Should I Go To Public Or Private University? Depends On Your Fear And Guilt Tolerance

The College of William & Mary Wren Building

Wren Building at The College of William & Mary (Public)

“What if I graduate from private school and have to live at home with my parents because I can’t find a job?”

“What if I graduate from private school and end up back at McDonald’s?”

“What if I graduate from private school and end up getting the same job with the same pay as my public school friends?”

“What if I bleed my parents dry to the point they have to work many more years to afford retirement?”

“What if I drop out of private school halfway through, thereby wasting all that time and money?”

I asked myself these questions over and over again when deciding between public university or private university. My parents weren’t rich nor was I smart enough to get large amounts of scholarship money from private schools, so I felt extra pressure to make the right choice.

My thesis is that the more fearful you are of failure and the more guilt you feel about spending money, the more you should consider going to public school. If you are unaware that 870 million people in the world suffer from malnourishment every day, then what do you really care about wasting food on your plate or gorging yourself to oblivion? If you know your wealthy parents will hook you up with a job at their company after graduation, does it really matter you spend $44,000 in tuition going to Boston University when U. Mass-Amherst costs $13,400 in tuition and provides just as good an education? Of course not.

In the end I decided there was no way in hell I was going to attend a private school that cost $25,000 a year in tuition back in the 1990′s if it wasn’t in the top 10. All subjects are taught off the same text books anyway. Some of the intro courses are even taught by teacher assistants. Why pay a premium?

I was even considering going to community college for two years and then transferring over to a four year institution to save my parents more money. But thankfully William & Mary accepted me despite my average SAT score. Virginia has some other great public schools including UVA, Virginia Tech, James Madison, and Mary Washington so it didn’t seem right to not take advantage of the public school system.

When I wrote “Average Inheritance By Country,” I was merely guessing at the $3,000 a year tuition my college charged back in 1995. After doing some digging online, it turns out my guesstimate was pretty spot on at $2,890 a year. The reason why I remember the cost 18 years later is because I was extremely sensitive to my family’s finances.

GOING TO PUBLIC SCHOOL IS THE PREFERRED CHOICE

I believe for the vast majority of middle class citizens, going to a public university is the optimal choice for the following reasons:

Benefits Of Going To A Public School

* High Rankings: Schools such as UC Berkeley, UCLA, UCSD, Wisconsin, Michigan, UVA, William & Mary, and UNC Chapel Hill are regularly ranked amongst the top universities in the nation. There is no dearth of high ranking public schools who produce Nobel laureates and Rhodes Scholars. If you don’t go to a highly ranked public school, rest assured that your public state school provides a similar quality level of education.

* More Economical: If we simply compare tuition costs, private school tuition is regularly 4X more than public school tuition ($40,000 vs. $10,000). After factoring in need based scholarships, the difference is still at least 2X. But if your family falls in the amorphous middle class income level of $60,000 – $120,000 a year, it’s unlikely your family will get need based help. The average student loan debt is roughly $29,400 according to the annual Project on Student Debt / TICAS report study.

* Larger Alumni Base: Public schools are generally much larger than private schools. As a result, you’ve got a much larger alumni base to work with who might help get you employed.

* More Grounded. No matter how hard a private school tries to diversify its students’ economic backgrounds, they will never succeed in reflecting the economic reality of the country’s population. I attended private schools for over a decade when I was overseas, and public schools for 11 years in the US and there is a big difference.

* Less Stress. If your parents pay $170,000 in tuition alone for your private education you’re going to be mighty stressed to be somebody successful by the time you graduate. You’ll feel similar amounts of stress if you have to take out student loans. If you go to public school that costs $40,000 in tuition over four years, you can afford to breathe easier if you don’t find that money job after graduation.

Benefits Of Going To Private School

* Prestige. If prestige is your thing, private schools in America carry more prestige. The reverse is true overseas at the university level curiously enough. Just remember that prestige must be followed by a prestigious occupation, otherwise, what’s the point other than to waste money?

* Facilities. Oh, how I envied some private school athletic and academic facilities! Some schools feel like you’re walking around a private country club with a world class golf course, a indoor Olympic pool, magnificent library, and the best computers and electronic equipment money can buy. Public school bathrooms and dorms can be less than Ritz Carlton like.

