Running the Real Numbers

In the Wall Street Journal  "Weekend Investor" of July 28-29, 2012, there was an article entitled, "You Paid for College How?" by Anna Maria Andriotis.  The author states that while, according to the U.S. Census, average household income fell 6% between 2006 and 2010, the annual cost at 4 year private non-profit colleges increased 14% from five years earlier.  In-state four year public college costs rose 20% in that same period!  The college cost statistics are from the College Board and all percentages were adjusted for inflation.  The figures are daunting and the article discusses ways in which families may cover college costs and the pros and cons of each strategy.  Some strategies include:  Tuition Installment Plans; Home Equity Loans; Credit Cards; Life Insurance and Loans.  The article is definitely worth a read.

What makes the task of covering college costs even more difficult is trying to find out what that cost will actually be.  Since 2011 colleges were mandated by Congress to provide a Net Price Calculator (NPC) on their online sites.  However, according to Rachel Louise Ensign in the Wall Street Journal of April 28-29, 2012, some colleges "lowball costs" by asking few questions.  "Others are splashy but potentially confusing."  In some cases, projected costs are an average of 14% less than what the student will actually wind up paying.  That's according to a study by FinAid.org which also provides an online calculator.

Some of the things to look for when judging the accuracy of a college's NPC are:
1)  Who developed the college's calculator?  those developed by the college or outside company tend to be more accurate than those using the standard template provided by the U.S. Department of Education.
2)  Does it ask more than 10 questions?
3)  Does it include questions that may help determine aid based on merit such as academic performance?
A helpful site to visit for more links and information as to how to understand and use NPC's is http://netpricecalculator.info.  NPC's that aren't  accurate and useful are mere gadgetry!

This blog will resume with a new post on January 9, 2013. 
 Blessed Thanksgiving and a very happy holiday season to all!

Job Outlook

This past spring, there seemed to have been a lot more articles about overwhelming student debt rather than the outlook for 2012 college grads.  The job outlook for them was a bit better but it's still tough and even tougher for 2010 and 2011 graduates.  It seems most people would rather have a new model than one that's been sitting on the used car lot for a year or more.

Recently a financial analyst appearing on a Fox Business Network show said that engineering is the only discipline with full employment even in this bad economy.  The U.S. has 300 colleges/universities that have engineering programs.  India, on the other hand has 3400. So India, with roughly four times the population of the United States, has over TEN times the number of engineering programs.  That's not to say that everyone should or could become an engineer but, with it being possible rather than probable that grads will land a job quickly, it's even more important that you consider the cost of your education and how you will cover it.

According to the Wall Street Journal of April 28-29, 2012, college graduates' earnings have fallen in the past decade about 15% and the average college debt has risen by 24%.  Many articles have been written in recent months as to how students can navigate and mitigate this debt.  Karen Blumenthal has written two interesting articles on this topic for the Journal - "The Student Debt Handbook",  April 21-22, 2012 and "Help for Student Borrowers",  August 11-12, 2012.  Both are worth a read.

One sure-fire way to avoid the pitfall of overwhelming debt is to know not only how much you must spend to afford a specific college but to know how much you can spend.  In the next post of 11/14 I'll discuss college cost calculators.

Wishing Will NOT Make It So!

Each time I began a career exploration segment with my students, I would start with a disclaimer to the worn out cliche, "You can be whatever you want to be".  One of the most important aspects of what you need to do when deciding what you "want to be" is an assessment of your talents and determination.  I would use the example with my kids that I may have wanted to be an Olympic figure skater or a concert pianist.  However, having never taken  a lesson and having had no desire to awaken at 4:00 a.m. for a morning practice at the rink nor to practice for hours on end to master "Frere Jacques",  that ship had sailed.  I like the old Army ad slogan, "Be all that you can be".  That phrase recognizes that you need to assess your potential and work to realize it.

One of the main goals in writing this blog is to help students find ways to assess their individual interests and abilities and explore career options that might suit them.  If you followed my posts and researched topics in the archives, you have an arsenal of tools with which to work.  Since I have already outlined a pretty complete approach to the process, I will spend future posts to delve deeper into subjects and highlight current approaches, books, tools and topics that might be of assistance.  In the past I published a post every other Wednesday.  In an effort not to be redundant, I will now post every third Wednesday.  The next post will appear on Wednesday, October 24.

Welcome Back!

