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Colleges Worth The Investment – Part 3 (There is More Aid Out There Than You May Think)

December 14, 2010 · 34 comments

in Parenting, Personal Finance

I have written a couple of posts about different colleges, and which are the ‘best’.  The opinion of which colleges are ‘best’ differ based on what the criteria is.  One article mostly favored larger, public schools because it was based on what recruiters preferred.  The recruiters liked to get the biggest bang for their buck by having access to a large number of students, many of which would be well rounded.  Recruiting at one large school made more sense than traveling around to numerous smaller, private schools.  What better way to rank colleges than to talk to the people than actually hire college graduates, right?  On the other hand, another article favored mostly smaller, private schools because they had a greater ROI (return on investment:  comparing total cost of tuition vs expected projected salary), even though this ROI was based on rather arbitrary data 30 years down the road.

Kiplingers recently posted another article ranking colleges.  This list includes only private schools, and it is based on how much student debt the average student graduates with.  The colleges listed will shock you.  (Well, at least they shocked me.)  The list is as follows, depicting the college, annual tuition, and the average amount of student debt amassed during their four years in college:

1. Princeton:  $49,780     $4957

2. Williams College:  $53,140     $7960

3. Berea College:  $31,494     $8133

4. Cal Tech:  $49,002     $8218

5. Claremont McKenna College:  $53,625     $9259

6. Yale:  $50,080     $10,717

7. Harvard:  $53,227     $10,871

8. Scripps College:  $53,227     $11,270

9. Amherst College:  $52,522     $11,347

10. Columbia:  $57,192     $11,564

Can you imagine being able to graduate from an Ivy League school with less than $10,000 in debt?  Don’t just assume that because you make good money that your child will not qualify for financial aid.  For instance, Harvard still provides aid to those that make up to $200,000/year!

I had no idea when I graduated college that so many colleges/universities would offer such great financial aid packages.  I graduated 20 years ago from Michigan State with a lot more debt than I may have amassed over 4 years at any of the colleges listed above.   I can’t speak for other high schools, but my high school pretty much just handed you the financial aid form and said ‘good luck’.  There was no encouragement to try for a ‘premier’ college or anything.  However, I think it was just expected you would go to a community college, maybe a state University.  Many students didn’t further their education at all.  I wish information like what was in the Kiplinger’s article was more readily available back in the mid 80s!

So the lesson is, keep a totally open mind when talking to your child about their college education.  Do not eliminate any possibilities based on finances.  You can always apply to the school and then apply for financial aid.  You just never know what aid package you might get.  I also suggest really working with your child to obtain scholarships.  There are so many out there that nobody has ever heard of, but that is a post for another day.

Did you end up with much student loan debt?  Did you go to a private or public school?

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{ 32 comments… read them below or add one }

Andrew @ 101 Centavos December 14, 2010 at 6:59 am

Kris, I graduated from Cal State with a $3000 Stafford loan. I mostly worked my way through, but I won’t recommend the same path to our kids. For one, it took me the better part of seven years to finish a 4 yr degree. I also only applied for financial aid in my last year, for the big push to finish (21 units per semester). A couple of Pell grants and the Stafford loan were very helpful. I didn’t put as much effort in researching scholarships as a I should have. I agree with you that these days, there’s much more information available.

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Kris December 14, 2010 at 2:27 pm

Andrew – Why did you wait so long to apply for aid? I can’t believe you took 21 credits the last semester. I typically took 16. Although I generally worked 16-20 hours a week too though

Great job just having 3k in debt though. I would have loved that!

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Andrew @ 101 Centavos December 14, 2010 at 2:35 pm

Why so long? For the life of me, I don’t exactly remember the reason, perhaps a combination of inertia and having enough from my day job to cover tuition and books. That last year was 20 credits in the fall, and 21 in the spring, and a part-time job. I do remember not sleeping much. Once during finals I pulled 3 all-nighters in a row, not that it was a unique feat, other students in my groups did the same.

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Kris December 14, 2010 at 3:23 pm

Yikes, I would fall apart if I went 3 days without sleeping. Actually, I was pretty crabby yesterday when I got only 4.5 hours of sleep.

I remember going through a computer training program for my first employer and I had to work some 100 hour weeks, with staying awake for about 42 hours the last days. (Then playing whirlyball after that.) I thought that experience was miserable. 72 hours would kill me.

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LifeAndMyFinances December 14, 2010 at 7:14 am

Wow! I really would have thought that there would be more debt coming out of those high-tuition schools. But, I suppose those that attend the school are either very well-off, or they understand the negative impact of debt moreso than an average student at an average school.

Maybe I’ll be sending my kid to an Ivy League school someday (I’ll have children someday). 🙂

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Kris December 14, 2010 at 2:26 pm

LAMF – I agree, I still can’t get over the low amount of debt. I don’t get how mine was so much higher 20 years ago from a public institution. I wish they provided more info behind the numbers. I do know that I will encourage my kids to apply to schools they may not have otherwise knowing that so much aid seems to be available.

