Thinking if getting a college degree is worth it? Read on as Julie Jason explains to us why a college degree is a good investment.
A College Degree is a Good Investment
If you have a junior in high school in your family, you may be planning to visit some college campuses over spring break. As college education is still one of the best investments you can make, it’s not too soon to think about paying for it.
College graduates earn almost twice as much as those who end their formal education at high school, and the gap between high school dropouts and those who earn advanced degrees is even greater.
Based on the most recent Bureau of Labor Statistics data (third quarter 2017), the median income was only $27,144 for those who did not graduate from high school. Contrast that with a median income of $76,440 for those who earned an advanced degree.
The median income of graduates with bachelor’s degrees (but no advanced degree) was $60,528, compared with $37,128 for high school graduates.
Finding the money to make the investment in a college education can be a challenge, but that should not stop you for two reasons.
First, there are new ways to save for college that are completely tax-free. The 529 college savings plan offers tax-free savings opportunities to students and gifting opportunities for parents and grandparents.
Second, the true cost of college may be lower than you think. Before abandoning hope of a college education, look beyond the published “sticker” price.
If you are like many people, you may think that you need more than $200,000 to pay for a college education. You may be surprised to learn that this does not have to be the case.
Based on data from the National Center for Education Statistics, about 17.5 million students are enrolled in undergraduate college programs in the U.S. About seven out of 10 high school graduates went on to college (two- or four-year programs) after graduation, according to NCES’s most recent data (2016).
Most pay less than $12,090 a year for a college education — that’s the published price for tuition and fees for the 2017-18 school year at four-year colleges, according to the College Board’s “Trends in College Pricing“.
If you carve out private colleges, the cost is even less: For the 2017-18 school year, the national average published cost of tuition and fees at four-year in-state public colleges was $9,970 a year, according to the College Board. For the same school year, room and board averaged $10,800 at public colleges.
There are regional differences. For example, in New England, four-year public college tuition and fees were higher, averaging $12,990.
It also is very important to understand that very few students actually pay the full cost of going to college. More than 90 percent of students are enrolled in private four-year colleges full time, and more than 84 percent of public college students receive some form of financial aid, according to the most recent NCES study (2014-2015 school year). While a new study is expected in early 2018, financial aid has been and continues to be a significant source of college funding.
Students enrolled in the 2016-2017 school year received $125.4 billion in grant aid (undergraduate and graduate), according to a study commissioned by the College Board titled “Trends in Student Aid.”
In addition, students took advantage of $106.5 billion that was made available to them through various types of loans, according to the College Board. Work-study programs accounted for an additional $803 million of the funding.
For further information on college costs and financial aid, you’ll find College Board to be an excellent resource. You can call (212-713-8000) or visit the website (CollegeBoard.org).
Let me add that I’ve updated a series of columns that I wrote over the years on the subject of college funding. They will be published in my next book, “Retire Secure,” in a section on how important it is to start early with a child’s financial literacy education. The book will be available this spring. In the meantime, if you are interested in the subject, I will be happy to send you a sample chapter if you email me at readers(at)juliejason.com.
One last point: If you are traveling through my home state of Connecticut, on Feb. 1, 2018, take advantage of the investor forum sponsored by the FINRA Foundation. For details, go online to www.finra.org/investorforum/stamford. The presentation will focus on “Smart Investing in Today’s Environment,” and you are all invited. FINRA regulates the securities industry, and the foundation promotes “universal financial literacy.”
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Julie Jason, JD, LLM, a personal money manager (Jackson, Grant of Stamford, Conn.) and award-winning author, welcomes your questions/comments (readers(at)juliejason.com). To hear Julie speak, visit www.juliejason.com/events.
(c) 2018 Julie Jason.
Distributed by King Features Syndicate Inc.
Senator Rand Paul: Pay Off Your Student Loans With Your 401k
Senator Rand Paul says you should pay for your student loans with your 401k. Paul’s new legislative proposal, the HELPER Act (Higher Education Loan Payment and Enhanced Retirement), would allow benefits like tax-free money for college, tax-free employer-sponsored plans, no cap on student loan interest deduction, and many others. Essentially, it would allow students and parents to withdraw retirement funds to settle expenses for college.
The act “would allow Americans to take out up to $5,250 from a 401(k) or IRA tax- and penalty-free each year to pay for college or make monthly student loan payments,” explained CNBC.
According to Forbes, “Paul seeks to reshape the way people save and pay for higher education, driven through tax and savings incentives.” He notes that “the current student loan interest rates can be as high as 7% for graduate students and parent borrowers.” Student loan refinancing rates, on the other hand, have dropped to below 2%.