The new school year has begun and with that comes the knowledge, for most of us, that the summer was not spent as productively as we had planned during those late May days.  College exploration and  application essays were hardly thought of at all as we gazed at those high summer skies.  Well, it's back to reality!!!  Unfortunately,  some medical procedures prohibit my being able to work at the computer for any great length of time.  Therefore, I too will be guilty of procrastination, as I am scheduling my first post for the school year for Wednesday, October 3.  It is entitled, 'Wishing Does NOT Make It So!",  and  it's worth a read.  Until then, I suggest you go back into the archives and review still timely suggestions in posts such as the "Welcome Back" post of 9-21-11.

How to Spend Your Summer Vacation

I am proud to announce that I have topped the 1000 page view mark!  I began this blog in August 2009 with the intention of helping students and parents with the daunting task of career planning and training.  As is my habit, I take the summer off.  (After over five decades of being on one side of the desk or the other, I believe I deserve this respite.)   I hope you enjoy your vacation and put the extra time to good use.   Please go back in the archives to the post of June 8, 2011 for suggestions as to how to spend part of your vacation.  Hope to see you in September!  (NOTE: collegeboard.com is now collegeboard.org)

Post Graduate Prospects

With the month of May come college commencements and news articles about the job outlook for graduates who hope to commence their careers.  In many of my previous posts I've discussed whether the advantages of having a degree justify the cost. The U.S. Bureau of Labor Statistics said that last year's unemployment rate was 4.9% for college graduates while it was 9.4% for those with no college. Also, those with a bachelor's degree had a median salary of just over $1,000 a week while high school graduates with no college earned a little over $600 a week.  That's a big difference and if you spent $10,000 a year just on tuition at a relatively inexpensive public college, it would only take about two years on the job to make up the difference -
assuming you have a job!!!


Jack Hough, a columnist at SmartMoney.com, recently wrote about PayScale, a Seattle based data firm which examines the links between pay and variables like colleges and majors.  PayScale's Katie Bardaro says students should consider the salary they are likely to make before deciding how much to spend on college.  Mr. Hough notes that according to Labor Department data, wages for college graduates rose just 9% while in the past 20 years college costs have risen 184%.


Don't just decide how much you CAN afford to spend on college but how much you SHOULD spend in order to capitalize on your investment.  Sara Murray and Joe Light wrote an article  on the job outlook for college graduates for the Wall Street Journal weekend edition of May 21-22, 2011.  (I'm sure one citing this year's prospects will be published soon.)  Some of their findings are still very relevant and, unfortunately, pertinent:


     Even for those lucky enough to land jobs, the consequences
     of graduating in a weak economy are severe.  Those who
     enter the work force during downturns tend to go for decades 
     earning lower wages than their counterparts who started their 
     careers when the economy was healthy.
     Meanwhile, some degrees are far more valuable than others.
     Computer science, accounting, economics and engineering
     majors were in high demand this year.  English majors struggled 
     and the market for education graduates was particularly
     dire amid state and local budget cuts.
     'It really makes a difference what your background is,' says 
     Till Marco von Wachter, a Columbia University economist
     who studied the long-term effect of graduating during a
     recession.  While engineers from top schools can recover
     their earning losses in five years, that's not the case for
     humanities majors at mid-tier colleges.
     




     

Hurry Up and Wait!

College-bound seniors in high school have been awaiting the mail eagerly these last few months. Many have received the dreaded letter sized envelope containing a single sheet, while others have happily received a large envelope filled with yet more forms to fill out! The third option is the purgatorial wait-listed status. Many students may have received all three types of notices. If they're lucky, they've been accepted to the school to which they would really like to go. In those cases the uncertainty of being wait-listed and the disappointment of outright rejection are mitigated. Many people would rather have a simple "yes" or "no" rather than be wait-listed. At least that's what they say, even though with being wait-listed the possibility of "yes" is still present. Or is it?

Rachel Louise Ensign and Melissa Korn wrote an article for the Wall Street Journal of 4/9/12 entitled, "Colleges Tough Waiting Game", which is available at online.wsj.com.. In the article they write about how unlikely it often is that a wait-listed student will be offered admission. Indeed, Carnegie Mellon in Pittsburgh accepted just six of the over 5,000 applicants they wait-listed last year. As part of the same article, they present a very interesting chart, "The Old College Try", which presents wait-listed information from more than a dozen "elite" schools.

As per the National Association of College Admission Counseling, colleges are supposed to fill remaining admissions openings from their wait-lists by August 1. The writers cite Kennon Dick who was the associate dean of admissions at Swarthmore and educational consultant at an admissions consulting firm called College Coach. Mr. Dick says that when colleges turn to their wait-lists they look to fill unique holes in the incoming class or for students who "show interest in the college through phone calls, emails and letters after accepting a spot on the wait list". In many of my previous posts I've advised that you get the names of various representatives you've met on visits and tours of the colleges you visit and contact them at different points in the application process, for example, after your visit/after you apply. This includes tour guides, professors, team coaches, admissions staff, etc. If you're wait-listed at a school in which you are really interested, now would be the time to contact them again.

