Are you coming back for part 3, or are you reading this Blog first?
If you are reading this one first, scroll down to find Blog 1 and Blog 2 of this series.
Keep moving. You don't have as much time as you may be thinking. Between now August 2020, when applications open for the Class of 2021, you have a lot to think about and decide. Financial aid is also tied to your good work now.
Here are the topics, and in reverse order.
5. Where are you going to apply?
4. Have I visited every college I am applying to?
3. What are my academic qualifications?
2. What will I major in?
1. What do I see as my future career?
Do you play sports? Video games? Anything competitive?
There is a competitive aspect to college. Not every student in every class will earn an A. Not everyone will earn a C. The difference between a C and an A is determined, in part, by how well the entire class is assimilating the subject matter.
Really good teachers (the kind we all want) feel out the academic ability of the class and adjust their teaching.
- Is the class getting it, and catching on? Accelerate the curriculum.
- Is the class giving you that deer-in-the-headlights look? Slow down. Take more time to explain each concept.
- Tests and grades are based on what has been presented.
I was a soccer referee for many years. I worked just about the entire spread of players' abilities from recreation matches for children, to college and professional players. The child who is the
star of the recreation program team might well sit the bench, or even not make a premier level, youth team. There are college athletes who, although good, will not make the cut in a professional team tryout.
Applying the analogy to colleges, there is a difference between the academic rigor of a school like the University of California at Berkley and California State University at Chico. A student who will find his comfort level at one may not feel pushed enough at the other. Turn it around, and a good fit at one may well struggle to keep up at the other.
Look at a college's most recently published, First Year Cohort. What are the SAT/ACT score ranges? What is the average GPA of the incoming class; average Class Rank?
Another tactic is call the university you are considering. Ask about academic rigor. Tell them you are determining where to apply based, in part, on that criteria. They will pick up the conversation from there.
Come back next week for answers to questions 4 and 5 above.
I'm in 11th Grade what should I be doing now for college admissions and financial aid?
The first answer is, "Keep moving." What I mean is, you don't have as much time as you may be thinking. College applications are not on your radar until next August. True. However, between now and then you have a lot to think about and decide. Financial aid is tied closely to five topics.
Here are the topics, and in reverse order.
5. Where are you going to apply?
4. Have I visited every college I am applying to?
3. What are my academic qualifications?
2. What will I major in?
1. What do I see as my future career?
The most important question to answer, now, is "What career?" (Purchase my book here.) Going to college without an outcome in focus is a HUGE mistake. Across America, for students attending a public university at in-state, resident rates, the annual, actual costs will exceed $20,000.00. At that price, how much time can you afford to meander through five or six years to a degree? Yet, that is the mistake the majority of college students in the USA make.
My students invest in a really good career assessment. It points them in the direction of what they are suited to do (aptitude), but more importantly, what they will enjoy doing for 40 years, more or less.
For example, I am good at taking and transcribing the minutes of meetings. But I do not enjoy it very much. I am willing to do it, but if given a choice, I'd rather not. Another example is I have had students who were science scholars. A medical career might be a logical choice, right? Many of them, however, freak out at the sight of blood. So maybe something else!
Do whatever it takes to figure out what you will love doing after college, and what is required by way of academic preparation to do that. What are the prospects for earning a living in that career? Is that job market expanding or shrinking? Check out www.BLS.gov. That's the Bureau of Labor Statistics. Great website, and updated regularly.
Check back next week for continued discussion of questions 2,3,4 and 5, or call us today.
Complete College America's white paper The Four Year Myth proposes its solution to the problem of college students taking 5, or 6, or more years to complete an undergraduate degree. CCA calls it "Guided Pathways to Success" (pp. 14-19).
Their's is an impressive solution to a problem that must be solved; and the sooner the better. However, CCA's solution is systemic. It requires system-wide changes in states, universities and colleges.
That will be nice . . . when it happens. In the meantime, you've got a kid in high school. What can be done for your student?
It would take a book to detail everything Succeed Where It Counts does (and such a book is in the publisher's hands, right now). But even through a book, it is an impossible challenge to address every variable. Your student is a unique human being. Your student deserves a tailored fit. Your financial future also benefits.
In outline form, here's what SWIC addresses with each family:
- AFFORDABILITY: what is a realistic budget, annually, for you to pay for college? Components include ways to reduce spending, student employment, and dollars currently being transferred away unknowingly and unnecessarily that can be recouped.
- INDIVIDUAL ASSESSMENT: we use the Birkman Career Assessment to help every student begin to visualize what a career might look like.
