Category: Prospective Student

The Money Blog

I think one of the toughest parts about the admission process, especially for talented students, is the pure number of college options you have. In the United States there are more than 2,400 four-year colleges, and more US students are going abroad to study than ever before. And in the middle of all of that, everybody is sending you glossy, shiny brochures of happy, smiling students underneath trees with professors blissfully learning in the sunshine. One day it’s the snow covered mountains of Vermont or Colorado, and the next day you’re picturing yourself strolling the beach after class in California or Miami. (Talk about FOMO!)

Adjusting to Choice

Having taught, employed, and regularly observed college freshmen over the years, I’ve found the variety of choices is one of the biggest adjustments to campus life. So I completely get it. High school was a constant cacophony of bells ringing, whistles blowing, horns honking. Start, stop. Begin, end. Go to school, practice or rehearse or work, study, sleep. Rinse and repeat. The big question is what are you doing with your discretionary 37 minutes each day?

Then you land on a college campus and are no longer required to run four miles a day for the cross country team. They have food courts and gluten-free options. And your class of 350 is now a campus of 18,000. “And wait, what?! I only have to be in class 15 hours each week plus a lab? Yeaassss!!!”

In addition to all that, at any time of day or night you can find someone interested in hitting a tennis ball, heading to the library, catching a show, or shooting potatoes off the roof with a homemade contraption (just spit-balling hypotheticals here).  Figuring out how and with whom to spend time is an understandable challenge. Ultimately, you learn to make choices based on hours in the day and week and what you want your experience to look like.

Student Loans & Debt

Unfortunately, when it comes to student loans and debt, we don’t take a similar approach. Instead, discussions of affordability are largely framed by a college’s Return on Investment (ROI) or a family’s perceived tolerance for a particular debt load.

At this time of year, families are usually looking at Net Price Calculators or specific financial aid letters and asking the question,“can we afford this?”

To answer that question you need to go beyond the bottom line number and consider how you are willing to live during and after college.

  • Will you co-op or intern during your time in school?
  • Are you willing to pick up a campus job or one in the surrounding community?
  • Is undergraduate research a paid position, and how much can you earn?
  • Are you willing to put yourself on a budget each week or month during college, and how much is reasonable?

Last week we established that the average debt for a college graduate is approximately $30,000 (the average salary for a new graduate is $45,000). We also heard some good tips from Jeff Selingo and Rich DeMillo on not graduating college with more student loans than your starting salary.

This week I wanted to provide you with a sample budget from a recent Georgia Tech graduate. 

 George P. Burdell

  • Student loans:
    • $40,000 (5% interest rate)
  • Salary:
    • $50,000, entry level, with full benefits (medical/dental)
  • Housing (in-town Atlanta):
    • 2-Bedroom 1-Bath Apartment (shared w roommate)
  • Lifestyle:
    • Eats at restaurants and grocery shops, but eats/orders out more often.
    • Enjoys travel, games, movies and social time with friends
    • Single, No pets
  • Car: Used 2013 Honda Accord:
    • 30,000 miles · Automatic · 29 MPG
    • Bought at $23,000
    • Down payment of $8,000 (earned via college internship and supplemented by graduation gift)
    • Interest Rate: 3%
    • Loan Period: 48 months
    • Payment: $333/month
  • Estimated Annual Costs:
    • Medical: $300
    • Car Maintenance: $500
    • Emergencies: $250
    • Car Tax: $100
    • Holiday Events/Gifts: $350
    • Total: $1500 ($125/month)

Monthly Budget

Monthly take home pay: $2,900

Category Budgeted Amount
Monthly Bills
Car Insurance $180
Car Payment $350
Cell Phone $75
Housing $700
Utilities $150
Loan Debt $675
Necessities  
Groceries $200
Gasoline/Fuel $100
Annual Costs Fund $125
Non-Essentials  
TV (Netflix, Prime) $20
Restaurants/Dining $125
Entertainment/Travel $100
Discretionary Spending $100
Total Expenses: $2900

 

Student Loan Debt vs. Car Debt

Using this budget (which you’ll notice assumes no raises or bonuses), George can pay off his student loans in six years. This is where I completely take issue with people who equate student loan debt to buying a car. Not only does that car require gas, insurance, and routine maintenance, but all the while it’s depreciating in value. Often it’s not long after six years that you end up with another car payment because the one you worked so hard to pay off is now needing to be replaced. In contrast, the investment in your college education continually appreciates due to network of classmates and other alumni. More on that next week.