In the Wall Street Journal of Saturday-Sunday, April 19-20, 2011, Jane Kim wrote an article entitled, "Buying Your Way Into College". In it she stated ,
Many schools begin by admitting part of the class without
regard to the ability to pay, but start to consider it
when the financial aid budget runs thin. For the first
time since 2005, the University of Rochester doesn't
expect it will be completely need-blind when it comes
to admitting students off the wait list this year.
Ensign and Korn also write about this:
Applicants requiring financial aid may have an even
tougher time. Even at a handful of need-blind schools-
those that don't consider financial need in admissions
decisions-waitlisted students with less need have an
edge. Six percent of private colleges were need-blind
in the regular admissions cycle but became need-aware
once they started admitting students from the wait list,
a 2008 survey by the National Association for College
Admission Counseling said.

These are all things to review when considering your options. The old adage comes to mind. "A bird in the hand..."

If Spring Training Is Almost Over, Can Summer Be Far Behind?

Although the area of the country in which I live has had an usually mild winter, the beginning of baseball season always seems to mark the long awaited countdown to summer. Most students look forward to a season away from school and homework but many parents are looking for ways to entertain their children and enrich their development. Truth be told, many are just looking for something for the kids to do while they're at work! Have you noticed all the summer camp advertisements and open houses?

In addition to camps geared to specific talents and interests, pre-college programs are offered by many schools for students in middle/high school. Students who are interested in a certain college or university may go to its website to see which programs are available. In my blog way back on September 22, 2010, I reviewed four such programs at New Jersey Institute of Technology, Douglass College and the Fashion Institute of Technology as well as one at the New Jersey Center for the Performing Arts. There are hundreds, if not thousands, more. Peterson's publishes a guide entitled, Summer Programs for Kids and Teenagers .
The Kaplan Yale Daily News Guide to Summer Programs is worth a look as well.

In finding information about summer programs, websites can be particularly helpful, as they are usually more current and updated more frequently. I like one out of George Washington University - www.usummer.com. Clicking on the "Summer Programs" tab will bring you to a directory of hundreds of programs not exclusive to GWU.

CAUTION: Many motivated students look at a summer program as a way to enhance their application to an exclusive or highly competitive college. As with many things, it's not WHAT is done as much as HOW it is done. An expensive or even self-sacrificing summer program really does little if you've gained no insight from it. If you travel to some exotic place to dig water wells and all you come away with is you didn't really like the food, you will not produce as good an application essay as the one about how you loved teaching the neighborhood kids to throw a curveball.

The Six Year Undergrad

In an earlier post I referenced Richard Vedder, Director of the Center of College Affordability and Productivity - www.centerforcollegeaffordability.org (blogpost of Tuesday, January 31, 2012) In April 2011 he stated that nearly half of full-time students do not graduate in six years. An article, by Kelly Heyboer, published in the Sunday Star-Ledger of January 30, 2011 supports this claim and presents data about colleges and universities in the state of New Jersey. The federal Department of Education requires all schools to provide information as to how many of their freshmen graduate in either four or six years. Ms. Heyboer writes that, "A Star-Ledger analysis of the numbers shows the chances of graduating in four years are slim at many of the state's public and private schools." Public colleges and universities in NJ must post this information on their websites. The Higher Education Agency for each state should be able to provide this information for your state. www.hesaa.org Of the 27 schools featured in the article, only four had four year graduation rates better than 50% in 2008.

Colleges make the argument that the numbers are low for many reasons. Students drop out or transfer. They also say that many students change majors, thereby delaying their graduation. However, often a student needs extra time to get into all the courses required for a specific major due to overcrowding and limited offerings.

Whatever the reason, you need to know the rate at the schools in which you are interested. Unless you have the luxury of unlimited funds, this factor should certainly play a role in making your decision as to which college to attend.

Working the System

The past few posts have featured where and how to find money for college/post-secondary education. The "Weekend Investor" section of The Wall Street Journal (Saturday/Sunday, January 21-22, 2012) ran a very informative article entitled, "The College Aid Shuffle". Jessica Silver-Greenberg, with Kristen Grind, writes about ways that families who may think they're too wealthy to qualify for financial aid can "make the system work" to their advantage.

Ms. Greenberg writes that:
The single most crucial year is the one that begins
on January 1 of a student's junior year in high school.
In financial aid parlance, that's known as the
'base income year', and it's the one that counts
most in determining a family's eligibility. Any
income earned or assets acquired that year are
counted more heavily than in later years.
One of the strategies she advises is that families minimize their capital gains that year. Specifics are given as to how to reduce reported income.

