As you’re weighing where to attend college, you may wonder: Is going to an expensive college worth it? The class of 2019 graduated with an average debt of $29,900 is already daunting, so the prospect of an even higher price tag deserves careful consideration.
Depending on your situation, an expensive college, such as an Ivy League, could give you access to powerful alumni networks and end up boosting your earning power. On the flipside, you may be saddled with an even heavier debt burden.
If you’re considering a relatively pricey school, here are four things to consider before making a decision:
The first step in deciding whether an expensive college is worth it is to take a look at your total costs. In addition to college tuition, you’ll need to look at other costs associated with college, including books, living expenses and transportation.
According to the College Board, private, nonprofit four-year schools cost $36,880 per year on average for 2019-2020 — and that’s just tuition and fees. Compare that to a public four-year college with in-state tuition, where the average cost is $10,440.
Even with a high sticker price, it might still be worth going to an Ivy League school. In some ways, the value of college education also depends on what you do with it.
“Ivy Leagues are very proud of their alumni networks,” said Lindsey Conger, a college counselor at Moon Prep. “Students can tap into this network to find a job or internship.”
It’s fairly common for graduates of Ivy League schools to help each other, and this could lead to a better job out of the gate. Plus, many prestigious schools have name recognition that companies might be impressed by when looking for candidates, Conger pointed out.
“Graduating from a prestigious school gets your resume looked at a second time in many cases,” Conger said. “Some companies, like Goldman Sachs, Morgan Stanley and Citigroup, recruit heavily from [the University of Pennsylvania] to help fill entry-level positions.”
There is the possibility that your future earning potential could be impacted by attending a top school. When deciding if it’s worth going to an Ivy League school, you might be surprised at the reports.
For example, Georgetown’s Center on Education and the Workforce (CEW) offers a handy ranking that looks at your return on investment depending on the school you attend. Harvard, for example, ranks eighth when it comes to 20-year return on value for attendance.
However, the school you attend might impact your earning power based on specialty. The two schools that offer the best return on investment 20 years down the road, according to CEW, are the St. Louis College of Pharmacy in Missouri and the Albany College of Pharmacy and Health Sciences in New York.
The top five schools in CEW’s rankings at the 20-year return level are all private schools. If you want a better return within 10 years though, the top four schools are all public — and three of them are focused on nursing programs.
If you end up needing to refinance your student loans, a higher earning potential can make a difference later.
You should also ask yourself what the more expensive college offers that other schools you’re considering don’t. Will you get access to world-class research facilities? Is there a certain program that you’re looking at that isn’t available elsewhere?
When weighing whether it’s worth going into debt for college — particularly if private colleges are worth it — you need to consider if there’s something extra that makes the cost a price worth paying. This is particularly true if you decide you need private student loans to close the funding gap.
School choice seems to matter more for some majors than others, said Conger, citing research from Brigham Young University and San Diego State University.
“Business majors who attended prestigious schools earned 12% more than their counterparts at lower-ranked schools,” said Conger. “However, the same study found that for science majors graduating from top schools don’t see a statistically significant earning difference compared to middle-of-the-pack schools.”
Basically, unless your school has some sort of secret sauce for your major, or there’s some other compelling reason to attend, the value of a college education at an expensive school might not be worth enough to justify the cost difference.
There are benefits of attending a top university, especially if you have a certain major. In addition to networking opportunities and potential career path benefits, Conger pointed out that, on average, prestigious universities spend more on each student. She also noted that students at top universities often have access to top researchers and education, as well as state-of-the-art facilities.
However, even though there are potential benefits of attending a top university, there might be other factors to consider before you borrow a large amount of money to attend.
“If the extra cost to attend a more prestigious school is going to require a student to take on a heavy debt burden, it might not be worth it,” said Debbie Schwartz, a college preparation expert and founder of the website Road2College. “Studies have shown that getting accepted to a prestigious school is the more important factor in success, not necessarily attending and graduating from that school.”
If you decide an expensive college is worth it, it’s important to make sure that you take full advantage of the opportunity. “Build relationships with professors and students throughout and reach out to alumni,” Schwartz said. “Participate in clubs and activities. If you’re paying more for the prestige, you should take advantage of it.”
The right way to choose a college for you is to consider multiple factors, rather than just relying on whether the school is prestigious. Some factors to consider include:
- Graduation rate
- Job placement
- Alumni network
- Educational opportunities
- Program rankings
Don’t forget to consider your major as well. According to research from economist Doug Webber at Temple University, your chosen major actually matters more than the school you attend. While you might see a bit of a premium by attending a more expensive college, ultimately it might make more sense to pay attention to whether the college you choose has a good program in a major likely to offer a higher return.