- CAREER COURSE-SETTING: we use Candid Career, job-shadowing and other opportunities to help a student capture a clear and accurate picture of what a particular career involves on a day-to-day basis.
- ACADEMIC RIGOR: we encourage students to evaluate their own ability to do college level work, and to compete in rigorous, academic environments. Their high school transcripts are a key indicator.
- COLLEGE SELECTION: we lead students through a process of narrowing down, from many dozens to a manageable group of a dozen or so colleges, for finer scrutiny.
- CAMPUS VISITS: are essential, time consuming and costly ( parents' PTO, travel, overnight lodging, food). That process begins online, and on the telephone to minimize costs.
- FINANCIAL AID: (free+self-help+loans) we work with parents and develop their plan. It sets parameters for what may be possible for scholarships and grants-in-aid ("free" money) from the colleges; for students' employment during college (self-help); and for the Direct Student Loan program. We discourage borrowing by either student or parents beyond the Direct Student Loan limits.
- CONSUMER PURCHASE: (value + price) at the end of it all, the decision is a family choice and a personal choice. The least expensive is not always the best, and the best is not always the most expensive. College is a consumer purchase. That means price and value are factors to weigh when making the decision.
Two more today and next week and that will wrap up my synopsis of Complete College America's white paper The Four Year Myth.
- What CCA concluded from the research
- How SWIC addresses CCA's solution
They did uncover corollary cost contributors which are, primarily, students taking longer than the presumed amount of time specifically, 4 years to complete an undergraduate degree.
- Students, overall, take unnecessary, non-degree-related classes. One reason is the schools themselves offer classes that have pop-culture, emotional or intellectual appeal, and are substituted for a degree-necessary class because students want a break from the academic rigor of their majors.
- Students transfer from one college to another. CCA's White Paper states that 60% of bachelor's degree recipients transferred colleges and, thereby, lost credits toward graduation.
- Students need a class that is either full or otherwise unavailable. That may leave them short of credit hours sufficient for scholarship and grant requirements. Therefore, students take classes they do not need simply to generate a credit-hour load for financial aid purposes.
Next blog will specify how SWIC strategically addresses the issue.
That image is from Complete College America's white paper, "The Four Year Myth."
Colleges report graduation rates as so many percent of a first year cohort completing a course of study within six years. Add $140,000 to what you think (and even financially plan for) are your out-of-pocket costs. Now what's the cost of a college education look like?
And, realistically, the numbers cited do not account for inflation (currently +/- 6% annually at colleges nationwide). Nor do those numbers show the opportunity costs of $140,000 over a working lifetime.
In that same white paper Complete College America exhorts colleges to reform their systems so that students do not wander in the limbo of "discovering themselves."
My blunt advice is, "Get a job or join the military. Discover yourself. Then go to college." Sorry. I said it is blunt.
There are other pathways. Those take time, effort and, in most cases, a little bit of money. Well worth all of that!
Look at these graduation-rate numbers:
15.9% - ON TIME
5.0% - ON TIME
19% - ON TIME
(FLAGSHIP/VERY HIGH RESEARCH)
36% - ON TIME
That disturbing reality is the report of Complete College America, as of 2015. I included their Community College statistic for a very important reason. Many parents adopt a position that their student will attend community college and, thereby, reduce the expense of education. That is demonstrably not true, unless the reasons for all of those statistics are addressed -- specifically, intentionally and intelligently.
- Specifically: statistics apply to everyone in general, and to no one in particular. When I meet with students my perceptions are often significantly different from the descriptions offered by their moms and dads. No surprise, on the one hand; but, on the other hand, the differences I perceive translate into many tens of thousands of dollars in college expenses. It is not some kid going to college. It is YOUR kid!
Intentionally: an affordable college education for your student will not happen by accident. Sadly, this anecdote is true:
- A mom emailed me: "Please tell me how we can get money from FAFSA for our $24,000 college costs." This student was a high school senior. It was March of her senior year, and FAFSA has no money either to lend or to give.
- My heart breaks, but that family simply waited too long and made too many assumptions about financial aid and affordability.
- Affordability -- people ask me when is a good time to start. I say, "When you come home from the doctor with the news you are pregnant." Since most of us are not that well organized, nevertheless, as soon as the thought occurs to you, do not procrastinate. Contact me immediately. Affordability is possible and the more time you give yourself the better off you will be.
Intelligently: Affordability also involves the process of college selection. Factors that must be included are
- Academic/admissions threshold
- Graduation rates
- Retention rates
- Flagship programs
- Financial aid history.