Among other strategies discussed in the article, it's advised that parents don't save in a child's name as those funds are counted more heavily in financial aid formulas - 20% in contrast to 5.64% for parental assets.

In the post on January 4, I wrote about an excellent resource to help you estimate your financial aid needs and determine your Expected Family Contribution (EFC). The website is www.finaid.org/calculators/finaidestimate .
Ms. Greenberg also mentions SimpleTuition.com. This is a good site and especially helpful for loan information, providing direct application links to various banks.

If you still don't get enough financial aid, you can appeal to the school. They will reassess or review your application. I have advised parents to do this and in each case the school has adjusted the offered package in the student's favor. The families were asked to provide the school with a "running budget" which often showed how assets that looked healthy on paper were already committed to and offset by living expenses.

Show Me the Money! - Part III

As promised, I'll devote this post to resources that provide information on scholarships. Way "back in the day" I received a scholarship from a very unlikely source. My father worked as a pharmacist in a drugstore that gave out S&H Green Stamps. You would collect the stamps and lick them into books which you could then redeem for appliances, cookware, etc. (Ask your grandparents!) Since my dad worked in a place that distributed the stamps, I was eligible to apply. I won the scholarship and it paid for a great deal of my tuition. The only downside was that every time my tuition bill was due and I would present my award proof at the bursar's office, some comedian would always have to comment on how many books I must have had to save up! I would never have known of that scholarship had my father not worked in that store. Today the internet makes information on scholarships readily available.

collegeboard.org has a scholarship finder. Search "scholarship" to be taken to a comprehensive guide as to how to find scholarships and to link to Scholarship Search and FastWeb. The College Board co-sponsors a scholarship program with the Siemens Foundation to increase "access to higher education for talented mathematics, science, engineering, and technology students in the the United States". The Board also publishes a book, Getting Financial Aid 2012, which is available through this site. FastWeb at www.fastweb.com is another free scholarship search service which also offers career planning and information about special programs such as Study Abroad and the military.

I really like the zinch.com site. It offers a free scholarship search that includes information about college, grad school and vocational school awards. The search filters information for students freshman through senior year in high school as well as grad school students and working professionals. Information about awards provided by corporations as well as zinch itself is also available.

In my post about the Prudential Prestigious Awards and the Metro PCS Leaders and Scholars Program on December 10, 2010, I discussed how looking further into a program and investigating its website carefully may help you discover links to other sources that provide scholarship info. In reading about those programs, I found that the Prudential program is administered by International Scholarship and Tuition Services, Inc. at http://www.applyists.com . It provides links to ScholarUp (www.Scholarup.net), Scholarships.com (www.scholarships.com) and other sites of interest to scholarship applicants.

States have their own Higher Education Agencies. The New Jersey Higher Education Agency at www.hesaa.org gives information about New Jersey Tuition Aid Grants and scholarships available to NJ students such as the Dana Christmas Scholarship which is funded entirely by the Public Service Electric and Gas Foundation. Check your state's agency.

For those who want to apply for scholarships that require an essay or some type of competition, there are books such as Secrets to Winning a Scholarship by Mark Kantrowitz in conjunction with FastWeb. Get Cash for College: Secrets to Winning Scholarship by Gen Tanabe and Kelly Tanabe has also received good reviews.
There are many of these guides but the two listed are pretty recent. That's important when searching for funds, especially in this economy where many sponsors may have cut back or even eliminated their scholarship programs. That's one of the reasons I prefer using the program searches available online.

In preparing this post I am impressed, once again, with the wealth of information available to anyone who can access a computer. And to think I had to depend on a lick 'em, stick 'em stamp program which I was lucky to find by chance and circumstance. Thanks, Dad and the Sperry & Hutchinson Foundation!

Time Out

Initially I had planned to devote this post to a discussion of scholarship availability as the third installment of "Show Me the Money". However, I want to back up a bit and will table that topic until my next post on February 16. It may seem a little late in the game for high school seniors to re-assess their post graduation plans, but before you make a commitment that will affect your life (and credit score!) for years, I think it's worth examining your decision.