Webber’s research indicates that a bachelor’s degree in chemical engineering is likely to provide about $1 million more in lifetime earnings than a bachelor’s degree in advertising. From that perspective, deciding on a college is less about the name on the administration building and more about the major you choose.
However, finding the perfect college for you is also about the location and feel of the campus. Think about things like where you might live, the amenities of the area and the overall experience in addition to the cost and how much you might have to borrow. There’s no one right way to choose a college, and how you go about it depends on your own priorities.
No matter what choice you make, college is expensive. As a result, it’s important to consider ways to make college less expensive for you, regardless of where you go to school. Here are some tips to cut your college costs:
- Consider less expensive colleges: First of all, consider attending one of the least expensive colleges. If you choose the right major, even attendance at a less expensive college can lead to a good career — without breaking the bank.
- Make sure you fill out the FAFSA: This is how you qualify for need-based financial aid with most schools. You can also see if you qualify for federal financial aid in the form of grants, work-study and federal loans. Some prestigious schools, like Harvard, have programs that make attending school very affordable for those who get in and qualify for need-based aid.
- Apply for scholarships: If you qualify for scholarships, you might be surprised at how much you can save on college. Search for scholarships, large and small, from a variety of sources, including local and national opportunities.
- Ask about merit-based aid: Some schools offer merit-based aid based solely on your test scores, grades or other factors, according to Schwartz. Find out what’s available and you might be surprised at how much you can reduce your college costs.
- Consider working during school: If you have a job, you might be able to reduce how much you have to borrow for school. Consider federal work-study programs on top of more traditional work.
- Start at community college: Rather than spending a lot on a four-year school to start, consider going to a community college first. It costs less, and you can transfer to a four-year school later.
Christy Rakoczy contributed to this report.
Need a student loan?Here are our top student loan lenders of 2021!
|1.04% – 11.98%1||Undergraduate, Graduate, and Parents|
|1.13% – 11.23%*,2||Undergraduate, Graduate, and Parents|
|3.80% – 9.36%3||Undergraduate and Graduate|
|2.20% – 6.17%4||Undergraduate and Graduate|
|1.05% – 11.44%5||Undergraduate and Graduate|
|1.82% – 11.32%6||Undergraduate|
|N/A7||Undergraduate and Graduate|
|1.12% – 11.23%8||Undergraduate and Graduate|
|1.15% – 11.01%9||Undergraduate and Graduate|
|* The Sallie Mae partner referenced is not the creditor for these loans and is compensated by Sallie Mae for the referral of Smart Option Student Loan customers.
1 Important Disclosures for College Ave.
College Ave Student Loans products are made available through either Firstrust Bank, member FDIC or M.Y. Safra Bank, FSB, member FDIC. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply.
Rates shown are for the College Ave Undergraduate Loan product and include autopay discount. The 0.25% auto-pay interest rate reduction applies as long as a valid bank account is designated for required monthly payments. Variable rates may increase after consummation.
Information advertised valid as of 7/22/2021. Variable interest rates may increase after consummation. Approved interest rate will depend on the creditworthiness of the applicant(s), lowest advertised rates only available to the most creditworthy applicants and require selection of full principal and interest payments with the shortest available loan term.
2 Sallie Mae Disclaimer: Click here for important information. Terms, conditions and limitations apply.
3 Important Disclosures for CommonBond.
Offered terms are subject to change and state law restriction. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900), NMLS Consumer Access. If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown. If you choose to complete an application, we will conduct a hard credit pull, which may affect your credit score. All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate. All variable rates are based on a 1-month LIBOR assumption of 0.15% effective Jan 1, 2021 and may increase after consummation.
4 Important Disclosures for EdvestinU.
EDvestinU is a product of the nonprofit New Hampshire Higher Education Loan Corporation (dba The NHHEAF Network) NMLS ID#1527348.
APR range and repayment rates displayed assume a $10,000 loan disbursed in two equal disbursements. APR low assumes immediate repayment and 7 year repayment. APR high assumes deferred repayment and 15 year repayment. APR’s presented include a .50% interest rate reduction for electing to have payments automatically deducted from a bank account. The interest rate reduction for authorizing our servicer to automatically deduct monthly payments from a savings or checking account will not reduce the monthly payment, but will reduce the monthly finance charge, resulting in a lower total cost of loan. All examples are provided for educational purposes and actual terms may vary based on credit history, loan amount, applicable repayment term, and chosen repayment plan and method. Please note that the interest rate on variable rate programs may increase or decrease over time. The variable rate example assumes the same standard rate for the life of the loan. The NHHEAF Network reserves the right to modify or cancel its program at any time.
