Michelle Obama's going on: 'Everbody must have college'-
Why? Why? What is the reason why everyone has to go
to college? Especially when college is so utterly
meaningless right now, it has no core curriculum and
people end up saddled with huge debts.
So opines the feminist cultural critic, Camille Paglia, in a recent interview in the Wall Street Journal.
(Saturday/Sunday, December 28-29, 2013) She goes on to state that the widespread emphasis on college is "social snobbery on the part of a lot of upper-middle-class families who want the sticker in the window". I'm happy to say that I share many of these views with Ms. Paglia, whom I admire, and have expressed them frequently in this blog.
As Glenn Harlan Reynolds, law professor at the University of Tennessee states in his new book, The New School: How the Information Age Will Save American Education From Itself
America's higher education problem calls for both
wiser choices by families and better value from
schools. For some students, this will mean choosing
a major carefully (opting for a more practical area of
study, like engineering over humanities), going to a
less expensive community college or skipping college
altogether to learn a trade.
("Degrees of Value: Making College Pay Off", Wall Street Journal, Saturday-Sunday, January 4-5, 2014)
The community college system has, in many regions, changed its model from a freshman program of unrelated courses to a more defined program wherein students' choices are limited to courses which will lead to a specific degree. Many times the program is designed to award certificates attesting to acquisition of employable skills along the way. Davis Jenkins, a senior research associate with the Community College Research Center at Columbia University states, "There's more attention to making the path through education to careers clearer, because people cannot afford to spend time earning unnecessary credits." (Wall Street Journal, Saturday-Sunday, December 14-15, 2013)
Mr. Reynolds agrees:
Today's emphasis on measuring college education in terms
of future earnings and employability may strike some as
philistine but most students have little choice. When you
could pay your way through college by waiting tables, the
idea that you should 'study what interests you' was more viable
than it is today, when the cost of a four-year degree often
runs to six figures. For an 18-year-old, investing such a sum
in education without a payoff makes no more sense than
buying a Ferrari on credit.
An interesting graphic from the Reynolds article highlights the following statistics:
71% College graduates in the class of 2012 who had student loan debt
$29,400 Average student debt per borrower
6% Annual increase in student debt at graduation from 2008 to 2012
As University of Michigan economics finance professor, Mark Perry, has calculated,
tuition for all universities, public and private, increased from 1978 to 2011
at an annual rate of 7.45%. By comparison, health-care costs increased
by only 5.8% and housing, notwithstanding the bubble, increased
at 4.3%. Family incomes, on the other hand, barely kept up
with the consumer-price index, which grew at an annual rate of 3.8%.
(WSJ, January 4-5, 2014)
41% College graduates who say their jobs don't require a college degree
I had contemplated not continuing my blog in 2014. Most of my "tips" regarding career exploration and planning were posted in the first year or two. (Yes, I began this blog four years ago this August.) Lately, I've been using my posts to draw attention to articles and books which may be of interest to students and parents looking for guidance. If you follow the suggestions I've made in archived posts, you should be finding these things out for yourself. Then I came upon the Paglia and Reynolds articles. They are just so worthwhile I needed to bring them to your attention and urge you to read them for yourselves. In the future I will post when something similar occurs. I won't be able to let you know specifics as to when that will be, as I have in the past. I may write weekly, monthly or not at all. I apologize for any inconvenience but I want to enjoy this experience and not make it a chore. As I've said often, most of this can be done on your own. I, most likely, will check in - or butt in, depending on your opinion of my posts - from time to time to keep you abreast of things.
HAPPY 2014 !
Showing posts with label college costs. Show all posts
Showing posts with label college costs. Show all posts
Wednesday, January 8, 2014
Wednesday, April 3, 2013
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!!!
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!!!
Wednesday, November 14, 2012
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!
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!
Wednesday, January 18, 2012
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.
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.
Wednesday, January 26, 2011
Two or Four Year College - "Pulling a Rudy"
In the last post I began a discussion of resources with which to help students find colleges to which to apply. I reviewed the site collegeboard.com which is invaluable in this effort. Unlike other college match sites, one of the first questions it asks the student is whether they're looking for a two or four year program. If the student responds, "No Preference", the college match results produced will not preclude two year programs. A lot of people may falsely stigmatize two year programs as being a last resort for students who "can't get in anywhere else". While sometimes true, that's an unfair generalization.
There are numerous reasons not to rule out a two year program. This post will concentrate on some major ones.
