On a recent segment of The Ramsey Show, Renee from Boston called in as a single parent earning $113,000 per year, trying to sort out how to pay for her youngest son’s freshman year at a private college in New York. The school costs roughly $93,000 per year. He received $72,000 in need-based scholarships, leaving her to pay $14,000 per year out of pocket. Her son is studying economics, has great grades, and was recruited by the football coach at the Division III school.
Ramsey’s verdict was memorable: “Where you go to school does not matter. Whether you go to class or play beer pong matters. Whether you learn something while you’re there matters.”
The Stakes for a Single-Income Household
Renee earns more than the typical full-time worker in America. Median usual weekly earnings for full-time workers were $1,251 in the second quarter of 2026, which puts her comfortably above average. But she is still one paycheck supporting two kids in a country where average annual household expenditures reached $78,535 in 2024. Committing $14,000 a year to tuition on top of rent, food, insurance, and transportation is a real squeeze.
If the plan works, her son graduates debt-free. If any assumption breaks, she is either dipping into retirement savings or her son is taking on student loans in a market that already carries approximately $1.85 trillion in outstanding volume across roughly 46 million borrowers.
The Verdict: A Conditional Green Light
Ramsey approved the plan, but only with a hard fence around it. His framing was direct: “If you can do this and he can play football for four years and you can come out of pocket $14,000 a year and cash flow it for four years and he gets a degree for the equivalent of $60,000 out of pocket, then that’s not going to be a bad deal.”
The reframe matters. Ramsey pointed out that all the free money the school gave Renee just brought the cost down to what the average state tuition is. A $93,000 sticker price sounds like a luxury purchase. A $14,000 net price sounds like a state flagship. Same degree, different math.
The financial mechanic is net price versus sticker price. Private colleges publish list prices to signal prestige, then use institutional aid to discount them heavily for families who cannot pay full freight. What matters to the household budget is the check that clears, not the number on the brochure. If need-based aid brings a private school in line with a state school, the private option is not automatically extravagant.
The Variable That Changes Everything
The variable is whether the scholarship survives all four years. Need-based aid can shift if family income changes. Athletic recruiting spots at Division III schools do not come with athletic scholarships, but coach interest can influence institutional aid packaging, and injuries can end playing careers.
Ramsey drew the line clearly: “If they rescind these scholarships and he gets hurt playing football, then he’s going to a different school if he’s mine. Because we’re not coming out of pocket $50 grand so you can finish up where they started me with a $70,000.”
If the aid holds, Renee writes four checks and her son graduates for the price of a car. If the aid evaporates after freshman year, the annual cost snaps back toward the $93,000 sticker. That is a household-breaking number for someone earning $113,000. The correct response is to transfer, not to borrow the gap.
Where the Prestige Argument Falls Apart
Ramsey’s core principle was that employers and clients do not audit alumni credentials. You do not ask your doctor or your lawyer where they went to school, and 78% of the CEOs of publicly traded Fortune 500 companies went to a state school. For an economics major, the differentiator will be internships, GPA, and the ability to actually do the work, not the name on the diploma.
What Renee, and Any Parent, Should Actually Do
- Get the financial aid renewal terms in writing. Confirm exactly what triggers a reduction: income change, sibling graduating from college, satisfactory academic progress thresholds.
- Set a walk-away number for year two. If the out-of-pocket cost climbs above what current income can cash flow, have a transfer plan to an in-state public option ready.
- Keep student loans off the table as the shock absorber. Borrowing $50,000 to bridge a rescinded scholarship is exactly the trap Ramsey was flagging.
- Separate the athletic story from the academic story. Football is why the coach called. Economics is why the tuition check is worth writing. Injuries end the first. Only the second pays back.
Ramsey’s advice lands because it collapses the debate to one number: what you actually pay. If the net price of a private school matches a state school, take it. If it does not, or if the discount disappears, walk.
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