Three cheers for college applications. My wife and I are parents of college-bound twins. We want them to graduate debt free. We believe college is a really good investment (my spouse is a prof at a selective college). But if education cannot be provided without crippling compound interest, it can be DIY (do it yourself). My great grandfather became an expert in Roman history, among other things, by reading books.
Our twins will be in good colleges for under $10K next year (including living expenses, on average). They ate almost that much at home, so the effective cost is better yet. They could work side jobs and earn their way out if they have to.
If I'd been debt free from my own two degrees, and I could have been saving money for my own kids college. But I'm from the class of 1984.
- President Ronald Reagan turned the Pell Grants into Pell Loans
- Inflation fell to 4%
- Colleges continued to increase tuition by 10-16% per year (!)
My generation was told that debt was rational. That the interest rates were "lower than inflation" and that that was somehow an equivalent of earning money. The result was the first generation to think you could actually make a living off of inflation in the housing market... which led to the 2008 mortgage crisis.
As many in my liberal arts college railed against Reagan and the Pell Grant cuts, I could see that we were just drinking straws, from the federal cup into the colleges' mouths. As long as the government kept filling the punch bowl based on "need" - set by what the colleges charged - it was clear the colleges had little incentive to stop raising fees.
So no big tuition savings for our kids. Instead, they get plenty of advice.
My parents and grandparents advice, as I recall, was all about money more than love, spirit and friendship... at least that's what if felt like listening to their advice, as an 18 year old. What I now know is that loved ones will someday call needing help, and you'll wish you had savings. If you can't help them and wish you could, it's usually due to past decisions about compound interest.
If our kids are the products of our marriage, this is about product stewardship.
6 Pieces of Fatherly Advice About College
1) First things first. They have to know how to work. It's mandatory the kids learn to earn.
Whatever becomes of these college applications, we must first fight back against the a system which teaches 17 year olds that their first major financial life decision is to rationalize college debt.
It was easier for me to find work in Boston during my BU days than it was in Northfield MN (though I managed it there too). I have a better appreciation for urban colleges now, because there are more ways to work. In both places I had a job driving a recycling truck.
2) Ignore the sticker shock. Don't look at the cost of tuition in the application stage. It will be important, but only one component, of the price of the education. At need-blind colleges, the higher the tuition, the more the financial aid. Look at the endowment before you look at the fees.
The more financial aid a college offers, the lower the cost for most of the admitted. Which brings the second economic fact, a cause-effect relationship...
3) The lower the cost, the more applicants. The more applicants, the more +highly selective" the college will be. That boosts the reputation of the college and its choice of students in your classes. It's simple economics.
4) Accept a larger set of application fees - $60-$150 applications. If you are accepted into a smaller and smaller percentage of schools, and there is going to be a standard deviation in financial aid offers of say $2000 (ours approximately), at least half of that deviation should be spent on increasing the number of applications.
Basically, these applications are where your "education savings account" should go. Savings will be subtracted from the financial aid award anyway, so use them to draw more cards (potential admissions offers) from the pile. You aren't applying to more and more schools, you are applying for more financial aid offers.
5) Prepare for a large number of rejection and wait list letters. You are applying predominantly to rich "reach" schools, which attract more applicants (see #2). The more expensive the school (#1), the higher the financial aid offered. The more aid, the more applicants, and the more rejection letters. Suck up and get ready.
It's not your fault you didn't make it into the big school. Your rejection letters show you were smart enough to take a chance with your ego and apply anyway. The international competition for USA colleges makes getting in harder than ever, that's why (#4) you spent so much on applications. More nations have wealth (see NYT on Kuala Lumpur Malaysia residential real estate markets). That's a good thing, it's good for the colleges, and good for the middle tier colleges who will improve, good for the world. Our colleges were overbuilt for a decade and we need a trickle-down to support the middle tier colleges.
6) Harder classes in high school may reduce GPA - do it anyway. Daughter took calculus and physics at the same time, and AP History, and was reading Crime and Punishment. Her GPA suffered, but there's no such thing as "not a math person", I told her. My alma mater (Carleton)'s head of admissions gave me a personal call to tell us the bad news, that Gabrielle wouldn't be admitted, because she didn't have a 4.0 I said "their loss". It wasn't really, as McGill University would still have been our top choice.
Oh yeah, the kids are tri-lingual. They had language immersion since infancy, and did a year of elementary school in France. Language also accrues nicely.
The point is that knowledge accrues the same as savings, and learning as much as you can as early as you can will pay dividends later. The value of whatever she learned would accrues more than the value of a pristin GPA. The GPA has a temporary value, and if she got A+s in calculus, that would be outstanding. But the value of the GPA disappears after the college selection process, the exposure to derivatives does not. Some kids are to be able to take really hard classes and still have a high GPA. But she was a soccer and gymnastics captain and worked (tutored) and has a social life. Those, too, would be experiences that grow and accrue "interest" (she'll be more interesting).
Results: So here's how it went down.
