06/29/2012 06:49 pm ET Updated Aug 29, 2012

Where You Want To Be: How Money Impacts Where You Attend College

It seems there is a great dichotomy when it comes to money for college. On one hand, parents want what's best for their children, but then they encourage them to make poor financial choices when selecting colleges. The mentality of what their child has "always wanted" trumps sound economic principles almost every time.

For instance, the student has applied to four to five schools. Once the student is accepted, they'll get their financial aid offers, and this is where everything falls apart. School A has offered the student a financial aid package that requires the student to take on a heavy debt load and the parents to come up with a hefty contribution. School B offers the student a fantastic financial aid offer, a lot of grant money, and parents have to contribute their EFC (expected family contribution), and nothing else. On paper this looks like a no brainer. School B will have the student graduating from college with much less debt and the parents 401K will remain intact. But then the parents say, "Johnny has always wanted to go to school A, so he's accepted the offer and is packing as we speak."

On the surface it seems as though everyone has gotten what they wanted. Johnny gets to go to his dream college. Mom and dad have made sure Johnny's feelings didn't get hurt and school A has a seat filled in their classroom without having had to spend much of their endowment money to do it. Smiles all around, but in reality, the college is the only one that walked away with a good deal.

When a college makes a mediocre offer to a student, it speaks volume about how they feel if this student will perform at their school and how well Johnny will fit in. A below average offer typically means the college is on the fence about the student. Sure, the student may do fine and graduate on time, but there's also a chance that things will not work out as they hoped for. The college isn't totally behind the student. This could mean Johnny will have to work harder than his classmates to keep up academically. He may not have as many opportunities open to him because he is stuck in the middle of the pack or slightly below the average student. In short, the school isn't willing to go out of their way to have Johnny attend their school.

The school that made the fantastic offer is saying just the opposite. They are saying, "you are exactly what we want at our school. We think you will do well, contribute and have many opportunities available to you." So now where do you think Johnny will do better? Let me remind you, we haven't even touched on the financial ramifications of Johnny's choice.

It's wonderful that Johnny wasn't disappointed in following his dream. But when he graduates with a lot of debt, and Mom and Dad have to postpone their retirement, or may be faced with supporting Johnny after graduation due to his debt load, is that fleeting moment of joy worth the aftermath of the decision?

Students should not apply to a school they are not willing to attend. There isn't a single school that will provide everything. Students will always have a top choice, and they should, but the other schools they apply to should be the schools they would also be happy to attend.

Through careful research and college visits students can find a variety of schools that will meet their needs, and offer a place for them to thrive and grow. After enrolling into college, the student will get used to their new surroundings, and make new friends and come out being happy with where they are. They will soon forget that the school wasn't their top choice. Choosing a college because it's "where you always wanted to go" but has offered you poor financial aid means your feelings won't be hurt, but you may be denying yourself a better, more financially sound future.