* Connections. The rich have gotten much richer than the rest of us over the past several decades. Attending private school puts you in contact with a much wealthier pool of students who likely have better connections to get you what you want. Your academics can only get you so far in this incestuous world. (Read: How The Rich And Powerful Become More Rich And Powerful)

* Target Schools. Many of the top employers in the world will specifically target a handful of schools for recruiting purposes. Many of these schools are private schools. Therefore it is even that much more important that if you do spend the big bucks attending a private school, that your school be on the recruiting list of employers you’d like to join.

Obviously if you are smart enough to get a scholarship from a private school that equals the cost of a state university, then attending a private school is also a great choice. Just know that not all private and public universities are created equal. And of course if your family is rich, then feel free to do whatever you want!

YOU CAN ALWAYS GO TO PRIVATE SCHOOL LATER

Hopefully nobody is foolish enough to want to go to private school just because it’s a private school. It’s important to do a cost benefit analysis on the university based on reputation, lifestyle, academics, sports, learning, alumni network, arts, music, and the ability to get a job upon graduation.

I seriously cannot believe that after 18 years, William & Mary still only charges $7,700 a year for tuition and fees. As an alumni, investor, and personal finance buff, there’s no way I would spend $45,000 a year for ANY private university over William & Mary. My kid would have to get at least a $25,000 a year scholarship from a top 10 school for me to even consider.

For folks considering blitzing their parent’s retirement savings or going into major debt by going to a private university, know that you might feel like a total failure if you graduate with a job that doesn’t match the cost and reputation of your university. You might even join protestors who rail against the government and your private university for not doing enough even though you consciously decided to attend! (Read: To the 99% Protesters: You Do Not Represent All Of Us)

Education is becoming commoditized with free online courses from MIT and other leading universities for example. You can even read blogs like this one to learn about personal finance for free and still throw peanuts at me in the comments section.

If you have your heart set on private university, I suggest going to public university first to see how things go. If you’re financially responsible and still have an itch to go to private school, then go ahead and spend a ton of your own money on graduate school.

Did you go to private university or public university for your undergraduate degree?

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Do you believe a private university education is worth its tuition over a public university?

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Readers, did you go to a public university or private university? Do you think you made the right choice? Do high school students not think about the cost of private university because they can’t see that far ahead in terms of the cost benefit analysis? Would we have as large of a student loan crisis if we all attended public schools instead?

Note: In an upcoming post I will highlight a formula to value your college education. The formula will help you decide on which college type to attend to minimize financial regret and maximize returns. For a list of great value public schools, Kiplinger magazine just came out with their rankings. UNC, UVA, Florida, W&M are in their top five.

Regards,

Sam

Sam started Financial Samurai in 2009 during the depths of the financial crisis as a way to make sense of chaos. After 13 years working on Wall Street, Sam decided to retire in 2012 to utilize everything he learned in business school to focus on online entrepreneurship.

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Comments

  1. Chaz Miller says

    I got my econ degree at a big state university, one that is known for it’s school of engineering. This translated well for me because the emphasis in my curriculum was quantitative-analysis based whereas many expensive private liberal arts college econ programs were qualitative in nature.

    The way I see it, the act of going to college is a future-minded endeavor; but taking on huge debt to finance an education is a purely present-minded endeavor. It extracts a future cost. It exchanges the opportunity of capital-building and compounding for years and years of debt service.

  2. Ian says

    Hey Sam,

    This is my first comment on your site. I think that you’re probably right for the average student but don’t forget that there is merit based financial aid available and some additional programs that are available at private colleges.

    I graduated from Clarkson, a private university in upstate NY, which cost about 35K per year in tuition and fees. I went back to check and it looks like tuition increased to just over 40K but I received 17K from various merit scholarships. Assuming the scholarships didn’t increase in value, tuition would have set me back 23K if I went now.

    The SUNY school that I considered currently costs 20K in tuition and fees but I have a lot of friends that went that route and didn’t get too much in financial aid but I’m assuming I would have found something to get the cost around 18K.

    What really made my decision was the opportunity to attend Clarkson and receive high school credit to finish off my high school degree. I grew up in one of the small towns in the Adirondack park and didn’t have a car so I could just take courses from the “local” community college.

    Having said all that, I will admit that my situation was a rarity. I’m sure that when I have kids, I’ll push them to consider public school. Especially if I stay in North Carolina (I moved since there are no jobs in upstate NY) and they can attend UNC for the in state price.

    Ian

    • Financial Samurai says

      Hi Ian,

      Thanks for sharing. It would be hard to pass up going to UNC-CH if your child got in because of its great academic reputation. If it was between $44,000 at Duke and $10,000 at UNC-CH, I’d go UNC-CH if that was the cost difference, and I made less than $200,000 a year.

