Why I won't have any college debt
Picking a school based on name recognition will leave students deep in the red for years. There's a smarter way, and I chose it.
"So, where's Zac going to college?" an aunt asked my mom at a summer family get-together on Cape Cod a few years back.
"Couldn't he have gone somewhere better?"
"He'll be fine."
Let's face it: Even if they won't admit it, most parents have some feelings about how people react to one of life's big announcements -- where their kids are going to college. And when it comes to status, most $50,000-per-year private colleges score a lot higher on the pride scale than UMass, which ka-chings in at $20,000 for in-state students.
If you're the parent of a high school senior, you have probably already sent in the deposit to the school your child will be attending. But if you haven't yet or your child is a high school sophomore or junior, it would be wise to keep in mind a few things before heading down this road.
The first is uncomfortable to talk about, but it's a fact: A 2002 study showed that of students who had enrolled in four-year colleges, only 63 percent had received a degree six years (no, not four years) later. That means there's a significant possibility that your child -- yes, your child -- will drop out before he graduates. If your child's high school performance suggests he is college-marginal, the time to stop, look, and listen is now, not later. Because if a student takes on loans and then drops out, he will find himself in a world of trouble: large monthly loan obligations and in all probability a job that doesn't pay well enough to meet them.
Approximately 60 percent of those undergraduates who do get their degree leave school with debt, and the average amount for the 2006-2007 graduating class was $22,700. Debt will likely be higher for the next graduating class as college costs continue to grow and college savings accounts continue to be rocked by the economy.
For any entering class, uncertainty about the job market four years hence is made a lot more stressful by large monthly debt obligations. (Spread over 10 years at current interest rates, repaying a $22,700 loan could come out to $261 a month.) There are, of course, very few free lunches when it comes to college, but the lower the debt load, the cheaper the lunch. In terms of costs, those of us in Massachusetts are fortunate to have the University of Massachusetts and its range of campuses across the state in Amherst, Dartmouth, Lowell, and Boston, along with a number of smaller state colleges. Just about every college-bound student in the Commonwealth should give these schools serious consideration before committing to more expensive private or out-of-state counterparts.
UMass-Amherst, my school and the flagship campus of the state system, is one of the best schools at providing an affordable education without burdening students with excessive debt. According to U.S. News & World Report, UMass-Amherst students graduate with the fifth-smallest average debt load in the country, behind only the University of Louisville among public institutions. A handful of extremely selective and exceptionally well-endowed schools do better (Princeton, Caltech, and Harvard), so if your child gets into those, well done. But for most students, public colleges offer the best bet for least debt.
When it comes to picking a college, size does matter, but perhaps not how you may think. Many of my friends in high school chose colleges based on specific programs -- often opting for small schools because of a perceived specialty in, say, classics. But research shows that roughly half of traditional-age undergraduates change majors at least once.
What that means is choosing a school based on a specific program is not necessarily a great idea, since there's a good chance that a pre-law high school student will have his interest piqued by an art history class and change majors.
I know because I did exactly that this semester. The legal studies classes weren't as interesting as I had hoped, and the art history class I was taking for a general education requirement was infinitely more interesting than I had expected. At a large university like UMass-Amherst, there are solid programs in a huge number of areas -- my school features 88 majors. Amherst College up the road offers 34. Amherst is a tremendous school, but if high school seniors aren't sure what interests them, a big university with a large array of programs might be a better choice. And if there is a particular class or professor at, say, Amherst College that interests them, they could take the class, thanks to the Pioneer Valley's Five Colleges consortium; there is no additional cost -- it's covered by their UMass tuition.
As much a relative bargain as UMass-Amherst is, however, it's still guilty of the occasional head-scratching financial decision, perhaps made out of a perceived need to spend aggressively to compete with better-capitalized private institutions. In 2006, the school spent $11.2 million renovating a single dining hall, at a cost of $14,000 per seat. The result is a space that is aesthetically pleasing, but the meal-plan costs make me wonder if it would be cheaper to eat three meals a day at
It's true that most private colleges have higher graduation rates than public universities, and some college experts suggest that parents should seek out schools with high freshman retention and four-year graduation rates. That's misguided: Graduation rates are hugely influenced by problems associated with selection bias: Students from families high up on the socioeconomic scale are less likely to drop out. Whether your child completes his education will be a function of his own drive and determination and, increasingly, economic factors. There is little to suggest that any given student is more likely to drop out of one college than another.
For families struggling with the cost of college -- and that's pretty much everyone today -- community colleges are also a great option. By spending the first two years at a community college while living at home, students can shave tens of thousands of dollars off the cost of college. And by working part time, a student can save up cash. This is an especially good option for students whose high school performance indicates they may not excel in college -- a trial run where less is at stake and they won't have to worry about massive debt obligations while working a minimum-wage job. The associate's degree that can be earned after two years provides a strong advantage in the workplace even if they decide not to transfer.
An ambitious student can get a good education at any number of colleges, and a lousy one can get a lousy education at even the best colleges. In 2006, Time magazine reported: "Surprisingly, Ivy League graduates do not dominate the top fifty Fortune 500 Companies. When measuring CEO undergraduate education, the University of Texas system has just as much representation as Harvard: a total of 3 CEOs. . . . An elite career doesn't always stem from an elite education."
College is an active experience, not an intellectual amusement park ride where you strap in and see what happens. Find one with a wide array of programs and, above all, a price tag that won't put parents' retirement on the back burner or make a student an indentured servant of Sallie Mae into middle age. Just as driving a Mercedes won't make you rich, attending an expensive school won't make you smart. But it very well could make you poor. ª