It’s not really a $240K differential, as the Tulane scholarship is full tuition, not full ride. So there will still about around 20K/year out-of-pocket, and the difference between the schools will be around 40K/year.
That said… $160K total is a lot of money that could come in very, very handy when it’s time to pay for law school, or buy a home, or whatever. Also, I think the full-tuition merit must be a named scholarship, which will be an ongoing feather in the resume cap. And Tulane is an excellent school with a strong reputation in the majors of interest. They have a Semester In DC program as well, so there’s still a DC experience on offer.
I’d have a hard time making an argument that the student is likely to squeeze $160K more value out of Georgetown than Tulane, for undergrad history and/or poli sci. As already noted, Gtown Law will still be there! If Gtown is manageable without undergrad debt, it’s a matter of weighing what the difference is worth, and that’s a very subjective assessment. If it’s really a matter of taking on debt before even reaching the grad school stage, I’d go with the debt-free choice.
Have you or your child broken down what their monthly payment would be on that loan? It could easily be $1,500+. If she wants to go to law school, she will likely have another similar-sized loan.
I could not in good conscience ever advise my child to be in that position financially.
Edited to add: My older child has a full-tuition scholarship to college. It has been the biggest gift for us and for her. She is graduating and pursuing her passion, which may or may not work out financially. She has the freedom to make thoughtful decisions, to choose the best job for herself, and to give herself the gift of time because she never has to worry about being strapped with a big monthly nut. If this path doesn’t work out, she can change course because she wants to try something different, not because she has to in order to keep the bill collectors away. She may go to law school, and she will feel confident in doing it because she won’t be below water financially. It was a gift to our family, too. We didn’t sacrifice our retirement or our sanity for her to get through school.
I don’t want to speak for the OP but I think it is a $240k differential. The $60k quoted for Georgetown is likely the cost for tuition only. Cost of living might be higher in DC than in New Orleans but, unless Georgetown also offered a scholarship, then $60k x 4yrs = $240k.
Hmm, maybe you’re right. I read it that $60K was the cost of attendance after need-based aid. OP may want to clarify… although Gtown seems like a big financial limb to go out on, even under the best-case assumptions.
I would choose Tulane. She can do internships in DC.
It seems to me that huge loans are necessary in order to attend Gtown. You will also need loans to pay for law school- the exact amount will vary depending on the school.
I would not want my child (or me) to have to pay back $160,000-$240,000 for undergrad….plus the cost of law school (if she goes)? That’s a lot to pay back! What kind of law might she want to practice?
If she doesn’t go to law school she will still have these loans to pay…at an entry level salary. If she goes for a PhD she can defer the loans, but interest will still accrue (I think) and she will eventually have to pay them back….on a salary that will likely be on the lower side. Also keep in mind that professor jobs are hard to find.
A named scholarship at Tulane will allow her the freedom to do all kinds of things. If loans are not necessary….I would let her choose.
First of all @BigU, let me start off on congratulating child & parent for this amazing accomplishment! Getting to this level of dilemma takes years of diligence and concentration. Please always cherish what you’ve all achieved here. This academic Sophie’s Choice is like a spiritual trophy in the family room - it’s a wonderful, big deal that you’ve gotten to this point.
Accolades aside, I’ll add that the real-world value difference between Tulane and Georgetown is not $240,000, especially for someone not seeking work in finance/consulting/corporate law. That’s a considerable amount to make up. Of course, the next history major who switches to econ/business during their initial months at school won’t be the first.
Yes, Georgetown is extremely prestigious, but Tulane (as much as I don’t love their EA/ED gamesmanship) enjoys a very, very, robust post-grad network.
another vote for Tulane. I’m a fan of Tulane in general and remember the kids there seemed super happy and engaged when we visited, but for free tuition that’s hard to beat. as someone else noted, to me the only time the big prestige schools are worth the cost is when the goal is wall street and banking and that stuff.
if the goal is grad school or law school, tulane will not hold you back at all.
and for sure your kid will have a great cohort of smart friends at both places.
So, both of you have good points. After everything is said and done (Tuition+ Room/Board) TU will cost around $15K per year and GU will be $60K per year. This is a delta of $180 total, which would be a loan.
So there was some amount of merit awarded at Georgetown?
Every financial situation is different but if your daughter is firm in her career path and that’s going to require Grad/Law school you have to ask the question if the investment in Georgetown is going to lead to entry to a “better” Grad/Law program than would otherwise be available to her from Tulane. And that “better” would need to lead to an occupation that pays SUBSTANTIALLY more to justify it.
Her ability to get into both of these schools shows that she’s likely to excel in either program.
