College Decision Guide

Congratulations! You have decided to attend a college or a university.
Pursuing higher education is both exciting and rewarding, however, not an easy path to say the least. Your choice of school will define not only how you spend the next 4+ years, but will likely have a significant impact on your adult life. There are endless factors to consider: location, student body, programs(majors), sports, ratings, campus, etc, etc. While all of those factors are important, in this guide, we will pay special attention to school cost.

As universities compete for talent and status, they increase their investments into facilities and faculty, pushing the cost ever higher. Even state university cost for some schools has gone as high as 30,000 a year. As a result, many individuals and families are currently struggling with repaying school debt, experiencing long-lasting hardship.

While various prestigious schools have a statistically higher future income, it is highly important to consider the earning potential of your chosen major , and weigh the possible gains vs costs. For many professions, the bachelors degree is just the beginning and a more advanced degree will be required, thus significantly lessening the importance of how prestigious your undergraduate degree is.
A college degree is an investment, and like with any investment, you need to consider when and how much return on investment you will receive. In addition to tuition, room & board and other expenses, remember that most of your loans will carry a high interest rate. For example a $50,000 loan with a 6% interest rate, will accrue $8,000 in interest over a five year term, and $16,600 over 10 years.

Let's look at how higher educational cost can affect your future. Let's say you enroll into a program that costs $40,000 per year, including tuition and life expenses. That results in roughly $160,000 total cost (Real number will be higher, because each year costs go up, and financial award goes down). Let's pretend that your parents have been saving for your education and have $50,000. That leaves you with a $110,000 in student loans. Now, let's say your major will lead you to jobs that pay $60,000 per year on average over the next 10 years. After taxes, your salary will be amount to roughly $4,000 a month. In order to pay your loans in 10 years you need to make payments of $1,220 per month. This leaves you with about $2,800. Maybe this seems like a lot, but start deducting your food, phone, internet, utilities, health insurance, transportation, clothing, entertainment and travel, and it will leave you with barely enough money to afford a room in a shared apartment. And don't forget, this is for the first, best years of your adult life! And I am not even mentioning saving for your own place, or investing for retirement. And what if you don't want to wait untill you're 40 to start a family?

My argument here is simple: Do your math, and don't force yourself into debt slavery. Your life after college is also meant to be enjoyed. Think of all the things you want to achieve after college, and how your degree and your student debt will play into it.

Some parents make big sacrifices in order to put their kids through college. Often they jeopardize their current lifestyle, or make a big dent in their retirement savings. Consider, whether your parent's sacrifice is worth it before accepting it.

I offer you this website as a tool to get an idea of your financial possibilities. You should still apply to your dream school and see what financial aid you qualify for, but do your math before making your final decision.
I wish you all the best of luck in your studies and life! Explore, work hard, have fun, make your dreams come true, and ... do your math :)

With love
Filipp Rakevich
Software architect and entrepreneur