in good mutual funds and pay cash for a quality state school education.

[Bad_Brad]

In my opinion, it doesn't matter all that much where you go to undergrad, unless you are focused on a few select fields or if you are planning on going to grad school. For some people who are in those boats, the high tuition for a higher prestige school may make a lot of economic sense. It all depends on individual circumstances and plans.

[AT]

"D) A lot of these colleges have a TON of financial assistance. Students who do not have a boatload of money sitting around will not pay anywhere near that amount."

+1 My brother and I each went to a different school on this top 10 list. Before you think "oh your poor parents", know that each of these schools took care most of our tuition with grants. Each of us came out with less than $10K in debt. These schools have tremendous endowments and are able to assist those in need. You can't assume everyone who goes to these colleges has to take on ton of debt to do so.

[Jim]

Overall I think a cheaper public school is the better deal.

But private schools can still be affordable given financial aid. A lot of these expensive private schools have generous financial aid for people who need it. When I applied to one of the private schools ended up more affordable to me overall compared to some public schools since the private school offered so much aid.

Look at Vassar:
http://collegesearch.collegeboard.com/search/CollegeDetail.jsp?collegeId=760&profileId=2

About 53% of freshmen receive aid and their average aid package is over $33k. The average indebtedness at graduation is about $20k. But thats still $20k in loans whereas at a public school like UC Berkely has average debt of $14k at graduation.

Some of the best schools have very attractive aid for people with financial need. Harvard's tuition is $31k but if you make under $180k a year then they don't expect you to pay more than 10% of your income. Stanford waives tuition for anyone making under $100k. And if you make under $60k they cover room & board too.

Jim

[Miss M]

I went to a large public university and graduated with minimal debt. It would have been even less but I was an out of state student, which meant higher tuition. I hear all about these great financial aid packages for the private universities but the people I know who went to them didn't get much and had to take out massive loans. Depending on your chosen field a lot of times the public universities are better for what you want to study. As for a "network" from fellow alums, many of my co-workers went to the same public university.

[Sarah]

Families with incomes under $60K pay nothing at Harvard, for instance.

Look, if your big ambition in life is some mid-tier job in industry in Ohio earning $45K, then by all means go to Ohio State. But why limit yourself in advance of your whole career? Increasing your earning potential is as good a way to get ahead than cutting your expenses.

If your college investment doesn't pay for itself, shouldn't you at least be able to take a tax loss for it?

[Kaitlyn]

I am $65K in debt, and had I known better, I would have worked harder at finding funding, but I would still have gone to the same insanely expensive school. The local public university everyone in my area went to had the lovely motto "kent read, kent write, kent state."

My parents also sent me to expensive private high school. Why? The public school system had screwed me massively when I was in 3rd grade, but more importantly, no one was encouraged to go to college at all. You were expected to graduate and work at the same factory your parents worked at. *shudder*

No thanks. I'll take my fantastic university that has opened doors for me, allowing me to graduate with 2 degrees in 4.5 years with very useful undergrad research experience.

[Pauline]

My alma mater is on that list...but also ranked in the Payscale.com survey of the most lucrative schools. I graduated only in 2007 but accumulated less than $20k in loans. (My parents and I paid very little out of pocket.) I got into a more "highly-ranked" school that is slightly more recognized, but for the marginally better career prospects I didn't think it was worth it for the extra $40k or so in debt. Definitely agree with the comments above about better alumni networks, a more stimulating experience, and the extra recognition that your resume receives!

[Double Journey]

I went to Princeton. Best investment ever. Still continues to pay dividends today. I hate being a school snob, but I can definitely tell I'm treated differently when people find out I went to a top tier school and it definitely makes it easier to get my foot in doors.

The thing about schools like this, they have lots of financial aid available. I was a dirt poor kid going into the school. They gave me lots of financial aid and I graduated with only 16K in debt. I paid it all off in less than 6 years, and I could have paid it off faster except it was such a low interest rate, it just didn't matter.

[Double Journey]

I should also add, that if I were just two years younger, I would have gotten into Princeton when they would have given me all my money in grants, no loans. So I actually would have graduated with $0 in debt.

[Studenomist]

Funny thing is today during a presentation in class we got into a debate with the prof over how big of a scam the school is. We pay our yearly tuition, pay for those damn overpriced textbooks, and then guess what we even have to pay extra from the fitness centre. On top of all of this the school had the nerve to call me this week to ask for a donation...Go figure.

[WS100]

I went to a private liberal arts college and it was cheaper than going to a Public university. I won a large scholarship and had grant money tossed in. I walked away with owing just my Federal loans. Alumni networks are one key part of the equation. How well is the campus maintained, what kind of student services does the college offer, who are the professors (yes, it matters for some professions) all go into this.

Don't write off private colleges because you think they'll be more expensive. If they want you on their campus bad enough, they'll pay for you.

[Greg]

The justification for taking on the debt would be if my child had a clear focus and goal that would be met by the school (for example, if his goal was to be a lawyer for a top-tier law firm in Washington or New York).

Even then, I would focus on a teaching college (small classes, the profs, not students, do the teaching) and save the debt for grad school.

[Cheska]

I'm in my fifth and last year for a bachelor's degree. I switched colleges twice and changed majors three times. I'm the oldest out of three, and my immigrant parents had no clue about college finances, so I had to struggle with the paperwork on my own. I just found out about FAFSA and scholarships two years ago; I wish someone had really taken the time to sit down with me back in HS and explained to me these things. It would have saved my parents a lot of money, and now that I have been paying my own tuition since junior year, it would have helped me out too by not relying so much on high student loans.