Average published tuition and fees are up 20 percent since 2008 at private, nonprofit four-year universities, the College Board reports. But the actual net price students pay has increased a much slower 4.4 percent. And while those institutions list a published price of more than $32,000 per year, on average, full-time students actually pay an average of less than $15,000. Source: http://hechingerreport.org
What You Need to Know About the Value of Education
Posted on February 4, 2014 // Leave a Comment
We know a lot about the cost of an education. It costs too much. Here are some other things we know about education. Growing student debt is a student problem that is rapidly becoming a threat to growth of our economy. These issues are getting a lot of attention these days. In contrast, there is little good information about the value of an education today. This post is devoted to the value indicators. 
Source: Pew Research Center “The Growing Economic Clout of the College Educated.”College-educated households are the only households whose incomes have grown on a per household basis from 1991 to 2012. There are a number of factors at play in boosting the household incomes of the college educated relative to less-educated households. A primary factor is the better fortunes of the college educated in the labor market. The Georgetown Center on Education and the Workforce finds college graduates earn nearly twice as much as workers with just a high school diploma.
Value Proposition number 1: Education is the key to upward social mobility. Research shows that it is possible to move up in society – with an education. Source: Federal Reserve Board of San Francisco: A college education can counter the effects of birthright. Only 5% of children born into the bottom quintile (lowest 20%) who don’t graduate from college end up in the top quintile (top 20%). By contrast, 30% of bottom-quintile children who graduate rise to the top quintile (from the bottom 20% to the top 20%). This is clear evidence that a college education is key to the American Dream of having a better life than one’s parents.
Value Proposition number 2: College favorably impacts skills that are important to compete in our modern global economy. Source: “How College Affects Students: A Third Decade of Research”. All of the following critical skills were found to have statistically significant improvement as a result of a college education. The list includes:
Verbal skills Quantitative skills Speaking skills Written communications Critical thinking skills Conceptual complexity.
A survey of employers shows that employers are looking for these very skills. A report from the American Association of Colleges and Universities provides data from a January, 2014 survey of 318 corporate executives showed that 93% of those responding agreed that “a demonstrated capacity to think critically, communicate clearly, and solve complex problems” is more important than the skills of the candidate’s undergraduate major. And 75% of those surveyed said they want more emphasis on critical thinking, problem-solving, written and oral communications and applied knowledge. And 95% said they want new hires to demonstrate ethical judgement, integrity and the capacity to continue to learn.
Value proposition number 3: College educated households are the only one’s with growing household incomes. All other levels of education have actually declined.
Household Income (2012 dollars)
Education 1991 2012 Percent change
Less than high school $33,959 $32,631 -4%
High School 54,707 52,199 -5%
Some College, no degree 66,038 63,008 -5%
Associate’s 72,407 68,902 -5%
Bachelor’s 92,289 100,637 +9%
Master’s 104,193 114,897 +10%
Professional 150,869 180,671 +20%
Doctorate 131,365 150,087 +14%
Source: Pew Trust Research
When you look at the difference between the income for Some College, no degree and the income of a Bachelor’s degree you can see why it is so very important for those with some credits but no degree to complete their college education and graduate. The difference in income is worth, on average, over $37,000 each year. There are about 38 million Americans in this position. The irony is that with wise choices, it could cost as little as another $25,000 to complete that degree. Doing that would be of immense value when the value created every year is much more than the total investment.
The cost of an education is pretty clear. The value of an education is less clear. And least clear of all is how to get the value of an education without incurring the high costs that are so widely reported these days. For the latter, see Your Future is Calling for exercises and valuable data.
Five Things You Need to Know to Determine: “Is College Worth It?”
Posted on January 31, 2014 // Leave a Comment
Not needed. High debt. No Job. Too costly. These are all things people are saying these days in answer to the question: “Is College Worth It?”. The two extreme answers are ALWAYS and NEVER (see BUZZ Today here). Neither of these answers is correct. If always and never are incorrect, the answer must lie somewhere in between these two absolutes. Indeed it does, which leads to the real question you should be asking which is: “When is College Worth It?” It is the answer to this question which will help you make better decisions for yourself and your children.
Source: Alen Weiss, The Fallacy of College. “College not only isn’t for everybody, it might not be for anybody.” In contrast: Source: Time, December 2013, Gallup Poll – Majority of Americans Think College Education Is ‘Very Important’. The Gallup poll found that seven in 10 Americans consider a college education to be “very important,” up from 36 percent in 1978. Only six percent of respondents said college education was “not too important.”
First Thing You Need to Know Any college degree that traps you in a life of misery is not “Worth It” no matter how much or how little you spend to earn that degree. Misery is about you. It is not about college or even jobs. You have to begin with “who you are”. The decisions you make about college majors, careers and specific universities all must be linked to you and what fulfills you as an individual. This is the starting place for your college decisions that I talk about in Your Future is Calling.
