Warnings before picking a costly college

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Q. My daughter got all her acceptances, and it’s narrowed down to two: one that costs $65,000 with no scholarships, and a second that costs $60,000 a year with $10,000 in scholarships. We won’t qualify for need-based aid and we will have to borrow. How do we decide?
— Mommy dearest

A. It is all about fit: academic, social and financial fit.

Academically, the schools would not accept your daughter if she were not capable of handling the work load, but if one school is offering merit aid and the other is not, this may be a good sign, said Steven Sirot, co-founder of College Benefits Research Group (CBRG) in Roseland.

Why would one school offer merit dollars where another does not?

“Possibly because one school feels that your daughter will be a better fit and that she would be someone they want more on their campus,” Sirot said. “While the offer letters do not spell it out, schools offering merit based aid are sending a message. We Want You.”

From the financial side of the equation, you need to look at your budget.

Sirot said too often, parents do not provide this context to their students, putting their family and financial futures in harm’s way.

Only you know what you have saved for college and your cash flow per month, Sirot said, but if you do not let your student in on this, why shouldn’t they go to the most expensive one?

Of course, $50,000 is lower than $65,000 after scholarships are deducted but this is all moot if the budget is $30,000, he said.

And make sure you include travel costs.

Equally important is to understand is how each school can best serve your daughter, Sirot said.

For this, look at job placement, educational quality, research opportunities, on time graduation rates and more.

From what you have provided the school offering the scholarship certainly seems compelling, Sirot said.

“Just make sure that you consider all of what is important to you and your family,” he said. “If you can reasonably assess that paying an extra $40,000 would yield her better opportunities, then it may be worthwhile choosing the more expensive option.”

Email your questions to moc.p1568521109leHye1568521109noMJN1568521109@ksA1568521109.

This post was initially published in April 2017.

NJMoneyHelp.com presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.