Choosing the right college is one of the biggest decisions a high schooler will make. Yet according to a recent TD Ameritrade survey of 1,000 American teens, many students are focusing on the wrong things.
Nineteen percent of students said “struggling to pay the tuition” was their biggest concern related to college — more so than finding a job, managing coursework, and making friends. However, only 36 percent strongly agreed it was more important to attend an affordable college than one with the best reputation.
That means 64 percent of teens might be making the wrong choice when it comes to college — a decision they could regret for years to come.
So if you’re confused about which college to choose, keep reading. We’ve got three tips for choosing a college that works for you and your budget.
3 tips for choosing the right college
When it comes to choosing the right school, college affordability should be one of your top concerns. If you end up taking on a mountain of student loan debt, it could seriously hinder you when you’re in your 20s and 30s.
So before you submit your letter of intent, take the following steps.
1. Rethink what makes a “good education”
The more expensive school isn’t always the better one. But only 31 percent of teens strongly disagreed with the statement: “colleges charging higher fees provide a better standard of education.”
The other 69 percent of respondents were either lukewarm or in agreement.
When choosing a college, don’t assume you’ll get the best education at a pricey private school. Although some of the most prestigious schools are a great value because they meet the full needs of every student, other smaller, more expensive schools might not.
Although each list used a different methodology, they all considered factors like cost of attendance and median earnings of graduates.
In other words, don’t look at which college has the prettiest campus or most famous name. Instead, analyze which one might give you the most bang for your buck.
2. Consider alternatives to a four-year college
While 65 percent of the teens TD Ameritrade surveyed expected to attend college, only four percent expected to attend trade school. Another 17 percent were undecided between the two.
However, if college ends up not being the best path for you, it can be an expensive mistake to make. And remember that dropping out of college doesn’t make your student loans disappear.
According to the survey, 39 percent of pre-college teens hadn’t considered any alternatives to a four-year college. In fact, only 35 percent had thought about a gap year, while 30 percent had thought about studying for two years instead of four.
But if you’re like the 15 percent of teens whose main concern was taking on too much debt, it’s imperative you consider other options.
Whether it’s taking a gap year to earn money and decide what you want to do, attending trade school to learn a valuable skill, or spending two years at a community college, make sure you’re thinking outside the box.
Still not convinced? Here are the 10 states where community college students save the most money. You could save an average of $11,377 by taking that route.
3. Discuss money matters with your family
The TD Ameritrade survey also found that 19 percent of teens hadn’t discussed college costs with their parents; another 43 percent had discussed some topics but not all.
Choosing a college is the biggest financial decision a young person will make. Therefore, whether you’re the parent or the teen, you should make sure the lines of communication are open.
Here are some examples of questions you should discuss:
- Will the parents help pay for the cost of college? How much will they contribute?
- Are there any stipulations for the parents paying for college, such as the student maintaining a certain GPA or getting a work-study job?
- If student loans are needed, will a parent be a cosigner?
- Who will handle paying back the student loans once the student graduates?
For example, taking out $3,000 per semester might not sound like a lot. But over four years, it would add up to $24,000. At an interest rate of 5.70%, you’d be on the hook for $263 per month — for 10 years after you graduate.
That money could instead go toward traveling, socializing, or even something a bit more responsible, such as retirement. To see examples of the monthly payments you could incur, check out our student loan payment calculator.
Look at the whole picture
When it comes to choosing a college, your decision has an impact that lasts far beyond the four years you’re in school. So don’t let reputation, your friends, or other factors sway you more than they should.
Instead of thinking about cute campus tour guides or glossy brochures, consider cost and ROI. Research affordable alternatives to four-year schools. And instead of assuming your parents will pay, discuss everyone’s expectations.
When you do your research and crunch the numbers, you’re much more likely to make the best choice for you.
Need a student loan?Here are our top student loan lenders of 2018!
|1 Important Disclosures for CollegeAve.
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.
