Recently, the University of Notre Dame's Facebook page (yes, I follow their fan page) posted several articles regarding the "worth" of a college diploma. Of course, they chose articles in which they were featured and spoken of in a good light. But anyway, the first article that caught my eye was from PayScale. They determined the worth of a school's diploma based on the average net return-on-investment (ROI) after thirty years (Notre Dame ranked 9th, MIT took 1st). The ROI is basically how much money you make after graduation in comparison with how much you paid for your education. Also on the Top 10 were the California Institute of Technology, Harvey Mudd College, and of course, the usual Ivies.
Pretty good advertisement, right? Well, yesterday they posted something from The Chronicle entitled "Are Colleges Worth the Price of Admission?". At first, I had problems accessing the article, so I decided to research the topic on my own. The best article I found was the one I posted on my Facebook, "Some Debt-Laden Graduates Wonder Why They Bothered With College" from abc News. It addresses the common belief that the best way to make money is to start off with the best education. But today's economy offers a limited number of jobs to all of these well-educated college graduates. So what does that mean? Not all of them are going to get good jobs. And so we see an increase in the number of people who took out loans to pay for college, only to graduate and find that they don't have enough income to pay it back. A Bachelor's degree will still get you more than a high school diploma - but it'll also set you back more as well.
Of course, the ever present question still stands: why is college so expensive? CNN's Money Magazine offers a few answers: supply and demand, marketing strategy, and a "luxury arms race".
The luxury arms race is the most obvious - schools are using the money to build state of the art dorms, classrooms, fitness centers, etc., essentially competing with other schools in an "arms race" of who has the more attractive campus. Personally, this doesn't really bother me since the students are the ultimate beneficiaries.
The other two, however, while understandable and clever, can also qualify as devious and avaricious if you ask me. I remember a while ago, Katy said that if it's becoming more common for people to want to get a college degree these days, why don't they make said education more affordable? Answer: because they know that people want education - and so they'll charge whatever they want knowing that someone, somewhere is willing to pay it. It's kind of like that concept about expectations we learned in economics: when a natural disaster is expected, the prices of flashlight batteries and bottled water will increase just enough to make a profit on public hype.
Additionally, comes the idea of strategic pricing. This is one I never really thought about. Obviously, the Ivy League schools are a bit pricier than say, state schools. But while the quality of education remains without a definitive price tag, people still have a subconscious respect for universities that charge more for tuition. CNN referenced Ursinus College in Pennsylvania who increased their cost of tuition and fees by 17.6% and were met with 200 more applicants than the previous year. Within eight years, the freshman class was 56% larger. It's like profiling - the way you would judge a person by just by looking at them. Stereotypically, racially, culturally, etc. - making assumptions without exchanging a word. The same goes for colleges; prospective employers will generally look at a Harvard diploma with admiration and a community college diploma with apprehension. Obviously, other things would be taken into account in a job interview, but you can't doubt that in the back of his/her mind, they're making a judgement - despite who may be better qualified in the end.
Showing posts with label student loans. Show all posts
Showing posts with label student loans. Show all posts
Wednesday, July 14, 2010
Wednesday, June 23, 2010
Arm Yourself, Because No One Else Here Will Save You
One of my longest-running obsessions is lifestyle experiments - where you adopt a lifestyle completely different from your own in order to learn about how other people live. I think my interest started with Morgan Spurlock when he did Super Size Me and ate nothing but McDonald's for a month to see what would happen (answer: bad things). And then Spurlock launched the series 30 Days, where he did various things like give everything up and live on minimum wage, incarcerate himself in jail, or otherwise take another person and put them in a situation opposite to how they live their own lives (i.e., a pro-choice activist lives with a pro-life family; a homophobic lives in a gay community, etc.).
Anyway, 30 Days was cancelled about two years ago, and my interest gradually died down (I actually never noticed that it ran a third season before it was cancelled). But two weeks ago, I got my wisdom teeth out and - in a Lortab-induced sloth like state - exhausted the On Demand function on my cable box and watched everything that caught my eye, namely other lifestyle experiment shows. Mostly BBC, Planet Green, and Discovery Health, to name a few channels - I could go on for pages about the different shows, but I'll spare you that. Anyway, the BBC is rather innovative and audacious with their experiments - they'll go all out on ridiculous things, like doing various crash diets in hopes of achieving a size 0, or smoking lots of marijuana to see what it does to you (see Super High Me).
But there were also more realistic ones that were more inclined to seeking a moral from the experience. Blood, Sweat, and Takeaways (and Blood, Sweat and T-Shirts) took six people and made them work in sweatshops (slaughtering animals and producing textiles, respectively), also requiring that they live under the same conditions as the people who spend their lives there. They have to do dirty, back-breaking, degrading work for very little pay and still have to find a way to make enough to provide for their families. I've always heard the phrase "cheap labor", but I never really thought about how everything works - basically, fast food and chain-store clothes are sold so cheap because the distributors are saving a heck of a lot of money on labor. While I don't see how that's ethical in any way, I'm sure many people will tell me things like "life isn't fair", or "free market capitalism". To each their own opinion.
