It’s time to buy a new car. You visit the local dealership and are presented with 30-plus models. There are sedans, SUVs, cross-over cars, trucks, compact cars, electric cars…so many options! You aren’t entirely sure about what you want, so you begin the process of weeding out what you know you DON’T.
Based on your current needs, you decide on an SUV. That whittles the pool down to 10 possible car choices-- that’s a start! How to differentiate them? They all have doodads and gizmos galore; seat warmers, four cup holders, you name it! At least six of them are in the range of your budget--you’re going to have to take them for a test drive.
Not a real big help. They all run. They all move when you hit the gas pedal, and stop when you hit the brakes. Some do it a little faster, slower, smoother than others, but they all get the job done. Now it’s late in the afternoon and you are tired, cranky and hungry; the free donuts at the sales counter have long since gone stale and you’re no closer to buying a new car than you were six test drives ago.
Sound familiar? Well, thankfully, there are other (and less maddening) ways to buy a car or to make any purchase, for that matter. There are salespeople who can help narrow the choice pool, and online engines that can help differentiate your ‘wants’ from your ‘needs’. You might think that the more choices you have to choose from, the happier you would be--sounds logical, right? Well, not always.
Too Much Choice Can Lead to Decision Paralysis and Frustration
Think of the child in the proverbial candy store... that’s a happy kid! Now, tell that child they can pick out one piece of candy from the rows and rows of options…chances are that after a few minutes of aimless wandering around the candy aisle, all that choice will result in full melt-down mode (we’ve all seen it!).
In fact, psychologist Barry Schwartz has written a whole book on the subject titled The Paradox of Choice. In it he presents the very counter-intuitive argument that too much choice is a bad thing. While there has been some debate and discussion over Schwartz’s argument (including his famous jam study), there seems to be little debate that his argument holds true when applied to choices whose complexity might hinder a good outcome.
Help your students navigate through the paradox of choice
The paradox of choice largely applies to paying for education. Hmmm, a complex decision that can lead to bad outcomes if there ever was one! Students and families need help and guidance to properly understand the options available to them, to avoid choice paralysis.
Counseling and Education
With just a few questions, you can filter the options a student or family should consider given their individual needs or personal circumstances. Free money is good, right? Yeah, you should probably take that. Subsidized loans are a good thing, you should probably take those. The less you can pay for now the more you need to borrow--and we all have read about the problem of growing student debt--so we know this is a good thought process. Every dollar that is paid for utilizing current income reduces total borrowing. Logical enough. What is wrong with asking a student or family with what they are comfortable paying on a monthly basis? A few intelligent questions later, and voila, you have navigated the complex maze of paying for education in a manner that is prudent and sustainable.
Choice is a good thing, but there can be too much of a good thing- a blessing and a curse. Make sure your students and families are not drowning in a sea of choices. Don’t be afraid to help guide them along the path.
Click here to see how TMS helps students and families make prudent education finance choices
By: Craig Lockwood, Managing Director, Product Strategy