How to Pick the Best College for You (and Your Wallet)

Mark Kantrowitz

What kind of information?

Job loss, salary reduction, a family member's surgery, things like that. If you do have an unusual financial circumstance, you need to tell the school and ask for what's called a professional judgment review. Some schools call it a financial aid appeal or a special circumstances review.

[Read Run the Numbers]

So students shouldn't go back to the financial aid office to ask for more money unless there are specific circumstances?

The process is driven by information and documentation. If you try to get schools into a bargaining situation, it's just not going to do any good. If there is a difference, you bring it to their attention. It's not that they're saying, "Oh, you're getting $2,000 more from this other college. We're going to match that offer." That really doesn't happen all that often. What is more likely is they say, "Oh, there's this piece of information you told to them that you didn't tell to us." Then they plug it in and out pops a new figure.

Colleges don't really get into bidding wars. If they believe that you're going to have a 3.75 GPA and you're middle income and the difference is only $500, maybe you'll get it—if they think they have a good chance of getting you to enroll as a result. But if you're low income, you're already getting full aid. If you're high income, it doesn't really make that much of a difference.

How should students think about their debt upon graduation?

Obviously, if you graduate with no debt, you're going to have much more flexibility than if you graduate with some debt. There's a lot of freedom in graduating with no debt. It might be worthwhile to go to, say, a second-tier school if you're intending to go on to graduate school at a top-tier school. And sometimes you'll get in easier to a top grad program if you went to a less well-known institution for undergrad, because the top-tier schools want to have a bit of diversity in the sources of their students.

Another consideration is you need to compare the total amount of debt you're going to be taking on to pay for your education versus the starting salary for your field of study—that is, if you already have career plans. If the debt exceeds your starting salary, you probably should go to a less expensive school. If you borrow twice as much as your starting salary, you're at very high risk of default. You will have to use extreme measures like living at home with your parents after you graduate for the next two decades in order to avoid defaulting on your debt!

There's another rule of thumb that I use. I take the 90th percentile debt at graduation by degree as a sign of overborrowing. For a bachelor's degree, that would be $45,000. For an associate's degree, $25,000. If you're borrowing more than that, you're probably overborrowing.

But it depends on the field of study. If you're going in to nursing or computer science, you might be able to afford more debt than $45,000. But if you're getting a degree in art or sociology, you probably shouldn't be borrowing $45,000.

How would high school seniors determine now what they're likely to owe when they graduate, or how much aid they might receive for sophomore, junior, and senior years?

Generally speaking, they will get the same amount of aid, barring significant changes in financial circumstances. But still, when there's a financial aid night or you're going on a tour of the college, a good question to ask is how next year's aid package will compare to this year's aid package, assuming everything is the same.

Is what you get out of college a function of what you put in? How important is name recognition in comparison to the amount of financial aid that is offered?

A funny story was told to me about MIT students during welcoming orientation session. The dean of students said, "How many of you expect to graduate in the top half of your class?" Everybody raised their hands. Somebody has to be in the bottom half. There are indeed going to be some students who will slack off. And that can happen just as much at a small rural institution as at an urban university in the middle of the city.

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