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Money Reasons December 14, 2010 at 8:22 am

I went to a state college, no student loans for me (it cost me though)…

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Kris December 14, 2010 at 2:24 pm

MR – no student loans? Good for you! How did it cost you? Is that a post for another day?

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Money Reasons December 14, 2010 at 4:11 pm

Yeah, it’s a post for another day. It helped that I worked since I wast 15 or 16 years old

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Moneycone December 14, 2010 at 8:41 am

And these numbers are only going up every year! I wonder where these numbers would be when my kid is ready for college!

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Kris December 14, 2010 at 2:24 pm

Moneycone – One MILLION dollars… (spoken like Dr. Evil)

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The Grouch December 14, 2010 at 8:58 am

There is so much more easy money out there than when I went to college. As a matter of fact, all that easy money from the government helps keep college tuitions high and rising higher than the rate of inflation. I went to one of the leading public university’s in the country, turned down Duke because I couldn’t afford it. Worked in high school and throughout college to pay my tuition, lived in a lot of dumps and ate cheaply. I ended up graduating with very little debt, and got that paid off quickly. I wouldn’t send my kids to an Ivy League school because I don’t think the education is worth the cost.

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Kris December 14, 2010 at 2:24 pm

Biz – Would you send your kids to Ivy League if it was almost fully funded externally?

I agree that there does seem to be a lot more money available out there than when I went to school. It was also really hard to find out about scholarships too. Our college counselor was a joke so it wasn’t like I was going to get any info from him.

It is shocking how much college tuition has increased. If only our salaries could actually increase for a change.

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The Grouch December 14, 2010 at 3:00 pm

I don’t think I’d send my kids to Ivy League even if I was worth several million…. wait, I am. I believe you shouldn’t put a silver spoon in your kid’s mouths, that they should role up their sleeves and do quite a lot of sweaty work to appreciate what it means to earn a dollar with their muscles and brains.

All that easy money floating around is driving tuition prices higher and inflating the cost of an education. College costs would actually drop if there were less federal dollars being thrown at students and institutions.

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Kris December 14, 2010 at 3:21 pm

I totally agree that you should not put a silver spoon in your kid’s mouth, and I am not real ‘pro’ Ivy League. However, if they could attend Ivy League with obtaining minimal debt, I would be fine with it.

It is interesting how the private schools (some) can manage to provide a lot of aid to kids through endowment programs, yet many kids cannot afford a much cheaper, public school. Something is definitely wrong.

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Nicole December 14, 2010 at 9:04 am

DH graduated from a near-Ivy with 10K in debt (unsubsidized). I graduated from a top 5 liberal arts college with only subsidized loans that my parents paid off right away. (Something like 2K). My entire senior year was free because of a fortunate scholarship that only I fit the criteria for that year.

My sister had more loans and my parents had to pay more for her near-Ivy, but if she’d chosen Cornell instead of the near-Ivy she’d have gotten a lot more financial aid. Not sure why she picked the near-Ivy except it was closer to home. (My parents gave her the money to pay the debts once she graduated.)

If I’d gone to the regional state school where my mom works, they would have paid me a stipend to attend, but I’m very glad my parents let me go wherever I wanted. Another private school (Earlham) offered me close to a free ride. But I went to the best liberal arts college I got into. I can’t remember what Caltech’s aid package looked like.

A lot of my friends were offered more money to go to a private school than it would have cost to go to the flagship state school. Bradley, Knox, and Claremont McKenna were common choices because of their aid generosity, and less expensive than the flagship state school.

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Kris December 14, 2010 at 2:20 pm

Nicole, were these scholarships mostly need based, or were some more academic based? My son is a junior and his job over Christmas break is going to be to investigate as many scholarships as he can. He would probably do better at a small college, but that may be outside our budget and I don’t think we will qualify for most need-based programs.

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Nicole December 14, 2010 at 5:20 pm

Mine were a combination of both. If you’re a really top student, national merit scholar etc., well-endowed non-ivy universities will compete for you on money. I think University of Kentucky also gave full rides to national merit students back when I was 18. I’m not sure if they still do. Ivies will also compete on money if you’re truly awesome, even if your parents are rich, but I was not in that awesomeness bracket.

Other than the small amount of state merit aid that our state gave (and still gives) promising students who apply for it, I didn’t apply for outside scholarships… they were found for me by the universities trying to woo me.

DH’s were almost all merit… his parents made more than mine. There was also a marching band scholarship in there. He got more aid from the near-ivy than he would have from the flagship state. The same was not true for his little brother (who went to flagship state instead).

It is definitely worth applying widely, especially to places with a reputation for generosity, and always fill out that FAFSA form.

