Not too long ago, the Pew Research Center found that a majority of Americans (57 percent) believe the higher education system in the United States
It's making quite the stir, even reaching all the way to pundits and panelists on NPR and CNN. For the first time people are publicly asking a question I once believed unthinkable: Is college worth the cost? Of course, I want to weigh in. And what I really want to say is an emphatic YES! But I can't, because it's not always...
If you finance your entire education investment with debt, you are not going to get the best return on that investment. For the first time ever last year, student debt topped consumer credit card debt, and just last month The New York Times reported that college debt may hit a trillion dollars this year. Not good. Not good at all. I abhor the slippery slope that excessive debt creates for our children and I've been warning my clients of a looming student loan bubble that could make the mortgage meltdown seem quaint.
So rather than ask whether college is worth the cost, I offer this instead: Make College
With proper admissions and financial planning at the outset, you can help your children get into great schools that won't require mortgaging their future or sacrificing yours. Pew wasn't the only report on college that came out recently. In a new study from the National Association of College and University Business Officers (the guys that actually set and then discount college prices), it was revealed that nearly 88 percent of first-time, full-time undergraduates received institutional grants (free money) in the form of 'discounts' in 2010. That's a jump of about 5 percentage points from 2007 and 10 percentage points from 2001. Of note as well: only about 71 percent of that 'aid' was given to students who demonstrated financial need, which means 29 percent of that money was awarded on non-need criteria to students who demonstrated value to the institution. I'm not talking about a little bit either. Most of our graduating seniors whom we helped demonstrate need, value, and desire, received significant offers ($14K - $40K+) from great schools such as Boston College, BU, Bentley, Babson, and Providence College.
This is important for a few reasons.
1. The right college at the right price is definitely worth the investment. Last year, when national unemployment was around 11%, it was only 4.5% (full employment) for college graduates 25 and over! And in the aggregate, college graduates still out-earn non-graduates by about $1.2 million over the course of a lifetime.
2. College is within your reach, but to find and get into the right college at the right price, you have to plan early and have a family-centric, integrated admissions strategy. Consider: how much financial need you'll be able to demonstrate; which colleges are likely to meet that need; where your student might have leverage (value); and how to demonstrate that value to the 'recruiters' of those schools!
3. College is not 13th grade! Too many students enter college without a plan, without a vision for their academic or professional future. The investment is more worthwhile if students bring a sense of commitment to the campus. The 4 year vacation (or 5+ years) with football and basketball season tickets is the wrong formula for a positive college ROI. That's why this is a 'family' process; it's not just about the student and not just about the money.
There are some great resources and tools out there including a new college ROI calculator at www.payscale.com, but the best place to start is to determine where your student might want to go and compare that list with schools they are likely to get into. Then, determine how much those colleges 'cost' versus how much you're actually going to have to pay to go there! Those may be two different numbers, so make sure to research resources such as the Smart Track™ Toolkit to help you plan for all scenarios. If you happen to be in the Boston
~ Murray Miller, President & CEO
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