Everyone knows that college is expensive. There are plenty of universities whose full published price is higher than the median family income in America. The numbers can be so big that they're hard to imagine and even harder to make realistic decisions about. So here's an exercise I do with most of my consulting clients. You can do this at home with your family.

When you have a preliminary list of colleges you think you might apply to, look up their total cost. Ideally you'd use a net price calculator to get reasonable estimates of their actual costs for you, but the exercise works even if you use the "sticker prices" available online.

First, compare the difference in cost between the most expensive school and the least expensive school. Ask yourself if the difference is worth it to you. Understand that at this point either answer--yes or no--is perfectly acceptable. If you're doing this exercise with someone else, explain your reason for your answer. You may decide that the more expensive school is a much better fit for you, and is therefore worth the extra cost, especially if you can get extra financial aid to cover some or all of the difference. Or, you may decide that the more expensive school just isn't worth it, especially when you multiply the difference by four or five years.

Next, do the same thing comparing your top-choice school with your least-favorite of the schools. (If your top-choice school is the most expensive and the last-choice is the cheapest, then you've already done this.) Ask yourself if going to the school you most want to attend is worth the difference in cost. Again, there is no right or wrong answer. It helps to say it aloud. There's a big difference between looking at some large numbers on paper and figuring it's all going to be ok and saying aloud "I'm willing to pay an extra five thousand dollars a year to go to my preferred school."

Now, pick two of the schools that are most alike and compare them. Is the difference in cost, which probably won't be very large, a factor when deciding between two very similar schools? There's not a right answer, but it's good to know where you stand.

Got it? Excellent. Now go through the comparisons again, only this time you have to pay any difference in cost yourself. You can't rationalize away that there will somehow be more financial aid or your family will come up with the extra money. You say that the more expensive school is worth the extra $5,000 a year--is it worth it if you have to work an extra job or take out extra loans to cover that $20,000? Or maybe you recognize that, despite the better fit, there's just no way you could pay for the more expensive school? I've seen plenty of clients change their mind about how much better the more expensive school is once they contemplate paying the difference themselves.

Now go back to comparing your top-choice school to your least-favorite school on your list. Imagine you get a full scholarship to the less-desirable school. Now how do you feel?

Here's an example. Let's say I'm a high school senior interested in majoring in art history. I've been accepted to Brown University, Loyola University Chicago, and Iowa State University. Brown is an Ivy League school, many people's "dream school," and has a top-notch Art History program. It's published price for tuition, fees, and room & board is around $70,000 per year. Loyola Chicago is a less-famous university, but it's in a great city for art and is known for nurturing, student-centered programming. It will cost around $59,000 per year. Iowa State is a large state school with a solid Art History major, but few of the benefits of a large city or elite private university. It's going to cost me around $32,000 per year ($18,000 if I'm an Iowa resident). 

It's easy to say "I want to go to Brown, and as long as I can afford it I'll go there." If it's less easy to say "I want to go to Brown, and I'm willing to pay an extra eleven thousand dollars a year to go there instead of Loyola Chicago," then you have to do some major thinking. Saying the prices and the price differences aloud can really help you make a decision you're more sure about. 

Again, there's not necessarily a right or wrong answer. It depends on your family's financial situation. I've heard parents say things like "We're going to make sure you go to college, but we are also going to make sure your siblings go to college, so we cannot support you going to the more expensive school just because you like it better." But I've also heard parents say "we've been saving for years so you can get the best college possible for you, so don't accept less than the best for you just because you think it will save us some money--that's what this money is for." The more you talk to your family about money--and the sooner--the easier these discussion will be.

Anyone who gets accepted to more than one college has to go through this exercise--only it's not just an exercise when you're writing real checks for real money. In this really big and really important decision, like most really big things, it helps to practice first. When you apply to schools, go through this exercise using the published prices. Do it again for the schools you get accepted to. And then do it again when you get financial aid offers. If you practice a few times, then the May First decision will be more rational and less stressful for you and your family.

Related blog posts: What if you get a full ride? Asking for more money. Thinking about Return On Investment.

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