Choosing a College Archives - The Free Financial Advisor

College students in America are facing a financial crisis.

According to the Center for American Progress, more than 13 percent of students who started loan repayment in 2009 wound up in default by September 2012. Another 26 percent of those borrowers were delinquent.

Ouch.

Many experts argue that the causes for these epidemic rates are systemic: College is getting more expensive, forcing students to borrow more, but the rising cost of college degrees is not being met by increasing value of those educations.

Many students who began loan repayment in 2009 entered into an economy that struggled to create new jobs for the youngest generation, resulting in an employment crunch where college education was not rewarded with the employment they merited. With horror stories running rampant, today’s prospective college student is increasingly weighing the cost of college against its supposed value. If you’re facing a similar situation, here are some financial considerations to keep in mind:

Consider the Total Costs

For many students, college is expensive. But there are other costs associated with college that are worth considering when weighing the total cost. For example, if you go to a school where you need to own a car, you’ll have to pay for the up-front cost of the vehicle plus maintenance, gas and insurance while you’re in school. That could easily up the price of college by thousands of dollars per year, depending on the vehicle.

And if you plan to live off-campus, the local cost-of-living might also factor in. Consider housing prices, food budgeting, and other situational costs that might affect how you consider the overall cost of attending one college over another.

How Does Financial Aid Vary?

Federal financial aid is typically awarded according to your family’s presumed ability to pay for college. This affects the federal grants you qualify for as well as the types of student loans you are eligible to borrow. Additionally, individual schools also have financial aid packages that can feature an array of scholarships and grants. Depending on the school you plan to attend, strong students can sometimes lobby for better financial aid packages.

Because your financial aid is likely to be different at every school, you need to get hard numbers from each institution, and use this aid to reassess your college options. One report by HCM Strategists identified financial aid packages and emerging aid channels as vital tools to make college more affordable. These tools help avoid the worsening student-debt crisis, so don’t ignore how these alternatives might create much-needed economic relief.

You can even receive financial aid if you enroll in an online institution, depending on your overall financial need. Contact your school’s admissions advisor for more information on state loans, personal loans, veterans’ benefits, and tuition reimbursement through your employer. The tuition reimbursement program is a great option for employers who want to invest in their employees and keep them around long-term.

Will You Get Your Money’s Worth?

When it comes to saving money in order to get more bang for your buck, students have a number of options available to them. They may choose to first attend a community college and complete general education requirements while the costs are low. It’s also helpful to keep online college courses in mind, particularly if you’re looking to maintain flexibility while juggling school and a job. Browse a directory of online colleges and programs to educate yourself on all of the options available to you. Scourge the web for all available online college resources you can find, and start comparing and contrasting each resource.

For Some, It May Depend on Your Major

A college education can offer job prospects and income opportunities that vary widely across different majors. According to a report from Georgetown University’s Center on Education and the Workforce, unemployment rates tend to be much higher for some courses of study than for others, as Forbes highlights.

Architecture graduates have the highest current unemployment rate, largely because the stagnant economy has deflated demand for new buildings. Not far behind are Arts, Humanities and Social Sciences, all of which have unemployment rates of 8.9 percent or greater.

Given those numbers, students might find it particularly risky to invest in an expensive education that offers poor income prospects and a high risk of unemployment. Degrees in business and other stable professions, on the other hand, are more likely to deliver a strong return, making it more practical to spend for a more expensive education.

Joe Saul-Sehy

Joe is a former financial advisor and media representative for American Express and Ameriprise. He was the “Money Man” at Detroit television WXYZ-TV, appearing twice weekly. He’s also appeared in Bride, Best Life, and Child magazines, the Los Angeles Times, Chicago Sun-Times, Detroit News and Baltimore Sun newspapers and numerous other media outlets. Joe holds B.A Degrees from The Citadel and Michigan State University.

joesaulsehy.com/

There are many unsuccessful methods you could use when choosing a college. I’ve made a list of a few:

Attend the school your boy/girlfriend decides on. Really, it’ll last forever. Promise.
Choose among the fliers that come in the mail. Why search when they can find you?
Great football/basketball/rugby/volleyball team? That must = great academics.

