Kerri Palmer Suggests Applying Risk Management to College Planning

For families managing college applications, the process often feels like a blur of deadlines, campus visits, and mounting financial anxiety.

However, according to Kerri Palmer, Co-President and Head of Financial Services at Sallie and President of Sallie Mae Bank, the most effective way to manage these pressures is to stop viewing them as a series of emotional milestones and start treating them like a calculated risk management operation.

In a recent perspective piece, Palmer argued that families frequently make massive long-term investments without the rigor they would apply to a major business decision. The stakes, while personal rather than corporate, require a similar discipline: defining the desired outcome, testing underlying assumptions, and planning for multiple financial scenarios.

The core of this strategy lies in shifting the focus from the prestige of a university to the return on investment. Palmer notes that many families skip the foundational math, often failing to have critical conversations about future earnings until after the college list is set.

“Only 38% of families discuss expected salaries in a student’s field of interest, and just 28% discuss potential earnings compared with the cost of education,” she reported.

Defining Success Beyond the Campus Tour

Before ever stepping foot on a campus, families are encouraged to establish what success actually looks like for the student. This involves mapping out potential career paths and their corresponding earnings trajectories. The distinction between a $30,000 education and a $200,000 one becomes clearer when compared to realistic career outcomes.

Testing assumptions is the second pillar of this risk-focused approach. Many families fall into the trap of focusing solely on the advertised “sticker price” of a college.

Palmer emphasizes that families must look at the net price—the amount paid after grants and scholarships are applied—while also accounting for the often-overlooked costs of books, technology, travel, and daily living expenses. These secondary costs can quickly derail a budget if they are not factored into the initial risk assessment.

Reduce Financial Risk Through Scholarships and FAFSA

Reducing financial risk is perhaps the most practical step for households. This involves a proactive approach to scholarships, which are often misunderstood by the public. Nearly half of families mistakenly believe scholarships are reserved only for students with exceptional grades or talents, ignoring the vast array of opportunities available to students with diverse backgrounds and experiences.

Completing the Free Application for Federal Student Aid (FAFSA) remains a non-negotiable step for any family, as it unlocks access to federal grants, work-study programs, and institution-specific aid. When borrowing becomes necessary, the mindset shifts to understanding trade-offs:

The key is understanding the trade-offs and making informed decisions that support the future you’re trying to build. If borrowing is part of your plan, compare your options and borrow only what you need.

Borrowers are urged to estimate monthly repayment obligations against projected starting salaries long before they sign a promissory note. This ensures that student loan debt does not compromise future financial stability, such as the ability to pay rent, save for retirement, or manage transportation costs.

Planning for Completion, Not Just Admission

The final, and perhaps most critical, component of this strategy is viewing admission as merely the starting point. A risk-aware family plans for the entire duration of the degree, accounting for potential shifts in family finances, the non-renewal of scholarships, or unexpected personal challenges. By identifying resources such as campus financial aid offices and counselors early, students can better manage setbacks without abandoning their educational goals.

While the cost of higher education continues to be a subject of intense national debate, the approach suggested by Palmer prioritizes individual agency. By treating the college search as a structured risk assessment, families may be better equipped to make decisions that align with their long-term financial health, rather than succumbing to the pressures of a competitive and often opaque application cycle.