I was working with a student who received a National Merit Scholarship. Although the actual dollar amount provided by the scholarship is not that significant, it attracts offers from colleges that want to claim National Merit Scholars in their ranks. Here’s a story of how I counseled this young man faced with the dilemma of choosing which college to attend.
The National Merit Scholarship is awarded based on national proficiency on the SAT. Students qualify for this competition by taking the PSAT in the fall of their junior year. This particular student scored phenomenal on his PSAT and had component scores of 800 (the maximum) when he actually took the SAT for the competition.
When he received the award, the offers began to pile up. I tell people that the National Merit Scholarship is a “money magnet” that draws parallel and complementary offerings from universities. Most colleges want National Merit Scholars because it increases the esteem of the institution.
The University of Oklahoma is noted for its gall in attracting scholars to national merit. It consistently boasts of having the highest percentage of National Merit Scholars in the country. To maintain this boast, OU offers some incredibly attractive proposals to National Merit Scholars, and with good reason. Unlike athletes, there are no NCAA limits on what can be offered to academics.
After analyzing the mountain of offerings, the decision was made by OU and a high-profile (and expensive) private religious institution in central Texas that I will not directly name or refer to as College B.
Or he offered what I call the “Magic Carpet Ride”, a “Full Ride” (translate = full scholarship) plus a host of other incentives. University B offered about $ 28,000 a year.
At first glance, either of the two offers may seem great, but let’s take a closer look at this. OU had no “out of pocket” costs for the student or their family. College B costs about $ 48,000 a year. The $ 28,000 a year “aid package” still left about $ 20,000 a year for the family to take care of. I don’t know of many families who have an extra $ 20,000 lying around, so they would probably have to take out a series of student loans.
One caveat I give to families is that college will allow them to lend themselves to oblivion. In this scenario, this young man would graduate from University B with a debt of $ 80,000. I don’t think there is a university in the country that is worth $ 80,000 in debt. Yet every year millions disagree with me (but that’s another article).
I can’t believe I really had to discuss this with the family. For me, this was a no-brainer. University B was in no way qualitative or quantitative $ 20,000 a year better than OU. I mean, work with me here, if you took American History, Columbus still left in 1492 and George Washington was the first president. That did not change. They would be paying the additional $ 20,000 for the privilege of paying an additional $ 20,000. In fact, in four years of borrowing, they would be paying $ 80,000 for the privilege of paying $ 80,000, PLUS paying the government (which just took over the college loan program – this was included in the healthcare bill) about $ 60,000 in interest. for the privilege of paying the original $ 80,000.
The child will have a house payment and no houses to show. I told dad he could take the $ 20,000 and buy his son a car. I mean, after four years, you can still sell the car and get some money back. Not so with a loan.
Anyway, once they saw the numbers, they made what I consider to be the right decision. The young man is going to OU.
Boomer Sooners!