Susan Smith looked at her calendar and couldn’t believe it was April already.  As a College Counselor at GoodTimes High School, she always looked forward to this time of the year.  Whoops of joy could be heard reverberating through the halls as students checked their IPhones, zipped through their emails and found the message that they had been waiting all their lives for.  Susan also knew that unbeknownst to many students that letter of acceptance did not always guarantee a spot on campus in the fall.  No, the financial aid award letter attached the acceptance letter often would be the determining factor.  While she loved this time of the year for so many reasons, Susan also knew there would be some difficult discussions also.  Today, being a typical day in April, she knew her schedule would be booked almost to the minute.  As she had reviewed the files last night for today’s meetings, she knew her next two meetings this morning would be perhaps the most challenging.  

With over 20 years of experience guiding high school students through the college application and selection process, Susan had developed a data-driven or analytical approach to help make sense of the chaos of serving over 300 students.  Some students and parents felt that she didn’t take into account the students “individuality” or the more subjective aspects of selecting a college but how was she supposed to get inside the heads of so many students to know about their individual wants and desires.  Besides, she had seen many a student choose schools based on factors such as the size of the dorm room, the quality of the student-led tour, the variety of food served in the cafeteria or (this was her favorite), the height of their climbing wall.  She knew in the end that students didn’t always grasp the importance of a school’s academic strength, its reputation among employers or the success of its graduates in the work world.  That was her job to educate them.

As she day dreamed about graduation day and celebrating the accomplishments of the senior class, the knock on her door reminded her of her 9:00am appointment.  John J. walked through the door grinning from ear to ear.  He had gained acceptance into his three top choice schools and couldn’t wait to tell Susan his decision.  Before he could, Susan interrupted, “John, great news about your acceptances. I think before you decide, however, we should take a look at some numbers.”  John interjected, “Ms. S., I was never that great at math, so can’t we just skip this part and let me tell you what I decided.”  

At that point, Susan pulled out a chart for John to review:

After peering over the figures for about 10 seconds, John spoke up:

“Well, now I am even more clear about why GoodTimes U. is the right place for me.  I want to go to a school that accepts more students since it means they will have better students there.  It also has the best student:faculty ratio which is important to me.  I couldn’t see going to a school where there are 20 students to 1 teacher.  Besides, when I went to visit FineState U., I sat in on an introductory class with over 200 students.  I want to be challenged so I like GoodTimes’ lower graduation rate as it means the coursework is harder and so not everyone graduates.  I am not sure what loan default means but clearly having a higher rate must be a good thing.  I can’t wait to sign my acceptance letter and get going.”

Susan felt the need to clarify and correct some of John’s thinking. [Insert your response to John here:]

Over the years, Susan had found most students didn’t want to talk about the M (money, of course) issue.  Since many parents and students weren’t comfortable with the discussion, Susan often found that her conversation with the student was the first time they had considered how they were going to pay for college.  She pulled out another sheet of paper with some figures on it:

John took a moment to review the Financial Aid summary before speaking up:

“I can’t tell you how lucky I feel to get into a school like GoodTimes.  I mean look at how much it costs and clearly something that costs more has to be better; after who wants to drive a Yaris when you can have a Ferrari?  Who wants to get a cheap education after all?  I mean look at how much GoodTimes is giving me in grants.  A $26,000 scholarship.  They always told me they have a great financial aid program.  That is awesome!  I haven’t talked to my parents yet, but I know when they see how much money the school is giving me they will want to support me so much.  Besides, whatever my parents and I can’t pay I can always take out in student loans.   I hear that government loans are awesome and have really low interest rates.  I can borrow as much as I need too so I am all set.  Private loans sounds like a great deal too and are easy to get without having my parents sign.  I was planning to work about 20 hours per week when I am at school too.  This will keep my loans down also since I hear those campus jobs pay about $25 per hour.  I can’t wait to send in my check to hold my spot at school.”  

Susan paused for a moment, drew a deep breath and then responded to John:

“Insert your response here.

Susan looked at her watch realized that Cheryl Ann had been standing patiently outside for awhile.  Susan sent John J. off with the words, “Think about what I said and let’s talk more tomorrow.”  She warmly greeted Cheryl Ann and pulled out her file.  An academic superstar with strong leadership positions outside the classroom, Cheryl Ann had her sights set high.  She had applied to and been accepted at some of the top U.S. universities.  Unlike John J., she didn’t have a clear sense of her top choice and hoped to get some clarity from Ms. Smith this morning.  

Ms. Smith pulled out the first chart and reviewed it with Cheryl Ann:

Ms. Smith looked over at Cheryl Ann who had spent several minutes looking at this information and had a puzzled look on her face.  When she spoke up, her confusion was apparent:

”Ms. S., this information makes my decision even more confusing.  I mean, on the one hand, I want to be close to home but I also feel like I am giving up a great opportunity to go to great schools that are 3,000 miles away from home.  I also don’t want to put too much of a burden on myself or my parents and I know that since Charles State is a state school it must be cheaper to attend.  My parents tell me I better not come home if I don’t graduate, and Charles’s graduation rate seems quite low at only 83%.  I heard somewhere that 90% of all college students graduate on time so I am a bit worried that Charles is so low.  Plus, it looks like students have trouble paying on their student loans since their default rate is twice as high as the other schools.  Can you help me?

Ms. Smith knew that Cheryl Ann only had good options available to her but she felt the need to correct some of her misperceptions:

“Insert your response here”

As with most families, Cheryl Ann knew that money would be an issue with her family too so she was happy when Ms. Smith shared the financial aid numbers that she had crunched after analyzing Cheryl Ann’s situation:

Cheryl Ann let out a sigh of relief after reviewing the numbers:

“Well, Ms. S., this certainly makes things easier.  I didn’t realize that Charles State was so much cheaper than the other schools.  I don’t know how I can ask my parents to pay $57,000 or $62,000 for my education.  I think they are even going to have difficulty coming up with the $3,000 that this EFC formula thing says we need to pay.  My Dad lost his job recently and my Mom had her hours cut at the office she works at so that $3,000 will really be a stretch now.  It looks like Charles State wins out based on the financial equation, right?  By my math, it looks like I will only need about $5,000 in student loans to go to Charles and since it should be easy to graduate in four years, that’s only about $20,000 in debt.  Wait, that seems like a really big number!  I don’t want to be spending $1,000/month for 10 years for my college like those people in the videos I have seen.  I need to rethink this and whether I should attend a community college first given all this financial pressure.  Ms. S., HELP!

It was meetings like this one with Cheryl Ann that made Susan realize why she entered the counseling profession so many years ago.  It was clear to Susan that without a personal finance class, bright students like Cheryl Ann would struggle with the college financing decision.  So Susan, looking at the notes she prepared the night before, provided Cheryl Ann with the following advice:

“Insert your comments here”

About the Author

Tim Ranzetta

Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.