My daughter's inclination was to apply to fewer colleges and not apply to the most selective where she'd "probably" get rejected. I told her that the feeling of "rejection" is fairly brief and doesn't do lasting financial damage, and told her that it's smart to apply to a college that hands out more financial aid. Because that's smart, statistically, she'd get rejected more.
She did apply to more colleges (20), and the additional 13 (above the 7 recommended by her high school guidance counselor) were all "reach" schools she'd likely not get into, but more likely to offer good financial aid. I offered to pay her application fees plus $100 for every rejection letter. (I did not help write her essay, though I read it and gave her some advice. That's probably the way a parent can both help their child get into the college, and also cripple them... see conclusion).
In the end she got into 3 selective schools plus the safety schools, got about 3-4 waitlist letters, and 11 rejection letters (worth $1100 to her from me). She chose an international university with a great world reputation and a low total cost of tuition and fees. The lib arts colleges offered 19-22k in financial aid, much appreciated, but had a worse inflation record, and no prospect for cheaper off campus housing after the first year. McGill has even better prospects for savings in future years if she goes off campus than the liberal arts colleges.
If a computer was running the process, perhaps it would have sent 30-60 applications and gotten a lower cost per year... I don't know and wouldn't recommend obsessing about it. The cost of the application fees and rejection letter (hundred dollar incentives) would eventually outweigh the benefits in deviation between offers, and we aren't computers... that's a lot of essays. I don't know what the standard deviation in school costs are globally, I think the 5k per year or so my daughter saved is pretty good. She might have gotten 8k with 50 applications, but would have paid 2k more in application fees and spent more upaid hours writing essays, and my "rejection letter incentive" would offset the savings... there have to be diminishing returns.
Her brother, the second twin, got into United World College...
Wherever they go, my kids' own spirituality will make the experience. Their own capacity to learn and love will yield fruit twenty-fold, fifty-fold, or one hundred-fold. Other people they will have in classrooms, professors and students, will contribute most to their memories. The colleges and universities will try to "brand" those relationships with alumnus labels and will hold 5 year reunions, etc.
But there is no way to know who the people are, whom you are going to meet. They may be the only thing, after college, you will care about your time there. If they are intellectual, truthful, honest, they are more likely to develop lasting relationships with people of integrity, and be their peer.
Most of the credit goes to the kids who have good grades, good test scores, and are good conversationalists. Mama and I get credit for never buying a Nintendo or XBox or flat TV, and for spending our money taking them on international travel, and spending our home time reinforcing subjects like history, geography, and language which USA high schools are not stupendous at. And we get credit for making them laugh and laugh and laugh when they were babies, which I believe helps grow happy synapses between brain cells that form a pattern that stays with us for our entire lives. Some things took (like foreign language), some didn't (philosophy), but we did what we could and could not do much more.
Those are the types of things that accrue. Good manners, knowledge, habits.
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If I'd been debt free from my own two degrees, and I could have been saving money for my own kids college. But I'm from the class of 1984.
- President Ronald Reagan turned the Pell Grants into Pell Loans
- Inflation fell to 4%
- Colleges continued to increase tuition by 10-16% per year (!)
My generation was told that debt was rational. That the interest rates were "lower than inflation" and that that was somehow an equivalent of earning money. The result was the first generation to think you could actually make a living off of inflation in the housing market... which led to the 2008 mortgage crisis.
As many in my liberal arts college railed against Reagan and the Pell Grant cuts, I could see that we were just drinking straws, from the federal cup into the colleges' mouths. As long as the government kept filling the punch bowl based on "need" - set by what the colleges charged - it was clear the colleges had little incentive to stop raising fees.
So no big tuition savings for our kids. Instead, they get plenty of advice.
My parents and grandparents advice, as I recall, was all about money more than love, spirit and friendship... at least that's what if felt like listening to their advice, as an 18 year old. What I now know is that loved ones will someday call needing help, and you'll wish you had savings. If you can't help them and wish you could, it's usually due to past decisions about compound interest.
If our kids are the products of our marriage, this is about product stewardship.
6 Pieces of Fatherly Advice About College
1) First things first. They have to know how to work. It's mandatory the kids learn to earn.
 |
| My son's first idea of "work" |
It was easier for me to find work in Boston during my BU days than it was in Northfield MN (though I managed it there too). I have a better appreciation for urban colleges now, because there are more ways to work. In both places I had a job driving a recycling truck.
2) Ignore the sticker shock. Don't look at the cost of tuition in the application stage. It will be important, but only one component, of the price of the education. At need-blind colleges, the higher the tuition, the more the financial aid. Look at the endowment before you look at the fees.
The more financial aid a college offers, the lower the cost for most of the admitted. Which brings the second economic fact, a cause-effect relationship...
