by Dave Ramsey
Growing up, although it was a different day, I attended public schools. So when Sharon and I faced this decision for our kids, we looked at the public schools in our particular county. There were no issues with safety, and the schools had excellent academics. And obviously the school system has to do things legally, so the schools are not “Christian,” but we are in the buckle of the Bible Belt, so most of the teachers were Christians. Because we had the best of all worlds, the Ramsey kids went to public schools.
As you begin to make your own decision, there are three things you must remember. First, you cannot live in the land of drama or fear. You can’t overstate the safety issue to rationalize the purchase —“Oh, my child is gonna die if I send him to that public school.” Don’t overstate the safety issue as a parent.
Second, you can’t depend on the school to be your children’s only model of a spiritual walk. Your children will not get this in a Christian school if they are not getting it at home. It’s your job to lay the foundation for your kids’ spiritual walks, not the school’s job. Anybody who’s ever been around a “Christian school” knows that a lot of bad things can go on there too. So to assume that it’s a bubble or a utopia is absolutely absurd.
Third, remember to use common sense when considering academics. Are private schools sometimes academically superior? Sure. But sometimes they’re not. There is no correlation between attending a private preschool, elementary, or high school and future success. I see no evidence or research to support this.
Now, do private schools have higher graduation rates, do more of their students get into college, and are the schools academically superior? Possibly, but even then, we can’t say that more private-school kids end up winning in life because of the schools they attended. A child’s family environment, socioeconomic environment, neighborhood, and parents have a lot more to do with his future success than where he attends school.
So if you’re going to look at private school as an option, it has to be a reasonable part of your budget. You cannot go into drama mode and bankrupt your family so your four-year-old can go to a private daycare. I talk to people all the time who are completely unreasonable about this. You must use common sense in the discussion and in making your decision.
Community and Online Colleges
RACHEL: Local community colleges have gotten a bad rap. Sure, they may not be as exciting as moving into the dorm at the big state school, but there are enormous benefits in attending a good community college for a couple of years. Most degree programs focus on the same basic prerequisites for the first year or two—things like history, English, and foreign languages. If your student is on a tight budget, he could save a ton of money by knocking out those fundamentals at a community college. Most of these colleges work well with the nearby four-year state schools, so it’s likely the course credits will transfer. He’ll just want to check in advance to make sure every community college class he takes will transfer.
Let’s say your child attends a community college for two years and then moves to a state university for his final two years. If he graduates from the state school, that’s the logo that will be on the diploma. You officially graduate from whatever school gives you the degree.
DAVE: Online college classes are a great way for your child to get a head start while still in high school. Some universities will even let high school students attend free. Just avoid ultra-expensive online schools and most “online-only” schools, including a lot of the for-profit schools you see investing enormous amounts of money for television commercials. The best option at the most reasonable cost is to take online classes from a full-on, regular brick-and-mortar college.
Choosing a Major
Using a common-sense approach to picking a major is as important as choosing the right school. Your child should study something that interests her and that she is passionate about pursuing. But you are not to abandon an eighteen-year-old to her passions. A useless degree or field of study is just that—useless. So you have the duty of finding the balance between encouraging your child’s passions, creativity, and dreams while simultaneously giving her the guardrails of common sense. If you err only on the side of practicality, you will guide—or force—her into something that is marketable but she hates. The paradox is she will never be successful because she has no passion. On the other hand, if you let her go unchecked into a major that is completely impractical, then she will also face disappointment. It is your duty as a parent to participate in the decision and to lovingly guide your child.
A twenty-nine-year-old man called my show recently with a mess on his hands. He has a master’s degree in opera, and he had racked up $120,000 in student loan debt to get the degree. To graduate with that degree, you have to be very, very talented—your voice literally becomes an instrument. His talents aside, he explained to me that he has never earned more than $35,000 in one year. Is a master’s degree in opera a bad thing? Not at all! But where were his parents in this decision process? And how can a government allow a kid to borrow that much in student loan debt simply to end up making what he could have made with a high school diploma in another field? This is crazy.
NAVIGATING THE FINANCIAL AID MAZE
RACHEL: There is a phrase you’ll become intimately familiar with as soon as you and your child start exploring colleges. This phrase will either be a blessing or a curse depending on how you use it. Even though you’ll see this phrase on documents, websites, and even office doors, no one really seems to understand what it means. This little phrase has enabled students to graduate 100 percent debt free, and it has caused people to graduate with more than $100,000 in student loan debt. As the parent, you need to get your head around all that it entails. I’m talking, of course, about financial aid.
Financial aid refers to all kinds of tuition assistance, from scholarships to loans and everything in between. It’s a catchall phrase, and that’s caused a lot of confusion for parents and students as they sit down and try to figure out how to pay for college. To get your kid out of college debt free, you both have to learn how to navigate through this maze.
Scholarships: Free Money!