$600 million dollars a year in unanticipated, if not unnecessary college education costs due to students transferring from one college to another. According to Complete College America's "The Four Year Myth" 60% of undergraduates transfer at least once prior to completing a four-year-degree track. In so doing they lose credits for courses taken, and extend their length of stay in college by a year or more.
Six hundred million dollars is an eye-opening number, yet it still leaves you thinking about "all those poor people," rather than, "That's me!" Furthermore, there are other, often hidden costs associated with lingering around the ivy-covered walls longer than prescribed.
In a previous blog, The Four Year Myth A True Story (March 20, 2017; scroll to read it), there is cited the costs of two extra years. That includes cost of attending four extra semesters plus income not earned over that same period of time. The dollar figure cited ($220,000) is not theoretical, but actual and is borne by one family for one student for one undergraduate diploma.
Other hidden costs, seldom considered, include the time value of money, also known as opportunity cost. Here are two examples:
- Jack and Jill use retirement funds to defray education expenses. They take advantage of the IRS exception permitting a penalty-free withdrawal from their 401k account. But they still owe the tax due on the amount withdrawn. Even that, however, is not the hidden cost to which I allude. Let's assume J&J were earning, without a hiccup, 6% annually as their return on investment in a well-managed retirement fund; and they withdrew $40,000 to cover education costs of $10,000 per year for four years. If J&J are 45 years old, and retire at age 67 they lose 6% compounding growth on $40,000 for 22 years. What does that add up to? One hundred forty-four thousand, one hundred forty-one dollars and change ($144,141.50). That amount may well equal their entire tax obligation on the full value of their 401k at retirement. Assuming their student is attending at the average cost of $23,000 per year, and assuming it takes only four years to graduate, the college education they are telling everyone cost them $92,000 in fact cost them more than $236,000.
- And now the example becomes even more hair-raising. Assume they avoided raiding their retirement fund and, instead, took out a line of credit on their residence (HELOC), paying 6% for the privilege. Let's also assume that, following the four years of college they got that loan repaid in ten years, totaling fourteen years of debt service. Principle + interest equals $59,219, plus origination fees and other incidental costs. Add that onto the lost, compounding growth they could have gained had they invested $40,000 instead of borrowing it, and the cost of a four-year education approaches $300,000.
Granted, there are other virtues beyond the "sheepskin." Many students find their life partner at college, enter into a career path that is fulfilling and remunerative, and develop a network of strong relationships that serve a lifetime.
I advocate, therefore, it's not just price, but value. Determining value takes work that, I believe, most families would do if they knew to do it. You've read this so now you know.
Complete College America is a non-profit formed to address the obvious problem of students attending but, seemingly, never graduating with a marketable education. Among the group's publications is the "Four-Year Myth."
Are you operating under the delusion of that myth?
I can't recount how many parents (especially dads) have assured me, "I've told my kid 4 years -- that's it!" Then what? With your students and you into the thing at costs approaching, if not exceeding, six figures are you really going to abandon it? Can you send your children off into the workplace with "some college" as their resume enhancement? In this and several, successive entries I will summarize and comment on the key points.
First: In American higher education, it has become the accepted standard to measure graduation rates at four-year colleges on a six-year time frame. . . . As lifetime savings are depleted and financial aid packages run out, the extra time on campus means even more debt, and for far too many students, additional semesters do not result in a degree or credential.
There are two, primary reasons students do not finish a "four-year degree" in four years.
- Changing majors mid-stream
- Transferring between colleges even from a community college to a four-year institution.
- How can you reach your destination when you don't know where, from the outset, you're going? Succeed Where It Counts, Inc. offers each student the opportunity to complete a Birkman Assessment. Some parents resist the idea that their 16-year-old can have any clear idea of a career, but the evidence indicates otherwise. Teenagers not only can, but in fact, should know their strengths, weaknesses, aptitudes and interests as measured through an objective, scientific tool. If nothing else, such a strategy offers the opportunity for teens to break free from the trap of less-than-helpful peer influence. Every high school student should be applying for college admission based on a clear sense of career direction from the outset.
Another vital component to achieving four-year success is research on, and visits to every college under serious consideration.
- Does the school offer the major you seek?
- Is that academic major a flagship program, or one of the "we offer that, too" after thoughts?
- Do you like the campus? Geography, architecture, campus life and other factors of personal taste matter a lot when you consider that the college you attend will be your place of residence and work for four years 24/7.
- Meet the professors in your proposed major subject. Are they friendly, approachable, persons with whom you otherwise would be comfortable associating? How do you know? A campus visit.
