Providing your child with some sort of assistance is one way towards helping them build a brighter future. To be saddled with debt upon graduation severely restricts a student’s options and risk taking abilities. What a shame it would be to never pursue one’s dreams.
When I was in high school I had a choice between a couple expensive private universities or a couple of dirt cheap public universities. My parents were squarely in the middle class and my older sister already decided to go to not one but a second expensive private university for graduate school. I distinctly remember sitting around the kitchen table hearing my parents say, “We make enough to afford tuition, but we make a little too much to receive any type of need based assistance.”
I already knew we weren’t rich because we lived in a modest town house and drove a seven year old Toyota Camry. But to hear these words over breakfast one morning cemented my decision to go to a public university where tuition was under $3,600 a year vs. $24,000 a year for private university back in 1995.
THE THOUGHT PROCESS BEHIND PUBLIC SCHOOL OVER PRIVATE SCHOOL
Despite working crap jobs every summer in high school making $3.5-$4.25 an hour, I still didn’t have enough money to pay for even one year’s worth of college tuition. Even then I already felt guilty for my parents forking over so much of their savings or annual salary just so I could attend a private school that wasn’t even really that great because I was never really that smart. If I had gotten into Harvard, OK, maybe I would have let them pay, but I didn’t even apply.
I also knew that if I attended a $24,000 a year private university (~$35,000 a year all-in), I’d have an enormous amount more pressure to succeed afterward. Getting a job after university is not a guarantee, and I didn’t want to feel like an absolute failure if I spent $140,000 of my parents’ money only to get a job that doesn’t even require a high school degree! Perhaps I would have studied my butt off to succeed no matter what, but who knows the future.
By going to public university I not only would save my parents $100,000 over the course of four years, I would also alleviate the pressure to be some huge success after graduation. The calculation was that my parents would spend roughly $45,000 for tuition, room, and board over the entire four years and I would “pay them back” by getting good grades and a job that paid around $45,000 a year. All my parents have ever wanted from me is to be happy and independent.
I felt the $45,000 spent by $45,000 earned formula was fair so I went with my public university choice. I never voiced out my thought process to them as to how I came about choosing a public university, but now they know if they read this post. Besides, they already spent over $100,000 on my sister and that felt like a ludicrous sum to me at the time and still does!
MISSING OUT ON “POWER RELATIONSHIPS” BUT THAT’S OK
One of the biggest benefits of going to private school are the relationships. Students tend to naturally come from wealthier, more powerful families. You always here of somebody getting a job at XYZ prestigious firm because of their parents or friend’s parents connections. Well, none of my friends in college came from wealth so they couldn’t help. But I didn’t really think about how connections would help me succeed in life because I was determined to succeed on my own. I also had relationships from when I lived overseas. Besides, this was also college, a time to have tons of fun without parental supervision!
Without the huge pressure of private school tuition, I studied as hard as I could to get A’s because it felt like I was gambling with the house’s money. I knew that even in the worst case scenario, I could pay back at least the $3,400 a year in tuition by working at McDonald’s upon graduation. I felt happy that my parents were less financially stretched.
I also enjoy being the underdog and even contemplated going to community college for the first two years and then transferring to a full university to help save my parents money. There’s something about coming from as little as possible that motivates me to do the best possible. It’s kind of like watching the Oakland A’s succeed with their pitiful payroll while the NY Yankees falter.
SAVE AND SAVE SOME MORE
Investing early in a tax-advantaged 529 savings plan is a no brainer since all withdrawals used for future higher education expenses are except from federal tax. Currently around 12 states also allow one through the 529 plan to prepay tuition based on today’s rates which is also very enticing. Georgia even offers heavily subsidized or even free tuition if you attend Georgia Tech or University of Georgia and you graduate with over a B average.
Canada has a similar education savings fund called a Registered Education Savings Plan. When investing through an RESP, you will be able to take advantage of tax-deferred savings. You will not have to pay taxes on the money that you deposit into the account until the money is ultimately withdrawn. Once the money is withdrawn it will then be taxed in the beneficiary’s name. Since the beneficiary will likely not have any significant form of income, the ultimate tax rate will be lower saving you money in the end.
If you have need and are smart enough, plenty of private schools will provide scholarships for you to attend. I never bothered to apply to more than two because I was already determined to go to public school after listening to my parents fret over tuition assistance.
But if you do want to go to private school, you can always go to graduate school. You still get the benefit of leveraging the alumni community and reputation, but you also get the coziness of smaller classes as well. I chose to go to another public school for business school because Berkeley has a great part-time MBA program nearby to where I was working. UC Berkeley is huge, but my classes were small and I’m still an alumni just like any of the other hundreds of thousands of alumni in existence.
Because of my positive experience with public school – learned a lot, had fun, found a job on Wall St., left Corporate America after 13 years to become a writer – I wholeheartedly encourage everyone to go to public school. Even if you mess up the first time around, there’s a second chance with graduate school.
Readers: For those who went to private school, did you feel an elevated amount of pressure to succeed after graduation? For those who went to public school, how much did thinking about your family’s finances go into making your decision?
