Good News for Anxious Graduates

If you're getting close to graduation, or you're trying to decide on your major, no doubt you're feeling a wee bit anxious (to put it mildly) about your employment prospects. After all, unemployment figures are up more than 44% from last year and the economic news is brutal, indeed. It may seem like a terrible time to be entering the workforce.

But look again. 

Just take a glance at that demographic chart, project a few years down the road, and recognize the tremendous potential you have not only to find a foothold in the new economy, but to rise swiftly as the path to upward mobility is cleared by the inevitability of a mass of retiring Baby Boomers. 

And if that's not enough optimism for you, consider this: President-elect Obama has just announced a key initiative to create 2.5 million new jobs by 2011, mainly aimed at rebuilding the crumbling infrastructure, modernizing schools, and developing new energy sources. 

If you can see a way in which your talents and abilities mesh with these key administrative initiatives, then you can probably write your own ticket. 

To learn more about the realities of the growing job prospects for young graduates, visit www.comingjobboom.com.

Finally! Help for the Upper Middle Class

Do you realize it can potentially cost you much much less to send your child to Harvard than to your local state university? Thanks to an aggressive new initiative, aimed at targeting the long-underserved middle and upper middle classes, families of Harvard undergraduates making up to $180,000 will pay no more than 10% of their income. This will cut costs to those families by between a third to nearly half. 

This is huge. And long overdue. 

Families earning between $60,000 and $120,000 will pay even less—between zero and 10 percent of their income. 

Dean of Admissions William Fitzsimmons quite rightly points out that families making between $60,000 and $200,000 find themselves in a "real state of crisis" when faced with college costs, as they are "neither poor enough to receive exemption from tuition fees nor are they rich enough to absorb the high costs."

 

In many ways, this makes winning admission to a well-endowed school like Harvard even more enticing. It's kind of like winning a lottery ticket now. 

Are YOU Well-Endowed?

Over 100 American colleges and universities have endowments over 1 BILLION dollars. You'd better believe these schools are the ones that are going to offer the best financial aid to accepted students. I did a little sleuthing and came up with this Top Ten list (leaving out state "systems" with multiple schools, like U of California.) For a more complete list of school endowments, click here.

1. Harvard 25 billion

2. Yale 15 billion

3. Stanford 12 billion

4. Princeton 11 billion

5. MIT 6.7 billion

6. Columbia 5.1 billion

7. U of Michigan 4.9 billion

8. Emory 4.4 billion

9. U of Penn 4.3 billion

10. Northwestern 4.2 billion

How Bad is the Cost of College?

Let's see. . .Here is a chart comparing from the Wall Street Journal comparing rise in the cost of college to the rise in the cost of other "consumer" goods:

Rising Consumer Costs 1985-2005

Item Increase

Gasoline 66.80%

Food 88.70?

Housing 93.00%

Car Repair/Maintenance 103.0%

Rent 114.0%

Medical Care 218.7%

College Tuition 330.2%

In comparison, how much has family income risen during the same time period?

Estimates range between 13% and 16%.

This is outrageous! And the solution colleges and the government provide us? Loans. More debt and credit enslavement.

Whatever Happened to Scholarships?

Once upon a time, if you were a good student, worked hard, and earned good grades, you could hope to win a scholarship to help you pay for college.

Not now.

Today, if you go to all the trouble of locating a good scholarship and applying for it (tons of work) and are actually lucky enough to win it, it probably won't help you one bit.

Why?

Financial aid. Unless you are paying 100% of your college tuition bills (and, let's face it, with a single year of college at $50K at many institutions, few people are) that scholarship money is going to help the college—not you.

That's right. They'll smile, thank you for the money, and happily reduce your amount of aid by the amount of the scholarship award.

Hardly worth the effort now, is it?

That's what you call the law of unintended consequences. You take away the incentive for earning a scholarship and sure enough, people stop trying to win them.

Today, the best financial bet is to get in to one of the highly endowed universities which offer gold-plated financial aid. More on that in an upcoming post.

Is Graduating From High School Obsolete?

It would seem so, in New Hampshire at least, where officials are now allowing students who pass a state test to go straight from 10th grade to community college or vocational school.

Students who want a four-year college degree would have to stay in high school until the traditional graduation age.

Apparently, this will save New Hampshire a lot of money on education.

No word on what students won't be learning.

Thoughts?

CREDIT CRUNCH?

We've learned a few lessons about unsustainable credit during the Housing Crash. Isn't it about time these financial realities were applied to the costs of a college education?

Tuition has been rising at more than double the rate of inflation for decades now. The only thing keeping the cost of college so high has been the apparent endless willingness of families to take out larger and larger student loans and for students to mortgage their futures.

Should a young person be enslaved by debt for decades, simply to get a toehold in the workforce?

Was it access to easy credit that made this happen?

Will the credit crunch finally make access to student loans difficult, if not impossible? Could this finally put a limit on the ever-spiraling cost of college tuition?