Further Considerations

I know quite a few of my recent posts may make it seem that I'm trying to talk people out of pursuing a college degree.  I'm really just trying to present some of the "cons",  since so many people have been "con"vinced that the only path to personal success is via a four year degree.  It's important to look at what you hope to attain by entering a specific program at a specific institution and whether or not your choice will meet your expectations.  As Charles Murray, author and WH Brady Scholar at the American Enterprise Institute said in a speech at a Cato Institute event in September 2012:
     Here's the reality: everyone in every occupation
     starts as an apprentice.  those who are good 
     enough become journeymen.  The best become
     master craftsmen.  This is as true of history
     professors and business executives as of chefs
     and welders.  Getting rid of the BA and replacing
     it with evidence of competence - treating post-
     secondary education as apprenticeships for every-
     one - is one way to help us to recognize that 
     common bond.
Post-secondary education which makes you competent to work as and for what you want in life should be your goal.  

Since many of you have decided to proceed on to college and it's almost time to send in that May 1 deposit, these are some things you may find of interest.  An article in the Wall Street Journal of Saturday/Sunday, December 22-23, 2012 was entitled, "Playing the College Game - Soaring Costs and Confusing Aid Packages Are Making the College Selection Process Trickier Than Ever."
As part of what the author,  Ruth Simon, suggests you do is:
     Settle on a budget as early as possible.
     Concentrate on the 'net price'.
     Consider the school's graduation rate.
     Focus on schools where you'll stand out.
     Aim for grants, not work-study awards.
     Beware of aid offers that taper off in the future.

These are all worthwhile tips and have been discussed in previous posts.  There was also an article in the Wall Street Journal on March 12, 2013 entitled, "Colleges Latest Offer:  Deals".  Doug Belkin and Melissa Korn write about the fact that certain private schools are offering creative enticements to a dwindling number of prospective students.  According to the College Board Advocacy and Policy Center the percentage of students at private four year schools dropped from 22% to 20% between 2006 and 2011.  At Nebraska Wesleyan University, students who maintain a certain grade point average but don't graduate in four years will get the fifth year free.  That's appealing since federal statistics show that only about 15% of students do graduate in four years. (Refer to my archived post, "The Six Year Undergrad" 3-21-12) Belkin and Korn report that, "Spring Arbor University in Michigan agreed in February to pick up a portion of the tab for future students who land low-paying jobs after graduation:  that offer will apply to those working 30 hours a week and earning up to $37,000."  Indeed, a recent news report said that there were 20 class action suits against law schools whose grads say misled them into thinking there were jobs when a lot of legal tasks can now be accomplished online or without a lawyer.  See if any of the schools you are interested in are making deals.  As with housing, some colleges see it as a buyers' market.  However, I wouldn't expect too many of the Ivy's to offer discounts, even though, sadly, their reputations often far exceed their production.

In "College's Harsh Lesson",  on 3-24-11, Michael Graham wrote on BostonHerald.com,
     The average private school now costs more than
     $40,000 a year, while the Bureau of Labor
     Statistics is projecting that most of the jobs
     created in the next decade won't require 'much
     more than on-the-job training'.  Princeton economist,
     Alan Blinder, tells the Los Angeles Times he 'won't
     be surprised years from now if a carpenter in
     the U.S. earns more than a college-educated
     computer operator.'

In the best of all possible worlds, you should know what you'd like to study before you choose the place in which to study it.  On Townhall.com there was an article entitled, "2012's Worst Paying College Degrees". (11-29-2012)  Not that earnings should be the only consideration.  However, if you plan to get a degree in "Child and Family Studies", you should know in advance that the job for which this degree prepares people has one of the lowest median salaries for "their respective career professionals".  Data is cited from the 2012-2013 College Salary Report from Payscale.com, another really good site.

This has been a tediously long post - and I'm the author!  However, since many of you may soon need to reply as to your acceptance of a school's award package, I would advise you to read an article in the Weekend Investor feature of The Wall Street Journal of Saturday-Sunday, March 23-24, 2013.  It's entitled "Making Sense of College Aid:  Many school's financial aid letters are devilishly difficult to figure out.  Here's what you need to know."  Ruth Simon and Rob Barry offer some valuable tips.  They highlight two great sites that may be of help before mailing in your deposit check.  The Financial Aid Shopping Sheet can be found at collegecost.ed.gov/shopping_sheet.pdf.  The second site is graphics.wsj.com on which you'll find an interactive tool which will help you compare packages and how schools stack up re graduate salaries, debt and other measures.

PHEW!!! I think that's quite enough for one post!  I tried to fit everything in, as this is the last post of the 2012-13 school year.  While I'm beginning summer vacation early -  a benefit of being retired - there is much left for you high school students to do.  For  suggestions, refer to my archived posts of 6/8 and 6/22 of 2011.  Have a Great Summer!

Necessity Necessitates Invention

In an ongoing effort to find ways to cover college costs I've come upon something called "crowdfunding".  Rachel Louise Ensign wrote about it in the Weekend Investor section of The Wall Street Journal  of October 20-21, 2012.  
     One new website, Upstart (www.upstart.com), allows
     ...'accredited investors' - generally, those who earned
     $200,000 or more in each of the last two years, or have
     a net worth of more than $1 million, not including a
     primary residence...(to) loan money to a specific
     recent graduate in exchange for a portion of his or
     her income for the next ten years.  The money can be
     used for any purpose, and some of the initial graduates
     have used it to help with student debt.
The service began in August and is offered at 30 schools including Stanford and the Rhode Island School of Design.

Ms. Ensign also highlights 529 plan registries such as 
www.Savingforcollege.com which tracks college-savings plans, GradSave (www.gradsave.com) and Give College (www.givecollege.com).  Withdrawals from 529 savings plans are usually tax free if used for appropriate education expenses.  Registry users should be aware of the user fees.

There are broader "crowdfunding" sites such as GoFundMe (www.gofundme.com), which charges a 5% fee on all donations and Indie-gogo. (www.indiego.com)

Social Finance or SoFi (www.sofi.com) raises money from a college's alumni to provide or refinance loans for current students and graduates and soon Common Bond (www.commonbond.com) will offer crowdfunding loans from accredited investors for MBA students of UPenn's Wharton School.

In discussing new creative ways to pay for college, there is also something called the Private College 529 which is a non-profit group run on behalf of its member colleges rather than a state run or state sponsored plan.  This program was begun in 2003 and through it a parent contributes the current rate for a specific member school's tuition and mandatory fees.  The student would then receive a credit for one year's tuition and fees that is guaranteed for 30 years regardless of tuition hikes.  One caveat is that the student is not guaranteed admission to that school.  Indeed, in Business Insider on October 13, 2012, Gus Lubin wrote an online article, "Admissions Offices:  Here's What They Don't Tell You About Getting Into an Ivy League School".  In it he reveals things discovered in an interview with a former admissions officer at Dartmouth College such as: 
         Legacies get a 'bump' though not as much as
         recruited athletes.
         It's much easier to be admitted during Early
        (admissions).   Even though most schools tell
         you it's just as competitive, it's simply not true.
Of course, this is one former admissions person from one elite college but a lot of what is related is very interesting and worth a read.  If a participant in the Private College 529 is not offered admission, a refund is issued with a rate of return that may not seem terribly attractive.

With all these "new" ways of funding exorbitant college costs, it seems the only thing college administrators are not getting creative about is reducing those costs!!!