      What do you do now? And do you feel your private school degree helped you get further?

      • Ian says

        Hey Sam,

        I’m a SAP consultant. The company I recruit for doesn’t actively recruit from any of the public schools in New York to the best of my knowledge. I would say that going to Clarkson helped out a lot in the industry since the school has a reputation for producing very technically savvy employees and I got into the workforce a year ahead of my high school class. Still a good state school like William and Mary, James Madison, UNC, UC Berkeley, or UM Ann Arbor would do just as well.

        Ian

  3. Dan says

    You may be right. But your argument is undermined by two false assumptions :

    . That the sticker price is a valid measure of a school’s cost. (This is much less valid for private than for public schools.)

    . That getting a scholarship is mainly a matter of being “smart” or a “good student.” (Ditto. Private schools use need-based scholarships much more.)

  4. Shaun says

    I went to a private college. I think the connections from being around a higher wealth group of kids can’t be understated. All of my friends from school have good paying jobs in a large variety of fields. It comes in handy time and time again. I also got at least 2 jobs in the 7-8 years since I graduated from connections. Easily made up for the extra cost I paid to go to school (I didn’t pay full price at the private college was only mildly more expensive than public school).

    That said, tuition has nearly doubled since I first stepped on campus nearly 12 years ago and had I been paying full price it is kind of tough to justify the difference in cost even with all the benefits factored in especially at today’s prices.

    • Financial Samurai says

      Shaun, can you share what you do, and can you quantify the dollar value of these connections?

      I have no doubt the tremendous amount of value connections provide for private schools as indicated in my Benefits of Private School section of the post.

  5. Dave says

    I went to a public university, in-state, and I think it was the right choice. I agree with Sam’s assessment. Unless you are able to obtain merit based aid to a “top 10″ school that brings the net cost down to something close to a public school, I think that a public university is the way to go. When I was looking at schools, my parents offered to pay for school but it needed to be a state university – any state but no private. Now that I am within 2 years of when my son will be going to college, we are going thru the same decision process. He is a much better student than I was so there is a possibility of some merit aid. Additionally, out-of-state tuition is still really expensive at the public universities. This is the trade off that is the most difficult: In-state vs. out-of-state public university. My wife only had one choice to get help from her parents – go to an in-state, public university. She thinks that was a great choice as she went to a large, well known, highly rated public university in her state.

    • Financial Samurai says

      Thanks for sharing Dave. It’s just the reality for most of us middle class folks growing up that going the public route is the better way to go if we can’t get tremendous merit scholarships. We’ve got such a huge student loan crisis, I hope more people consider going public.

  6. Michael says

    I went to both a private and public school. I think that the quality of the education can be similar, but its up to the individual to take advantage of the resources available at their school. I started at a private school, and once the financial reality set in, I decided the costs weren’t worth it for me and I transferred to a public school.

    I have siblings that attended private schools and I think one of the biggest advantages is the network and ability to make connections. I feel that if someone is focused and has a specific reason or career path, the cost of private school can be worth it.

    I’m happy with my decision as it left me virtually debt free coming out of school and I still was able to start my career of choice.

  7. Done by Forty says

    I chose the awesome path of going to a small private university for two years, then transferring to a state school in California. It is, quite possibly, the least cost effective way to get a degree from a public university…so I have that going for me, which is nice.

    I haven’t personally found that the degree from a public university has held me back in any way. I think that, outside of the very top private schools, the benefits of going private are overstated. It’s tough to get a positive ROI on the delta between private and public.

  8. Mark Ferguson says

    I want to a public university and it was a great party school! Haha I ended up going into real estate which I am so happy I did instead of the corp world. The schooling did not do me a whole lot of good. Most of the focus was on joining the corp world and investing in the stock market. No mention of real estate, very little mention of starting your own business. I learned so much more on my own after college.

    • Financial Samurai says

      You are lucky your parents let you go to a party school! Although at that age, ever day or week is a party in college!

      Did you consciously decide to want to go to a party school? Or is that just how things ended up?

  9. The First Million is the Hardest says

    I went to a large public university, I know many people who went to both public and private schools. Outside of the few who went to top schools (Cornell, Princeton, UPenn), I don’t see any advantage gained by my private school friends vs those of us with public school degrees.

  10. Ace says

    Both my sister and I have degrees from private universities.

    I think if the private university provides significant financial aid (and most do), it isn’t a bad way to go.

    My overall opinion is that public college is a far better deal. If it’s a choice between carrying heavy debt or going to a public university: go to public university.

