How should I think about college debt?
Four years ago, my wife and I decided we were ready to start a family. As we prepared to see our lives turned upside down, we realized that our current home was no longer adequate. In our new home, we wanted affordability so we could continue to prioritize giving, service, and experiences; a safe but stimulating environment; and various neighbors who would become lifelong friends.
A few days after moving, we learned that we were pregnant. As a higher education administrator, it didn’t take long before I started thinking about my son’s education – daycare, elementary and secondary school, even college.
We opened an education savings account and discussed its future: we wanted top-notch learning that didn’t hamper its (and our) ability to give, serve, or experience; a safe study environment that encouraged him to take big risks; and access to lifelong friends and mentors who reflected Christ. We soon realized that a common philosophy guided both our home buying and our investments in education.
Worth the investment
I often hear families of prospective students say they are looking for the cheapest school in order to help their student avoid crippling debt. As a parent, I totally understand that. But I remind them to make their decision based on value, not cost.
As Christians, we understand vocation differently from the world. A vocation is not only a diploma or a salary, it is our life. In response, we should pursue learning that reflects and prepares students for fully integrated lives, both as world-changing engineers or epidemiologists and as spouses, parents, deacons and football coaches for young people transforming the community.
I remind parents and students to make their decision based on value, not cost.
Like a home, a quality education will also increase in value. Our students will acquire foundational skills and worldviews that will prepare them to navigate their ever-changing environment and profession. They will cultivate a network of lifelong relationships that will only grow richer after graduation. Above all, they will engage in an ecosystem that prioritizes Christ over all things.
However, just as a financial adviser will encourage you to avoid overstretching your portfolio on a house and becoming “home poor”, we should avoid becoming “college poor”. If paying back our loans prohibits us or our children from paying tithing, stresses our relationships, or prevents us from responding to God’s call, it’s probably not a responsible investment.
So how should we react to price tags that rival our salaries?
Discounts on tuition fees
It is important to understand that most colleges, unlike real estate, operate on a discount model. In other words, the college typically determines an average targeted tuition discount (30% to 70% at many schools) and then prioritizes the discount based on the number and profile of students that he wishes to register.
Discounts come from college and extracurricular scholarships, provisions for financial need, and many other avenues. Some states offer grants that encourage students to stay in the state and make private college prices more comparable to public universities. My advice: Apply to schools that appeal to your family, then work closely with their admissions and financial aid offices.
Interestingly, sticker prices are often the worst predictor of future student debt. Instead, research on-time graduation rates, retention and graduation rates, and career outcome rates to predict future financial burden. Here are some additional recommendations for families looking for an affordable Christian education:
Be intentional. Students are increasingly coming to college with limited occupational exposure. The more students understand their career options, the more likely they are to have confidence in their career choice, graduate on time, and receive major-specific scholarships. So start creating meaningful experiences early – spend a Saturday serving alongside a pantry manager or attend a presentation from naturalists on habitat restoration. As a family, discuss these experiences and the importance of the work of these image bearers. Also, pro tip: your church is a great place to start identifying people to shadow.
Encourage and model the quality of work. Your parents may have told you: “When I was your age, I paid for my studies by working in the summer. It was probably unrealistic for you, and it’s almost certainly impossible for your children. But current economic conditions have created an opportunity – compared to last year, students are likely earning 50% more every hour, while college costs have only risen 3% to 5% over the same period. Additionally, many colleges, including my own, have started expanded work programs for students who want to fund more of their education through employment.
Develop a game plan. Years ago, some high school students aimlessly racked up college credit only to find that basket weaving wasn’t necessary for a computer science degree. These days, strategic course planning can optimize your child’s college experience and help them graduate on time or sooner.
Crunch the numbers. Include your child in your family financial stewardship and tithing practices, helping them understand real-life expenses (housing, childcare, entertainment, etc.) and teaching them about opportunity costs, the beginnings and the return on investment. During their senior year of high school, sit down as a family to determine how much debt you and your child are willing to take on. Consider future earnings (many colleges track their graduates’ initial career outcomes by major) and plan for living expenses. If the award is still out of reach after you receive the financial aid award letter, do not reject it immediately. First, speak with that school’s admissions team — they may have creative solutions to cut costs, including graduating early, a premium job on campus, or enrolling in alternative financing opportunities.
My wife and I have been owners for eight years. It was a greater blessing than we ever imagined, but it wasn’t always clear that we had made the best decision; after all, we had to sell our second car to pay the down payment.
With the clarity of hindsight, I can now see the immense growth our home has created – for the community we have developed, for the financial equity we have gained, and for the opportunities for engagement it has created. facilitated. I expect to be able to say the same about my children’s education.