OPINION | SAVE YOURSELF: College decisions a financial, psychological minefield

Meet the desperate dad with college decisions looming, who is supposed to get in line -- duck and dodge the facts, succumb to the feelings of fear and guilt, and then in complete surrender open the spigot of assets saved and those yet unearned for this four-year experience for his children. Instead, what if this dad did the unthinkable and committed himself to understanding college pricing and the complicated financial aid process so he and those who follow could make an educated decision about the price to pay and for what value?

That's exactly what Ron Lieber did in his book "The Price You Pay for College," released today. The author is a father who understands the power that guilt and fear have over math. My favorite line is: "Successfully figuring out what to pay for college is about acknowledging your feelings, airing them, and then bringing them to heel. There are no wrong feelings other than the ones you fail to confront."

But this isn't his personal story. With 15 years' experience as a personal finance columnist for The New York Times and The Wall Street Journal, Lieber takes on the herculean effort of interviewing college administrators, counselors, professors and experts and digging into the research to understand pricing and financial aid. He distills this information and offers a road map for readers who face an emotionally taxing personal finance decision.

Someone had to do this. The student loan crisis is worse than you may think. As Lieber points out, recent stats show that parents borrowed $12.8 billion in Parent PLUS loans, a little over 40% higher than the decade before. Take former Maryland Gov. Martin O'Malley who is 50% through his four kids' college experience and is currently at $340,000 in Parent PLUS loans, and counting.

As a financial planner and a retirement plan adviser, I watch with curiosity and heartache as parents obsess over and agonize about their children's education with less concern for the much bigger issue looming: Will they ever be able to retire?

Lieber arms parents for battles in the financial aid office, the admissions office, in their living room with their kids, and in their own heads. He guides parents to face the facts and their feelings, and then offers a plan to find the best college fit for the best price.

Fact: We are not in a college tuition bubble. Prices will remain high.

Also, colleges and universities use high tuition rates to then offer "discounts." This is where facts and feelings battle it out, because colleges call these discounts merit aid. And as Lieber warns, "Perhaps the recipients should feel good. And perhaps they should also understand that these kinds of merit awards are, at least in part, about marketing. Marketing aims to make people feel a certain way." That flattery can certainly play tricks on the brains of parents who want to hear how great their kids are.

The issue? With a very high list price, colleges can deeply discount and still leave students and parents on the hook for a lot of money. Like, Martin O'Malley six-figure kind of money.

[Video not showing up above? Click here to watch » https://www.youtube.com/watch?v=BqquR5k5w_o]

Fact: Not saving for college as a strategy to increase your chances of receiving financial aid is a bad idea, as Lieber argues. Income weighs heavier against you than assets, including college savings. You are much better off saving for college, particularly with the benefits of a 529 tuition savings plan (to my delight, he dedicates an entire action-packed chapter to these), than not saving to try to game the system. Lieber asks us to imagine asking for more financial aid -- how is a college going to take your passion for college seriously if you have nothing saved?

Fact: Colleges are like businesses, and they need enough students (aka customers) to pay the bills. For parents who enter the process with only one concern -- having a child accepted to that institution -- early decision makes sense and allows a college to lock in payments. For the rest of us, who will have to precariously balance admission and affordability, why would we ever do early decision? Early decision is literally promising that you won't walk away. Instead, it seems like the best idea is to cast a wide net, secure admission and aid letters, then delay the decision as long as possible to negotiate for more aid. If the college needs more seats filled it might work.

After dispelling myths and offering us facts about this process, Lieber walks us through how to navigate fear and guilt, snobbery and elitism. If we assume there are roughly 50 "top" schools that would most assuredly offer opportunity for top jobs upon graduation, Lieber counters that notion with research, including from University of Arkansas professor Jonathan Wai , who found that only 21% of Fortune 500 CEOs attended those schools.

Then we get to value. Lieber breaks down every metric for value and arms us with important questions worth asking on college tours or in admission offices, along with net price calculators and suggested statistics to Google.

Value starts with what you want from a college experience, but many of us haven't thought about what we actually want. Did you know that something as simple as a mentor could define how meaningful or successful s child's college experience will be and even increase the likelihood to finish on time? Beware of research schools, where there may be plenty of faculty to create a desirable student-to-faculty ratio but in practice aren't interested in students very much, just their research. Oh, and pro-tip: it turns out college is not an end but a means. Turn to alumni satisfaction surveys to see how well their college experience served them in the real-world.

In my world, the college debt that parents take on for their children is crushing their own retirement dreams, and in some cases even putting them in a position where they may ultimately become dependent on their children. Lieber's book is an enlightening read for parents as we prepare to send our kids to college. Beyond the college financing strategies, he helps us explore the tension between our feelings and the math, with a heavy sprinkling of won't-find-them-elsewhere tips.

In a dose of reality and a reminder of his own human struggle, Lieber asks, "Is [taking on debt for your kids' college] your solemn duty, the most profound obligation a parent can have? Or is it just so much guilt? Let's be careful out there."

Sarah Catherine Gutierrez is founder, partner and CEO of Aptus Financial in Little Rock. She is also author of the book "But First, Save 10: The One Simple Money Move That Will Change Your Life," published by Et Alia Press. Contact her at sc@aptusfinancial.com.

CORRECTION: An early decision is a binding application plan and a student must attend the college if accepted. An incorrect phase of the admissions process was referenced in an previous version of this column.

Upcoming Events