In the meantime, pick this budget apart. Add debt to the beginning assumption… decrease the salary… increase the amount you might spend in groceries or transportation costs… or lengthen the amount of time to pay off in order to distribute expenditures differently. Each of those choices is a reflection on your values, your priorities and your life goals and vision. Even if you change every row of George’s budget, you’re a lot further along in determining what you will choose to pay for, and how you can and cannot live. “Can we afford it?” is a very personal question rooted in choice. Hopefully this will provide you some of the tools and prompts necessary to answer that for yourself. Happy budgeting!

The Lies We Tell Ourselves, Part 1. Students.

I run, but I’m not a REAL runner. But I am a competitor. So when someone passes me or is faster than me, I always tell myself that they’re just in the first quarter mile. Conversely, when I pass someone, I convince myself that they’re fresh and barely getting started, while I’m nearing the end of my jog. It’s ridiculous. But we all do this on some level, don’t we? “I’m not gaining weight, this scale is always five pounds too high.” “Going out with friends instead of studying for tomorrow’s final will be fine. I’m really at my best after 2 a.m. anyway.” “This shirt is expensive, but I need to look good and land this  job.” On some level, we know these thoughts aren’t true but they help us justify our actions, they make us feel better, and they provide us a little bit of hope that we love to cling to.

These little lies also happen in college admission, and we’re all guilty- students, college admissions counselors, and parents. Let’s start with students.

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Students:

Lie 1- Applying to multiple schools with extremely low admit rates increases my chances of getting into one of them. Statistically incorrect. If every school you apply to takes one out of every five students (or less), you are entering a complete crap shoot, as we examined in Holistic Admission, The Struggle is Real. Each year I hear from a student or about a student who applied only to Ivy League Schools, and was not admitted to any of them. Or worse, from the student who applied only to one ultra-selective school, only to learn in March they’ve been denied and are left scrambling for options. Maybe you’re too young to have seen the cinematographic masterpiece Dumb and Dumber in which Lloyd Christmas (Jim Carey) asks Mary Swanson (Lauren Holly—also briefly, and I mean briefly, Carey’s wife) the chances of them ending up together. He suggests one in a hundred to which she replies, “I’d say more like one in a million.” Christmas pauses, considers, and then replies exuberantly, “So…you’re telling me there’s a chance… YEAH!” Like I said before… it’s the hope we love to cling to.

If you’ve been tuning out counselors, teachers, or parents who advise you to apply to a “foundation” or “safety” school, it’s time to snap out of it and get one or two more applications in NOW. If you’ve been looking at data in Naviance or from prior years matriculation lists from your high school and see no one with your profile has been admitted to a particular college over the last few years, then I implore you to submit at least one application to a place you could see attending (not only one that will admit you, but likely offer you a scholarship too).

Lie 2- I have to go to X institution if I’m going to have a really successful career. Look at the Fortune 500 or Fortune 100 list of companies and their CEOs. Most come from schools not categorized as highly selective. While this is a purely monetary measure, it demonstrates that you do not have to attend an elite college in order to be highly successful. Similarly, ask any parent or teacher that attended a prestigious school about their experience and their experience now 20-30 years after graduating from college. They’ll inevitably rattle of plenty of examples of classmates who have not “succeeded,”, and an equal or greater number who are not happy, content, or thriving. The college you attend does not dictate your life trajectory. Getting into a school earns you nothing but the right to pay tuition. It’s the work you do once there, the contacts you make, the worldview you gain, and the opportunities you grasp and capitalize on that will have the primary bearing on your future success—however you define that.