2 Important Disclosures for Discover.
3 Important Disclosures for Ascent.
Before taking out private student loans, you should explore and compare all financial aid alternatives, including grants, scholarships, and federal student loans and consider your future monthly payments and income. Applying with a cosigner may improve your chance of getting approved and could help you qualify for a lower interest rate. Ascent Student Loans may be funded by Richland State Bank (RSB) or Turnstile Capital Management, LLC (TCM), which are not affiliated entities. Certain restrictions and limitations may apply. Ascent Student Loan products are subject to credit qualification, completion of a loan application, verification of application information and certification of loan amount by a participating school. All loan products may not be available in certain jurisdictions. Other terms and conditions apply. Ascent is a federally registered trademark of TCM and may be used by RSB under limited license. Richland State Bank is a federally registered service mark of Richland State Bank.
* Application times vary depending on the applicants ability to supply the necessary information for submission.
* 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.
4 = Sallie Mae Disclaimer: Click here for important information. Terms, conditions and limitations apply.
5 Important Disclosures for PNC.
PNC Bank is one of the nation’s largest education loan providers. For over 40 years, PNC has been committed to helping students and their families make possible the adventure of college.
6 Important Disclosures for SunTrust.
Before applying for a private student loan, SunTrust recommends comparing all financial aid alternatives including grants, scholarships, and both federal and private student loans. To view and compare the available features of SunTrust private student loans, visit https://www.suntrust.com/loans/student-loans/private.
Certain restrictions and limitations may apply. SunTrust Bank reserves the right to change or discontinue this loan program without notice. Availability of all loan programs is subject to approval under the SunTrust credit policy and other criteria and may not be available in certain jurisdictions.
SunTrust Bank, Member FDIC. ©2018 SunTrust Banks, Inc. SUNTRUST, the SunTrust logo and Custom Choice Loan are trademarks of SunTrust Banks, Inc. All rights reserved.
7 Important Disclosures for LendKey.
Additional terms and conditions apply. For more details see LendKey
8 Important Disclosures for CommonBond.
A government loan is made according to rules set by the U.S. Department of Education. Government loans have fixed interest rates, meaning that the interest rate on a government loan will never go up or down.
Government loans also permit borrowers in financial trouble to use certain options, such as income-based repayment, which may help some borrowers. Depending on the type of loan that you have, the government may discharge your loan if you die or become permanently disabled.
Depending on what type of government loan that you have, you may be eligible for loan forgiveness in exchange for performing certain types of public service. If you are an active-duty service member and you obtained your government loan before you were called to active duty, you are entitled to interest rate and repayment benefits for your loan.
A private student loan is not a government loan and is not regulated by the Department of Education. A private student loan is instead regulated like other consumer loans under both state and federal law and by the terms of the promissory note with your lender.
If your private student loan has a fixed interest rate, then that rate will never go up or down. If your private student loan has a variable interest rate, then that rate will vary depending on an index rate disclosed in your application. If the interest rate on the new private student loan is less than the interest rate on your government loans, your payments will be less if you refinance.
If you don’t pay a private student loan as agreed, the lender can refer your loan to a collection agency or sue you for the unpaid amount.
Remember also that like government loans, most private loans cannot be discharged if you file bankruptcy unless you can demonstrate that repayment of the loan would cause you an undue hardship. In most bankruptcy courts, proving undue hardship is very difficult for most borrowers.
9 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|3.69% – 10.94%1||Undergraduate, Graduate, and Parents|
|3.97% – 12.97%3||Undergraduate and Graduate|
|4.34% – 12.99%2||Undergraduate and Graduate|
|4.12% – 10.98%*,4||Undergraduate and Graduate|
|5.03% – 11.23%5||Undergraduate and Graduate|
|4.00% – 13.00%6||Undergraduate and Graduate|
|4.72% – 9.81%7||Undergraduate and Graduate|
|3.72% – 9.68%8||Undergraduate, Graduate, and Parents|
|4.19% – 12.06%9||Undergraduate, Graduate, and Parents|