All Posts Tagged With: "private school"
Should you stay close to home for college?
Jennifer McClelland | RSS | Fri, Nov 27 2009 | 1 Comment
Is it time for college students to be calling home?
When you’re going to college should you stay close to home or go away to a private school with ridiculous tuition, room and board?
Of course, I’m biased.
I am a product of public college education and think that I came out as well as another peer of mine who is Vanderbilt educated (even though I paid THOUSANDS less than she did overall).
Since the recession, many new students are opting to stay in their home states to attend college rather that go to other states to get their bachelor’s or master’s degrees.
Public universities are hurting for money. My business school’s professors are encouraged to not print syllabus among other necessary documents.
Over the past a small amount of years, the financial organization of public universities has changed radically. States no longer fund the accounts for the majority of a school’s budget. A school is lucky if the state supports 20% of a college’s overall budget. For example, William and Mary’s college for the 08-09 school year was only funded 18% by taxpayer dollars. In the 1970’s, taxpayers funded 43% of the school’s budget. “At this point, we’re a privately supported university that also gets some meaningful state aid,” says W. Taylor Reveley III, president of William & Mary.
To make up the divergence, public universities have got to rely on tuition and charges to pay for the majority of the budgetary requirements; because of this, many state schools work hard to be a magnet for out of state students, who will pay a premium, sometimes more than three times as much as residents, to attend.
“Given the way that states are cutting back on funds, to replace an in-state student with an out-of-state student, particularly if you can capture some of that revenue for your own purposes, is a good thing financially for schools,” says John Maguire, chairman and founder of Maguire Associates, a research-based consulting firm specializing in educational institutions.
So I suppose sometimes it comes down to whether you want to go in state or out of state and the cost you may incur.
If you live in Alabama, congratulations, you can go to Auburn. If you live in Mississippi you get to go to … Ole Miss.
Related posts:Cuts from the public school system that everyone will notice
Tags: new students, divergence, private school
In the long run, college will end up hurting your savings.
Jennifer McClelland | RSS | Mon, Jun 29 2009 | 2 Comments
It’s looking more and more that if you have discipline and want to save for the future, going to college may be a bad investment. A four year college degree costs too much and proves too little. It has become increasingly unlikely to be able to make up the cost of a college degree, even with the fact that college grads get paid more.
In an example for the New York Post as written by SmartMoney associate editor Jack Hough, if you look at two people from similar backgrounds each of whom save $16,594 for college. One decides to not go to college and invests his savings in a mutual fund that tracks the broad stock market. He ends up making an average pay that peaks at $32,538. He adds to his savings 5% of his after-tax income and it returns 8% a year.
His friend goes to college. He goes to public school and transfers to a private school. He ends up spending $48,286 in tuition and fees. These fees do not include room and board. He ends up spending $34,044 after grants. When he finishes school he owes $17,450 at 5% in student loans. He starts making just over $23,000 a year after taxes and peaks at almost $57K. Like his friend, he sets aside 5%. It will take him 12 years to pay off his loans. When he finally escapes from the debt at age 34, he starts investing in the same fund as his friend. He is able to make bigger monthly contributions. However, when they reach 65, the friend who didn’t go to college will have saved almost $1.3 million while the one with the degree will have less than a third of what his friend saved.
I believe that this all comes back to the fact that many people don’t think about saving rather they want to have a comfortable lifestyle while they can enjoy it. I’m not saying that you can’t enjoy things when you’re 65, but you can enjoy travel and have more ability to do so when you’re younger.
Related posts:How college can negatively impact your retirement
The Five College Degrees you will see a good ROI on
College graduates are finding work in some fields
Tags: smartmoney, stock market, student loans