Paul’s critics will likely note objections such as removing money from a retirement account for any purpose that is not related to retirement may not be a wise financial move; many students cannot both save for retirement and pay off student loans; and the annual amount may not be enough to help borrowers make a meaningful impact.
8 Tips on Going to College with No Debt
It’s not uncommon to hear news stories anymore about the millennial generation going thousands upon thousands of dollars into debt to receive a college education. This is a conundrum because most jobs that offer good pay require a college degree, but this also requires students to go into debt for a large portion of their lives in order to eventually make a profit from their education. However, this doesn’t have to be the case. There are ways of going to college without going into debt at all!
Is College for You?
Firstly, you need to determine if you need to go to college. There are individuals who are more skilled working with their hands, to which a vocational school would be a better (and much cheaper) option. There is a gap of laborer jobs because of the large emphasis put on people to go to college after high school. If you do not fit into this category and feel called to go to college to achieve your dreams and livelihood, then please read the tips below to help you go to college without a large debt to pay off afterward.
1. Scholarships and grants
This should be the first step to pursue after you receive your college admission letter. Complete the FAFSA, a form that will allow you to determine how much the government can help you, and you could also receive some money from the government for free if your family fits into a certain socioeconomic category.
However, if you complete the FAFSA and find that there isn’t much help the government can offer, look at the college’s financial aid. The scholarship and grants options are listed the university’s website and can help you determine which scholarship options would be best for you to apply. AS a general rule, always apply for scholarships even if you think you aren’t the perfect fit. It’s surprising how many people don’t apply for scholarships for this reason alone!
2. Negotiate with the financial aid office
This is not a common way to obtain some funds for college, but it can be done if handled tactfully and if the university policy allows it. This could be as simple as finding out how much you would spend each semester, proving that you are just shy of being able to pay it, and talking to a financial aid officer about your situation. You will need to go through a rigorous process of proving your income and expenses, but this may be an option worth considering if you need a little extra help.
3. Work study
This is an option typically offered through the university for students that are within a certain income bracket. The university will offer on-campus jobs that are an excellent choice for those wanting to focus on their schooling, but need some financial help as well. This does count as job experience, and most work studies are flexible with your school schedule and understand that your grades come first. Work studies may pay a portion of your tuition in exchange for some part-time work on campus.
4. Employer reimbursement
If you already have a job, look into whether or not they will pay for your college tuition. Some employers take a strong stance on bettering their employees, and if you are fortunate enough to work at one of these companies, they will offer to pay your tuition so long as you continue to work at that company for a specified period of time and can maintain a good grade point average. This also counts for military veterans: the military will pay for schooling after your time in the armed forces.
5. Choose an affordable college
As much as private universities tout their reputation, immaculate campuses, and benefits of attending their school, it is usually rarely a good idea to go into a large amount of debt to go to the top college of your choice. Public universities have their benefits as well, one of them including minimal to no debt upon graduation! Public colleges tend to have a wider range of degree options to choose from, have a wider range of classes that are offered, and can have just as accomplished faculty as those in private schools. Before going into debt for your dream college, really think about if it’s worth it to you to spend almost triple what it would cost to go to a public university.
6. Transfer credits
If you have (or had) the opportunity to take college-level courses in high school, then you are already off to a good start! These high school credits will usually transfer into college coursework and can save you money paying for more classes, meaning you may be able to graduate sooner. This also means that you get to focus on more major-related classes instead of having to take required courses in your first semester or two.
Coursework can also transfer from other universities. Going to community college for a year or two can save you a lot of money and once you find a college that will accept the credits you had already taken at the community college, you can move ahead in your degree program as if you were at that university the entire time. However, be aware that you may need to retake some courses if you feel that a course at the community college did not teach as much as you would need to successfully take higher-level courses.
7. Commute to college
If you live with parents or a roommate off campus, you will already be saving yourself a lot of money in the long run. You will still be able to have the college experience even if you don’t live on campus and you will be able to save a lot from not paying for meal passes and dorm room costs. Though you may need to cough up the cash for a parking permit and spend money on gas, it will pale in comparison to how much on-campus housing costs. That, and you will hopefully be able to have a much quieter living space.
8. Learn to budget
This is a skill that a lot of college students learn too late. They will spend money without thinking about the consequences of every purchase and then will need to take out loans. Budgeting gives you a birds-eye view of your finances and how you are spending your money. It can be uncomfortable to see how much you may find yourself spending on eating out or shopping, but learning your spending habits can drastically reduce how much money you will spend while you are in college and for the rest of your life.