- Talk to current students and ask what it is they love and what it is they're not so crazy about. How do you do that? A campus visit.
However, something is clearly wrong when the overwhelming majority of
public colleges graduate less than 50 percent of their full-time students in four years.
Current on-time graduation rates suggest that the "four-year degree" . . . [has] become little more than modern myths for far too many of our students. The reality is that our system of higher education costs too much, takes too long, and graduates too few.
Taken up in this blog:
- Retirement Readiness
- Paying Cash
- Parent Borrowing
- Social Security
In a Prudential Investments [http://www.prudential.com] study of American's preparations for retirement the facts revealed are
- 80% of us claim that retirement is our top financial priority;
- most surveyed adults gave themselves a grade of C or worse for their own preparation;
- 40% claimed they have no idea how to better prepare;
- 63% say investing is too confusing; and
- well over half plan to work beyond retirement age, at least to supplement retirement income.
- For your nest egg to provide you with the standard of living you want, and still last your natural lifetime, what rate of return must you earn in your current retirement plan?
- For your nest egg to provide you with the standard of living you want, and still last your natural lifetime how much more do you need to be saving on a monthly or annual basis?
- For your nest egg to provide you with the standard of living you want, and still last your natural lifetime how many more years will you have to work?
- If you make no changes to your current retirement plan, by how much will you have to reduce your lifestyle so that your nest egg will last your natural lifetime?
Sarah Watt House
Economist at Wells Fargo Securities spoke this morning (January 19, 2017) at the Business Today Newsmakers Breakfast, Cornelius, NC. My interpolations from her insights include:
- Be ever more careful and reluctant to borrow money to pay for college
- By exploiting relaxed repayment plans, more students and parents are loan-current, but . . .
- Employment outlook for college graduates is looking favorable.
Federal Student Aid and the Parent Loan for Undergraduate Students (PLUS Loan) are linked to the Treasury Bill rate. Inflation is rising, interest rates are rising, and each (more than likely) shall continue to rise. Although Federal loans are at a fixed interest rate, that rate is adjusted annually (linked to the T-Bill rate) for each new installment.
In other words, assuming you graduate in four years, you do so with four different loans, each carrying its own interest rate. As T-Bill rates rise, so will each, successive year's loan rate. If you enter college depending on borrowing as your primary means of paying, you may find yourself, financially, between-a-rock-and-a-hard-spot before you complete your degree.
I recommend that no parent use PLUS. If you do not see how you can send your child without that, please contact me. I may be able to help you discover alternatives (usually; but not always call me and let's talk).
Pros/Cons of Repayment Plans
According to Ms. House more students are utilizing the federal IBR (Income-Based Repayment) plans [https://studentaid.ed.gov/sa/repay-loans/understand/plans/income-driven]. The upside is that your debt-service is more manageable, relating to your income. The down side is that, often, repayment is stretched out over many, many years. That impacts debt-to-income credit worthiness when you are seeking a loan for a major consumer purchase (house and car, in particular).
There are also possibilities for student loan forgiveness based on tightly defined public service jobs. Although an option, remember that any amount forgiven is 1099'd in the year forgiven, and creates a tax-obligation for which you may be unprepared. I know a woman who successfully applied for forgiveness of over $100, 000 (one hundred thousand!) in student debt. She was elated until, the following January, the 1099 came in the mail. Her income for the previous year jumped from under $30,000 to more than $130,000 with the consequent income tax due by April 15.
Sarah is confident that employment outlook for college graduates is good, and shall remain so, at least in 2017, if not beyond. Good news for sure!
My caveat to that is, depending on your degree and planned career, not all job markets are equal. At the breakfast where Sarah spoke I was sitting with a gentleman whose 11th grader was thinking of either a degree in business or a law degree. My advice to him was to check the Bureau of Labor Statistics employment forecasts for specific professions, trades and industries. If the family heeds my advice the choice of majors will be resolved, I feel confident.
|Older Posts »|
- 11th Grade, heading to college -- What should I be doing? Part 3
- 11th Grade, heading to college -- What should I be doing? Part 2
- 11th Grade, heading to college -- What should I be doing for admissions and financial aid?
- Four-Year Myth -- What You Can Do Now
- The Four-Year Myth -- why are students not graduating in 4 years?
- On-Time Graduation is Not Optional
- Four-Year Myth -- Graduation Rates Matter
- The 4 Year Myth -- Hidden Costs
- The 4 Year Myth -- a true story
- The Four Year Myth
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