College Inequality: The rational decision to spend irrationally

By College Advice

I’m a father of three and I was the sole breadwinner for many years and have always been the primary breadwinner.  So the financial pressures facing my clients are very understandable to me.  One of the questions I am asked with increasing frequency during college counseling meetings relates to the college investment.

“Does it make sense to spend $200000 plus per year for Good College?” Or would it make more sense to spend $100,000 on a state college?

My Connecticut-parent-clients are wealthier than most everyone in America. But most still find it extremely difficult to come up with that kind of money, particularly if they have several children.  When I tell the few friends I have who are childless that it is likely that I’ll spend close to $900000 on college ($75,000 x 12) they are in disbelief.

Is it a rational expenditure?  Personal family-financial circumstance is the biggest determinant of whether it makes sense.  Obviously, if the money just isn’t there, then “it is what it is.” The goals of the child are the second issue.   As I tell families, if your child wants to become an elementary school teacher, spending money for Harvard is superfluous.

The problem for many Connecticut parents is that UCONN – a great state school – has become a real admissions challenge for those who have SATs lower than 1260.  While the other state schools are fine, many of my clients view UCONN as the only acceptable state school.  The other schools of consideration are all private.  The solution: get high enough SAT scores to get merit aid at private colleges.