Blom & Howell
  • Home
  • About Us
    • About Us
    • Our Team
  • Services
    • Financial Planning
    • Retirement Planning
    • Investment Management
    • Social Security Planning
    • Insurance Planning
    • College Planning
  • Insights
    • Blog
  • Contact Us
  • Account Access
    • Schwab Alliance
    • MoneyGuide Pro
  • Home
  • About Us
    • About Us
    • Our Team
  • Services
    • Financial Planning
    • Retirement Planning
    • Investment Management
    • Social Security Planning
    • Insurance Planning
    • College Planning
  • Insights
    • Blog
  • Contact Us
  • Account Access
    • Schwab Alliance
    • MoneyGuide Pro

INSIGHTS

CATEGORIES

All
College
Economy
Estate Planning
Financial Planning
Healthcare
Investing
Retirement
Social Security
Tax Strategy

College Focus: Where the Chances for Merit Scholarships are Slim

11/30/2016

 
Picture
​Are you Fixated on Elite Schools?
 
This month’s newsletter is directed to parents with smart teenagers. Chances are, you may be encouraging your children to aim for highly selective colleges.
 
At the same time, you may be stressing about how you’d pay for some of these extremely expensive brand name institutions.
 
Some of these schools are now charging upwards of $280,000 for a single bachelor’s degree. And for parents with two or more children, the costs are beyond staggering-even for those with comfortable six-figure incomes.
 
Where the chances for merit scholarships are slim to none
 
One of the realities is this:
 
The schools with the very shiniest brand names don’t have to bother giving merit scholarships to highly accomplished students from high-income families.
 
Why? Because there are plenty of wealthy parents who will pay ANY amount to get their children into one of the U.S. News & World Report’s rankings darlings. Schools like Harvard or Stanford could charge $1 million or $2 million for a bachelor’s degree and they’d still reject most teenagers.
 
Once this reality sinks in, many parents begin wondering if they should plunder their retirement accounts and/or take on debt to underwrite a degree at one of these elite schools that seem (notice the emphasis on seem) to have a monopoly on dispensing golden tickets.
 
Here are some key things parents need to know:
 
You don’t have to go to an elite school to succeed!
 
It is not uncommon for a bright student to get accepted to the flagship school of their dreams, only to find little or nothing awarded to them in the form of merit scholarships. Yet these same students routinely can snag big, fat merit scholarships from other good, but lesser known schools.
 
This may not seem as obvious to parents in wealthy communities who sometimes view getting into prestigious colleges as a trophy sport. There are parents who have been known to obsess about their children going to a prestigious college while their children are still in diapers!
 
The following hypothetical is NOT true, but let’s just say all the best jobs in the entire country go exclusively to the graduates of the most highly ranked colleges and universities. This would still leave roughly 99.5% of jobs left to the rest of us.
 
One quick, easy and practical way we can unscientifically confirm this is to take a look at your LinkedIn contacts (if you have a LinkedIn profile). Most, if not all, of the most successful contacts you have did not attend a trophy school.
 
The smartest student advantage
 
There have been two highly touted studies on whether an Ivy League bachelor’s degree conveys a professional advantage for students.
 
The main conclusion of the papers is this: Students who attend Ivy League institutions and equally bright students who apply but get rejected from these elite schools or who get accepted, but attend other institutions end up making roughly the same amount of money in their careers. These are bright and motivated students, after all, who can succeed wherever they go to school.
 
There was an exception to the research findings. Minority and first-generation students who don’t enjoy the same advantages as the students whom the Ivy League schools specialize in educating – wealthy students – did gain an advantage from attending these elite schools.
 
SAT score predictor
 
What should make parents feel better is the conclusion that Alan Krueger, the famous Princeton economist and coauthor of the studies, reached.
 
Krueger pointed out that the average SAT score at the most selective college that students apply to is a better predictor of their future earnings than the average SAT score at the college they attend. Read that again and let that sink in!
 
Here are shorter summaries from the New York Times and the Brookings Institute on what the famous Ivy League studies uncovered.
 
  • Revisiting the Value of Elite Colleges (New York Times)
  • Who Needs Harvard? (Brookings Institute)
It’s what you do in college that counts!
 
A Gallup survey conducted with Purdue University last year provided further evidence that people should really stop fixating on elite schools.
 
The survey results indicated that the type of institution that college graduates attend matters less to their future happiness at home and work than the experiences they have at whatever college that they end up at. In fact, the survey concluded that whether respondents attended an elite school, a public flagship, a private college or a regional state school didn’t matter at all.

-WEBSITE OF THE MONTH

​The Chronicle of Higher Education just released a search tool that allows you to sort colleges and universities by state, tuition, room/board and total cost.
 
You can also sort by type of school including public institutions, private, nonprofit schools and two­year colleges.
 
You can also check the price figures for individual institutions and trace the published prices from the 1998-­1999 school year up through 2016­-2017.
 
Most of The Chronicle’s website is behind a pay wall, but this search tool is available to anyone.
Picture

This research material has been prepared by Horsesmouth
 
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

Comments are closed.

    Categories

    All
    College
    Economy
    Estate Planning
    Financial Planning
    Healthcare
    Investing
    Retirement
    Social Security
    Tax Strategy

    Archives

    May 2022
    April 2022
    February 2022
    August 2021
    July 2021
    June 2021
    February 2021
    January 2021
    December 2020
    November 2020
    October 2020
    September 2020
    August 2020
    July 2020
    June 2020
    May 2020
    April 2020
    March 2020
    February 2020
    January 2020
    December 2019
    November 2019
    October 2019
    September 2019
    August 2019
    July 2019
    June 2019
    May 2019
    April 2019
    March 2019
    February 2019
    January 2019
    December 2018
    November 2018
    October 2018
    June 2018
    April 2018
    January 2018
    December 2017
    October 2017
    August 2017
    July 2017
    May 2017
    April 2017
    February 2017
    January 2017
    December 2016
    November 2016
    October 2016
    September 2016
    July 2016
    June 2016
    March 2016
    December 2015
    September 2015
    August 2015
    May 2015
    November 2014
    October 2014
    August 2014
    June 2014
    March 2014
    February 2014
    January 2014
    December 2013
    November 2013
    June 2013

    RSS Feed

Company

About Us
Services

Insights
Contact Us

Connect With Us

SEARCH

Find Us On Facebook
Connect on LinkedIn

Blom & Howell Financial Planning, Inc. | 3340 Tully Road, Suite B-4, Modesto, CA 95350 | Phone: 209.857.5207 | Fax: 209.857.5098

Investment advisory services provided by Blom & Howell Financial Planning, Inc., an SEC registered investment adviser in Modesto, California. Advisory services are offered to clients or prospective clients where Blom & Howell Financial Planning, Inc. and its representatives are properly licensed or exempt from licensure. This website is solely for informational purposes. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. 
Privacy Policy |  Form ADV Part 2A  |  Form ADV Part 2A Appendix 1​  |  ADV Part 2B | Form CRS - Client Relationship Summary