Friday, November 11, 2016

Thinking Through the Costs and Benefits of Attending College

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 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.


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 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!


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.

Friday, September 30, 2016

What Type of Job Will I Find, and What Education do I Need to Get it?

Don Siegel

In my last post I reported on the finding that a college degree is associated with significantly enhancing one’s lifetime earnings. But, I also conveyed that going to college was not necessarily the right move for everyone. However, what is true is that whether or not someone decides to go to college, they will ultimately need to find a job. Clearly, it is difficult to know what job may be appropriate, if one does not know what they may like doing, or the sorts of things for which they may actually be paid. Where even should a young person start their research?  While there are different ways to get help with resolving this problem, a tool that I believe can be very useful is The Occupational Outlook Handbook, produced by The Bureau of Labor Statistics.

This wonderful resource surveys a wide array of occupations and provides projections about whether they will be expanding or contracting over the next decade, identifies the necessary entry level of education, and conveys whether on the job training is provided. Descriptions of jobs entail what workers do, what the work environment is like, how to go about qualifying for a position, and where jobs are most likely to be available. Median salaries are also given. For a high school or college student who is perplexed about future employment possibilities, the Occupational Outlook Handbook can stimulate thinking and provide direction regarding concrete steps to take in order to qualify for a real job that aligns with their interests.

Below are a couple of examples of how the Occupational Outlook Handbook works:

A.   Entering high school diploma or equivalent and a projected job growth of 20 – 29 percent, I found the following:

Solar photovoltaic installers piqued my interest, and by clicking on its link I found the following information:
·      Solar photovoltaic (PV) installers, often called PV installers, assemble, install, or maintain solar panel systems on roofs or other structure
·      Although some installers need only a high school diploma and they typically receive on-the-job training lasting up to 1 year, many candidates take a course at a technical school or community college, or receive training as part of an apprenticeship program.
·      The median annual wage for solar photovoltaic installers was $37,830 in May 2015.
·      Employment of solar photovoltaic (PV) installers is projected to grow 24 percent from 2014 to 2024, much faster than the average for all occupations. The continued expansion and adoption of solar panel installations will result in excellent job opportunities for qualified individuals, particularly those who complete a photovoltaic training course at a community college or technical school.
B.    As a contrast I did the same as above, but entered college diploma for entry level education, and found the following:

Drilling down to the highest paying occupation, Biomedical Engineers, the following information appeared:
·      Biomedical engineers combine engineering principles with medical and biological sciences to design and create equipment, devices, computer systems, and software used in healthcare.
·      Biomedical engineers typically need a bachelor’s degree in biomedical engineering or bioengineering from an accredited program in order to enter the occupation. Alternatively, they can get a bachelor’s degree in a different field of engineering and then either choose biological science electives or get a graduate degree in biomedical engineering.
·      The median annual wage for biomedical engineers was $86,220 in May 2015.
·      Employment of biomedical engineers is projected to grow 23 percent from 2014 to 2024, much faster than the average for all occupations. Growing technology and its application to medical equipment and devices, along with an aging population, will increase demand for the work of biomedical engineers.
As one can see by playing around with different parameters this tool can be very informative in finding projections about various occupations, information about prerequisites for entering a field, and what the working environment may be like. For youth who wish to find out more about what their future may hold, I highly recommend that they take some time, and explore occupations that may be of interest.  If they find occupations that they wish to pursue, they can then make more informed decisions about the best way to structure their education.