The best, safest, most cost-effective way to pay for school is through scholarships. Shocking, I know. Scholarships really are free money, because you don’t have to work for them, and you don’t have to pay them back. Students can get awards for a million different reasons. Maybe you know your child well enough to realize that she’s not the sharpest tool in the shed. That’s okay. Sure, there are scholarships based on academic achievement, but there are just as many (or more) based on the most random criteria you can imagine. The harder you look, the stranger they get.
Think I’m exaggerating? I did a little research to see just how crazy some of these scholarships can be. I found one that’s awarded to the student who creates the best prom dress out of duct tape. Another gives a cash award for showing off a milk mustache in public. I even found an actual scholarship that’s given to the applicant with the best survival plan in case of a zombie apocalypse. I’m not kidding—these are real scholarships! Of course, having so many options means your student will have to work that much harder to track down and apply for as many individual scholarships as possible. This is where good old-fashioned hard work comes into the equation.
It’s easy to blow off a $200 scholarship possibility because the amount looks so small. I hear that from high school students all the time. They ask, “What’s $200 when you’re facing a $10,000 tuition bill? It’s just not worth applying for.”
Wrong!
I always frame this objection a different way. I say something like, “Look, we’re talking about $200 here, and all you have to do is fill out this application and write an essay. It’ll take you about thirty minutes. If you get it, that means you earned $200 in half an hour. I don’t know any part-time job that can touch that hourly wage!”
As your child hits her senior year of high school, I want to suggest a new part-time job for her: filling out scho
larship applications. I recently talked to a new college graduate, and she told me that all through the spring semester of her senior year of high school, her mother made her fill out two scholarship applications every day. That took maybe an hour a day, and at the time, this girl was not happy about it. But her mom wouldn’t let her off the hook, no matter how much she complained. Then the award letters started rolling in. By the time she started college, she had enough scholarships to give her a completely free ride for three years! That meant all she had to do was work enough during those three years to save up for her fourth year’s tuition. That’s incredible! What a great gift that mom gave to her daughter. It taught her about hard work, dedication, creativity, and, most of all, how several little scholarships lumped together add up to some serious cash.
Student Grants: Even More Free Money!
A college grant is basically a scholarship funded by the school, private individuals or institutions, or federal government assistance programs. Grants are usually based on need, and they may require your student to maintain a minimum GPA in order to keep receiving aid. Other than that, a grant is just like a scholarship, so your student should pursue every one you even think your family might be eligible for.
Stuck in the Details: Dealing with the FAFSA
The key to scholarship and grant money is the Free Application for Federal Student Aid (FAFSA). This is an excruciatingly long and detailed form that will make you wish you were filling out your taxes instead. Seriously, it’s painful. That’s the bad news. The good news is that the FAFSA opens the doors to all of the scholarships and grants your child will receive. In fact, it’s required for practically any kind of financial aid.
You and your child need to sit down with the FAFSA form as early as possible during his senior year of high school. Those deadlines vary by state and school year, so get the most recent information at the FAFSA website (www.fafsa.ed.gov). Not long after you complete and submit the form, your student will get an award packet in the mail that outlines all of the scholarships, grants, and other assistance he or she is eligible for. This is where you need to be extremely careful, because it gets confusing. This packet will be filled with potential debt in the form of student loans. More often than you’d like to think, students mistake these loan offers for scholarships, so they turn in the requested paperwork and end up with a loan they never expected or wanted. Work with your child to make sure he’s only applying for free money, not a pile of debt.
Make the Grade: ACT and SAT Prep
DAVE: The higher your ACT or SAT scores, the more scholarships you qualify for. So your high schooler should plan on taking the tests at least twice, maybe three times. They should take an ACT or SAT prep class before each test to help raise their scores. There are a ton of test preparation businesses out there that can help. There are even firms that promise an improved score or they don’t charge you for the class. Each of my three children took the ACT multiple times with prep classes between each test. In every single case, they improved their scores. It is worth the time and work if it means you will get more money for college.
GET A JOB: WORKING THROUGH COLLEGE
RACHEL: As Dad and I talk to parents about having their kids work while they’re in college, we hear all kinds of objections. Some of them are legitimate, but others are ridiculous. Let’s take a look at the top three we’ve heard from parents.
“But My Child’s Grades Will Suffer if He Works”
That’s a myth, and it’s usually held by parents who think their little darling does nothing but sit in the campus library all day absorbing the wisdom of the ages and staying five weeks ahead of his class deadlines. Please allow me to bust this myth for you. Your college student isn’t spending eight hours a day resting and sixteen hours a day studying.
A part-time job will actually not hurt your child’s grades; it will improve them. Studies show that students who work ten to nineteen hours a week actually have higher GPAs on average than students who don’t hold jobs while in school.6 There are even studies that show how much a student’s GPA goes up the more he is responsible for paying for his education.7 This might seem counterintuitive, but think about it: You value what you pay for, remember? We saw that when we talked about buying a car. If your child is financially invested in his own education, he’s more likely to place a higher value on it and work harder to make the most of it. And if he’s managing a job while in college, he also gets the added bonus of learning things like priorities, goal setting, and time management. That’s some of the best education you can get in college.
