I Got My Degree, and a Job at the Coffee Shop!

Could Your Best Efforts Result in Failure?

It grabs your attention as you read in Yahoo or any of the popular news sites… a headline like what you see for this article. We read about how there is a “growing trend” of degree’d graduates working menial jobs, or who have returned to their family home and are spending most of their days playing video games.

We also re-read again the “American Dream” stories rags-to-riches entreprenuers who never went to college and dozed through most of their high school classes and then finally blossomed into self-made millionaires in their late twenties or thirties.

When we read this sort of stuff, and we are at the same time wondering how we are going to manage the tens or even hundreds of thousands of dollars typically required for a modern day college education, it can make you wonder: is sending our kids off to college really in their best interest?

Well, just as with so many things in life, there isn’t just one simple answer that is true for everyone. You’re not surprised?

Let’s look for a moment at the cost of a degree and the average return for those who manage to attain one.

If what we learn from that doesn’t revitalize your hopes, let’s then take a look at what might be for some the most advantageous alternatives to earning a degree.

We’re imagining you’ll see more clearly after all this what is the “right thing to do” in your child’s case. Should it be that college-bound seems best, we’ll offer several tips you can get started on right now, that will optimize you and your child’s actions, to better the likelihood that college and what follows is all part of the “happily ever after” you are looking for, for you and your kids.

According to a June article in USA Today, “Penn State has the highest in-state tuition for a four year public university at $15,250 during the 2010-11 school year. When the costs of room, board and other expenses are factored in, the total rises to $19,816…”  In this article, a recent grad tells us that his total tuition for four years came to approximately $50,000, and that, to cover this, he took out about $25,000 in student loans.

And, while this is definitely not cheap, it’s a long ways off from the $200,000 degrees that we hear about from the Ivy League schools. These schools are the most often given as examples of the spiraling costs in higher education, even though they educate less than 1% of all the nation’s undergraduates! (It’s interesting to note that applications to the Ivys increase with every rise in tuition… should we imagine that high price equates to high quality? Of course, that’s not always true).  We read at Forbes that, “the median cost of a four-year degree in-state at a public institution is about $16,000 per year, or $64,000 overall.”

What would that typical, median investment of $64,000 bring us in return? According to the Bureau of Labor Statistics, there’s a $400 per week advantage in earnings between those with a high school diploma and those with a bachelor’s degree. And, there’s a substantial difference in unemployment. As of the end of 2011, high-school only workers were unemployed at a rate of 9.4% while those with a bachelor’s degree had an unemployment rate of 4.9% (4.1% as of July 2012).

Most interesting is the fact that the total cost of degree acquisition ($64,000) is repaid through the increased, salary ($1600 per month, or $19,200 per year) in less than four years. That’s excellent ROI, and accompanied by a 50% increase in job security! The difference between a degree holder’s earnings and those of a high school-only worker are sizeable over a lifetime. According to the U.S. Government Info Web site, “… a high school graduate can expect, on average, to earn $1.2 million; those with a bachelor’s degree $2.1 million; and people with a master’s degree $2.5 million.”

Alternatives?

There certainly are alternatives, the most famous being the entrepreneurial American Dream stories of Bill Gates and Steve Jobs (Gates dropped out of Harvard and Jobs never graduated from Oregon’s Reed College). As popular as these stories are, successes such as these are the exception to the rule. The facts are that someone with a college degree is statistically more likely to have a higher salary than someone who doesn’t and is also more likely to have more job and promotion opportunities.

If your youngster decides not to college, and somehow missteps on his way to becoming the CEO of a new tech start-up, positions of cook (average yearly wage, $28,570), welder (average yearly wage, $37,000),  Auto Mechanic (average yearly wage $33,934) or landscaper (average yearly wage, $30,000) are the greater likelihood.

How To Guarantee Success?

One of the main reasons for not “hitting the ground running” into a satisfying career after college is choice of major.  Read these tips to find clues to navigate to find the right major for your son or daughter.

