During the coronavirus crisis, I am answering a question every weekend day posed by parents on my newsletter list.
You’ll find the latest Q&A below. I hope you can benefit from it! Lynn O’Shaughnessy
Question from an Indiana mom:
Our senior has been accepted to University of California, San Diego, which is her top choice as an out-of-state public university.
She also got into her back-up, in-state school. The in-state school is Indiana University with a direct admit to Hutton Honors College, Kelley School of Business and a Provost Scholarship of $8,000 per year.
We do not qualify for financial aid and would have to take out student loans to complete her undergraduate degree at UCSD.
Currently she has enough funds in a 529 plan to pay for in-state tuition with funds leftover for graduate school. Should we try to appeal for reduced tuition from UCSD?
Currently her major is psychology with the thought of becoming a psychologist. She is longing to get out of the Midwest and live near the ocean
As far as I’m concerned, the answer to this question is simple:
Attend Indiana University!!
UCSD’s cost of attendance for non-residents is $61,295 for the current year. (UCSD’s nonresident price for the 2020-2021 school year is not available yet.)
This family could end up paying $250,000 for a bachelor’s degree in psychology from UCSD.
Now let’s contrast that with what this household would pay for Indiana University in Bloomington. Subtracting the $8,000 annual scholarship from the sticker price of $24,417 for the 2020-2021 would bring the four-year tab to roughly $66,000.
My own question is this:
Is attending college in sunny San Diego (where I’ve been a resident for nearly 30 years) really worth paying $184,000 more for a bachelor’s degree?
The fact that I even have to ask that question illustrates how emotional the college selection process is. And how irrational it can be.
I think the choice in this instance is a clear one.
By choosing Indiana U., the parents can save a huge amount of money that can be used, if they wish, to help their child with graduate school.
If this teenager hopes to become a psychologist, she will need graduate school.
Saying no to a dream school
I’d urge anyone who is considering over paying for their child’s dream school to read this success story of parents who refused to spend the money.
The parents vetoed their daughter’s desire to attend Northwestern at full cost (they didn’t qualify for financial aid) and instead the urged her daughter to attend University of Pittsburgh where she received a large merit scholarship.
What’s cool about this story is that the dad gave me updates while the daughter was thriving at Pitt.
She ultimately had lots of graduate school choices. She is currently at Oxford University and the money the parent saved for the bachelor’s degree is being used for her graduate studies.
Squeezing more money from UCSD?
Asking UCSD for a price break won’t work. Unlike plenty of college, UCSD doesn’t have to offer a price break to an affluent student whether they live in California or not.
Only 1% of freshmen at UCSD receive a merit scholarship.
The dearth of merit scholarships is typical of the University of California campuses.
Admirably, the UCs want to devote their aid to students who need it. That is actually a rare position among the nation’s public universities.
Over the years, merit scholarships have been exploding at state universities across the nation. And I should add, this is happening at the expense of students who actually need financial help.
You can learn all about this phenomenon by reading this excellent report by Stephen Burd, a phenomenal higher-ed journalist and researcher, who is at the New American Foundation.
Why are the UCs so expensive for nonresidents?
UCSD, UC Berkeley and UCLA are always among the nation’s most expensive state universities for outsiders because these schools can attract nonresidents due to their brand name. Enough high-income families are willing to pay a high price for a brand name.
The UCs recruit affluent nonresidents to come to their campuses so they can charge them extremely high tuition to underwrite their operations.
Does where you attend college matter?
By the way, there is absolutely no reason to think that UCSD will be a better school than Indiana University!!
Research strongly suggests that what’s most important is not where you go to college, but whether you make the most of your time at wherever you land.
Here’s a blog post I wrote about this phenomenon
Save your money and come out to San Diego for a vacation. We can meet up when you are here and you could tell me how it turned out!
Especially during this scary time, it is absolutely crucial that you become a smart consumer as you weight your college choices. You can do that and ultimately save tens of thousands of dollars or more by enrolling in my online course, the College Cost Lab.
You can learn more here.