“But I Want My Child to Enjoy College”
DAVE: Someone please call the waaambulance. Seriously, sometimes I think we have lost our minds in this culture. All of you who worked while you were in school please raise your hands. Yep, that probably includes you. And you enjoyed college, right? I rest my case. The idea that it’s child abuse for your children to work while in college is just nuts. They don’t have to work, but it sure won’t hurt them if they do.
We made our kids save for their cars, and we saved for their college, so we paid 100 percent of the cost of college for our children. This gift, however, was contingent upon them behaving like responsible adults, maintaining good grades, and graduating in four years. Our girls were involved in campus activities like sororities and Young Life and did not work outside jobs, which was fine with us. My son chose to work most of the time while he was in school to earn extra spending money and gain experience. He also was involved in Young Life. All of our kids maintained good (not perfect) grades and good behavior, and they all graduated in four years.
“But My Child Can’t Cash-Flow College on a Part-Time Income”
RACHEL: If your child has zero savings, no scholarships or grants, and a part-time job, then yes, he’s going to have trouble starting college tomorrow. I’ll give you that one. But let’s get out of this mindset that school is year-round. It’s not; it’s usually broken up into two sixteen-week semesters a year. That leaves your child twenty weeks every year to work forty hours a week to pile up tuition money. Twenty weeks of working forty hours at ten bucks an hour is $8,000 before taxes. And remember, the average in-state tuition at a public university is only $8,655 per year. Throw in some part-time work during the fall and spring semesters, and it starts to look like your student really could work his way through school.
There’s another issue we must deal with here, and that’s the issue of timing. If your high school graduate waits until August to start thinking about how she’s going to pay for college, then she may have to face the hard reality that she has to put school on hold for a semester. That may seem harsh, but trust me, it’s a lot more gracious than walking her into student loans that will follow her around for years after graduation. I don’t want your child to have to delay school, but sometimes it’s necessary. That’s another reason why you should start having these conversations with your kids while they’re still in high school.
MANAGING THE COLLEGE LIFESTYLE
Movies and TV paint this amazing picture of what college life is like. You see students living together in huge apartments and going out to eat all the time, and no one ever seems to leave the party early to go to work. Reality, however, is a different story. Some dorm rooms are nasty. Many college-area apartments are gross. And you’re never going to see meal-plan cafeteria food on the menu at the Four Seasons. Many students are so shocked by the reality that they go into an unbelievable amount of debt to bring their lifestyle up to the level they expected. They even use student loan money to supplement their lifestyle. That’s such a big mistake. Even more than watching tuition and necessary expenses, keeping a handle on your students’ college lifestyle could be the key to getting them through college debt free.
By the time he starts college, your child should have $500 in the bank for emergencies, and he should definitely be living on a budget. Even if you’re still giving him money for expenses every month, he should be responsible for managing that money.
If he calls home every other week asking for more money, you’ve got a problem. You might need to sit down with him and look at how he is spending his money. A lot of students don’t take into account all of the expenses associated with college. He might be paying more for housing than he realized, so look at on-campus versus off-campus options. Food is always the top category college students spend their money on, so look at meal plans versus buying groceries. Even extracurricular activities come at a cost. Clubs, sororities, fraternities, intramural sports, season passes to their school’s sporting events, and other activities will have fees attached. So it may not be that your student is blowing all of his money; it might be that he didn’t take into account all the expenses associated with being a college student. So help him plan his cash flow—and don’t be his on-call ATM.
Room and Board
DAVE: You have to guard against the college lifestyle costing more than the education itself. An expensive car and an apartment with a Jacuzzi, a skylight, and a racquetball court aren’t necessary to get an education. In most cases, dorm lodging and cafeteria food will work just fine. When I was in school, I lived at my grandparents’ lake cabin for free. It had no heat except for a fireplace the first winter we lived there, so when we woke up in the morning, we could see our breath. Don’t feel too sorry for me, though. I was living with a bunch of guys. It was an adventure, it was free, and it was on the lake. Once winter was over, we all thought we were in heaven!
Finish in Four Years
I worked my way through school with some help from family, and I graduated in four years because I didn’t want to write any more checks than I had to. I watched the classes I needed to complete my degree like a hawk. I wanted out of there!
Given my personal history, I had a rude awakening sitting with my oldest daughter, Denise, at her college freshman orientation. The woman leading the orientation was standing in front of this group of people, bragging that the university’s graduation rate was above the national average. The graduation rate was something like 53 percent which meant 47 percent of students didn’t graduate. I couldn’t help thinking to myself that the 47 percent of students who don’t graduate leave school with student loan debt but no degree.
