Archives for May 2013

$150,000 in Student Debt and No Job is designed to give readers like you the information you can use for to prosper in your future. The key words are your and future. Unfortunately many of the headlines about higher education today are crafted to grab your attention and appeal to your emotions.

Buzz TodaySource: Daily Finance: Stories of Student Debt. William: “In just a few months I’m going to turn 62 years old”, says Williams who took out $44,000 in private loans to study psychology. He still has nearly $130,000 to pay off. Paul: Paul sunk more than $120,000 into undergraduate and graduate studies in visual arts, but he has yet to find a job in his field. He owes $150,000 today.Mark: “I wish I hadn’t gone to school,” says Mark, who graduated in 2005 with degrees in psychology and music and $875 monthly payments on $80,000 worth of student loans.

As a nation, student debt totals over $1 trillion dollars. The average student debt of college graduates is around $25,000. This means that there are millions of college graduates with debt that is manageable. What this also means, is that William, Paul and Mark are the exception, not the rule.

Nonetheless, it is valuable to examine the $150,000 and no job case to see what you can learn. The three men in BUZZ Today show us some important lessons.

The ROI that you can expect by earning a degree depends on two things. The first is the amount you pay for your education or the I in the ROI calculation. This you can reduce through a number of important ways that I explain in detail in Your Future is Calling.

The second factor in the ROI calculation is the R, or the Return you can expect to earn in a job. Here BUZZ Today provides some clues. Let’s turn to William, Paul and Mark. Go to O*NET and look up the pay and number of jobs for the identified areas of study: psychology, music and visual arts. The O*NET data speaks for itself.

Headlines about high student debt and no jobs grabs our attention. But it ‘s the lessons to be learned that are most important to you. It’s important to your future that you make key investment and return decisions before you enroll in any degree program. Your choices need to match who you are.

In a recent radio interview I was asked what advice I would give to a young person with $150,000 in student debt and no job. My answer was: “I have no advice to give them. I do not know of any good options once you have arrived at that outcome.” To impact this sad result you have to make better decisions before you begin your learning.

What we see in BUZZ Today, is that merely getting a degree – any degree at any cost, can actually be a very bad decision. The learning that impacts your future begins here.

How to Answer the Question: Is College Worth it?

The debate: “Is College Worth It?” directly affects you. Here is how. In BUZZ Today you see the debate as the professors in universities see the issue. In my earlier post “Is College Worth It? Yes – for Most” you see a different take on the issue.

  Buzz TodaySource:   The Chronicle of Higher Education:  The conversation about college and its returns gets down to a question that has dogged academe for decades, if not centuries:  What is education for:  Personal growth?  A golden ticket?  Or some of both? … for some, particularly among advocates of the liberal arts, framing the value of education in dollars and cents is a perilous trend that discounts other benefits, like college graduates’ tendencies to be more involved in civic and intellectual life.

For them, it is not so much about the economic issues Bill Bennett raises in his new book titled:  “Is College Worth It?”  For the former secretary of the department of Education, the issue is about the Return on Investment (ROI).  The answer to the question:  “Is College Worth it?” is answered with the ROI on your student education costs. ROI is all about what you get back financially (R) for what you put into it (I).  This calculation works for any financial investment decision.  It is the calculation you need to do to answer the title question.

What the professors say is that there is a lot more to be gained from an education than merely the money you can earn.  I agree and actually outline many of those benefits in my book Your Future is Calling.  There is no question a quality education makes you a better person in many ways.  These values should not be dismissed lightly.

But the reality is that in today’s highly competitive global world, where change is the only constant, ROI has rightfully moved to the top of the priority list.  Becoming a better person has to be a lower priority when food on the table and a roof over the head of your family is competing for the dollars required to enroll in a degree program at a college or university.  When this is the case, ROI does move to the top, and you have to consider how to manage it.  This is especially true for individuals with limited resources aspiring to create a better future for themselves and their loved ones.

It doesn’t matter whether you are using a part of your pay check to pay tuition or borrowing money from the federal government under the student loan program, the ROI calculation still applies.  The borrowing is merely about whether you pay the money now or later.  I both cases you should be managing the factors that determine the ROI to the best of your knowledge and ability.  How do you do that?