Choosing a college is a decision that can impact your entire life. You should use a better method to decide than those above.

My Story: I worried a ton about what college I should attend, just like you might be right now. I knew the weight of the decision: I might meet my spouse while in college. I would make friends that would last my entire life. Lots of thoughts. Most of them misguided. Hopefully, you’ll do a better job than I did.

In the end, I chose a college based on a running scholarship and the fact that it was a military school far away. It was one of the most half-baked decisions I’ve ever made, and within two years I was back at a state university closer to home. That said, I would never discourage someone from a military college education. It was difficult and enlightening–just what I needed at the time. More about that another day.

While every education decision is intensely personal, here’s what I should have done:

What Are Your Strengths?

Many people ask “what do you want to do” while you’re in high school. I don’t know about you, but I had no clue. I wanted to be an architect because I thought Frank Lloyd Wright was cool. I can’t draw stick people. Slight problem. I wanted to be a lawyer because I thought those shows on television were cool. People were well dressed. I didn’t know that you sat in a room much of the time reading law books. Boring (for me). Another problem. I might have been an engineer if I didn’t think that was just the dude who drove the train.

List your strengths. Had a been realistic, I would have known that:

– I’m creative—not in a drawing or musical way, but I can quickly come up with creative solutions to a problem

– Because I stuttered at a young age, I’d overcompensated and become a good public speaker

– I’m not great in large groups, but thrive in small discussions

– Because of my ADD, I love to dig into problems and bury myself in finding solutions

List yours. What tendencies do you see?

What Schools Match Your Strengths?

Your next task is to eliminate schools that don’t match your taste. There are few ways to figure out what is a good match than to:

Make a “long list” of colleges you may wish to explore further. How do you do this? Using your strengths list above, go to the Peterson’s College Search: College Compatibility Tool. You’ll see we use Peterson’s a ton for college planning at our house (as I did when I was a practicing financial advisor). The reason for this: it’s a comprehensive, free resource that’s easy to navigate. This site saves you a mountain of time and energy looking for phone numbers, admission info, financial aid, student body facts, and more. I’m not compensated by, nor do I have any affiliation with this company or website. I’m just a huge fan and user. Some people endorse Presidential candidates. I endorse websites. Another point about this website? U.S. News and World Report has a similar program, but they charge around $30. Ouch.
Visit some schools. You’ll begin to see if some scare you because they’re too big or suffocate you because they feel too small. I didn’t do this myself. What a mistake. In fact, both colleges I attended I’d never set foot on before I went there. Use Petersons to link to the Facebook page of a school, find the phone number for admissions, and schedule a tour and briefing on the college.
Read. I swear my twins come from different parents. My daughter reads voraciously about colleges, while my son would rather visit the school. However, once he gets to the college, he studies the literature about the place non-stop. Some of her favorite books are:
- Treasure Schools: America’s College Gems. We would have NEVER contemplated visiting some of the tough, beautiful little schools across the country if my daughter hadn’t read this book. It succinctly makes the case for a small school education.
- Colleges That Change Lives: 40 Schools That Will Change the Way You Think About Colleges. This book makes the case that it doesn’t take an Ivy league school to receive an Ivy league-style education. If you match your strengths with some of the 41 schools listed, you’ll find a winner.
- The Insider’s Guide to the Colleges, 2012: Students on Campus Tell You What You Really Want to Know. Want a simple statement about how awesome this book is? Try this: it’s in the 38th edition. What my kids fear is that there are some hidden reasons not to attend their favorite school. By giving some insight from a student’s perspective, this has worked to quell some fears.
When we visited MIT this summer, they had great advice: read some of the student and faculty blogs attached to the university. You’ll get a great feel for some of the personalities and exciting events on campus. You’ll also read some of the dirt about the school as if you were already there. Don’t just stick with the school-sponsored blogs. A simple search could lead you to some eye-opening blogs from students.

