Money for College: Using a gap year to financial advantage

March 16, 11:35 AMCollege Admissions ExaminerLauren Starkey

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Colleges around the country are hoping high school seniors and their parents missed Saturday’s New York Times article, “Delaying College for a Year Could Have Benefits.” In it, Jonathan Glater makes a case for shelving an acceptance letter and using the next twelve months to better position yourself for freshman year.

Many colleges allow acceptance deferral, but in this year’s tumultuous admissions environment, they’re hoping few students will take advantage of it. Think about it this way: they always admit more students than they have space for, because not all students will attend (the percentage that do is referred to as the yield). This year, though, the time-tested algorithms for determining acceptance rates and projected yields is off, and no one knows yet how far. Record numbers of students applied this year, but the economy has forced those students into making decisions based more on cost than ever before( read this previous column on admissions trends and family finances).

If a significant number of accepted students asks to wait a year, the impact on the yield ratio would be severe. Glater notes in his Times article that the pros of such a delay for students go beyond the usual maturity factor (waiting a year while working for AmeriCorps or a private company could help focus interest and allow time for emotional growth). Again, it’s about the bottom line. The tuition benefits from the Stimulus package don’t kick in until next year.  Twelve months of employment could translate into tuition money. And there’s a chance the economy will recover during that time, boosting investments intended for education.

But the potential downsides shouldn’t be ignored. Glater quotes Seth Allen, dean of admission and financial aid at Grinnell College in Iowa; “There’s a real possibility things could be worse. What if…the kind of economic news coming out suggests that unemployment will continue to rise and endowments for the foreseeable futures will remain flat?” Colleges wouldn’t be able to offer the aid they can now, and the anticipated recovery of family finances might not materialize by this time next year.  

Taking a year off is not a bad idea for many students. The real benefits of gaining experience, wisdom, and income aren’t dependent on the stock market. But contemplating it solely for financial concerns is a serious risk. Be certain you’re planning a gap year for reasons that make sense rather than for a gamble.