    Public universities offer excellent value and outside of the more obscure occupations, where a person gets his or her college degree won’t really matter (as long as it is a legitimate, accredited school).

    Also….. For some folks, the community college/associates degree/vocational/trade school route does work. Think about this: your goal is a six figure job. Plumbers/electricians/etc. typically make that. And it is very hard to outsource those kind of jobs!

      • Ace says

        Sam,

        I was a non-traditional student. I joined the military after high school and basically paid for my own education.

        It’s been so long; I can’t really remember the prices. My sister was a traditional student, and she received substantial financial aid at both the undergrad and graduate level.

        Both of us have master’s degrees which is really cool! Mom & Dad never got past eighth grade.

  11. Michelle says

    I received my undergraduate degrees from a private university, and my MBA from a public university. I’m happy with my decision, but boy, was that private university super expensive!

  12. Austin says

    My alma mater has raised tuition 5.5% TWICE in the last twelve months. I believe it’s now roughly double the cost that it was when I enrolled 12 years ago. That’s a six percent annualized increase largely across periods of low inflation.

    There is an incredibly interesting movement lead by the Texas Public Policy Foundation to get degree costs down to $10k. The idea is to phase out tenured professors and rely on adjunct professors. In addition, the $10k plan would require “research universities” to pair back their research programs which inevitably lead to tenured faculty who almost never lecture. Understandably, there has been major backlash from tenured faculty threatened by such a potential realignment. The idea is now being pushed at satellite campuses rather than the flagship campuses.

    Private initiatives like this coupled with Federal momentum to reduce education costs and the rise in prospects for online education make me feel like it is somewhat of a gamble to contribute heavily to 529 plans where I may be faced with withdrawal penalties if I overestimate costs in the future.

    Just to play devil’s advocate here: I believe in the 1970′s only 10% of the US population had a college degree. Today roughly 30% has a degree. Arguably, the perceived value of a college degree has gone down. Perhaps the price increases we are seeing are commensurate with the demand and could ultimately act as a natural equalizer which would increase the value of a degree. (I don’t personally think an uneducated workforce is a positive for the US in a globalized world, I am just throwing this idea out there).

    • Concerned says

      The Texas Public Policy Foundation’s ideas are mostly non-starters. Despite the name, it is a privately funded group.

      We have schools taught solely by adjuncts that do no research and cost very little… community colleges. US universities are still some of the best in the world, although that’s been changing in the last few decades. They draw smart people from around the world to this country. Most large public schools are “research universities” and tenured faculty lecture a good deal. However, many of these universities have significant graduate programs so you, as an undergrad, may not have been exposed to all of the classes tenured faculty teach.

      I have no problem with the creation of a university employing only non-tenured, adjunct faculty and offering degrees for $2,500/year including fees and books if it’s truly feasible. I would not change existing, successful universities directly to that model though.

      • Chris C says

        One of the biggest and most powerful things that happened to me in my college education was the realization that I already had most of the knowledge and ability to resolve problems on my own.
        All this thanks to a 200 level class teacher (who was going for his PhD at the time,) that I had who didn’t know how to use a tool for debugging assembly programs more easily (by variable name vs finding out where the variable was and dumping the information out). This is back before the Internet was remotely around, so I did it the “old fashioned way” of going to the library to research it, and wrote up a 1/2 page guide on how to make it possible. The teacher copied and distributed it to the class with my permission the very next day after trying it out himself and gave me full credit in front of the class … made me embarrassed at first because I was rather shy back then. :-)

  13. Dave @ The New York Budget says

    I went to private school and was lucky enough to have my parents (and grandparents) cover the cost. Our family didn’t hurt for money, but we weren’t fabulously wealthy either. But they did place a very high priority on education (being educators themselves) and put a large portion of their savings away for me and my sister to be able to attend any school we wanted.

    Was this prioritization misguided? Perhaps. I might have received an equally good education from a state school, but I think it was a much better use of money than always having a new car, a huge house, the latest electronics, etc, which we didn’t have. I have absolutely benefited from going to a private school – enough to offset the cost? I’m not sure.

    I appreciate the fact that you laid out the benefits of a private university as well, though – a very even-handed approach.