Eligibility: Dependent and independent U.S. citizen students. Currently residents of Washington and California are not eligible for EDvestinU programs.
Loan Limits: Minimum loan amount of $1,000.
Repayment: Standard or graduated repayment options available during repayment; 7, 10, or 15 year term selected by the borrower.
Cosigner Release: Cosigner release allowed if an account is in current standing, after 36 months of consecutive & on-time payments with a borrower FICO >749 for EDvestinU Private Student Loans and minimum income requirement of $30,000 with no foreclosures, repossessions, wage garnishments, unpaid tax liens, unpaid judgments or other public records having an open balance exceeding $100 during the last 7 years. The borrower must not currently be involved in bankruptcy proceeding or had any bankruptcy filings during the past 10 years and cannot have any defaults on education loans.
5 Important Disclosures for Earnest.
6 Important Disclosures for Ascent Student Loans.
Ascent Student Loans Disclosures
Ascent loans are funded by Bank of Lake Mills, Member FDIC. Loan products may not be available in certain jurisdictions. Certain restrictions, limitations; and terms and conditions may apply. For Ascent Terms and Conditions please visit: >AscentFunding.com/Ts&Cs;.
Rates are effective as of 07/01/2021 and reflect an automatic payment discount of either 0.25% (for credit-based loans) OR 1.00% (for undergraduate outcomes income-based loans). Automatic Payment Discount is available if the borrower is enrolled in automatic payments from their personal checking account and the amount is successfully withdrawn from the authorized bank account each month. For Ascent rates and repayment examples please visit: >AscentFunding.com/Rates.
1% Cash Back Graduation Reward subject to terms and conditions, please visit AscentFunding.com/Cashback. Cosigned Credit-Based Loan student borrowers must meet certain minimum credit criteria. The minimum score required is subject to change and may depend on the credit score of your cosigner. Lowest APRs are available for the most creditworthy applicants and may require a cosigner.
7 Important Disclosures for Funding U.
Offered terms are subject to change. Loans are made by Funding University which is a for-profit enterprise. Funding University is not affiliated with the school you are attending or any other learning institution. None of the information contained in Funding University’s website constitutes a recommendation, solicitation or offer by Funding University or its affiliates to buy or sell any securities or other financial instruments or other assets or provide any investment advice or service.
8 Important Disclosures for SoFi.
UNDERGRADUATE LOANS: Fixed rates from 4.13% to 10.66% annual percentage rate (“APR”) (with autopay), variable rates from 1.12% to 11.23% APR (with autopay). GRADUATE LOANS: Fixed rates from 4.13% to 10.90% APR (with autopay), variable rates from 1.10% to 11.34% APR (with autopay). MBA AND LAW SCHOOL LOANS: Fixed rates from 4.08% to 10.86% APR (with autopay), variable rates from 1.05% to 11.29% APR (with autopay). PARENT LOANS: Fixed rates from 4.23% to 10.66% APR (with autopay), variable rates from 1.20% to 11.23% APR (with autopay). For variable rate loans, the variable interest rate is derived from the one-month LIBOR rate plus a margin and your APR may increase after origination if the LIBOR increases. Changes in the one-month LIBOR rate may cause your monthly payment to increase or decrease. Interest rates for variable rate loans are capped at 13.95%, unless required to be lower to comply with applicable law. Lowest rates are reserved for the most creditworthy borrowers. If approved for a loan, the interest rate offered will depend on your creditworthiness, the repayment option you select, the term and amount of the loan and other factors, and will be within the ranges of rates listed above. The SoFi 0.25% autopay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. Information current as of 4/1/2021. Enrolling in autopay is not required to receive a loan from SoFi. SoFi Lending Corp., licensed by the Department of Business Oversight under the California Financing Law License No. 6054612. NMLS #1121636 (>www.nmlsconsumeraccess.org).
9 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
Undergraduate Rate Disclosure: Variable interest rates range from 1.15% – 11.01% (1.15% – 10.24 APR)Fixed interest rates range from 4.18% – 11.70% (4.18% – 10.83% APR).
Graduate Rate Disclosure: Variable interest rates range from 1.89% – 10.66% (1.89% – 10.41% APR). Fixed interest rates range from 4.64% – 11.23%% (4.64% – 10.95% APR).
Business/Law Rate Disclosure: Variable interest rates range from 1.89% – 9.22% (1.89% – 8.50% APR). Fixed interest rates range from 4.38% – 10.44% (4.38% – 9.72% APR).