Second Thing You Need to Know One of the things that significantly increases the cost of college is the tradition of using the college to “find yourself”. This might have been an option in the good old days. It is the best option today. Going to a campus for five or six years is just too expensive today. There are much more efficient ways to get answers to this critical question. Degree Accelerator and Caliper assessment.are proven online instruments to efficiently get at the “who you are” question.
Third Thing You Need to Know The career you pick as well as the college you pick have significant impact on your earning power. But what is traditionally done is to pick a college or university and then figure out what to study. This is what I call Major – Major – Major in Your Future is Calling. The Major – Major – Major decision is one of the main reasons the average number of credits of college graduates is on average over 10% more than than required for graduation. This excess both delays earning income and increases student debt.
Fourth Thing You Need to Know The vast majority of students pay only about one half of the list price of tuition, yet 54% of the potential students judge a college’s expense by sticker price alone without considering aid that could be offered. If you pay double the cost for tuition it makes every degree less likely to be “Worth It” from a financial point of view.
Fifth Thing You Need to Know Beyond getting the best discount. In college language this is stated in terms of grants and merit scholarships. In addition there additional way that the total cost of the education can be reduced
– Enroll in a community college to get a low cost education for your first two year general education requirement.
– Test out competency with CLEP testing from the non-profit College Board.
– Earn credit for prior learning assessment for life experience from CAEL and Learning Counts.
In summary, the five things that you can do to increase the answer YES to the question: “When is College Worth It?” are listed in summary here:
Use modern tools to determine “who you are”. Use data available on O*NET or Bureau of Labor Statistics to select a career before taking your first class. Learn what the average grants and merit scholarship awards are at the college you plan to attend. Know the facts on tuition costs and negotiate. Further reduce costs by avoiding Major – Major – Major. Finally further reduce costs through the approaches listed in detail in the Fifth item listed above.
Five Things College Freshmen and Their Parents Need to Know
Posted on December 8, 2013 // Leave a Comment
Increasingly college freshmen are enrolling in majors that do not fulfill their personal passions because they think it is more important to have a high paying career. That is a mistake. This choice is not an either or. Both the freshman and the parents should be doing everything they can to have both. It’s possible. Your Future is Calling gives you a clear road map to follow.
Source: Bureau of Labor Statistics” Number of Jobs Held…Results From a Longitudinal Survey”: The average person born in the latter years of the baby boom (1957 – 1964) held 11.3 jobs from age 18 to 46, according to the U. S. Bureau of Labor Statistics. The survey was of 9,964 men and women who were ages 14 to 22 when first interviewed in 1979 and ages 45 to 53 when interviewed most recently in 2010 – 2011. Both high school and college graduates were included in the research.
Here are the five things college freshmen and their parents need to know.
#1 College is often viewed as the place where our sons and daughters go to “find themselves”. This a part of the mission of our colleges and universities and it should be. But the truth is that many of us spend most of our lives trying to “find ourselves”. There are scientific ways to help the freshman accelerate this personal development, to help they find out “who they are”. Among online instruments I recommend these in particular: O*NET Interest Profiler, Strong Interest Inventory, the Gallup SF-34 Strengths Finder and the Myers-Briggs Type Indicator All of these personal assessments can be done online for less than $100 (O*NET Profiler is free). They are well worth the investment of the freshman’s time and money.
#2 College freshmen are faced with many complex decisions as they set the course for their life. Many of those decisions, including immediate ones like the university they decide to attend, the major(s) they study and the careers they ultimately go into depend on “who they are”. It is one of the most important things they (and their parents) need to know to make good decisions.
#3 In college, and in careers after graduation, the freshman will compete against others and some will make better decisions because they have a good idea about “who they are” from the start. Your freshman needs to have every possible advantage in these life competitions.
#4 Career choices are important to consider early in the education process. Earning power is strongly related to the career chosen and there are lots of sources of excellent data that shows exactly what various careers pay. Three I recommend on this important topic include: O*NET, Occupational Employment Statistics from the U.S. Department of Labor and for California residents interested in a community college, there is the very detailed Salary Surfer.
#5 Many freshmen start out with majors that do not lead to good career choices. It is what I call the Major – Major – Major decision. This costs time and can lead to huge student debt. It is important to consider the choice of college major as the first step in the life career decisions. The earlier the freshman can know about what motivates them the better will be the education choices.
The bottom line is that the freshman year is the first big step to the life of an adult in our society. Cost, quality, the college of choice, the major are all important decisions for the freshman. It is not easy. The press is telling the story about today’s college experience. Business Week reported: “Stress Takes Its Toll on College Students”
But even with all of these factors one thing is very clear. The freshman will live every day of their life with “who they are”. What science tells us is that this does not fundamentally change over the course of an entire lifetime. We are who we are. On the other hand, what the BUZZ Today clearly tells us is that the freshman will change jobs – many times. What the freshman has to get right is knowing what motivates them, not how they can make the most money possible in their first job after graduation.
