Picking which school is best for you is a very complex decision. You weigh tuition costs, programs offered, location and a number of other factors before deciding on your future college– but an article in the Wall Street Journal brings up an interesting point. Are you thinking rationally? Chances are, you’re not– sorry.
The WSJ compares it to a bet. Apparently, people feel better about the gamble if they think they have a 90 percent chance of winning as opposed to a 10 percent chance of losing. It’s kind of like the “glass is half full vs. half empty theory and it also applies to choosing your school:
Families may be drawn to a school that charges $40,000 tuition and offers a $10,000 “merit” scholarship instead of one that simply charges $30,000. Likewise, one school may say that, after allowing for all aid, the student need pay only $5,000. That may seem a lot more attractive than another school that makes the same $5,000 offer but spells out what the family needs to do to get there: $10,000 in grant aid, $12,500 in loans that need to be repaid with interest and $2,500 in on-campus work, leaving $5,000 to be paid now. Same apparent bottom line, quite different stories.
Families may also tend to overlook additional costs like housing, food and books and just focus on a “low” tuition. But those other factors can greatly impact the bottom line.
Another mistake is focusing too much on the short-term. Parents and students often project about how much the student will be earning at their first job, leading them to choose a school with lower tuition, even if it’s not the best choice.
The current economic climate also tends to have a hold on families when it comes to making decisions. If they hear about a graduate who is thousands of dollars in debt from student loans and still without a job, they tend to think this will happen to them, too. That frame of mind sometimes causes the impression that college isn’t worth the money.
Alas, there is hope. You can free yourself from the confines of your own misconceptions:
If parents understand more about the decision biases they share with the rest of the human race, they may be able to plan and save more effectively and to help their children make more constructive choices. They should actively question all of their assumptions and be open to planning, choosing and supporting their children even in ways that don’t immediately feel “right”—like taking on more debt for a higher-tier school.
So as long as you remember that you are a completely irrational person and that you should question everything you believe, you’ll be fine! Best of luck.