3) The lower the cost, the more applicants. The more applicants, the more +highly selective" the college will be. That boosts the reputation of the college and its choice of students in your classes. It's simple economics.
 |
| Ignore the sticker shock |
Basically, these applications are where your "education savings account" should go. Savings will be subtracted from the financial aid award anyway, so use them to draw more cards (potential admissions offers) from the pile. You aren't applying to more and more schools, you are applying for more financial aid offers.
5) Prepare for a large number of rejection and wait list letters. You are applying predominantly to rich "reach" schools, which attract more applicants (see #2). The more expensive the school (#1), the higher the financial aid offered. The more aid, the more applicants, and the more rejection letters. Suck up and get ready.
It's not your fault you didn't make it into the big school. Your rejection letters show you were smart enough to take a chance with your ego and apply anyway. The international competition for USA colleges makes getting in harder than ever, that's why (#4) you spent so much on applications. More nations have wealth (see NYT on Kuala Lumpur Malaysia residential real estate markets). That's a good thing, it's good for the colleges, and good for the middle tier colleges who will improve, good for the world. Our colleges were overbuilt for a decade and we need a trickle-down to support the middle tier colleges.
6) Harder classes in high school may reduce GPA - do it anyway. Daughter took calculus and physics at the same time, and AP History, and was reading Crime and Punishment. Her GPA suffered, but there's no such thing as "not a math person", I told her. My alma mater (Carleton)'s head of admissions gave me a personal call to tell us the bad news, that Gabrielle wouldn't be admitted, because she didn't have a 4.0 I said "their loss". It wasn't really, as McGill University would still have been our top choice.
Oh yeah, the kids are tri-lingual. They had language immersion since infancy, and did a year of elementary school in France. Language also accrues nicely.
The point is that knowledge accrues the same as savings, and learning as much as you can as early as you can will pay dividends later. The value of whatever she learned would accrues more than the value of a pristin GPA. The GPA has a temporary value, and if she got A+s in calculus, that would be outstanding. But the value of the GPA disappears after the college selection process, the exposure to derivatives does not. Some kids are to be able to take really hard classes and still have a high GPA. But she was a soccer and gymnastics captain and worked (tutored) and has a social life. Those, too, would be experiences that grow and accrue "interest" (she'll be more interesting).
Results: So here's how it went down.
My daughter's inclination was to apply to fewer colleges and not apply to the most selective where she'd "probably" get rejected. I told her that the feeling of "rejection" is fairly brief and doesn't do lasting financial damage, and told her that it's smart to apply to a college that hands out more financial aid. Because that's smart, statistically, she'd get rejected more.
She did apply to more colleges (20), and the additional 13 (above the 7 recommended by her high school guidance counselor) were all "reach" schools she'd likely not get into, but more likely to offer good financial aid. I offered to pay her application fees plus $100 for every rejection letter. (I did not help write her essay, though I read it and gave her some advice. That's probably the way a parent can both help their child get into the college, and also cripple them... see conclusion).
In the end she got into 3 selective schools plus the safety schools, got about 3-4 waitlist letters, and 11 rejection letters (worth $1100 to her from me). She chose an international university with a great world reputation and a low total cost of tuition and fees. The lib arts colleges offered 19-22k in financial aid, much appreciated, but had a worse inflation record, and no prospect for cheaper off campus housing after the first year. McGill has even better prospects for savings in future years if she goes off campus than the liberal arts colleges.
If a computer was running the process, perhaps it would have sent 30-60 applications and gotten a lower cost per year... I don't know and wouldn't recommend obsessing about it. The cost of the application fees and rejection letter (hundred dollar incentives) would eventually outweigh the benefits in deviation between offers, and we aren't computers... that's a lot of essays. I don't know what the standard deviation in school costs are globally, I think the 5k per year or so my daughter saved is pretty good. She might have gotten 8k with 50 applications, but would have paid 2k more in application fees and spent more upaid hours writing essays, and my "rejection letter incentive" would offset the savings... there have to be diminishing returns.
Her brother, the second twin, got into United World College...
Wherever they go, my kids' own spirituality will make the experience. Their own capacity to learn and love will yield fruit twenty-fold, fifty-fold, or one hundred-fold. Other people they will have in classrooms, professors and students, will contribute most to their memories. The colleges and universities will try to "brand" those relationships with alumnus labels and will hold 5 year reunions, etc.
But there is no way to know who the people are, whom you are going to meet. They may be the only thing, after college, you will care about your time there. If they are intellectual, truthful, honest, they are more likely to develop lasting relationships with people of integrity, and be their peer.
Most of the credit goes to the kids who have good grades, good test scores, and are good conversationalists. Mama and I get credit for never buying a Nintendo or XBox or flat TV, and for spending our money taking them on international travel, and spending our home time reinforcing subjects like history, geography, and language which USA high schools are not stupendous at. And we get credit for making them laugh and laugh and laugh when they were babies, which I believe helps grow happy synapses between brain cells that form a pattern that stays with us for our entire lives. Some things took (like foreign language), some didn't (philosophy), but we did what we could and could not do much more.
Those are the types of things that accrue. Good manners, knowledge, habits.
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