    • Financial Samurai says

      Thanks for sharing Dave. What is it that you do now, and can you highlight any specific benefit(s) you received of going to private school that your public school brothers and sisters might not have received? thx

  14. Andrew@LivingRichCheaply says

    I went to public school for undergrad and I’m glad I did because I would have had even more debt if I didn’t. However, I probably should have gone to a state school that was more respected in that field though. Maybe it wouldn’t have mattered since I went to law school…which was a private school I really wished there was a public school option for law school in NYC. I would have much less debt. Well there is CUNY Law School, but they didn’t have a part time evening option which is the route I went. I didn’t take on as much debt since I was working full time and took only the federally subsidized loans.

    • Financial Samurai says

      I think if you got into a law school you desired, then I don’t think where you went to state school mattered. It was probably the best financial move for you to save money on undergrad if you got into your private law school. Big bucks though going to law school!

      • Andrew@LivingRichCheaply says

        I would have preferred to have paid much less and have gone to a public law school. You might need to go to a highly rated private law school to get some of the jobs at the white shoe law firms paying 6 figures but I work in government. It probably didn’t matter as much where I went.

  15. Bill V says

    Sam,

    My daughter is entering high school next year. My wife and I decided private school for her in high school, public school for college. Were doing this for a couple reasons.

    The private high school will cost us $35,000.00 for 4 years. Last year the 52 graduates received a combined $2,000,000.00 in scholarships. During there senior year they are required to take a class were all they do is apply for scholarships. (I think all high schools should do the same.) My hope is that scholarships will offset her tuition costs

    Secondly, this particular school provides much more structure and personal responsibility than our local public high schools. If that keeps her on the right path in these formative years, money well spent.

    Our thinking is, if we give her all the love, discipline, and advantages in her first 18 years of life, it won’t matter what college she goes to.

    • Financial Samurai says

      Bill, I think this is a very rational and smart move you guys are making. Makes sense to be a little more hands on during the first 18 years. After that, perhaps let the kids fly freely!

  16. Broke Millennial says

    I didn’t have the option to go to a state school. I was an expat when I went through my college apps process and didn’t have residency in any US state. I applied to a few state schools, but the out-of-state tuition is just as atrocious as private schools. Luckily, the private school I went to offered me a pretty hefty academic scholarship, so there was no breaking of the bank. My little sister also went the private school route and even though she got into great state schools (like UCLA) she opted for USC, again because she had no in-state tuition benefits. She’s also a film major, so saw value in going to the best program in the country.

    • Financial Samurai says

      That’s an interesting perspective on NOT having the option of going to public school since you went to HS abroad. Makes attending private school more digestable.

      Isn’t USC still 2X more expensive than UCLA out of state tuition though e.g. $44,000 vs. $22,000?

  17. Broke Millennial says

    And speaking of those ritzy private international schools, a lot of them cost more than a college education. Talk about lack of economic diversity… I’ve written about that before on my own site.

  18. Geek says

    I think school choice doesn’t matter much other than finding a target school. I started in community college then went to a target school for a large redmond software company and everything turned out ok, paid off 50k of loans in <2 years.

    Make sure to major something society deems useful and you can pay off private school loans and help your parents pretty quickly. Then you can earn your non-paying degree if you still want it later on.

    Society is telling you that we need more engineers and scientists (finance guys! ;) by paying them more money. Math isn't that fucking hard.
    D:

  19. Nick @ Step Away from the Mall says

    Knowing what I know now, as they say, I’ve become a big public school guy. That being said I went to and got good value from private undergrad and grad school. But the key for me was that I got the value out. I didn’t go to a $250,000 school to make $25,000 per year.

      • Nick @ Step Away from the Mall says

        Yeah… At first, I unintentionally did a value calculation. I got into a handful of schools out of high school (decent grades pretty good SAT). The school I chose gave me the best financial aid package. I ended up really clicking first year and got a gig in the student loan office, making friends with the financial aid people and learning the grant system. I ended up getting half the tuition paid by various grants and a little more in scholarships. I got into a top grad school, applying only to three that had a reputation and history of being viewed in the private sector as being good places to find talent for large companies that pay top dollar. I got half tuition grant there and a little more aid. Total time in school was 8 years and my total out of pocket was less than my starting salary. On top of that I had a summer internship that paid me another $25,000. I worked through both undergrad and grad, first as a bouncer and then as a bartender that paid for living expenses and then some.

        Long story short, I chose a good value undergrad, even though it was private, given my plan going in (always pursued this line of work), focused on getting crazy high grades to maximize grants/scholarships, studied/attended class in a way that helped me learn best rather than sticking to the “this is how you get through college” advice, worked almost full time throughout and then chose grad schools based on expected results after graduation. The “average” starting salary was what I started out at and there was something like a 95% employment rate, etc.