Speaking of ethics; here's a touchier subject that's been on my mind today: how much of your body is marketable? Legally, and ethically. For example, you can go to a blood center and donate blood plasma for about $35 or so twice a week, which is the least taboo of everything I've researched. And I've known that guys could go to a sperm bank and sometimes receive a monetary compensation for their donation - something significantly easier, doesn't even involve needles, and will get you about $200, maybe. Unfortunately, women don't have the luxury of that ease. But something that's recently become popular is women selling their eggs to infertile couples. This is substantially more difficult than either of the other procedures - interested parties must pass rigorous physical as well as psychological exams in order to be deemed fit. About 10% of women will pass on to the next step. If a woman is approved and chosen by an interested couple, she must then go on a hormone regime, which involves taking a daily hormone shot in the lower stomach to stimulate the ovaries (normally, one egg is released every month, but with hormones, you'll get maybe 10-25). Then, she'll go in for an outpatient procedure to have the eggs extracted by a needle and a suction tube. When she recovers, she'll be rewarded with anywhere from $3,000 to $15,000, depending on a variety of factors.
Sounds slightly terrifying, right? And it has all kinds of downsides, from minor inconveniences to health risks - some of which haven't even been fully investigated - and everything in between. But what reporters are postulating is that in the declining economy, people will do anything to get themselves out of debt. And that is why young, healthy female college students who are suffering from student loans and credit card debt are the prime target.
But where do you draw the line between taboo and just plain wrong? Generally, things like hair, plasma and sperm are socially acceptable to be traded for money, mostly because your body can make more. However, women only have as many eggs as they're born with, yet paid egg donation is completely legal. And while you're born with two kidneys, you really only need one - yet you can't be monetarily compensated for donating the other. And livers will grow back if you donate a part of it, but that's only accepted as a donation as well (disregarding that most donations are between family members who wouldn't dream of charging one another a penny).
I'm not even going to try to address black market organ rings, or anything like that, simply because it's late, and trying to figure that stuff out makes me sad.
A last few things:
1) I finished A Clockwork Orange. Notes to come.
2) I have a reading plan for all the time I have to wait on my dad at the University in between classes: Finished ACO, check. Now to finish The Hunchback of Notre Dame, which I abandoned two months ago for happier books. Then The Picture of Dorian Gray.
Anyway, 30 Days was cancelled about two years ago, and my interest gradually died down (I actually never noticed that it ran a third season before it was cancelled). But two weeks ago, I got my wisdom teeth out and - in a Lortab-induced sloth like state - exhausted the On Demand function on my cable box and watched everything that caught my eye, namely other lifestyle experiment shows. Mostly BBC, Planet Green, and Discovery Health, to name a few channels - I could go on for pages about the different shows, but I'll spare you that. Anyway, the BBC is rather innovative and audacious with their experiments - they'll go all out on ridiculous things, like doing various crash diets in hopes of achieving a size 0, or smoking lots of marijuana to see what it does to you (see Super High Me).
But there were also more realistic ones that were more inclined to seeking a moral from the experience. Blood, Sweat, and Takeaways (and Blood, Sweat and T-Shirts) took six people and made them work in sweatshops (slaughtering animals and producing textiles, respectively), also requiring that they live under the same conditions as the people who spend their lives there. They have to do dirty, back-breaking, degrading work for very little pay and still have to find a way to make enough to provide for their families. I've always heard the phrase "cheap labor", but I never really thought about how everything works - basically, fast food and chain-store clothes are sold so cheap because the distributors are saving a heck of a lot of money on labor. While I don't see how that's ethical in any way, I'm sure many people will tell me things like "life isn't fair", or "free market capitalism". To each their own opinion.
Speaking of ethics; here's a touchier subject that's been on my mind today: how much of your body is marketable? Legally, and ethically. For example, you can go to a blood center and donate blood plasma for about $35 or so twice a week, which is the least taboo of everything I've researched. And I've known that guys could go to a sperm bank and sometimes receive a monetary compensation for their donation - something significantly easier, doesn't even involve needles, and will get you about $200, maybe. Unfortunately, women don't have the luxury of that ease. But something that's recently become popular is women selling their eggs to infertile couples. This is substantially more difficult than either of the other procedures - interested parties must pass rigorous physical as well as psychological exams in order to be deemed fit. About 10% of women will pass on to the next step. If a woman is approved and chosen by an interested couple, she must then go on a hormone regime, which involves taking a daily hormone shot in the lower stomach to stimulate the ovaries (normally, one egg is released every month, but with hormones, you'll get maybe 10-25). Then, she'll go in for an outpatient procedure to have the eggs extracted by a needle and a suction tube. When she recovers, she'll be rewarded with anywhere from $3,000 to $15,000, depending on a variety of factors.
