“You have brains in your head. You have feet in your shoes. You can steer yourself in any direction you choose. You’re on your own. And you know what you know. And YOU are the one who’ll decide where to go.”
– Dr. Seuss, “Oh, The Places You’ll Go”
This Thursday, May 1, is “College Decision Day,” the day that most high school seniors who have been accepted into one or more colleges are expected to choose the one they plan to attend.
In case you are one of those anxious, aspiring students, or the parent, family member or friend of one of them sharing in the big decision, let me offer this advice: No one has to go into big debt to get a good education, earn a college degree, and have a rewarding career in Massachusetts.
Despite the pressure you may be feeling to “match” to the best possible school on your list, and your expectation that if you do, you will be much better off in your life and career, for most people, just going to college matters more than which college you go to.
And, depending on your circumstances, choosing a selective, high-priced college for its prestige and ivy-covered walls may leave you deep in debt, putting off major life decisions like getting married, starting a family, and buying a home; and struggling with chronic stress while working alongside others in similar jobs who chose different, more affordable paths to their college degrees.
Here is a common example of what to avoid, followed by some suggestions for what you might do instead:
Congratulations! You applied to seven colleges, including a balance of “safety”, “target” and “stretch” schools, and were admitted to all of them. That’s huge, and you should feel proud of your accomplishment.
You decide to shoot for the stars on May 1 and accept your admission to your “stretch” school, a moderately selective private university with an annual cost of $75,000 for tuition, fees, room and board (not at all unusual, in Massachusetts, where nearly 20 colleges now cost over $80,000 a year and two just topped $100,000).
We’ll assume you take at least five classes each semester, study hard, get good grades, don’t change your major, and graduate in four years (even though, according to the National Center for Education Statistics, only about 41% of students complete their bachelor’s degrees in that time).
That’s a total of $300,000 (not accounting for annual tuition increases, which will happen).
Your family earns the Massachusetts median annual income of $101,000, so you do not qualify for a Pell Grant (only about a third of college students do), which would have shaved up to $7,400 a year off that price tag.
Thankfully, though, you are one of the 35% of American families sending kids to college who have a 529 savings plan, where you have accumulated the average amount of $30,000. Well done!
On top of that, the university has offered you a $20,000 merit scholarship that is good for “up to” four years—wow, that’s huge!
Or is it?
Please read the fine print. Watch for requirements (like maintaining a minimum grade point average, taking a certain number of credits each semester, and other academic or conduct requirements) that could cause you to lose that scholarship unexpectedly, and especially find out what “up to” four years means, since many merit scholarships are not automatically renewable, are only available for the first year or two, or fluctuate based on class size.
Let’s say you get the full monte: $80K!
Congratulations: Between your 529 plan savings and your merit scholarship you just whittled down the total amount of your college education to “only” $190,000.
Of course, you’re energetic and ambitious, so you’re planning to work a part-time job while taking classes. While the average college student, according to ZipRecruiter, earns $17 an hour, you’re so good at what you do, you actually rake in $20 an hour and work twenty hours a week (makes the math easier anyway) and bring home $20,000 a year ($80,000 for all four).
Just to keep things simple, we’ll assume every last cent of that goes to your college expenses (it won’t since you’ll have a modest amount of taxes to pay, will likely want to eat something other than dorm food once in a while, and may want to go bowling or catch a movie on the weekends).
Way to go! You have now reduced your total bill down to $110,000, for which you have decided to take out student loans.
Since the maximum amount of federal student loans you can have is $31,000, you will need to take $79,000 in private loans. On top of figuring that out, some of your federal loans will be “subsidized” and some will be “unsubsidized” which will affect how much interest you pay and when you pay it, but to keep things simple, let’s just say you’ll pay a flat 7% interest rate (the average across all types of loans right now) on the total amount of your loans over ten years (the standard repayment time).
Assuming that working that part-time job on top of taking at least five classes a semester (so you graduate on time and maintain your merit scholarship) doesn’t completely exhaust you (about a third of all college students drop out each year), you’ll collect your diploma on commencement day, along with a letter from your student loan servicer (Probably Navient and Sallie Mae if you have a combination of federally subsidized and private loans) telling you it’s time to start paying for that education you just received.
Your $110,000 loan at 7% interest over ten years will cost you nearly $1,300 a month (and you will end up paying back over $150,000).
A standard rule of thumb for student loan borrowers is that your repayment should not be more than 10% of your gross salary, to leave room for living expenses and other financial goals.
So, as long as you are making at least $130K a year, you should be fine.
Except, the average college graduate, according to Bankrate, is expected to earn $68,680 in 2025, and even engineers, the highest paying profession right out of school, will be starting at $78,731 (I stopped rounding off because at this point, as you can see, every dollar is starting to matter).
You will be paying nearly 20% of your salary, double the recommended amount, toward your student loans, leaving you strapped for cash and probably wracked with stress.
And this has all been the best-case scenario: It assumes you have money saved in a 529 plan, a reasonable merit scholarship every year, a part-time job at a good wage, you graduate on time, and live like a monk (no car, no gym membership, no Door Dash, no nothing) and only leave your dorm to go to class.
There are better ways, including:
- Early College: Chances are, your high school is working with one or more colleges to provide “dual enrollment” classes that will provide you with college credits toward your future degree. More than sixty high schools in Massachusetts now have state support for these programs, making them free to students, and dozens more have created agreements with their local community colleges and state universities so students can earn a year’s worth of credits or even an entire associate degree while they are still in high school.
- Free Community College: Massachusetts now has two programs, MassReconnect and MassEducate, that provide free tuition and fees at all fifteen of the state’s community colleges, plus an allowance for books and supplies based on income level, cutting the cost of that bachelor’s degree (wherever you end up getting it) in half.
- Go Public: While Massachusetts has some of the best-known private colleges and universities in the world, we are also home to nine public state universities and four University of Massachusetts campuses, and all of them offer a high-quality education leading to rewarding careers at a fraction of the price of many selective private institutions. In addition, tuition is free at UMass for families earning $75,000 or less a year, and even if your family earns up to $100,000 the MASSGrant Plus program can cut the cost of attending any state university or UMass campus in half.
- Transfer: More than half of all Americans who have earned bachelor’s degrees over the last thirty years have attended two or more colleges on the way to their diplomas. Join the crowd! The MassTransfer program offers roadmaps for starting at the state’s community colleges and transferring to a state university or to UMass that guarantee your credits will go with you and save you money on the way.
And if you still want to go to that selective, private, “stretch” college that accepted you this year, chances are pretty good, because of increased competition for fewer students these days, they will still be eager to welcome you as a transfer student, possibly even with extra scholarship opportunities. You’ll end up with the same ivy-imprinted diploma, but a lot less (or maybe even no) debt.
Attending college for most people is a life-changing experience, leading to self-discovery, knowledge and skills, new friendships, broadened horizons, and better-paying, rewarding careers.
This College Decision Day, make the best choice for yourself that will get you set without the debt.
