Guidance counselor talking to a teenager. Photo courtesy of Shutterstock.

Posted January 09, 2019 by

What colleges don’t want high school students and parents to consider during the application process

A friend of mine recently posted to Facebook that the guidance counselor at the high school her kids attend recently indicated that “most” colleges require at least three years of a second language in order to consider the student for possible admission. I called b.s. on that statement and then outlined some additional information that high school guidance counselors and college admissions representatives often either don’t know or, for whatever reason, often fail to communicate:

I know you and I are on the same page, but the guidance counselor is providing terrible guidance and needs to be more careful about accurately guiding her students. 

There are 8 Ivy League schools. There are 3,000, four-year colleges. There are another 4,300 one- and two-year colleges. 

Ivys represent 0.267 percent of four-year colleges. Hardly representative.

More important words of advice: Talk openly and honestly with your kids about the financial impact of college. 

Here is the reality: if a family is wealthy and can pay out of pocket — including savings — then the cost isn’t as important. 

For the other 95% who will require financial aid, almost none get enough grant or scholarship money to pay for even most of their schooling. Most get some, but not nearly enough. The schools deliberately mislead families about this by touting the percentage who get aid and coupling that with stories of the kids who get free rides. Families then infer those stories are representative. They’re not. 

The vast majority borrow money. Unlike college loans taken out by Gen X’ers and Boomers, the loans available to Gen Z’ers are mostly high interest and often interest accumulates immediately. Some even require repayment starting immediately. 

Student loans have the lowest risk of all loans to the lender and yet a common interest rate is 8-9 percent, which is more than double the higher risk home mortgage interest rate. Where does the excess go? As a wealth redistribution from students and their families to higher education and financial services. 

A key strategy that pushy parents and ill-informed guidance counselors often don’t communicate: do not enroll at your dream school. It will likely be a stretch school, meaning that you will be one of the least qualified to be admitted. Their stress will be high, grades low, and merit-based aid little to nothing.

If your kids get into a good school and get a typical amount of need- and merit-based, free money, figure $40,000 per year per kid, so $160,000 per kid. A family of two kids then has $320,000 of high interest, non-dischargeable debt. A typical re-payment schedule is 20 years. At 8% interest, that’s almost $2,700 per month. Pre-tax that’s about $4,000, which is $48,000 per year. Average salary for grads is $46,000. 

Another key strategy: foreign schools or at least starting at a two-year school. Many schools in Europe are either free or only a couple of thousand dollars a year. If your kids are Canadian, tuition is about $2,500 to $4,000 per year. 

If your kids understand the financial devastation they or you will incur and they care about their and your future, they will be more likely to push for financially responsible choices.

 

Print Friendly, PDF & Email

Posted in Advice for Candidates, Alternative career paths, Applying, Career Advice, Choosing a School, Economic Indicators, Gen Z, High School, International, Paying for School, Salaries and Compensation, Saving for College, Scholarships, Student Loans | Tagged Tagged , , , , , , ,