Regards,
Sam
I went to a state uni and paid for my tuition by also working full time. Wasn’t pretty, but I made it. If the job doesn’t really depend on the kind of college attended, I’d say go with public and LEARN what you need to do in your job. It’s not as nice as being in a private school, but the money you save are clearly a lot
I did public for college. I had to pay for half of everything so lower costs and being somewhat close to home helped save a ton. I was able to go home on all the holidays because it wasn’t that expensive to travel whereas if I had gone somewhere private there’s no way I would have been able to afford it.
There are very few private universities in Canada. Everything is pretty much public. I graduated from my BSc back in 2008, and tuition and books for four years was around $36,000. No board though. That seems to be about par with public schools in the US.
$36,000 is great for today. Interesting there is no private universities in Canada.
Public school tuition is now around $10,000-$15,000 a year. At least that’s what I see at UC Berkeley.
I read an interesting op-ed piece from the Salt Lake Tribune today. It was about Lars Peter Hansen, recent winner of the Nobel Prize in Economics. The Op-ed wasn’t about what he did to win the Nobel prize, but the fact that he went to public schools, even we had the chance to go to private.
I think you were way ahead of most high school seniors in thinking through the money aspect of college. I attended a private school and funded that experience through scholarships, student loans, working on campus (and during the summers) and the financial support of my parents. I don’t remember feeling pressure to succeed after graduation even though I graduated about 20K in debt. Perhaps that’s because my parent’s money only accounted for about 1/3 of what I needed to fund college for 4 years. I will say now, as a parent with a child 5 years away from college and three more to go after that, public education is looking very attractive.
Maybe they all get scholarships and save you a ton of money!
I grew up on a farm so I didn’t have to worry about my parents finances for school as I would qualify for financial aid. It wouldn’t all be grants and would include loans but they wouldn’t have to foot any portion of my bill. Even so, the cost was a huge factor of why I decided to stay in state for school. I couldn’t justify the extra cost that an out of state university charged for a similar education.
I went to a small private college (nearly 50 years ago) when it was a lot less expensive. I benefited from small classes and dedicated professors. It just seems natural after attending (k-12) private school. The irony is the cost of each year of college was roughly about the same cost of a year in a private prep school.
In contrast my children who attended private school (k-12) went to public universities. My son was offered a partial scholarship to a private college (Claremont McKenna colleges), but it did not compare with the full scholarship to UC. You could say, I paid a considerable amount of money for 12 years which is much more than a private university. I do not regret any of it and they will never need my financial help because of it. I think is much better than just leaving them money in a will!
It’s always interesting to see parents send their kids to private private school and then graduate to attend a public school. I donno. I think I would feel relieved I’m not going to be spending an arm and a leg for another 4 years. But I’ll also be like WTH, s/he coulda just gone to public school and saved me tons too. Of course, getting into one of the too 10 public schools is hard no matter which avenue you chose in high school and middle school.
For students from low and middle-income families, it is not uncommon for private universities to be cheaper than public (out-of-pocket+loans) due to generous and realistic need-based financial aid.
I did public university for undergrad and law degrees. It was $3000/yr for undergrad in 1998 and $5000 to $12000/yr for law school in the early 2000’s. Private schools would have been $20-30k/yr more expensive. For the six years of college, I would have spent an extra $120-180k. Doubtful that my earnings for the 9 years I worked would have been much higher. I may have ended up in DC or New York instead of Raleigh, which would have led to higher incomes. But I didn’t want to go to either of those places.
I’m planning on public universities for my kids. It’s still under $10k/yr for tuition and there are many great local options for virtually any career path. The competing private universities aren’t too much better academically. Although Duke would offer slightly better networking (but perhaps not that much better than UNC right down the road at a fraction of the cost).
I have two in college and both had the option to attend private school. Today, many private schools have endowments that are quite generous. Most (if not all) Ivy League schools pay a very generous amount of college costs for all but the wealthiest of families. We are fairly solid middle class and our out of pocket for an Ivy League would have been less than for in-state public universities in NC. Fortunately they both earned partial scholarships to state universities, so chose to stay in-state. (Yay!) It still is difficult when the books for a 15 hour semester cost almost $800 and the professors have chosen new texts that can’t be found used.
Even with endowment, merit or need-based scholarships, most students will still struggle to pay travel, books, living expenses, etc.
I don’t think either of my girls is missing out by not going to a private school, but I like that it was their choice. They are both doing well and have the option to go to Ivy League for grad school. The oldest has a 4.0 at a major university. I hope like hell someone will give her money for grad school. :)
I went to a small public University in Pennsylvania that had a business school with a great reputation. I feel a received an excellent education and overall experience. I think what matters most is what you do outside the classroom and that is what got me hired by Westinghouse to join the financial graduate program. I was involved in several student organizations and held several leadership positions, did some volunteer work, worked in the University Controllers Office, and formed important relationships with the staff and faculty. These relationships and experiences is what makes the difference!
I went to the University of Cincinnati for my BS in econ, Miami U (public, Ohio) for my masters in Counseling, and Penn State for my MBA in finance. All public universities with affordable price tags. I have and continue to have a great career and don’t feel disadvantaged in any way having attended public universities! Your life is what you make of it, not where you went to school.
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