Sounds slightly terrifying, right? And it has all kinds of downsides, from minor inconveniences to health risks - some of which haven't even been fully investigated - and everything in between. But what reporters are postulating is that in the declining economy, people will do anything to get themselves out of debt. And that is why young, healthy female college students who are suffering from student loans and credit card debt are the prime target.
But where do you draw the line between taboo and just plain wrong? Generally, things like hair, plasma and sperm are socially acceptable to be traded for money, mostly because your body can make more. However, women only have as many eggs as they're born with, yet paid egg donation is completely legal. And while you're born with two kidneys, you really only need one - yet you can't be monetarily compensated for donating the other. And livers will grow back if you donate a part of it, but that's only accepted as a donation as well (disregarding that most donations are between family members who wouldn't dream of charging one another a penny).
I'm not even going to try to address black market organ rings, or anything like that, simply because it's late, and trying to figure that stuff out makes me sad.
A last few things:
1) I finished A Clockwork Orange. Notes to come.
2) I have a reading plan for all the time I have to wait on my dad at the University in between classes: Finished ACO, check. Now to finish The Hunchback of Notre Dame, which I abandoned two months ago for happier books. Then The Picture of Dorian Gray.
Sunday, April 25, 2010
Does This Make You Feel Safe?
Last week, I officially sent my enrollment deposit to the University of Notre Dame. Somehow, I thought everything after making the decision would be all down hill - however, there still lies the question of "how am I going to pay for it?".
When I wrote the first blog entry while filling out federal aid papers, I didn't fully understand exactly what I was doing. I think I was under the impression that receiving federal aid meant the government would give me money because I needed it - it didn't really occur to me that they would, but I'd have to pay it back, i.e. student loans - I just didn't make the connection.
On Friday night, I had to complete an online loan counseling session that taught me what my federal loan is and when I'm expected to pay it back. I'm getting two kinds of loans, a federal direct loan for $3,500 a year, which is from the U.S. Department of Education, and a federal Perkins loan for $2,400 a year, which comes from the university. In total, I'm borrowing $5,900 annually as of right now - I may have to borrow less depending on variable expenses like transportation and books, etc. The total estimated cost of a year at Notre Dame is about $53,000. For the first year, I'm getting about $32,000 a year on scholarship. Depending on if I decide to do the work study program for another $2,000 a year doing odd jobs for the university, we have to pay the balance of whatever's left.
However, my parents definitely don't have some $20,000 just laying around every year. So how do we make the difference?
Get another loan.
The loan process is actually rather efficient. It sounds rather scary to owe so much money, but the payment schedule is pretty reasonable. Upon graduating from Notre Dame, I'll owe about $24,000. After graduation, I have a six month "grace period" before I have to make my first payment within 60 days of the end of the grace period. I can choose from a range of payment plans that spread the total over 10-30 years. According to the chart, if I choose the standard plan, with my total I'll pay about $300 a month and be done in less than 10 years.
However, I'm not entirely sure where I'm going to get the money for med school...but I think we're just going to have to worry about that later, considering the idea of coming up with another $200,000 is not a very pretty idea.
When I wrote the first blog entry while filling out federal aid papers, I didn't fully understand exactly what I was doing. I think I was under the impression that receiving federal aid meant the government would give me money because I needed it - it didn't really occur to me that they would, but I'd have to pay it back, i.e. student loans - I just didn't make the connection.
On Friday night, I had to complete an online loan counseling session that taught me what my federal loan is and when I'm expected to pay it back. I'm getting two kinds of loans, a federal direct loan for $3,500 a year, which is from the U.S. Department of Education, and a federal Perkins loan for $2,400 a year, which comes from the university. In total, I'm borrowing $5,900 annually as of right now - I may have to borrow less depending on variable expenses like transportation and books, etc. The total estimated cost of a year at Notre Dame is about $53,000. For the first year, I'm getting about $32,000 a year on scholarship. Depending on if I decide to do the work study program for another $2,000 a year doing odd jobs for the university, we have to pay the balance of whatever's left.
However, my parents definitely don't have some $20,000 just laying around every year. So how do we make the difference?
Get another loan.
The loan process is actually rather efficient. It sounds rather scary to owe so much money, but the payment schedule is pretty reasonable. Upon graduating from Notre Dame, I'll owe about $24,000. After graduation, I have a six month "grace period" before I have to make my first payment within 60 days of the end of the grace period. I can choose from a range of payment plans that spread the total over 10-30 years. According to the chart, if I choose the standard plan, with my total I'll pay about $300 a month and be done in less than 10 years.
However, I'm not entirely sure where I'm going to get the money for med school...but I think we're just going to have to worry about that later, considering the idea of coming up with another $200,000 is not a very pretty idea.
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