It gets real from here - acceptance letters will be received and final choices will need to be made. In Daniel Akst's review of Andrew Ferguson's Crazy U,
he writes that, "Most students (and their parents) have no clear idea why a university is the reflexive next step after high school, and yet roughly 70% of American high school graduates go on to college.". (WSJ Weekend March 5-6, 2011) Indeed, I contend that's a major reason why - "Everybody else is doing it.". Every parent of an adolescent has heard that "reasoning" from their child. In the April 2011 edition of The Costco Connection (Yes, Costco! Don't be a snob. You can find useful information in many places.), Richard Vedder who is a professor of economics at Ohio University says, "Too many persons go to college today, not too few.". Vedder is also the author of Going Broke by Degree: Why College Costs Too Much,
and director of the Center for College Affordability and Productivity - www.centerforcollegeaffordability.org. He says that by his estimates, "60% of the increase in the proportion of Americans with college degrees since 1992 has ended up doing jobs that the Bureau of Labor Statistics says do not require a college diploma". Vedder's research shows that we have about 300,000 waiters and waitresses who have college degrees as do 15 % of taxi drivers. He also states that many students should consider community college and transfer to a four year program if successful. I blogged about this in detail on January, 26, 2011 - "Two or Four Year College? - 'Pulling a Rudy'".

While we're on the topic of "why college?", there's another article worth reading. Michael Graham wrote, "College's Harsh Lesson", which was an op-ed for The Boston Herald and can be found at www.bostonherald.com (March 24, 2011). Graham contends that for many, the motivation to attend college, especially prestigious ones, is actually bragging rights. I discussed this in my post way back on September 8, 2010 - "The Scarecrow Syndrome".

High school graduation and commitment to a costly college education becomes real as you're asked to submit your deposit to the school of your choice shortly after acceptance. It's not something you should take lightly and definitely not because, "Everybody else is doing it!".

Show Me the Money! - Part II

In the last post I discussed resources where information about financial aid could be found for free. The federal website, www.college.gov, cautions against scholarship search scams and other fee based services. There are, however, reputable companies that charge for these services. Many families find reassurance in hiring someone to do the "legwork" for them. Indeed, many families pay an accountant to help them file the FAFSA.

Recently, Prudential Financial sent emails to their customers advertising a service from StudentAid.com. They offer a personalized College Cost and Planning Report for a nominal fee ($89). The report assesses the family's ability to pay for up to 10 colleges of the student's choice. Most of the information included in the report, such as estimated federal and state aid amounts, college profiles, etc., can be found for free as readers of this blog well know.

In "5 Weird Ways to Pay for College", www.smartmoney.com, 3-22-11, Jilian Mincer writes that, "...many cash-strapped states are capping grants and raising eligibility for student aid - a trend expected to continue as they shift more of the costs of college to students and their families." According to the College Board, the average cost of a private college in 2010 was $37,000 a year which included room and board. I find it an astonishing coincidence that according to Mark Whitehouse in the Wall Street Journal weekend edition of May 7-8, 2011, "average starting salaries for four year college graduates are less than $37,00." (The exact same figure!) It doesn't seem likely that in this economic climate starting salaries will surpass college costs anytime soon.

Show Me the Money!

"If you don't know where you're going, you might end up some place else."
Lawrence Peter Berra (AKA - Yogi)

By now seniors should have some idea of what their plans are after high school. Optimally, applications should have been sent and efforts now should be focused on finding the money to fulfill your goals. You should have made alternate choices for reach and safety schools, not just academically, but also financially. The letter most anxiously awaited after the one from the admissions office is the one from the office of financial aid. We'll be discussing different sources of aid in the next few posts. FAFSA forms are currently available in high school guidance offices. All schools from whom you wish to receive aid will require this form to be filed before they will offer a financial aid package. The sooner you can send in a complete and accurate form the better, as schools award monies available as they receive requests from eligible accepted students.

There is an excellent resource to help you estimate your financial aid needs and determine your Expected Family Contribution (EFC). FinAid, the Smart Student Guide to Financial Aid, provides an explanation of the methodology colleges use to determine a student's financial aid and an EFC calculator. The website is: http://www.finaid.org/calculators/finaidestimate.phtml

On the www.college.gov site I first blogged about in 2010, there is a section titled, "How to Pay". There is also a portal to completing the FAFSA online. A simple and brief explanation of the financial aid process is provided as well. Links are available to federal and state scholarship searches. On the Federal Student Aid site there is also a "Student Aid on the Web's Financial Aid Wizard" which takes you through the process in "8 easy steps". "State Higher Education Agency Listings" on www.college.gov provides links to each state's Higher Education Agency sites. These agencies provide information on programs specific to each state. Under the "How to Pay" tab there is a "be money smart" heading. It includes tips on how to avoid fee based scholarship scams and where to find more FREE sources of financial aid assistance.

The financial aid process may seem daunting but all the information is within easy reach. With some effort and perseverance, you may be able to find the money you need so you won't "end up some place else".