Reader Request Week 2013 #4: College Education (And Costs Therein)
You went to a great university. Assuming you support the concept of higher education for your own child, Athena is old enough that you may have started thinking about where she might want to go, or at least, wondering if you have been saving enough for it. What are your thoughts on where to send your child to college, or allow them to attend? How much of the choice should be up to her? Should a parent try and find a way to pay or borrow for the best school to which a child is admitted and wants to attend, even if a really expensive private university like Yale, Stanford, or heck, University of Chicago? Absent scholarships of some kind, should a parent pay only for the high quality, but cheaper, and perhaps more geographically limiting, state school?
For those who might possibly not be aware, the “great university” I attended was the University of Chicago. Which is, for the record, indeed great — it’s regularly ranked in the top ten of national and international university rankings, has tons of resources, A-list faculty, successful alumni in important places, etc. It was a great place for me to attend and I’ve never had cause to regret going there. It was well worth what I paid for it twenty years ago, and is probably even be worth the $44,500 it costs to go there yearly today.
Athena has started thinking about colleges and we started talking to her about them, but those conversations are private and I’m not going to recount them here. What I will do is say that I tend to be unromantic about four-year colleges and universities. They basically offer two advantages to the students who attend: education and reputation/networks. I’m pretty confident that in a general sense, if one is motivated enough, one can get a good education at just about any accredited school. As for reputation/networks, those are highly variable and contingent, but let’s not beat around the bush here, for this a few schools are substantially better than most, and even among those there is an elite tranche whose reputation/networks are of high enough quality to pay for.
Here in the US, we have public four-year institutions and private ones. Public schools are (generally) less expensive than private schools, and good public institutions are as good as most good private ones, in terms of the education you can get there. Where (some but not all) private schools have (most but not all) public schools beat is the reputation/network thing. But even then, there is a very wide range, and to put it bluntly, in my opinion the majority of private schools don’t have the reputation/network that makes their cost premium worth it, relative to a public education.
Here in Ohio, we’re fortunate to have a number of very good public universities. There’s The Ohio State University, of course, which is one of best public universities in the country (and does perfectly well in overall rankings) and has a very strong overall reputation and network. There’s Miami University, one of the “public ivies,” ranked third best in the entire county for undergraduate teaching, below only Dartmouth and Princeton. Ohio University isn’t bad either. I’m pretty sure my daughter would do just fine at any of those schools.
Presuming my kid has the chops to get in where she wants to go — which I find a reasonable presumption, all things concerned — what I am likely to tell her is this: I’m willing to pay for an elite private institution (think generally but not exclusively the top 25 colleges and the top 25 universities in the US) because their reputations/networks are worth the additional expense in long run. But outside of those schools, why would I pay $40,000+ for a private school when I can pay $10,000 for Ohio State or Ohio University, or only slightly more for Miami University? The value add — the reputation/network — isn’t there in almost all those cases.
And yes, while we pay lip service to the idea of fitting the student to the exactly right school, I’ve gotta tell you, an additional $120,000 or so over four years for “the exact right fit” seems like a lot. And while barring a sudden reversal of fortunes we are in the happy position of not having to worry about how we’re paying for my daughter’s college, most people in the US are not in the same situation. How much is “an exact right fit” worth? Is it worth tens of thousands of dollars a year in non-dischargable educational loans? I have to tell you, unless it’s Harvard or Yale or Amherst or Pomona (or the University of Chicago) or other schools on that level, where the name and networks are going to open lots of doors, I’m not convinced.
There are always exceptions and caveats and so on and so forth (scholarships help, too). But generally speaking, unless you’re getting a hell of a reputation and network to go with that private school tuition bill, if I were a parent or a student, I’d be asking what, exactly, I’m getting out of that extra up to thirty grand a year I’d have to pay over the perfectly good education a motivated student can get at an arguably less glamorous but otherwise capable public institution. If you don’t have a good answer for that, think of everything else you can do with that $30k, or, alternately, how much less debt you/your kid will have to service.
I think a college education is awfully important for most folks today and I encourage people to get at least a BA, if nothing else because that degree opens a lot of otherwise closed doors, employmentwise (I also see value in trade vocations as well, but that’s another discussion entirely). But college is like anything: it’s easy to overpay if you don’t know what you’re doing. What I really suggest is that parents and prospective college students have as good a grip as they can on what they’re looking for, what they can afford, and what they’re going to get out of any one school and whether it’s worth the money (hint: Don’t just take their word for it).
A college education is worth paying for, and worth investing in. But not worth overpaying for, or overleveraging one’s future over. Get educated about the education (and anything else) you’re putting money into. That’s what I would say.