Medical/Dental Rate Disclosure: Variable interest rates range from 1.89% – 8.02% (1.89% – 7.72% APR). Fixed interest rates range from 4.28% – 9.24% (4.28% – 8.94% APR).
Parent Loan Rate Disclosure: Variable interest rates range from 1.97% – 7.06% (1.97% – 7.06% APR). Fixed interest rates range from 4.94% – 8.58% (4.94% – 8.58% APR).
Bar Study Rate Disclosure: Variable interest rates range from 4.44% – 9.58% (4.44% – 9.52% APR). Fixed interest rates range from 7.39% – 12.94% (7.40% – 12.83% APR).
Medical Residency Rate Disclosure: Variable interest rates range from 3.53% – 7.03% (3.53% – 6.76% APR). Fixed interest rates range from 6.99% – 10.49% (6.98% – 10.09% APR).
Variable Rate Disclosure: Variable Rates are based on the one-month London Interbank Offered Rate (“LIBOR”) published in The Wall Street Journal on the twenty-fifth day, or the next business day, of the preceding calendar month. As of June 1, 2021, the one-month LIBOR rate is 0.09%. Variable interest rates will fluctuate over the term of the loan with changes in the LIBOR rate, and will vary based on applicable terms, level of degree and presence of a co-signer. The maximum variable rate is the greater of 21.00% or Prime Rate plus 9.00%.
Fixed Rate Disclosure: Fixed rate ranges are based on applicable terms, level of degree, and presence of a co-signer.
Lowest Rate Disclosure: Lowest rates require a 5-year repayment term, immediate repayment, a graduate degree (where applicable), and include our Loyalty and Automatic Payment discounts of 0.25 percentage points each, as outlined in the Loyalty Discount and Automatic Payment Discount disclosures. Rates are subject to additional terms and conditions, and are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change.
Federal Loan vs. Private Loan Benefits: Some federal student loans include unique benefits that the borrower may not receive with a private student loan, some of which we do not offer. Borrowers should carefully review federal benefits, especially if they work in public service, are in the military, are considering possible loan forgiveness options, are currently on or considering income based repayment options or are concerned about a steady source of future income and would want to lower their payments at some time in the future. When the borrower refinances, they waive any current and potential future benefits of their federal loans. For more information about federal student loan benefits and federal loan consolidation, visit http://studentaid.ed.gov/. We also have several resources available to help the borrower make a decision on our website including Should I Refinance My Student Loans? and our FAQs. Should I Refinance My Student Loans? includes a comparison of federal and private student loan benefits that we encourage the borrower to review.
Eligibility Criteria: Applicants must be a U.S. citizen, permanent resident, or eligible non-citizen with a creditworthy U.S. citizen or permanent resident co-signer. For applicants who have not attained the age of majority in their state of residence, a co-signer is required. Citizens Bank reserves the right to modify eligibility criteria at any time. Citizens Bank private student loans are subject to credit qualification, completion of a loan application/Promissory Note, verification of application information, and if applicable, self-certification form, school certification of the loan amount, and student’s enrollment at a Citizens Bank participating school.
Loyalty Discount Disclosure: The borrower will be eligible for a 0.25 percentage point interest rate reduction on their loan if the borrower or their co-signer (if applicable) has a qualifying account in existence with us at the time the borrower and their co-signer (if applicable) have submitted a completed application authorizing us to review their credit request for the loan. The following are qualifying accounts: any checking account, savings account, money market account, certificate of deposit, automobile loan, home equity loan, home equity line of credit, mortgage, credit card account, or other student loans owned by Citizens Bank, N.A. Please note, our checking and savings account options are only available in the following states: CT, DE, MA, MI, NH, NJ, NY, OH, PA, RI, and VT and some products may have an associated cost. This discount will be reflected in the interest rate disclosed in the Loan Approval Disclosure that will be provided to the borrower once the loan is approved. Limit of one Loyalty Discount per loan and discount will not be applied to prior loans. The Loyalty Discount will remain in effect for the life of the loan.
Automatic Payment Discount Disclosure: Borrowers will be eligible to receive a 0.25 percentage point interest rate reduction on their student loans owned by Citizens Bank, N.A. during such time as payments are required to be made and our loan servicer is authorized to automatically deduct payments each month from any bank account the borrower designates. Discount is not available when payments are not due, such as during forbearance. If our loan servicer is unable to successfully withdraw the automatic deductions from the designated account three or more times within any 12-month period, the borrower will no longer be eligible for this discount.