
I thought it might be interesting to see how these things
work together, or at least how I think they will work together before my 15
year-0ld grandson makes his way into the collegiate world.
Sometime ago I wrote a post on college debt. I was surprised in researching it that
student debt is the highest debt in our country: over $1 trillion; higher than
auto loans and much higher than home mortgages. Also, because it is deferred (and
often defaulted) the actual debt upon graduation is staggering. For example a student who has debt of $300,000
would pay $710,000 with payments of $3741/month. That $300,000 is not an uncommon number for
dental graduates.

The granddaddy (or grandmamma) of them all is Coursera ®
which today has more than 3.5 million registrants taking more than 370 courses
developed by Stanford, Princeton and at least two other prestigious
schools. The model of offering low cost
or in the case of edX (Harvard and MIT)
and Coursera, free courses is called a Massive Open Online Classes or MOOCs. One of the cofounders is Daphne Koller who
gives an eloquent explanation of her vision in an 18-minute TED presentation linked here.
The government is beginning to demand
information on a ROI for the subsidized loans money: demanding data to support
number of graduates, placement in jobs related to their field of study and giving
preference to student who choose public service of non-profit opportunities
upon graduation. Some of this makes
sense to recent graduates like my niece, who chose nursing and questions the
relevance of some of here courses. The
MOOC concept takes prior knowledge into account, offering preparatory or remedial
background to those who test or feel the need for some background.
For parents who wish to assist their children
the current thought is save rather than borrow.
Actual parent contribution had fallen by more than a third in the last
five years, from almost $9.000/year to $3,700.
A modest investment or $2,000/year in a 529 plan would pay for schooling
without need for loans if we could halt the runaway tuition, which has grown
faster than even health care costs over the last several years.
Probably one of the more interesting articles
I read came from a recent English Major graduate, who wrote an editorial on “How
to Graduate Debt-Free” stressing several points worthy of mentioning:
·
Make a choice to be frugal in your early choice
of college to begin with, choosing to live at home and/or go to Community
Colleges where the tuition is low.
·
Look for scholarships rather than for
loans. Many organizations will have
smaller scholarships that are tied to choice of major rather than financial need,
athletic skills, or academic achievement
·
Use your skills to make money or find
scholarships. As you progress in your
education how can you apply your new knowledge to gain workplace experience and
make money at the same time? Are you musically
proficient? Give lessons. Very bright in one subject? Tutor.
Learning accounting? Take a tax-preparer exam.
·
Use your summers. Not only can you make and save money (you spend
less when you are working), you build a resume that will help in getting future
scholarships or even admission to more prestigious schools.
·
Live frugally.
Have a budget for meals. Share room
accommodations. Let college be an opportunity to develop socialization skills. This may make you less likely to divorce and
more likely to work well with others.
While we are waiting for a solution to higher tuition and
higher other college costs, we might look to other countries were education in
needed fields is greatly subsidized for those who are progressing. We might look to revisiting the purpose of
our community colleges, which have become gateways to four-year colleges rather
than preparers for skilled fields where we have need.
And we might think of ways to improve the ROI on our tax
dollars that go to loans by restraining the amount that can go to living
expenses and demanding accountability from the schools for their participation
in the process. If we are loaning $150
million a year, we should see that we are recouping at least that.
On a lighter vein, my next post will be on a rather a unique
vegetable I now equate with summer and Wisconsin. I hope you will join me.
No comments:
Post a Comment