        It was methodical and multifaceted. But it was worth it and also expected to be worth it from the beginning.

  20. Larry says

    I started at a private school (Oberlin), finished my BA and MA at a state school (Stony Brook) in my home state of NY, and took my Ph.D. at another state school (Rutgers). I saw no essential difference in the quality of education at all three; in fact at the time I graduated from Rutgers (1977) it was considered to have one of the best English departments in the nation. Fortunately I graduated with virtually no student debt.

    A point not yet mentioned: there is a oversupply of young Ph.D.’s looking for academic jobs, which means that colleges and universities have their pick (and many recent Ph.D.’s are going begging for work, or are scraping out an existence as underpaid adjuncts). This situation has actually been going on for decades and shows no sign of easing up. As a result the entering college student has a good chance of a quality education at any school he or she chooses to attend.

  21. Eric Shun says

    Four degrees, $25,000 total out-pf-pocket tuition:

    1983 – A.S. Computer Science, large MA community college; $2000.
    1985 – B.S. Computer Science, mid-size MA private college; $5000.
    2000 – MBA, large southern state university; $5000.
    2005 – M.S. Risk Management, large southern state university; $10,000.

  22. Micro says

    Another thing to look is if a top tier school is part of a state system. University of Wisconsin-Madision is widely regarded as a top university. There isn’t anything wrong though with their smaller schools in Green Bay, Milwaukee, Lacrosse, etc. Most employers don’t look at your resume closely enough to see the difference in cities. They just see that you went to the University of Wisconsin. So you get that presigious association with out the prestigious price tag.

  23. NoDegree says

    I didn’t respond to the questions, since they didn’t allow for additional options. I think I chose the best option:

    I dropped out of the first quarter of ninth grade, got my GED, never went to college, followed my auto-didact nature, and by the time most people were graduating high school, I was signing a six-figure contract in silicon valley and have doubled that annual income in the dozen years since that day.

    Not having spent four or more of my earning years stuck in college, earning nothing, is great.

    Having four or five years of professional experience on my resume by the time most were finally entering the work-force was very beneficial.

    Having six-figure net-positive instead of six-figure debt before everyone else’s careers have even started is an incredible relief. Especially as I see the financial difficulties of colleagues who went into debt for their education (only to wind up where I am, without the education).

    Best of all, regardless of the fear they try to instill on you in high school, nobody in my entire career has ever cared about *or even inquired about* my high school graduation, my high school grades, my college education (or lack thereof), or any other aspect of my education.

    All I had to do was bust my ass to get my foot in the door one time at one place with one person and capitalize on that. From that point on, all I had to do was refer to that first experience to build my career on.

    If I were a doctor or a lawyer, this would obviously not be an option to me. It isn’t an option for a lot of people, who simply may require the structure and guidance of institutional academia pointing them each step along the path until they’re in their mid 20s. That is completely fine. That is what some people need. We aren’t all the same.

    I have to say, though, that if you have the ambition, passion, work-ethic, self-determination, and charisma, you can follow things you care a lot about and become good at them and then find someone somewhere to give you that one shot. It may not be easy and it may not be guaranteed to happen, but if you can pull it off, you just saved yourself a mountain of money (combine the debt you don’t have to incur and the net-income you earned during the time you’d have been in school — and the additional income you’ll gain throughout your career by having more experience and more background under your feet!).

    It’s unfortunate that we don’t at least present this option (and all the known success stories) to young people. Especially the very ambitious ones who know what they want to do with their lives. Yes, aim for college. Don’t cut that option out. But mix in the option of just breaking your balls and climbing the ladder on your own. That potential still exists, even in 2014.

    • Financial Samurai says

      Great to hear you are doing well with your GED! Should give hope to folks with no college degree.

      The question though is, what you be OK if your kid followed the same route since you did well?

      • Chris says

        I resemble that remark! :-)
        I really do, although I did graduate from High School, but never did finish up my degree. Today after busting my butt in many different jobs (including some temp work), I’m doing what I started training to do in college, and being decently paid to do it for the past 20 years or so now.

        Guess I just have to figure out what I want to do next.

  24. Untemplater says

    I went to a nice public school and am very satisfied with the quality of my education and the opportunities it gave me. I certainly hope more high school students today are cost conscious because private college tuition costs make me sick to my stomach.

    One of my relatives went to a very expensive private school, never kept a full time job, and is now broke and unemployed. Would he have ended up in a similar situation if he went to a public school- probably bc he doesn’t strike me as super motivated person, but at least he would have less debt and would be better off financially because of that.