How Competitive Are These Colleges and Will I Be Accepted?

If you’ve read and researched, you’ll already know how competitive these schools may be. But, there are two sources which we use to dig further:

Will I be accepted into the school? There’s no sense pursuing a school if I can’t meet the entrance requirements. For this, we’ll use Petersons again, but this time, we’ll dig into the actual school page. We’re looking for the Admissions page, which tells us testing criteria (how many students beat common scores on the SAT, ACT and possibly others) and what will be required to apply.

You won’t want to apply to every school on your “long” list (which hopefully is shorter by now), because there’s a fee for each one. Only apply to schools you seriously hope to attend.

Is the school competitive? To find out how a school ranks in your particular area of focus, we’ll turn to U.S. News and World Report annual ranking of colleges and universities. This site duplicates some of the Peterson’s information, while also providing additional ranking details in many areas. Much has been made of the U.S. News and World Report rankings and some school’s attempts to manipulate these rankings.

Here’s the deal for us: a school’s ranking isn’t the final factor when choosing a school. However, it is another barometer for us to watch when making a choice.

An example: my son seems to be focusing on engineering programs. He also likes Catholic schools. Unfortunately, Boston College, a school he liked a ton, doesn’t have an engineering program (that’s not the end of the road for Boston College, but it’s a big red mark against it). Notre Dame does have an engineering program, but U.S. News and World Report ranks it in the mid 50’s, while the University of Texas (in—state public) and Texas A&M (in-state public), both rank in the top 10.

While he may be able to secure enough scholarships to attend Notre Dame, and while it certainly is a door-opening name in some circles, he’s more likely to focus now on the less expensive in-state options.

What Do the Schools Cost?

Attending college is a cost/benefit decision. While I’ve had friends who ran off to school without any purpose other than beer and women, or who majored in a degree without employment prospects, it’s probably a better idea to spend your money wisely and study a field that’ll end in gainful employment opportunities.

I strongly believe that you should NOT study something just for the job prospects, though. Keep your focus on your passion and the dollars will follow, as long as there are some jobs available. I’ve met many people who felt they’d wasted their life chasing a dollar instead of their dream.

Research your dream jobs to find out what the employment prospects look like. While dreams are fine, they’re better if they pay. Between two dreams, choose the one that’ll secure your income first.

As a personal example, I’m a recovering financial advisor. I also wanted to write. I spent the first years of my life earning a great living in the financial planning industry. Then, once I’d accumulated enough to support my new career, switched to writing. This way, I’ve been able to chase both dreams, where if I’d become a writer first, it would have been much more of a struggle.

Once again, head to Peterson’s College Search to find out the “retail” cost of colleges. I’ve placed retail in quotes so you don’t have a heart attack when you see the huge difference in price between many private colleges when compared to their public counterparts. While a public school may still end up being more expensive, it’s important to focus on how much you’re going to actually pay when you attend a school. You may be surprised to find that the bottom line isn’t always much different between public and private schools.

While we visited schools this summer, we found a good question to ask was what price the average person pays. You’ll be surprised to find a number far south of the huge expense you anticipated.

What If My Son/Daughter Is Too Young To Know What School To Attend?

While you won’t need to be this specific, you will want to narrow your choices of colleges to focus on the Peterson’s College Search link. By making a list of schools that you’d like to afford, it’ll be easy to begin a program to plan for the future. Make sure and inflate the cost of college. According to FinAid.org, it’s wise to project college costs growing at double the normal inflation rate. This means you should expect an 8 percent per year inflation rate in your college cost planning. This is a good place to start your plan.

For more information on this topic, see our post:

http://www.thefreefinancialadvisor.com/2012/01/5-steps-to-a-successful-college-plan/

That’s my story. Now it’s your turn: What tools did you use to find The Perfect College for you? Dartboard? Lucky ducks?