Bryan Clintsman did what you might expect a financial planner to do when his daughter Jennifer was choosing a college this year. He got out his spreadsheet.
On it was a detailed financial analysis of six schools -- public and private, in-state and out -- they had chosen together for her to pursue her degree in education.
After looking at his own financial situation, especially retirement planning, the Southlake planner told his daughter that he was willing to pay for four years of an in-state, public college.
"I tried to take my own medicine and do what I tell my clients," he said. "You have to be reasonable when deciding a school for your kids."
Anything above that cost would have to be on her dime, but he warned her that a teacher's salary would not support a lot of student loan debt.
"There needs to be a general alignment between the income potential of the college degree and the college chosen for that degree," he said.
Last week, the U.S. Education Department made a similar ruling on some of its direct student lending. The department would require for-profit career colleges to better prepare students for jobs or risk losing access to federal aid. Students at such schools face more difficulty paying off their loans than students at other institutions, the department said.
Slightly more than half their borrowers were able to pay off more than accrued interest on their loans, versus 88 percent of borrowers from nonprofit institutions and 80 percent of borrowers from public institutions.
"I think that eventually this might happen, probably the next time Congress gets concerned about rising debt at nonprofit and public colleges," he said. "It might even happen next year, when I'm predicting that public college tuition in many states will increase at double-digit rates."
The Project on Student Debt reports that for the graduating class of 2008, 87 percent graduating from four-year colleges and universities owed an average $23,200. That's up 20 percent from 2004.
A study of high school seniors by Fastweb, conducted with Maguire Associates, shows that families are becoming more aware of the debt-and-salary issue when picking schools and majors.
"The College Decision Impact Study shows an increasing sensitivity of families to out-of-pocket cost, debt, graduation rates and employability when choosing where a high school senior will enroll," Kantrowitz said.
One great resource to check for current salary levels of different jobs and how the employment picture looks for those jobs is the Bureau of Labor Statistics at www.bls.gov. In addition to a spot on its home page that helps students decide on a career based on their interests, the bureau publishes the Occupational Outlook Handbook every two years.
This handbook details training and education needed, current salaries and employment outlook.
It was helpful when our eldest son, Robert, now a senior in high school, said he was interested in studying physics. The handbook said employment of physicists and astronomers is expected to grow 16 percent over the next decade -- faster than the average.
While most physicists who want to do research and teach (like my son) need a doctorate, the Bureau of Labor Statistics also reports that the median annual wage of physicists is $102,890. Between the job outlook and the median annual wage, he should be able to support some student loans, along with the help we give him.
He plans to get a degree from the University of Texas, then go out of state for his doctorate, which he hopes will come with a teaching assistantship and grants.
The Clintsmans came to a similar conclusion.
After visiting schools and gathering information on all costs and scholarships, both came separately to the same conclusion: Texas Christian University.
While private school costs are higher than public, Jennifer retook the SAT to raise her score , qualifying for more aid. She also was accepted into a work-study program.
The remaining difference between TCU's tuition and a public school will be supplied by $5,000 in student loans each year, plus summer earnings, she said. Jennifer also aims for a master's degree in her field at TCU that will largely be paid for by the school if she agrees to teach. The added degree, which should take a year, should help her earn a higher salary from the beginning of her career.
Father and daughter are pleased with the deal.
"Every parent has to make a decision about how much they can or want to pay for a child's college expenses -- anywhere from zero to 100 percent," Clintsman said.
Teresa McUsic's column appears Fridays.