Don Siegel
A major goal of out of school time programs working with
underserved youth is supporting a child’s academic progress and success. This
is because education is viewed as the means for redressing inequality and fostering
upward social and economic mobility. Clearly, going to and graduating from
college is a major objective. While, this is certainly a worthy goal, as my
previous posts discussed the economic valueof a college education, and how to be strategic about planning post-secondaryschool employment, an issue that often is given lesser attention is how the
costs of attending college are connected to the potential payback for pursuing
a particular field of study. Specifically, what one studies in college is
critical in determining how the investment in time and money pays off. In many
ways this question is like that of investing in the stock market. Finding
stocks that produce positive returns requires forethought. In contrast investing
randomly, can produce, negative, neutral, or positive results. The same is also
true about selecting a college and a field to study to pursue.
Choosing a College
Clearly, there are as many views as there are advisers and
counselors about the best college for a particular student. Small or large,
urban or rural, east coast or west coast, rank on various polls, areas of
specialization offered, student faculty ratio, diversity of student body, are a
few things to consider. Having an updated library, gymnasium, student center,
and excellent cuisine are also considerations.
Increasingly, students and their families are focusing on
the costs of attendance which can be a very tricky business, since actual expenses
for most students are not what colleges advertise as their sticker price, since financial aid and educational tax benefits can
offset a large percentage of the sticker
price. Thus, the net price of
attending college is equal to the sticker
price minus financial aid and educational tax benefits. Such aid
typically is determined by a student’s financial need. Other factors may also affect
aid such as a student’s academic prowess, her athletic or musical talent, attributes
such as economic, racial, diversity, the state from which she comes, or whether
one or more of her relatives had attended the institution. Nonetheless, even
after factoring in financial aid, most students wind up encumbering some debt
to pay for college, with the average graduate of a four-year institution owing
about $30,000 upon graduation. For the prospective college student and her family, a good
starting point to determine the approximate net
cost of attending a particular school is to use a college’s net cost calculator. The Department of
Education publishes a list of where to find these calculators which can be
accessed by clicking here.
As an example of how this works, I identified Holyoke
Community College as one that I might be interested in attending and ran the
following scenario for an 18 year old having the following characteristics:
·
Living on my own or with roommate
·
Eligible for in-state tuition
·
Married: no
·
Not primary support for children
·
Family household: 4
·
Number in college: 1
·
Household Income after taxes: $30,000-$39,999
And found the following:
·
Estimated Tuition and Fees: $3,574
·
Room and Board: $7,110
·
Books and Supplies: $1200
·
Other Expenses: $5,320
·
Total Cost: $17,204
·
Estimated Grant Aid: $6,050 ((Includes both merit
and need based grant and scholarship aid from Federal, State, or Local
Governments, or the Institution)
·
Net Cost: $11,154
I then did a similar analysis for attending Westfield State
University, and found the following:
·
Tuition and Fees: $8,615
·
Room and Board: $9,615
·
Books and Supplies: $1200
·
Other Expenses: $2,379
·
Estimated Total Cost: $21,809
·
Estimated Total Grants: $7,395 ((Includes both merit
and need based grant and scholarship aid from Federal, State, or Local
Governments, or the Institution)
·
Estimated Net Price: $14,414
One should note that in each of these computations room and
board is included, and it can be argued that room and board will be a cost to
the individual whether or not s/he is in college. Consequently, the actual net
cost of attendance, in real terms, is significantly less than the amounts shown
above ($4,044 and $4,799 respectively). Furthermore, a student’s family may be
able to deduct up to $4,000 from their reported taxable income for tuition andfees paid to a college so
that actual out-of-pocket costs will be less than the net costs shown above.
Nonetheless, having done such calculations early-on, leads
to the question of how to pay college expenses even after financial aid is
awarded and tax credits taken. This is something that should not wait until a
prospective student and their family is faced with the bill. Clearly, there are
no simple answers to this problem, but seeking out additional scholarship aid is
certainly something to pursue. A website such as collegedata.com might be a place to
start. Depending on one’s race, ethnicity, financial status, geographical
locale, and impending major, additional scholarship opportunities are
available. By going to Pay Your Way,
and Scholarship Finder Search on this
website, one can find many scholarships that are targeted to one’s intended
field of study, and personal demographic profile. Another more local source of
scholarship funding for PCers is the Community
Fund of Western Massachusetts, and a list of targeted scholarships can be
found here.
To help make up remaining gaps between a college’s sticker
price, financial aid award, and scholarships acquired, one can also factor in
potential income generated from part-time employment, and work-study programs
that various schools offer. As a last resort, taking a low interest loan to
fill the gap between college costs and available funds is also an option.
Payback:
Given that one has the tools to get an estimate of what it
will actually cost to attend a college, and some tools to help finance it,
another critical issue will be to find a college that offers a course of study
that one wishes to pursue. For many high school students, or even college
freshman, this question is not a simple one to answer, given that interests
vary with age and with exposure to different people and experiences. But for
argument’s sake, let’s assume that a prospective college student wishes to
maximize her payback from the time and money which she invests in attending
college. How might she tackle this problem?
To answer this question, one can go to PayScale.com.
By clicking on All Majors in the Associate’s Degree Category, a prospective
student can get information about different majors, the level of degree
required, early career pay, mid-career pay, and the intrinsic satisfaction that
people employed in a major’s field get from their work. A quick scan in the
associate’s degree list shows that at mid-career those in Computer Engineering
($77,300), Economics ($76,500), and Management Information Systems ($76,400)
are among the highest paid, while Social Worker ($32,800), Child Development
($29,600), and Early Childhood Education (28,900) are among the lowest paying
fields. Running similar queries for the Bachelor’s Degree Category shows
Petroleum Engineering ($172,000), Systems Engineering ($121,000), and Actuarial
Science ($119,000) as having the highest mid-career median salaries, and Early
Childhood and Elementary Education ($41,900), Child and Family Studies
($40,700), and Early Childhood Education ($37,500) having the lowest.
Clearly, monetary payback should not be the only criterion
when deciding on whether to go to college and what major to pursue, but it
should be a consideration, given the time, expense, and potential debt that one
may incur. It is interesting to note that going to college will cost about the
same amount to someone who majors in a field which may have a potentially high
financial return, as one with a lower one. As seen above, for both associates
degrees and bachelor’s degrees the difference between the highest and lowest
paying majors is more than two fold!
Conclusion
My conclusion from these analyses and suggestions to a
prospective college student are to find a suitable school that offers a course
of study that is of interest, use the various on-line tools to: (a) get a
ballpark figure for what attendance at different schools will cost, (b) estimate
the amount of financial aid for which one will qualify, (c) assess what other
scholarships may be available to fill the cost gap, (d) do a rough estimate of
tax credits to be had after estimating net
costs, (e) determine how much money must be borrowed to make up the
difference between costs and various forms of aid, and (f) apply to schools
that will fulfill one’s goals and cost the least. In many ways, going to
college can be viewed as an investment, and just like people who invest in the
financial world, a higher payback is a worthy objective. But, higher returns
often require careful research. Free tools are now available for the
prospective college student to do the necessary research required to assess the
costs and benefits associated with the decisions that they will make as they
enter the world of post-secondary education.
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