1. Choosing That “Right” Major

There is no denying that choosing a major can still be a stressful process for students. Many may work themselves into a frenzy about this before even starting college. Exploring passions and finding the right fit for the student is extremely important. All of these ideas should be the underpinning of selecting an area of study that the student believes can be marketable for him or her. These are complicated economic times and majors should be within the field or area in which your child is passionate and should also be one where s/he will be able to find employment after college is done.

2. Variety Is Key… (At least, early on!)

Students may *think* they know exactly what they want to major in when they get to college but actually once they start taking classes in their ‘dream’ major, they often find it wasn’t exactly what they thought it was going to be. That is why it is really important to take a variety of classes once the student starts college. This gives the student the opportunity to get an overview of many different areas and disciplines. Business and finance may ‘sound’ perfect but once the classes begin, it may feel the absolute wrong place for some students.

Students do not have to declare a major right away so there is always sometime early on. Exploring a variety of different majors should be interesting to the student and give them a chance to see what suits him or her best. Taking time will give your child enough leeway to find something that is both interesting to him or her and is marketable.

3. Don’t Wait Too Long To Narrow Choices…

College can seem like one long party for many students and focusing in on a particular area seems like a goal that is always in the distance. One can be surprised how quickly four years can fly by and if the student is not focused on finding the right discipline or major then those previous years can be seen as a waste. Students do not have to be overly stressed but taking a lackadaisical approach is not going to move the student closer to his or her goals either.

Deciding on a major in one’s junior or senior year can be disastrous to one’s pocketbook, as well. College is expensive so making a decision early on will serve the student best in the long run.

Your child will need to enter the work force after college. Making sure they focus on finding something that is both passion-filled and valuable in the marketplace will make life much easier for them when are through with school.

4. Utilize Available Resources

College is the perfect place to investigate and ask questions. If the student is uncertain about what type of major to choose then go to the career services center and see if there is an assessment exam to take to get additional ideas. Tell your child to visit popular professors in their fields of interest and ask for advice. Ask students how they feel about their particular majors and what their plans are after school. Availing themselves of all the resources that are out there for them will make more proactive and more engaged in their education.

5. How Minors Can Have A Major Impact

Remember that a minor can sometimes be earned quite easily simply by taking classes that already interest your child as electives… And having that additional credential can help your child appear as an attractive candidate to future employers or graduate and professional programs. With a shrinking business world, a foreign language or other area of additional expertise can really increase his or her marketability for the future.

6. Summer Internships

Summer internships are extremely valuable in this economic climate. They can mean the difference between starting a career and having nothing after graduation. Making the right connections early on is key to making it after college. Securing internships probably will require becoming connected to the influential professors in your child’s particular major. They may not be able to help directly, but they can provide guidance as to what your child should do and in which direction s/he should move. They may even be able to point them to particular companies that are hiring interns during the summer or vacation seasons.

Summer internships can often turn into jobs after college. Make sure that your child understands the implications. This is the time to shine, to show that s/he is a hard worker and that s/he is there to learn as much as possible. Making good impressions can make all the difference when it comes time to start looking for work after college.

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Of course, making sure that your child has the information to wisely plot his or her course through college or university is just one of the many elements required for adequate preparation for higher education. As college funding professionals, we are well-acquainted with all of these important steps, and none is more vital to creating the best array of options for future success than appropriate financial preparation. Even a student with very good academic prowess in high school can find some doors closed to him or her for financial reasons, if the proper preparation has been ignored… or if they are started too late. This is one of the reasons that we are such strong proponents of education — by which we mean not only higher education for students, but proper financial training for parents with regard to the best ways to manage the costs of that higher education!

One of the educational tools that we have prepared for parents of college-bound high school students is an outstanding report entitled “Fifteen Ways To Beat The High Costs of College.” As part of our educational efforts, we offer this report free of any charge or obligation to all parents who express an interest. For your own copy of this report, which outlines the most fundamental elements of current college funding trends and requirements, please take a moment to call our excellent staff at: 818.839.6600, and they will be sure to get a free copy sent to you immediately through email.

Until next month…

Michael Budnick
President and CEO
College Tuition Advisors

 

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