This is such a difficult and emotionally fraught issue. We're going through the college process now with our own kids (20, 18, and 15), and it's clear to me that they and their friends, even though very bright, don't have the life experience and maturity necessary to make sound decisions on such a huge financial issue. Despite providing them with guidebooks and resources galore, our kids and their friends focus almost exclusively on the US News rankings and on the college's acceptance rate (the lower the acceptance rate the better, even though many colleges artificially deflate them by encouraging students to apply that don't have the credentials to get in). I went to a small liberal arts college that was not highly ranked but gave me nearly a full ride scholarship (my parents didn't go to college and did not have the money to save for higher education). I then was able to go to a highly ranked law school, even though I had to incur a lot of debt to do so, because I wasn't already saddled with student loans. I got an outstanding education at college and felt every bit as prepared to succeed in law school as my classmates, many of whom went to Ivy League schools. But I was a driven student who was going to make the best of my education no matter where I went. It sounds like your grandson might be in that same boat. We have been fortunate to be able to save enough money over the last 20 years in our kids' 529 accounts that we can afford the college of their choice. And my wife--whose family, although extremely frugal (think no cable TV or microwave, for example), allowed her and her siblings to pick their own college back when it was more affordable--feels strongly that we should do the same now. Our son's decision boiled down to a "top 50" large, in-state university and a similarly ranked (but, frankly, more impressive) mid-sized private school that cost roughly three times as much. He chose the private school. Is he getting a better education there and making better contacts? It's hard to know for sure, but I think the answer is yes. A tougher question is whether he could have gotten a similar education at a less expensive and selective school of the same size that would have given him scholarships. (Probably yes.) An even tougher question is whether it's ever worth paying an extra 260K over four years to send your kid to the school they like best, even when it's got a nicer campus, smaller class sizes, and better professors. Had we invested that 260K in a total market fund and let it earn a 10% interest rate over 40 years, he'd have more than $11 million when he retired. Or he'd have money for a down payment on a home, etc. But high school seniors don't have the ability to think that far ahead. Instead, they want to go to the "best" school they get into and show their friends and family that they are successful people. To be honest, it's easy for parents to fall into that trap as well. If you're lucky enough to have been able to save the money to afford an expensive college, then I guess you can afford the perhaps ill-advised decision to send your kids to their dream school, regardless of how much it costs. But if your kids or grandkids are having to take out significant loans for an undergraduate education, even with additional support from you, I would advise against it. Perhaps you make an exception for a very select few schools that can open doors everywhere, but most schools, including a lot of great schools in the US News top 40, aren't in that league. I think this is especially true if your kid is likely going to graduate school. Grad schools don't care that much about where you went to undergrad, and frankly it can be beneficial to be a big fish in a smaller pond at undergrad when it comes to applying to graduate schools (think better grades, better relationships with professors, better letters of recommendation). But the ranking of your graduate school definitely DOES matter and can have a significant effect on the quality of the job you get out of school, which can set you up for significantly more financial and professional rewards over the long run. Sorry for the long post, but this question hit home given my life situation at the moment.
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This is such a difficult and emotionally fraught issue. We're going through the college process now with our own kids (20, 18, and 15), and it's clear to me that they and their friends, even though very bright, don't have the life experience and maturity necessary to make sound decisions on such a huge financial issue. Despite providing them with guidebooks and resources galore, our kids and their friends focus almost exclusively on the US News rankings and on the college's acceptance rate (the lower the acceptance rate the better, even though many colleges artificially deflate them by encouraging students to apply that don't have the credentials to get in). I went to a small liberal arts college that was not highly ranked but gave me nearly a full ride scholarship (my parents didn't go to college and did not have the money to save for higher education). I then was able to go to a highly ranked law school, even though I had to incur a lot of debt to do so, because I wasn't already saddled with student loans. I got an outstanding education at college and felt every bit as prepared to succeed in law school as my classmates, many of whom went to Ivy League schools. But I was a driven student who was going to make the best of my education no matter where I went. It sounds like your grandson might be in that same boat. We have been fortunate to be able to save enough money over the last 20 years in our kids' 529 accounts that we can afford the college of their choice. And my wife--whose family, although extremely frugal (think no cable TV or microwave, for example), allowed her and her siblings to pick their own college back when it was more affordable--feels strongly that we should do the same now. Our son's decision boiled down to a "top 50" large, in-state university and a similarly ranked (but, frankly, more impressive) mid-sized private school that cost roughly three times as much. He chose the private school. Is he getting a better education there and making better contacts? It's hard to know for sure, but I think the answer is yes. A tougher question is whether he could have gotten a similar education at a less expensive and selective school of the same size that would have given him scholarships. (Probably yes.) An even tougher question is whether it's ever worth paying an extra 260K over four years to send your kid to the school they like best, even when it's got a nicer campus, smaller class sizes, and better professors. Had we invested that 260K in a total market fund and let it earn a 10% interest rate over 40 years, he'd have more than $11 million when he retired. Or he'd have money for a down payment on a home, etc. But high school seniors don't have the ability to think that far ahead. Instead, they want to go to the "best" school they get into and show their friends and family that they are successful people. To be honest, it's easy for parents to fall into that trap as well. If you're lucky enough to have been able to save the money to afford an expensive college, then I guess you can afford the perhaps ill-advised decision to send your kids to their dream school, regardless of how much it costs. But if your kids or grandkids are having to take out significant loans for an undergraduate education, even with additional support from you, I would advise against it. Perhaps you make an exception for a very select few schools that can open doors everywhere, but most schools, including a lot of great schools in the US News top 40, aren't in that league. I think this is especially true if your kid is likely going to graduate school. Grad schools don't care that much about where you went to undergrad, and frankly it can be beneficial to be a big fish in a smaller pond at undergrad when it comes to applying to graduate schools (think better grades, better relationships with professors, better letters of recommendation). But the ranking of your graduate school definitely DOES matter and can have a significant effect on the quality of the job you get out of school, which can set you up for significantly more financial and professional rewards over the long run. Sorry for the long post, but this question hit home given my life situation at the moment.
Post: $92,000 a year is quite an investment. The ROI is real, but maybe not.
Link to comment from December 13, 2025
Excellent article!
Post: The Paradox of Smart Money Decisions
Link to comment from December 13, 2025