Optimizing the ROI on a big state school education

So, you (or your child) are ready to go to college. Now the question is, where to go and how to go there for the least amount of money. Large public research universities (think UC system, University of Minnesota, University of Iowa, University of Illinois, etc.) are an excellent option for many students. Some benefits of a large research state university are:

  • A lot of options for choosing a major
  • A wide variety of courses
  • Access to top research faculty
  • Variety of student activities such as clubs, Greek life, etc.
  • Generally, easy to transfer in credit if you took classes somewhere else

There are also some negatives to be aware of. Most of these negatives can be largely avoided if you do some planning:

  • Large classes: Many of your classes, especially general education classes, will be large, often hundreds of students. You can mostly avoid this issue (and save money!) by taking many of your general education classes at a community college. Do make sure you understand the rules your university has about transferring credits, but most state schools have very generous policies.
  • TAs instead of professors: Graduate students will teach many of your discussion sections (small sections that go along with your large lecture classes). This is not necessarily a bad thing because, while inexperienced, graduate students usually put a lot of thought and effort into making their classes a good experience for the students.
  • Adjuncts: Some of your classes will be taught by adjuncts who teach at the university part-time and are often hard to reach if you need a recommendation a few years later. You can select your classes carefully to mostly avoid this issue.
  • Easy to get lost: Being self-motivated is very important when going to a large public university. Help is available, but you have to seek it. It is easy to fall behind, miss assignments, etc., and it is unlikely than anyone will notice. If you see you are falling behind, seek help right away!

State schools often give you the best ROI because they combine relatively cheap tuition with well-established credibility of your degree. Even with their lower tuition, though, an average public university will run about $80K with in-state tuition for four years. According to Zillow, that is 1/3 of the average price of a home in the US, so it is worth doing some planning to reduce your cost. Here are some ideas:

Start taking classes at a local community college while in high school. Make sure you take courses that will transfer. If you take one class per semester each of your junior and senior year and two classes each summer, you will be able to transfer eight classes–cutting your time in college by a whole year! That means not only saving $20K but also entering the job market a year early. If your starting salary is $60K, your hard work in high school will translate into $80K! That’s way better ROI than any high school job that you can get.

If you already missed your chance to take classes while in high school or if you want to super-charge your college experience, take summer classes while in college. You do not have to take summer classes at your university; you can still take courses at a community college, just make sure they transfer. Taking two classes every summer starting with the summer before your freshman year can also give you eight extra classes–cutting your time in college by a year. Some institutions also offer winter term classes for extra fun!

Take a minimum of 15 credits each semester and consider taking 18 credits. Even though 12 credits is deemed to be full-time, taking 12 credits per semester is not enough to graduate in four years. In fact, at most universities you will have to take five full years to graduate if you take 12 credits per semester and that is assuming that you don’t need to retake any classes, you don’t decide to change your major, you never have to drop a class, etc. An extra year in college will cost you not just $20K in tuition and living expenses but also a whole year in lost wages as you will enter the job market a year late.

On the other hand, taking 18 credits each semester will shorten your time in College by nearly a year. Keep in mind that 18 credits is a large workload. Be sure you can handle it before committing to such a plan. Taking summer classes may be an easier route to take to shorten your time in school.

Consider alternative living arrangements. Room and board run around $12K per year, but you do have options. If living at home is a possibility, seriously consider it. Maybe you feel ready to be out of the house, but if you stick it out for four years, you will start your post-college life $50K richer! And your chances of being academically successful are probably better if you are away from the college party scene.

If living at home is not an option, consider getting a job as a live-in nanny. It is usually easy to build your schedule around the hours the family will need you, and you can get all the benefits of living at home without actually living at home.

College is expensive, but that doesn’t mean that you should approach it with the mentality that you will “spend whatever it takes.” Making smart decisions about this huge investment will have a significant effect on your financial health for many years after you get your degree.