Archive for June, 2011
The Sunday Business section of the New York Times had an interesting but bleak story about the growing number of “Job Jugglers.” People, especially young adults, are finding that it takes two, three, maybe even four or five jobs to make ends meet in today’s challenging economic environment. The curriculum specialist/online marketer/website creater/reality-show developer profiled found his workday filled from 7 a.m. to midnight. A young journalist took a job baby-sitting five nights a week. Workers trying to get ahead or get established have always worked long and hard, but many of these workers are simply trying to stay afloat. That’s because starting salaries are down for new college graduates, according to a recent study by the John J. Heldrich Center for Workforce
Development at Rutgers University. Those who graduated with a bachelor’s degree in 2009 and 2010 earned $3,000 LESS per year than those who graduated, $27,000 is what new grads can expect, compared to $30,000 for those who graduated betwen 2006 and 2008. Here’s another shocker from the article: Nearly half of all college graduates held a job not requiring a bachelor’s degree. Add in a mound of college loan debt, and it’s clear that many grads may see little return on their education investment.
Here’s another story questioning whether college is a good investment. This certainly is shaping up to be the summer (spring, actually) of discontent with higher education. NPR’s Scott Simon interviewed an education professor from UCLA during last week’s Weekend Edition. Essentially, the professor says there is more to higher education than simply the economic argument. Going to college is about more than simply boosting your earning power. Intellectual development is an important individual and societal benefit. However, the posted summary of the interview misses some key points. At the very beginning of the discussion, the professor notes that so much attention is on the price tag at exclusive, expensive schools. Students, he says, can find enriching experiences at more reasonably priced, lesser-known (often public) universities. At around the 4:18 mark, he notes that a traditional four-year bachelor’s degree isn’t right for everyone. Finally, we’re starting to see some progress in the “just go”/”don’t go” debate:
- College was never designed to educate everyone.
- Some sort of postsecondary education is critical to survive today’s rapidly changing job market — and a commitment to lifelong learning and retraining will be important for keeping pace.
- A key way to improve the payback on the education investment is to minimize cost.
- Intellectual development is a benefit, although a good bit of the personal development colleges claim occurs naturally as 18-year-olds become 22-year-olds.
Apparently, young people get a thrill out of debt. A recent study by Ohio State University researchers suggests that young adults feel a boost to their self-esteem when they pile on student loans and run up credit cards. Instead of being anxious and depressed, young adults feel “mastery.” The higher their debt loads, the more in control young people think they are of their lives. The researchers had assumed that borrowing for education would be viewed positively as an investment in the future, while charging on credit cards would be viewed negatively. But for young adults ages 18 to 27, all debt is good debt. That is, until they hit the ripe age of 28. At that point, the realities of the work world appear to take hold and these older and wiser adults start to worry about how much they owe. Here’s a good New York Times posting on the findings.
This study seems to fit with a recent local news story reporting the Class of 2011 as the most indebted college graduates ever. The reporter asked some graduating seniors from an area college about their student loans. Two of the three interviewed said they owed about $100,000! It was shocking how unconcerned they seemed about paying back such a huge amount. The study suggests that young people need better advice about the potentially life-limiting consequences of debt. Here’s one financial strategy tip: Before committing to a college, students should know how much their monthly payment on their loan obligation is likely to be. Visit www.makingcollegepay.com to learn more.
It’s graduation season. Congratulations to all those high school students and their parents who are commencing on a new stage of life. For the vast majority of graduating seniors, college will be that next step. But a number of recent articles and news reports have begun to question the value of a college degree. College costs have soared, student debts have mounted, yet average wages have barely risen. Students today are caught in a higher education paradox: A college degree is more important today than ever before for them to land a good-paying job, but a good payback on the time and money spent earning that degree is no longer the “sure bet” it once was. Check out http://www.makingcollegepay.com/Making_College_Pay_Chapter_1_Excerpt.pdf to learn more about the tough challenges today’s students face.