Speaking of UC-Santa Barbara, here’s some loser who couldn’t get into a better school. Carol Greider. America’s latest Nobel laureate in physiology/medicine.
A few weeks ago we got chided (chiding is a regular occurrence in our world) by the guy in change of a far more prominent personal finance blog that we occasionally contribute to.
A high school senior had a choice to make – a free ride at a demanding but obscure college, or full price ($40,000) at a heralded school in the Ivy minor League. Let’s call the first school Commuter University, and the latter Pretension College. She posted her dilemma on the site and asked commenters to weigh in.
Can you guess what people recommended? Here, we’ll do it in multiple-choice form:
__ Do whatever you think is best.
__ Either one is a good choice, there are pros and cons to both.
__ This is the time to live, not to think about financial considerations.
__ Have you thought about student loans?
__ Are you insane? Go to the school that’s offering the full scholarship.
The answers were evenly split among the first 4, with one vote for #5. You can probably guess whom.
#1 and #2 don’t even count as advice, but that doesn’t stop people from sharing their non-opinions. #3 and #4 are essentially the same (rotten) advice, which is to incur debt now and worry about the ramifications later.
The worst part is that she was going to study a hard science, too. Look, if you major in chemistry, it doesn’t really matter whether you do it at Duke or at the University of North Texas. It’s not going to impact your ability to get a job in your chosen field. Only those who employ non-scientists (sociologists, social workers, basically anything that starts with “soc-”, with the possible exception of soccer coaches) care that you went to a “prominent” school. A Harvard English degree might be more profitable than one from Cal-Santa Barbara, only because of that ridiculous concept called cachet. It’s not as if the professors at the former can inspire you to parse the meaning of Pilgrim’s Progress any better than those at the latter.
This girl was obviously bright enough to get the attention of multiple schools, but her financial acumen was the equivalent of a kindergartner’s. And along with the failure to make the obvious decision were a litany of excuses, most of them citing “life experiences” and other non-monetary considerations. Not that non-monetary considerations aren’t important in this life, but paying for college isn’t one of them. Knowing that you’re going to be incurring 4 years’ worth of student loans is like knowing that you’re going to have a gigantic credit card balance in 2015. Or knowing that you’re going to lose every game of chance you play. Or knowing that your house is going to lose $40,000 in value. The last three examples are somewhat subject to explanation, but the first one was a fixed cost that this woman gleefully embraced. The two birds in the bush are the primary motivating factors for many a young person who can’t see the giant California condor resting in her palm.
We finished our diatribe by asking an equivalent question with a slight twist, which no one (including the story’s protagonist) bothered to answer:
This time, it’s Pretension College that offers you the full scholarship. Meanwhile, Commuter University starts off your freshman orientation week by handing you a $40,000 check. Now which school do you prefer?
**This article is featured in the Carnival of Personal Finance #320-Plutus Awards Edition**
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Since the choice is free ride versus a $40K check, I would take the check! Is that $40K per year? Then I would invest the funds and what it grow to a million dollars. Remember I am thinking like an adult, most 18 year olds will not invest it. Instead, they would blow it on a car and having a good time!
Now I want to know which blog the story came from, just so I can go and laugh at the morons who told the student not to take the scholarship.
Link shortened for discretion’s sake: http://bit.ly/qo3Z3c
HAHAHAHAHAHAHA! My two favorite parts:
-1- Take the freaking money. We’re ultimately about personal finance here, right? We’re not helping Katharine with her love life or her diet and exercise regimen: she came with a financial question, seeking advice, and we answered.
-2- I don’t mean to engage in poor form
…
I admire your ability, Greg, to draw a line in the sand and take an unwavering stance. My dad gave me that same choice and I did the same (dumb ass) thing she did buying the “premium” education. 8 years later, I am running the same business I could have run with a $20,000 education, except now I am still paying debt.
But hey, at least my resume looks good.
Oh wait… I haven’t needed a resume since 2000.
Ummm. Well… AT LEAST I MET MY WIFE AT…. oh wait… that didn’t happen either.
(lmao)
Thanks. I assume you also read the beating my advice took. That’s one thing that drives me nuts about the “community” aspect of some blogs. Everyone too busy patting each other on the back to talk about things objectively, for fear of hurting anyone’s feelings. Not that we go out of our way to hurt people’s feelings (really, we don’t) but someone has to be the one to stand with palm facing out and say “stop the madness.”
Yeah… I tend to be one of those back-patters on this blog… mostly because I agree with just-about everything you say. lol. But if you ever posted something that started with “what should I do, option A or option B,” I certainly as hell wouldn’t be like: “they’re both good!” Ugh.
Most people are afraid to take the money when it is setting right in front of them
These kinds of discussions are quite difficult for us Brits. Over here there are massive differences between the top schools and quite frankly the useless universities. Secondly, although tuition fees are going up next year, they’re not a patch on what some schools charge over the pond. In the UK, if the student took a place at, say, Oxford University, for example, she’d have a significantly higher earning potential than if she studied the same course at, say, London Metropolitan. Even if London Metropolitan sponsored her, it almost certainly wouldn’t be worth taking up the opportunity. Whilst this might sound elitist, there are more networking opportunities available at the higher tier schools, which in turn impacts employability.
Would this student’s earning potential be impacted by her decision? If so, by how much? Are there other factors besides pure economics and money that pertain to employability that need to be taken into consideration?
Harri, I encourage you to read the original thread linked to in the comments above.
There are a staggering number of 4-year colleges in the United States. Per capita, there are well over twice as many as in the UK. Networking is still a big reason for attending a marquee school in the U.S. (our last 4 presidents all attended either Yale or Harvard), but the nation remains so vast, diverse and dynamic that employers have no choice but to value merit over connections.
Judging from my own experience, which can’t necessarily be extrapolated to the society as a whole, I know two Ivy League graduates on a personal level: a 60-something from Yale who worked in advertising sales and probably never cleared $60,000 a year, and a 30-something from Harvard who worked in a similar position. Whatever connections they made are still waiting to pan out.
Meanwhile, the two most financially successful people I know went to Northern Arizona University, which is located in a remote part of the nation, known primarily for its forestry program, and counts the guy who played Cookie in the old Roy Rogers movies as by far its most famous alumnus.
FYI- It’s called UCSB not Cal- Santa Barbara. =P