Boarding School vs. College Savings Fund

D_yer_Maker
Tue, 20 Mar 2012 07:53:20 +0000

Even if your son is only interested in colleges that are very aggressive about awarding financial aid, there’s still a component of savings toward college that’s assumed has been taking place. In a way, you’re very possibly limiting his college options by spending those savings now, to pay for an experience that – at least in part – is geared toward expanding his options and opportunities. If you’ would spend that money on other things and not sock it away for college, then you’re doing him a favor (in terms of college matriculation) by spending it on boarding school. But if you’re going to take that money and stick it away in a college savings account and keep it there, unmolested by anyone other than the investment bankers, his college opportunities may be expanded by your improved financial means. Of course this depends on what sort of situation he is in if your turn back on the boarding school path. One of the big lessons I learned going through the college admission process was how savings don’t kill you in the financial aid game…but the lack of savings is very likely to throw up barriers to many colleges (mostly private, of course). If you’ve got a decent income, they’re going to assume that you can pay partly from loans (although some colleges try to take a “no loan” approach to financial aid), partly from savings, and partly from current income. If you can’t tap into alternative sources – larger loans, grandparents, that account in Grand Cayman you forgot to disclose and just remembered, the Powerball coming through for you – the colleges that assume you’ve been saving for college will not be financially viable options.

Full-pay or even good saving habits don’t necessarily get an admissions bump in a world where admissions is often need-blind – but the financially viable options (which are the only options you care about, right?) are significantly better for full-payors and good-savers. If you’re not at – or close to – the income levels that qualify you for full aid, you will very likely need to tap into savings for a private college. So there’s a definite trade-off.

I should point out that boarding school is not simply a vehicle for improving college admissions. You presumably have identified other benefits beyond that. The son who applies to college from boarding school and the son who applies to college from your alternative-of-choice will not be the same person. They are two hypothetical people and they are going to be bringing different things to the college admissions table. And, looking further, they’ll be different hypothetical people long after college, too. It becomes a choice as to when and where you want to sink that savings in terms of how it will best work out for your family. I can’t even begin to dream up the complex decision matrix this would entail…but I definitely want to confirm that spending that savings now to bankroll boarding school is going to have downstream consequences and create some restrictions and barriers if private college is in the plan for your son.