-Some students are interested in careers that require Associate's Degrees or even Certification rather than a four year Bachelor's Degree. Many of these jobs are in the technical or applied sciences. People interested in being a Veterinary Technician or Drafter often are employed with certification or a two year degree (Associate). For students who are unsure of their level of interest in a certain area, this can be a very good option rather than spending upwards of $30,000 a year to find out. Once employed in the field, they can decide if they are interested in advancing to a career that requires further study such as Veterinary Medicine or Architecture.
-Students who decide late that they even want to go to college may be able to "prove themselves" to a college with tougher academic and testing requirements than they acquired in high school. I call this "pulling a Rudy". That's a reference to the movie where the character, Rudy, used his good record in a two year program to transfer to Notre Dame. Many two year programs have bridge programs or articulation agreements with four year colleges where, upon completion. a two year graduate can enter into the four year college as a junior. The Baccalaureate Degree you get at graduation reads the name of the four year college or university, not the community college where you began.
-You've probably already figured out that the transfer option previously mentioned is a great way to save money as well. On the average, a community college costs less than half of what a four year state school charges. At a community college you can take core degree requirements at a much lower cost. Just be sure that the four year program you want to transfer to has an articulation agreement with the two year college or will accept the majority of your credits. Consider your college budget. I went to a very fine state university which was relatively inexpensive. Students who had to transfer there from pricier programs were seldom happy. You always want to trade up.
-If the above reasons aren't sufficient to at least pique your interest in alternatives to applying to a four year program immediately after high school, consider the USA Today article of January 18, 2011. The article by Mary Beth Macklein, which can be found at www.usatoday.com is entitled "Report: First Two Years of College Show Small Gains". In it she refers to a report based on a book, Academically Adrift: Limited Learning on College Campuses.
One of the study's conclusions is that, "Nearly half of the nation's undergraduates show almost no gains in learning in their first two years of college." The authors also found that students spent 51% of their time socializing and recreating; 24% sleeping; 9% working, volunteering or in student club activities; 9% attending class and only 7% studying. Sounds like a sweet deal but, unless you have no need to take loans to subsidize this life style, is it really worth going into thousands of dollars in debt?
There are numerous reasons not to rule out a two year program. This post will concentrate on some major ones.
-Some students are interested in careers that require Associate's Degrees or even Certification rather than a four year Bachelor's Degree. Many of these jobs are in the technical or applied sciences. People interested in being a Veterinary Technician or Drafter often are employed with certification or a two year degree (Associate). For students who are unsure of their level of interest in a certain area, this can be a very good option rather than spending upwards of $30,000 a year to find out. Once employed in the field, they can decide if they are interested in advancing to a career that requires further study such as Veterinary Medicine or Architecture.
-Students who decide late that they even want to go to college may be able to "prove themselves" to a college with tougher academic and testing requirements than they acquired in high school. I call this "pulling a Rudy". That's a reference to the movie where the character, Rudy, used his good record in a two year program to transfer to Notre Dame. Many two year programs have bridge programs or articulation agreements with four year colleges where, upon completion. a two year graduate can enter into the four year college as a junior. The Baccalaureate Degree you get at graduation reads the name of the four year college or university, not the community college where you began.
-You've probably already figured out that the transfer option previously mentioned is a great way to save money as well. On the average, a community college costs less than half of what a four year state school charges. At a community college you can take core degree requirements at a much lower cost. Just be sure that the four year program you want to transfer to has an articulation agreement with the two year college or will accept the majority of your credits. Consider your college budget. I went to a very fine state university which was relatively inexpensive. Students who had to transfer there from pricier programs were seldom happy. You always want to trade up.
-If the above reasons aren't sufficient to at least pique your interest in alternatives to applying to a four year program immediately after high school, consider the USA Today article of January 18, 2011. The article by Mary Beth Macklein, which can be found at www.usatoday.com is entitled "Report: First Two Years of College Show Small Gains". In it she refers to a report based on a book, Academically Adrift: Limited Learning on College Campuses.
One of the study's conclusions is that, "Nearly half of the nation's undergraduates show almost no gains in learning in their first two years of college." The authors also found that students spent 51% of their time socializing and recreating; 24% sleeping; 9% working, volunteering or in student club activities; 9% attending class and only 7% studying. Sounds like a sweet deal but, unless you have no need to take loans to subsidize this life style, is it really worth going into thousands of dollars in debt?
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