Start Your College Journey
With these tools, you should be more equipped to tackle college and all the financial burdens that come with it. It will be a hassle to go to various people and research various things in order to make sure you go to college debt-free, but all that hard work will pay off in the end when you can enter the workforce and not have to spend years and years paying off your college debt.
Don’t Lower The Bar
In this article, Mr. Berko explains to us why we don’t lower the bar.
BY MALCOLM BERKO
RELEASE: WEDNESDAY, NOVEMBER 1, 2017
Don’t Lower the Bar
Dear Mr. Berko:
California wants to lower the minimum score needed to pass the bar exam. Passing scores on the ACT and the SAT have been lowered. Dayton, Ohio, lowered its requirements for the police exam. Colleges give courses online. States let applicants take physician licensing exams in Spanish. Banks make auto and home loans to people with 550 credit scores. States have lowered requirements to become teachers. I could go on for pages. What do you think? — JS, Charlotte, N.C.
Thanks for your very long letter. The following is a summary of a recent article by Chris Sperry, a prominent baseball consultant.
In 1996, one of the most storied high school and college baseball coaches, John Scolinos, spoke to a convention of more than 4,000 baseball coaches in Nashville, Tennessee. Scolinos, who had retired from coaching in 1991, shuffled to the stage and received a standing ovation. He wore a string around his neck, from which hung a full-size home plate.
Scolinos spoke for 25 minutes before referring to his home plate necklace. He was mindful of the snickering among some of the coaches and then reproachfully said, “You’re probably all wondering why I’m wearing home plate on my neck.” He continued, “I may be old, but I’m not crazy. The reason I stand before you today is to share with you baseball people … what I’ve learned about home plate in my 78 years.”
Then he asked: “Do you know how wide home plate is in Little League?”
After a pause, someone said, “17 inches.”
Scolinos then asked, “How about in Babe Ruth’s day?”
There was a long pause, and another reluctant coach said, “17 inches.”
“Right,” said Scolinos.
“Now, how many high school coaches do we have in the room?”
Hundreds of hands went up.
“How wide is home plate in high school baseball?”
“Seventeen inches,” they exclaimed in unison.
“And you college coaches, how wide is home plate in college?”
“Any minor league coaches here? How wide is home plate in pro ball?”
“Right!” Scolinos said.
And then he asked about the major leagues, confirming that it’s 17 inches there, too.
“And what do they do with a big-league pitcher who can’t throw the ball over 17 inches?”
After a pause, he answered himself: “They send him to Pocatello!”
The coaches laughed.
“What they don’t do is … say, ‘Ah, that’s OK, Jimmy. You can’t hit a 17-inch target? … We’ll make it 20 inches so you have a better chance of hitting it. If you can’t hit that, let us know so we can make it wider still, say 25 inches.”
He continued: “Coaches, what do we do when our best player shows up late to practice? When our team rules forbid facial hair and a guy shows up unshaven? … Do we hold him accountable? Or do we change the rules to fit him? Do we widen home plate?”
The laughter faded as Scolinos’ message became clear.
Scolinos made a drawing of a house on the home plate around his neck with a marker.
“This is the problem in our homes today, with our marriages, with the way we parent our kids, with our discipline. We don’t teach accountability to our kids, and there is no consequence for failing to meet standards. We widen the plate.”
Then he drew an American flag on top of the house. “This is the problem in our schools today. The quality of our education is going downhill fast, and teachers have been stripped of the tools they need to be successful. … We are allowing others to widen home plate.”
Scolinos concluded: “If I am lucky, you will remember one thing from this old coach today. It is this: If we fail to hold ourselves to a higher standard, a standard of what we know to be right, if we fail to hold our spouses and our children to the same standards, if we are unwilling or unable to provide a consequence when they do not meet the standard and if our schools and churches and our government fail to hold themselves accountable to those they serve, there is but one thing to look forward to.”
He held home plate in front of his chest and presented its black backside. “Dark days ahead.”
This is what our country has become, and it’s wrong. Go out there and fix it. Don’t widen the plate.
John Scolinos passed away in 2009 at the age of 91.
Please address your financial questions to Malcolm Berko, P.O. Box 8303, Largo, FL 33775, or email him at [email protected] To find out more about Malcolm Berko and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate website at www.creators.com.
COPYRIGHT 2017 CREATORS.COM
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