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Once again, student debt managed to climb its way up to be among the top of the headlines. President Obama proposed to reform student loan interest rate structure to be based on market forces rather than bureaucratic rules. The situation with student loans have become so desperate that lawsuits are being filed by students against their alma mater. An oversized student loan can be a perpetual anchor to weigh down the American Dream. Before I go on, let's get one thing out of the way. Yes, not all diplomas hold the same value. For example, a degree from Harvard University clearly carries with it the prestige and recognition that does not come with "Podunk State College". The moral of this story is not so much how diplomas from all colleges are interchangeable or perfectly substitutable. However, with prudent decisions, one may be able to obtain a quality education toward a fulfilling career whilst avoiding the worst case scenario for college students: spending decades to pay down a debt that cannot be shed through bankruptcy. In 2001, I was facing a problem that few American high school students faced. I came from an (legal) immigrant family. Due to various circumstances, we were not able to amass any notable degree of wealth. Needless to say, I did not have a college fund. Even worse, in-state tuition was not an option for me because of my status as a F-1 international student. Although at the time I was living in Texas, where top 10% of all high school students are guaranteed entry into any public institution, my grades were pulled down by my early years in high school due to language deficiencies. My choices were limited: pay out-of-state tuition in Texas or anywhere else. Although tuition inflation had only recently surface as a hot issue in the media, its upward trajectory was already well in place by the early 2000's. In short, a F-1 student with pretty good (though far from excellent) grades is not exactly hot commodity. My choices essentially came down to a private university in the Midwest that is nationally ranked among top 20 undergraduate programs in the country, or a little-known liberal arts college in the South but has an excellent regional academic reputation. My parents urged me to enroll into the private university, which offered me a substantial amount of scholarship based on a combination of merit and need but still required annual out-of-pocket expenses of at least $16,000. However, the liberal arts college chose to take a chance on me and offered me a full ride, including room and board. It was funded by a private philanthropist who lived her entire life within her means and simply saved, saved, and saved some more. Thus, the opportunity for me to make the best financial decision of my life presented itself. Instead of taking out a six-figure student loan and pursue my education with a top-ranked private university, I chose the liberal arts college. My decision process went something like this: 1. What is the main reason for choosing the private university? The answers were clear: prestige; recognition; potentially superior education experience. 2. What is the main drawback for choosing the private university? The answer was just as clear: being knee-deep in debt without quality employment prospects as a F-1 student (contributing causes are for a separate story). There is one underlying common denominator: information. By now, the accreditation process for higher education helps to standardize much of the content among schools. In other words, the information and knowledge being taught at various universities are largely the same. Key differences reside in method of delivery. Yet it is well known that larger schools - both public and private, particularly those classified as "R-1" (major research institutions) tend to use Teaching Assistants. Thus the quality of education likely differs little among schools with the same accreditation. Any positive or negative experiences in institutions of the same accreditation are likely idiosyncratic to individual faculty members rather than systemic to the entire institution. However, I will concede one point. Even identical information cannot account for external relations. Two schools, both with the same curriculum and accreditation, are also likely to have different networking opportunities. The difference is likely much greater between schools from obviously different "tiers". This is where the student should do his/her homework on the following: 1. Which school offers the most robust program that fits my main interest? 2. Which school has a more robust career development and placement program? 3. Do the two items above justify the premium (if any) in total expenses? Although the choices presented to me were rather extreme, many students today likely face choosing among multiple schools from the same tier. Equally as likely is that the student has little to no clue as to what career field to choose. Under such circumstances, my advice is simple: choose the least expensive option as long as the accreditation standard is identical. Because once a student loan is taken out, there is no other option besides paying it back. On the other hand, information acquisition and application are both efforts of the student. As Abraham Lincoln said: "Always bear in mind that your own resolution to succeed is more important than any other one thing." One does not need an expensive education in order to obtain career success and financial independence. With caveats, of course. |
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