    There are some great private schools out there but they definitely aren’t the best option for a lot of people.

  25. Jamin says

    To me, it very much depends on the market value of the degree and the prestige of the private school. For example, having an MBA, I very much understand the annual rankings which show that the average MBA is not worth it in terms of tuition, living expense, and deferred earnings. That being said, however, I went to an MBA program at MIT (after a BS in comp sci at another private school) which is routinely ranked in the top five, enabled me to double my income in the two years of the program, and ultimately helped enable me to earn enough to pay over 50% in taxes… :( or :) depending on how you look at it.

    That being said, I know classmates from undergrad which racked up $120k in private school undergrad debt, another $80k in graduate debt… all to major in psychology/sociology and earn $33k per year with a crippling student loan burden.

    As with most thing in life, you get out of it what you put into it and there are wrong choices.

  26. Matt says

    I went to a public state school in Pennsylvania and feel that for my undergraduate education, I received a great value. I participated in the honors college at my university and that experience provided me with the extra intellectual stimulation that I was looking for when I was considering more expensive private schools.

    Like a lot of other folks, I have to say that I really believe it’s about 90% what you do with what you have and about 10% luck/good fortune.

    • Financial Samurai says

      That’s what I’m thinking. If you’re really smart, then get a scholarship to make public school cost practically nothing and enter the honors program.

      At W&M, we had the Monroe Scholars who got scholarships and stipends to study abroad, and their own dorm room! I was not smart enough to receive, but other friends did and they enjoyed it!

  27. krantcents says

    No one size fits all! Some may benefit more from the smaller classes and support of a private university. The hard part is to make that decision when you are 18 years old. Private universities are much more concerned about graduation and drop out rates so they have much more support systems for their students. Depending on the industry, there is a huge advantage for certain private universities (particular the ivies and prestige schools). Google, high tech, and entertainment companies prefer certain private universities. Some professions such as medicine, legal and others network with alumni.

    For most of the rest of us, a public university is fine if you distinguish yourself with high grades, sports, campus involvement, part time work and/or the right internship. Success is still up to the individual! I would guess that the unemployed new grads during the reason recession are from all schools including the most prestigious public and private universities.

  28. WhatAboutGoldman's says

    I have a friend that worked in M and A at Goldman’s in NYC. At some point at Goldman’s, he was involved in screening CV’s. He told me that their initial screen weighed heavily on the undergraduate school attended. The HYPS (Harvard, Yale, Princeton, Stanford) in one pile for interviews and the others would get rejected. He mentioned an occasional Dartmouth would make it in! I was incredulous but he really had no reason to make this up for me as I’m not in the financial sector. (By the way, he cashed out in his early thirties and is retired now.)

    To play devil’s advocate, if you want to be with an A list Wall Street firm or top consultant firm (ie. McKinsey), doesn’t your undergraduate institution matter at least to get that first job? How many state school kids get the coveted internship spots? (One of my other friends sons is at Princeton and he just got the coveted offer …. pretty set for life financially if that’s what you want to do I guess. Apparently all the other kids at the interviews were from the HYPS of the world.)

    • Financial Samurai says

      There is definitely a heavy weighting screen towards the TARGET schools, but the target schools go beyond HYPS.

      Your friend sounds like me, given I’m in my 30s and worked at GS. Do I know him? Where did he go to school?

      You’re only set for life working at McKinsey if you work at McKinsey for a long enough time.

      The point you are making is in my last point on the benefits of going to private school.

      • WhatAboutGoldman's says

        Interestingly, my friend went to a third tier private school BUT was a brilliant Math and Econ guy. He got his job at Goldman’s through his family connections as his dad owned a large manufacturing company and his father-in-law was a big time developer. What’s ironic is that he was put in a position (apparently) of reviewing intern CV’s and fell into the same trap that if you went to certain schools, you were “better qualified.” If it were not for his connections (inspite of his academic qualifications), he probably wouldn’t have been at Goldman’s!

        I think he is about 8-10 years older than you Sam so you probably wouldn’t know him.

  29. James says

    Sam,

    Another great posting as usual. One thing I didn’t see discussed in either the posting or the comments – are the sociological effects of private school. Children who go to private schools tend to get better and more prestigous jobs after graduation. For example, consider how many U.S. presidents have gone to yale or one of other Ivy league colleges.

    Given that this is so, its important to consider that a public school education, while fine for most purposes, isn’t going to get you or your children into better jobs or propel you into a higher level of social strata.