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DoNotWait December 14, 2010 at 9:35 am

Wow! I am very surprised! I live in Quebec, Canada. Tuition fees are much lower, but many students have more debts. Try to figure! I think its because the government here helps more than yours, but colleges here help less than yours. Maybe “private” help is better? How would you explained that a $15,000 fees a year here would end up with a $10k-$20k and even $30k of debts after 3-4 years? I am speechless. I am guessing students here do not party more than the ones in US… Any thoughts on this?

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Kris December 14, 2010 at 2:18 pm

Well, I am guessing that some get a completely free ride, and others pay close to full price. However, I am confused myself how the average debt is so low. Had I known then what I know now, I may have gone somewhere else. But, I didn’t pursue many scholarships and there wasn’t much info available. I do know there are people that graduated with 80k in debt too. I guess a lot depends on the amount of effort you put into finding scholarships and grants.

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DoNotWait December 14, 2010 at 3:59 pm

Maybe! If I may share my own experience, I always worked during college and tried to applicate for some scholarships but did not get them. I also had to move as my parents were living too far from college. So yes, I ended up with students loans and debts. Something around $15k if I remember well. So I am very impressed by the numbers you gave since I never paid as much for college.

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Suba @ Wealth Informatics December 14, 2010 at 1:58 pm

I went to a private school (not ivy league) with no loans. There really is a lot more aid than students believe. It takes hard work to apply for lot of loans, but it is there. Student loans are just a matter of numbers now, the more you apply the more you get.

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Kris December 14, 2010 at 2:12 pm

Suba, that is really impressive that you emerged with a private school degree and no debt. Congratulations!

I do think it is much easier to get money from private than public schools, that is for sure.

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Squirrelers December 14, 2010 at 4:07 pm

I went full-time for an MBA, and graduated with more debt than what’s shown there for expensive 4-year undergrad programs. Well worth it and I paid it all off, but it was more than these figures.

Have to say, if one can graduate from an Ivy with an undergrad degree with about $10k in debt, that’s a no-brainer. I don’t care if the public school is free, that’s no contest. Take the Ivy, pay off the modest amount, and you’ll have some extra things going for you in the future.

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Nicole December 14, 2010 at 5:23 pm

I’m actually not that crazy about Ivies… too much teaching by graduate students in large classes. I’m a big fan of the SLAC. 🙂

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Deidre Lin December 14, 2010 at 6:22 pm

Nice post Kris! Yes, I graduated over 20 years ago and still have a huge student loan debt! I can’t believe it either LOL.

I sometimes wish I had gone a different route but…live N learn. 🙂

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Molly On Money December 14, 2010 at 8:27 pm

I went off to a private college almost 25yrs ago (before the internet). My senior year my Mom marched me down to the University library to research grants and scholarships. I still have vivid memories of spending several Saturday afternoons going through these huge books that held all the information one would need to apply to get my way paid for my very expensive school. I was able to cobble together quite the package!

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Ken @Spruce Up Your Finances December 14, 2010 at 11:08 pm

I went to a private college instead of the Cal State system since most of my friends are saying how tough it is to get courses and it will take forever to graduate. The average is about five years. I finish a degree in less than three years and already have a 2 year head start on experience and already earning the money. It came at a cost though and I did carry student loans.

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Roshawn @ Watson Inc December 15, 2010 at 12:15 pm

This seems so unbelievable Kris. I’m dumbfounded that it could possibly be this cheap. I need to do more research on this for sure. Provided that this info is correct, it could be a game-changers in many the arguments of many people.

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First Gen American December 16, 2010 at 6:58 am

I live near williams and amherst college. At least with williams, most of the students come from VERY wealthy families. Downtown williamstown is filled with swanky boutiques and hip restaurants. Pretty much any time we go out to eat there, there, 1/2 the restaurant is filled with students eating fancy dinners..even midweek. You know, when I was in college I was going to the all you can eat pasta night at papa ginos. I wasn’t going to sushi bars.

In general though, I agree with your assessment. Many of these universities have huge endowments, so there is lots of aid available to those in need.

Wow. I had no idea annual tuition has gotten that high. Yikes. I need to start upping my 529 contributions.

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Kris December 16, 2010 at 10:00 am

Sandy, I realized ages ago that I will never have enough saved to fully fund all 3 of my kid’s college educations! I would have to get 3 jobs! It is depressing to see how much it costs.

The prospect of college kids eating at swanky restaurants is not even close to the experience I had. I lived off Dominos pizza and dorm food.

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First Gen American December 17, 2010 at 7:52 am

I imagine it’s gotta be a little hard going to one of these places if you’re there with scholarships but don’t have any pocket money to hob knob at all the hippest places with your buddies. (I’d still take it though if it were offered).

I went to an expensive engineering school, but most of the kids came from families with frugal tendencies. There is definitely something to the stereotype that engineers are tightwads.

If I’m working when my kids are in college I could probably pay as they go (except in the last year where 2 will be in college at the same time). By then we should have our debts paid off so my income would be gravy. I am going to start saving for their education more seriously in the next year or two after I’ve got my own ducks in a row.

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