How should physicians pick a college for their kids?

One of the surprising questions we get from many physician families is how to pick a college for their children. Of course, we’ve focused on college funding with those families earlier in their lives, but as their children enter the teenage years, the “where” question comes up.

This is actually one of the most important financial questions a family will consider. The cost of sending a child to four years of college can easily run between $100,000 and $500,000 after tax. In high-tax states, four years of college might carry a $1 million pretax cost. Without question, in a physician family with several children, this will often be the most expensive purchase, or second only to a home. Add in the likelihood that one or more children will attend graduate school (usually even more expensive than undergraduate training), and this can be a financial disaster.

Author Malcolm Gladwell made some interesting observations in one of his books and in several of his lectures. He noted that some elite Ivy League colleges in the past found significant psychological problems and unhappiness among students in the lower half of their classes. The schools realized that these young people had probably been straight-A students in high school and were now doing relatively poorly in college. So consider whether your hard-charging, high-achieving child might encounter the same problem when competing with the best in the country. More than once, I have seen a smart young student go to a very competitive college and become discouraged about achieving a goal, such as medical school. I have often thought that the same student at a less competitive school would have had a better chance and been happier, given their relative performance in class.

When we help parents pick a college for their children, we start by asking, “Where do you think we went to college?” We also ask them to think of three other people they highly respect who are very good at their jobs, and then ask, “Where did they go to college?” Almost always, the parents cannot answer. This points to an important fact: It is usually the caliber of the student, not the college, that counts. Although some top-name schools might open doors in a few fields, this is becoming less important. Many “public Ivies” enjoy wide name recognition among employers and graduate schools.

Picking an expensive college for one or more children may lead to a lack of financial success. In general, it seems extremely unlikely that a more expensive college will automatically produce a better outcome for your child than a more reasonably priced one. If your wealth is so great that it doesn’t matter, good for you. However, that is not the case for most of us.

It is important to start shaping a child’s expectations early about where they may want to go. If all of their peers are talking about expensive private schools and you have decided that is not worth it to you, share that expectation early on. One fair way to do this is to tell your child you will fund the total cost of a state education with no debt, as long as the child earns a degree with a reasonable chance of leading to meaningful and financially successful work. If the child really wants a more expensive school, they can work or take out loans to cover the difference and have some skin in the game. In my own children’s upbringing and in several other families I have seen, this tactic worked very well and left the child quite content with a state education.

In the past, I’ve heard arguments that certain jobs are more likely with certain schools. Strong alumni networks, or just the name and reputation of the school, can open doors. Think of getting a job on Wall Street or getting into a prestigious graduate program. Although this may be true in some cases, it should be weighed against the costs in dollars, and perhaps the psychological impact, discussed above. And again, there is ever-increasing appreciation that many public colleges produce both excellent educations and excellent students.