    Thanks,

    James

    • Financial Samurai says

      James, is that you? Do you seriously think a public school education isn’t going to get children beter jobs or propel you into a higher social strata? Does having a private school diploma really propel someone that far?

  30. Mike Hunt says

    Good article. I went to John Hopkins, at the time the tuition was $15K a year and my parents kindly paid for this. I did get in to U Michigan but out of state tuition was 2/3 of this. I got a full ride to Fairleigh Dickenson but wasn’t interested in going. Based on that I got a full scholarship for a Masters at UVA where I continued after my B.S.

    In hindsight it was all worth it and then some but the math for students today is tougher. College tuition is too high and the prospects of high paying jobs out of school faces much more competition. At some point people are going to vote with their feet.

    My question is where is Google U? Shouldn’t the internet be lowering the barrier to learning? Surely there can be a lower cost way to network and connect with like minded people… I see this as the definitive wave of the future. And will be proud to send my child to Google U (vs Tencent U) in 2030!

    -Mike

    • Financial Samurai says

      I think there is a Google U. Khan Academy, MIT free courses online, webinars etc! All point to making paying $44,000 a year in private school tuition even that much more tough to swallow.

  31. Moises Silva says

    I went to public school in Mexico, I paid about 500 bucks in total for 4.5 years of an engineering degree in electronics that I combined with working part time and sometimes full time.

    I live in Canada now, well paid job (well above 6 figures), while many of my peers in Canada are still paying off their degrees, not even making 70k / yr. I tend to think that while private education may have its advantages as you’ve pointed out, it’s a luxury rather than a true investment.

    While I benefited from moving to a richer economy, even when I worked in Mexico I did just as good or better than peers studying at private university.

    As other’s have mentioned, perhaps private education prestige works better for certain careers such as medicine, law etc, but in other areas such as computer science I don’t think it helps that much.

  32. Tom says

    For my undergraduate degree I went to a pretty expensive school, but by the time the need-based financial aid and scholarship kicked in, it was only $2-4k more per year than my state school (Rutgers), which I absolutely despise. What kind of state university tells its potential applicants it doesnt give ANY preference to in-state students?? Then why in the world did my parents state taxes go toward funding the school.

    If I had gotten into The College of NJ, I may have changed my tune, but I would say my time at my particular private university helped me greatly with connections and even though it is ranked about the same as Rutgers, I was very happy with my decision.

      • Tom says

        I should clarify, it is a bit cheaper for in-state students at least at the time I was applying, but not by much. I actually could have gone to Florida State as an out of state student for less than what Rutgers was charging me in-state. Needless to say that school leaves a bitter taste in my mouth.

        • Financial Samurai says

          Yeah, seems like your state school choices were limited. Virginia had a plethora of good quality state schools so I thought it was a waste not to go to at least on one of then. W&M and UVA are beautiful!

  33. David Michael says

    It’s amazing to me how the academic world has changed so dramatically in the past 50 years. My costs for everything (room, board, tuition, etc) at Duke U (class 1960) was $2000 a year, The most remarkable part of it was that I worked three jobs during the summer to cover all of the costs. Today, that same school costs about $50,000 a year.

    My granddaughter, who is highly skilled in languages, is studying at a university in Venice, Italy for $7000 a year for everything. She now speaks Italian fluently after a year there as a Rotary exchange student. Her major is Mandarin (Chinese) and she plans to work at a factory setting in China for a term as part of her language and cultural learning. Her parents were delighted with her selection since it was even less than her local university costs at the University of Colorado in Boulder. I mention this because there are unlimited ways to get a college education these days. Studying and working overseas offers many opportunities not available in the USA.

  34. Brian says

    I went to a private college and graduated in ’97. I believe it was about 25K/year and I didn’t have any loans or scholarships. I don’t necessarily think that I got a better education or even a leg up having gone to a private school. However, I do know my first boss lived in the same city as the school and knew of tough academic standards – science and engineering school. He did make a comment that if I could handle that academic pressure then he was confident in my ability to do the job.

  35. Cat Alford (@BudgetBlonde) says

    I was just talking to someone the other day about our dear alma mater. :) They thought it was private and were sort of talking about expensive private schools, and so I schooled them on how affordable ol’ Bill and Mary really is, esp for in-staters.

    Also I thought about you when I read this article yesterday and was going to send it to you – for no other reason than knowing you worked on Wall Street and was curious about your thoughts: http://www.nytimes.com/2014/01/19/opinion/sunday/for-the-love-of-money.html?smid=fb-share

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