High School Students Can’t Make Financial Decisions About College

At the beginning of my senior year of high school, we had to fill out a questionnaire for the college adviser. It asked if I wanted to stay close to home or if I wanted to move to the opposite coast, what my interests were, what strengths and weaknesses I had, and o yeah, if finances were going to factor into my decision about where to go to college.

Maryland Terrapin

University of Maryland by enygma

Like many high school seniors, I said that finances were not going to be a major part of the decision making process.

My College Decision Making Process

This is what my decision making process looked like while I was filling out that questionnaire:

  • My parents had provided for all my education expenses up until that point
  • I had some money saved up for college
  • It was more important to go to a good school than to worry about how much it would cost

I had no idea how much my parents had set aside for me, and I had absolutely no concept of money at the time. So why should I care how much college is going to cost?

The Problem With Letting High School Students Make Financial Decisions

At age 17, the difference between $25,000 in student loan debt and $100,000 in student loan debt is really small. Many teenagers look at the options like this:

  • In either case, it’s a lot of money that will get paid back eventually.
  • With a college education, it won’t take long after graduating to start paying it off.
  • Every else goes through the same thing, so I am not any different.

Why are these kids being put in charge of a potentially life-changing decision without being given all the tools to make the best choice?

How High School Students Decide Where To Go To College

Most high school students think more about the social and academic aspects of college than the financial aspects. Some schools are better when it comes to specific disciplines and for the most part, kids are looking at what their lives will be like during college instead of thinking about what their lives will be like after it.

I went off to the University of Maryland (Go Terps!), and at some point during my junior year, my father told me how much debt I was probably going to graduate with. OK, it was a fact of life that I was going to have to deal with. If he had said $70,000, my reaction would have been the same.

Parents Need To Help Make The Decisions

I’m glad my parents were looking out for me and didn’t allow me to take on more than a reasonable amount of student loan debt. I had absolutely no idea what I was doing, and if there hadn’t been any money set aside for my college education, I am confident that I still would have decided to go to the University of Maryland. I consider myself very fortunate that I had help during the entire process.

It’s not fair to make high school students decide between two enormous amount of debt. Parents need to be extremely involved and not only lay out the realities of what life after school will be like, but guide their children because they are much better suited to look at the whole picture.

How much student loan debt did you have when leaving college? As a high school senior, were you able to make an informed financial decision about where to go to school?

16 Responses to High School Students Can’t Make Financial Decisions About College

  1. I was worried about money when I was looking at schools, but at the same time I was willing to pay for a good education. I ended up with about $35k in student loans and have paid all of it back.

    However, I think we need a culture change. The culture when I was in high school was “go to a great college no matter what the cost.” Now it’s “be cost conscious.” Hopefully soon it will be “only go to college if you know what you want to do and that job needs a college degree.”

    The third option is what I plan to tell my kids.

    • @Kevin @ RewardBoost, And what do you do if you’re someone like me who didn’t know what they wanted to do until their junior year of college?

      I was in the “go to a great college no matter what the cost” boat, as you were.

  2. My parents told me at the start of high school that I could go to any college I wanted (i.e. don’t worry about the money). I don’t think they had ANY idea how expensive college had become since when they attended. They kept their promise even though they had no dedicated savings for college and I chose one of the most expensive schools in the country. I finished college with a little debt in my name and a LOT in their names.

    My point is that sometimes parents can’t help students make these decisions because they are just as clueless/delusional!

    Everything’s working out – all the debt has been paid and our relationship is good – but this whole situation could have gone quite another way.

  3. Absolutely true, and especially about the need for more financial education early on. Great post!

  4. I did not have any but my fiancée had over 80k… we are working on paying it off aggressively but it will still be a couple more years I think…

  5. I think your last point is the most important, the college decision requires A LOT of input from parents.

  6. uclalien says:

    My parents and grandparents made it a point to discuss and educate me about finances at a very young age. By the time I entered 3rd grade, I already had my own savings/checking account and had started investing in CDs. My parents also instilled in me a strong desire to study hard and go to college, while also encouraging other interests (e.g., sports, art, music, etc.).

    Due to some poor decisions my parents made when they were young, they struggled financially for much of my childhood. As a result, I knew that the financial burden of college would fall on my shoulders. I had this realization in 5th or 6th grade, which is when I started saving for college. (I did buy myself a $450 new bike in 6th grade, which set me back a bit. But it only made me more financially conscious.)

    By the time I reached high school, I knew that the best way for me to afford college was to attend a community college. Fortunately, we lived only 10 minutes from an exceptional community college. And due to scholarships and grants, I was able to attend community college at no cost (I mean none. Because I lived with my parents, I actually made money.).