Briefly the answer is, you select a major that fits “who you are” and provides the best financial result.  I talk about how to use the Department of Labor data base O*NET to do that.  The other thing you need to do is to make sure you get the best purchase price you can for your education.  That data is available at the Education Department WEB site COLLEGENavigator.  I show you how to use both of these important data bases in my book Your Future is Calling.

Is College Worth It? YES – for most

Lot’s of people are jumping onto the question of the value of college education.  In a just released book titled “Is College Worth It?: A Former United States Secretary of Education and Liberal Arts Graduate Expose the Broken Promise of Higher Education” the former secretary of education asserts that the promise of education has been broken.

          Data from the US Department of Labor shows that the conclusions the authors draw in the BUZZ Today quote simply are not true.   Source:   Department of Labor careeronestop
The graph shown here shows that for every level of education, higher levels  of education result in both lower unemployment and higher income for most graduates.  Note that the median is the point where one half of the group is above the value and one half is below.  The conclusion has to be that for most students, higher levels of education result in higher economic benefit to the learner.  Buzz Today Source:   Washington Times – Is College Worth It? book review:   William J. Bennett and David Wilezol’s “Is College Worth It?” asks and authoritatively answers one of life’s biggest questions.  It provides a thoroughgoing deconstruction of the “of course it is” delusion. It turns out that for too many, and maybe even most of our young people, the answer to this central question is, sadly, “no.” “Whether the standard of excellence for higher education is cultivating the mind and the soul or maximizing financial return on investment, most of higher education fails most students,” the authors write.   The Department of Labor data shown here is unambiguous.  For every increase in education level obtained the unemployment goes down and the income goes up.   Under no line of reasoning can one conclude from this data that higher education fails most students. Instead of the sweeping claims that associate degree holders earn more than bachelor degree holders (shown not true in the data above) or that the ROI on an education investment is not worth it financially, the discussion needs to focus on what a student needs to do to make sure that they get the best return on their personal investment. The Practical Guide on how to do that is what Your Future is Calling is about. Instead of making headline grabbing general statements about all and every, we need to be helping individual higher education students make better decisions about their own career choices, college majors and universities that they attend.  This can only be done with specific objective data about the choices each individual faces.

Feel Overwhelmed by All the Education Choices?

You should be feeling overwhelmed. Without help, it is daunting for anyone trying to decide.

The combination of “who you are”, careers, universities, majors, courses of study, degree programs, funding choices total in the millions. Yes, that’s right, there are millions of alternatives. No wonder it is confusing and difficult to decide. What makes is even harder is the fact that there are few good sources that integrate the various elements of your decision. Buzz TodaySource: Your Future is Calling. In the end you have to weigh all of the information because this journey is about “who you are” and what you do in the future, and not about who I am and what I do. I can be a mentor but I cannot make the choices for you. You must do that.”

The most successful investor in history, Warren Buffett, has advice for you about the best investment you can make. His advice? Invest in yourself. We can tell from all of the Google searchers that millions of you are trying to do that, but the growth in information searches combined with the drop in enrollments is strong evidence that many of you are not finding what you need to make these choices.

You need better, more objective information. You need a road map to make sense of all the information. You need to be motivated to stay the course. You need a vision of the future you desire.

One exercise that is helpful is to envision the future you desire but that needs to be more than a day dream. The vision you create for yourself needs to be positive and concrete. One exercise I recommend is to envision a day in the life of your desired future. This effort needs to be concrete and specific, not some general fairy land fantasy. The vision needs to contain a lot of specifics about what you are actually doing during a typical day in that desired future. Write them do, Reflect on them. Relish them. Make them a part of your desire – a desire that will motivate and sustain you while you face the uncertainty of your choices.

Learning and education is the key to competing in the twenty-first century global economy where ideas are more important than things, where innovation trumps sweat, and where more choices create both complexity and opportunity.

Your future is yours to create. As Warren suggests, GO FOR IT!