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..."