Lie 3- The school I get into and attend represents my success and standing. We all want to be part of something bigger than ourselves, and this is a very noble trait. In its best form, it leads to people serving in the armed forces or sacrificing their own stat sheet for a team win. But when it comes to college admission, unfortunately, this often goes the other way. Take Eric. Yesterday he was admitted to Stanford. Congratulations, Eric! Only 5% of applicants will be this year. Today Eric proudly threw open the schoolhouse doors with his chest out, his hair flipping, and his chin unnaturally high. The other mere denizens of the school (including his teachers and administrators) were simply thankful to be in his esteemed presence. Eric perused the cafeteria at lunch as he considered whom he should grace with his presence….. Eric had been admitted to Stanford. But he’d also become a complete jerk. Don’t be like Eric.

Tomorrow we’ll hear the lies college admission officers tell.

When Should Families Start Talking About Paying for College?

Financial aid deadlines at colleges across the nation typically arrive in mid-February. When should your family start the conversation about paying for college? Is it better to have the cost conversation early on, or wait until a student has been accepted to his or her dream college?

A Family Affair, Part 1

It’s taken me over fifteen years working in college admission to realize a basic human truth:  People love their kids. Profound, right? But it’s an extremely important lesson and a statement I continue to tell myself and our staff each year.

People love their kids. That’s why a mother might call pretending to be her daughter in hopes of receiving a password or an admission decision. That’s why a father will be in the lobby at 7:30 a.m. after his son was deferred admission or waitlisted the day before. People love their kids. You’ve been holding them up literally since they were born and even now at 120 lbs or 250 lbs, you’re figuratively still doing just that.

This is why this excerpt from Jay Mathews’ article in the Washington Post a few years ago is so disconcerting to me: “There are few experiences short of death, disease, injury or divorce that have as much potential for trauma for American families as the college admissions process. The first great rite of passage for young humans once was killing a wild animal. That was replaced by getting married, or getting a job. These days it is getting into college.”

Now I realize this is hyperbolic journalism. Regardless, nobody wants to be part of an industry that breeds that kind of angst. However each year we see strained family dynamics, so his sentiments are somewhat true.  I believe there is a different solution– a better way forward. So here is a practical tip for helping your family thrive in the admission process, rather than allowing it to be divisive.

Safe place-safe space

Starting in the junior year of high school and gaining momentum in the senior year, the “college conversation” can seem like THE ONLY topic. So whether you are on the way to church or coming home from a tennis match, or driving two states over to visit relatives, the talk is always about college. “Have you considered applying to University X?” “I hear Brandon is really happy at Y College. You remember Brandon, right sweetie?” “Have you finished your essay?” “Where is your friend Sarah going to go for college next year?” And on and on and on…

If this is your pattern, then the quality of the conversation simply cannot be sustained. Nobody can talk about one subject all of the time and expect everyone else to continue to be interested or engaged.

I propose your family set aside two hours on a specified night each week or perhaps on Sunday afternoons and agree that the conversation will be about college. It’s in this time you open college mail, discuss deadlines that are coming up, look over essays to be edited, or discuss upcoming trips and the logistics of all of this. Everybody agrees to come to that meeting open, potentially even smiling (snacks help) with a willingness to ask and answer questions in the spirit of unity.

If this sounds cheesy or utopian or Pollyanna, then good. We all need a bit more of that in life in general, and certainly in the college admission process (Again, your alternative is what Mathews proposes). Also, no cell phones, no petting the cat, no staring longingly out the window. Just a defined period of time and a “safe place” where these necessary (and hopefully now more intentional) conversations can take place. Outside of that time and place, the college conversation is forboden (a great and all too infrequently used word). So if mom asks about a scholarship deadline on Wednesday at 7:30 a.m.- you can simply reply, “Safe place- safe space.”

At the end of the day, people love their kids. Students- remember that when mom and dad are on your case about this. Parents- remember that when your voice raises or when your patience wanes.

Tune in next week for tip 2 of A Family Affair.