    I was also fortunate to have an older brother who had already been through a similar process. I was able to follow the path he took when applying for grants, scholarships, and financial aid. After graduating from community college, I learned that grants, scholarships, and financial aid would cover my entire college tuition. In addition, my parents were in a better position to help with my other expenses.

    Despite the fact that I chose to attend a university in a place where the cost of living is extremely high (Los Angeles), and the fact that it took me 3 additional years to graduate (I also earned a minor), I left college (in 2003) with less than $15,000 in loans, which was less than I had sitting in my bank account at the time. Not to jump off topic, but I only paid off $1,000 in loans and because my effective interest rate is roughly 1.5% on the remaining portion. In addition, I wanted to keep a financial safety net given that the job market wasn’t strong at the time.

    I used my experience to strongly encourage my sister-in-law to take the same route (community college, apply for financial aid, etc.). Fortunately, her parents and I were in agreement. We put a lot of pressure on her to consider the financial ramifications of her decision and eventually persuaded her to spend 2 years at the same community college I attended. In the end, it saved her about $60,000.

  7. CollegeMom says:

    Daniel, as a mom of two college age daughters (one is there and one goes next year) we had all these conversations with our daughters. Our college savings for them was hurt in 2007 and 2008. We knew that some state universities would be as expensive as private since the private often come with endowment “scholarships.”

    The time to start talking with your kids about college costs is 9-10 grade. Don’t dash their hopes of going somewhere you know you can’t afford in the fall of their senior year.

    Thanks for the post. Included it in our Friday roundup.

    • @CollegeMom, Thanks!

      It’s great that you were realistic with your daughters. It’s definitely hard to understand for a 15 or 16 year old, but better to have the information than go through and find out at the very end.

  8. I knew about money and budgeting in high school, so I made my decision based on finances and what I wanted out of my future. But I was around hundreds of teenagers that definitely had no idea. I think it depends on the person.

  9. Kate Horrell says:

    Hi Daniel, fellow Terp here. I ended up at Maryland by default, as I was too busy enjoying my job, and the accompanying social life, in the restaurant business in Annapolis. Good thing I didn’t end up at a more expensive school, because I was not paying any attention to my loans and had given no consideration to how I was going to pay them off once I graduated. I think I graduated with around $30,000 in debt (this was a long time ago :) and I was fortunate that my husband and I were able to pay it off in about five years.

    I often wonder if I would have been more conscientious if I had a realistic idea about how much my payments would be, and how much money I would actually be making. I probably could have financed my college with the money I made at my job, but it didn’t seem important at the time.

    I hope I give my four daughters a better education about financing college. The oldest is 15 and up until now, we’ve asked her to not worry about the money and focus on her schoolwork. With four kids in five school years, I am somewhat counting on financial aid as part of our overall college package. I’ve also introduced the concept that our family’s college funds are community property and that you will be expected to contribute to the overall costs of educating everyone, whether by getting lots of financial aid or getting a job after graduation to help your siblings pay for school.

    Great topic!

    • @Kate Horrell, Having it be a community fund is really interesting, could write an entire post just about that. How much are they expected to contribute to others?

  10. Ryan @ RLD Investments says:

    Like you said, having smart people around you to help with the decision making process is extremely important. But, that assumes that most people do, which isn’t the case. I think a good move would be if high schools worked some sort of education into the academic program for juniors or seniors. It’s obviously not an entire course worth of material, but something for the people who don’t have any other kind of guidance.

    • @Ryan @ RLD Investments, There is not nearly enough personal finance education in high schools, and this is just one of a number of topics that need to be addressed for teenagers.

  11. Our two kids are in college right now, and boy the price has sure gone up since we went, and we both attended private colleges! We are fortunate to be able to pay for both the kids’ college educations. If we were not able to, their total debt would be between $140k to $200k each! OMG, no one should begin their career saddled with that amount of debt. It’s outrageous! The cost of colleges in this country are out of sight. There needs to be a big correction somehow, especially since now a college education is a must have to get a job, kind of like how a HS degree was a minimum requirement when we were graduating in the 70s. Online courses at a fraction of the cost are beginning to be talked about and even offered at some universities. While not the same in-class experience, perhaps this will make a college degree possible without the huge price tag attached.

  12. Jeremy Norton says:

    At the age where you are making decisions for college, let us admit it, we have idealistic minds rather than being realistic. We always think what should be right and best of us rather than thinking also of the consequences of our decisions.