You will have to borrow that money with interest. How much is that going to eat into your retirement funds? Will your daughter also be taking out the maximum fed student loans? If so, that will be a lot of debt for her to be starting her working life with.
I personally wouldn’t take out that much in loans. Tulane is a great school. A full tuition scholarship is hard to say no to.
One of my s’s went to Tulane on a full tuition and national merit scholarship. He got a fine education and met his wife there. And the history department is excellent there too. If you didn’t have to take out loans you could afford to be choosy. But if she is considering law school too, unless it’s a small loan amount, why would you?
To me that’s a non-starter, as most of those loans will be on the parents either directly or as a co-signer (most students can only take out $27K federal direct student loans during undergrad). Then, if you are talking law school or grad debt on top of that? That could impact how long parents have to work/retirement plan, their credit rating/ability to get loans for other things like a mortgage or car loan, etc.
Current parent plus loan rate is 8.05% with a 4.228% vig. You may be able to get a private loan at a lower rate, depends on your credit history and current debt load.
I always suggest a thought experiment- work through one of the many online loan calculators.
Then take a look at the monthly payment on the loan-- Yours, your daughters.
If it were that easy for you to set aside that much money every month (EVERY single month) wouldn’t you have done it already? And then folks tell me- yes, we were on a savings plan. But the muffler fell off the car just as it came off warranty. Do you think mufflers magically stay on because you are paying off college loans? No they do not. Or there was emergency dental work not covered under your plan. Do you think you will not need another root canal just because you are paying off college loans? Leaky roof, refrigerator dies one day and you come home from work to melted ice cream all over the kitchen floor- these are the day in, day out reasons why it is hard to save a few thousand dollars every month in the 18 years leading up to your kid going to college.
But these reasons don’t go away once she’s IN college!
And then folks tell me- no, my kid is going to assume the Parent Plus loans.
Then it’s an even easier calculation. Does your D plan to move back home, take the bus, eat nutritious dinners of black beans and rice every night so that her entire paycheck can go towards paying off the loans? No? There’s your answer.
Paying full freight even if you have a full tuition scholarship is a choice that many people make. But those are people with the luxury of writing a check after cashing out a bond fund, or tapping into their money market account.
Just to be clear on this for people new to college loan financing…there is no mechanism to transfer parent plus loans to the student in the federal system. Obviously no way to ‘make’ the student take these payments over either.
Parent plus loans can be refinanced in the private market, so the kid could do that, but many young people are still a long way from qualifying for $180K in private loans shortly after undergrad/law school/grad school.
Thank you for clarifying. I meant that we often see people on CC explain that the loans won’t be burdensome because their kid intends to pay them off/pay the parents back. And I’m pointing out that the likelihood of a new grad being able to make payments on such a heavy debt level is very close to zero.
Appreciate your fact-checking me!
I’ve gotten somewhat nasty PM’s asking “Why would they even have Parent Plus loans if they are as awful as you claim”. I’ve never claimed they were awful. And for some families they make good sense. Parent A works in startup which is in the process of going public. So they can’t put their hands on cash today-- but can easily pay off the loan for freshman year in one go once the “event” happens, and will be able to cashflow the next three years. Parent B is an heir to an estate which is now in probate. It will take time to settle, but once some real estate is sold, Parent B will be inheriting X which will pay off the Parent Plus loans in full with half a million in play money besides.
If someone is using Parent Plus loans as a handy means of liquidity because they are faster and require less hassle than some of their other options- terrific. If someone is using them because they were unable to save enough money over the last 18 years-- but believe that they WILL be able to scrimp and save their way to pay them off NOW- no, it rarely works that way.
Before I read this comment, I assumed that your “loans” comment was in response to how grad school would be paid for. If it’s for undergrad, it’s totally a no-brainer to me. Others have detailed more about the costs of loans, so I won’t go there. I will say that if it was a matter of going to Georgetown for $180k in loans compared to going to any accredited, nonprofit 4-year college with no loans, we’d be going with the other college.
Thankfully for your family, Tulane is a very good school. There are lots of resources for history majors in the city, there is a lot of flexibility to switch majors at Tulane should your D’s interests change, and getting a named scholarship is highly likely to provide a number of other benefits, too.
My two cents as someone who took loans for undergrad. Until you are paying money back every month, you have no idea how it will feel.
I vividly remember writing those checks (dating myself here) and realizing that I was paying 4x as much as I had borrowed to pay for the stale, off brand Lucky Charms I’d eaten for 4 years at the dining hall. Hated writing those checks every month, and had my own Scarlett O’Hara moment of, “As God as my witness, I’ll never allow my children to take out loans for school”.
Tulane is a great school, and honestly imo - no school is worth $180k of loans.