Costs vs. Public: Is it worth it?

hyeonjlee
Tue, 27 Mar 2012 22:06:41 +0000

you need to have this discussion with your parents.

Here is my take.

If your family can afford it without much hardship, then it’s a question of what you value.

As for me (as a parent), I was willing to send my kid to U Chicago as a full pay when he had a full ride offer from another school that also has an excellent reputation. But we were not taking any loan for this either on our part or on his part. It just meant that we would have that much less money for our retirement. Note:we are not gazillionaires, but we are also OK without that money for retirement: it just means that we won’t do certain things.

If you need to take the loan out for this difference, I would say no. Here are the reasons:

(1) First of all, UCLA is a very good school. It’s not like you are choosing between U Chicago vs. Podunk U. You won’t be terribly disadvantaged career wise.

(2) Granted, there are many advantages of U Chicago over UCLA. However, weigh this with the idea of starting your young adult life with well over $100K in debt. That will be a mill stone around your neck. Granted, if you go to a Wall Street bank and immediately get paid $100K a year, perhaps you could pay off this debt soon enough. But you don’t know that. Even if you think that’s the career path you are interested in right now, you are only 17 or 18. Many kids changes their major and career goals while in college.

What if you embark on a career that is very meaningful to you but does not pay well? You will be paying this debt FOREVER. Imagine not being able to afford any vacation. Imagine not being able to go out with your friends for dinner and a show. Imagine not being able to buy a house when you are ready to settle down.

What if you decide to go to a post graduate professional school (law, medicine, MBA). These programs are more or less full pay, and very expensive. Now, you are starting your adult life with $300K in debt. Whoa- you are a slave to the bank now for decades.

You may have to work seriously while you are going to school. Another stress point.

Under this circumstance, if I were your parent, and I can’t afford to take out the loan, I would seriously discourage you from taking this loan on your own for the reasons described above. Chicago’s life of the mind education is good, but not good enough to become an indentured slave at the age of 22.

I am saying this as a parent who feels investment in my son’s education was the best money I ever spent. But, again, we did not have to run the risk of taking on an unmanageable loan for ourselves or watch out son do it.

Good luck.