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.

At Boston University, you can get a great education in the heart of Bean Town. Now, you can also stay in luxury while you’re doing it. There is a new dorm building that boasts a 25th floor of rooms that are so luxurious, you will be sending your child away for only $13,000 a semester (that doesn’t include tuition).

The suites have city views of Boston, private baths, accommodating common areas, a 24 hour reading room, and a plasma tv in the media lounge. The rooms cost $5,000 more than the standard room and are only available to 14 students.

When the Boston Globe was able to catch up with one of the students that was “lucky enough” to get picked to live in the dorm, she said that she would be paying for the dorm with student loans and that all her friends were “too cheap” to live there. I don’t want to be mean or anything, but perhaps her friends were “too smart” to live there. I mean, this girl is paying $26,000 to live in a dorm that she will have to pay interest on for what? I can’t figure out what is so pressing that she has to spend the extra $10,000 to stay there.

When I lived in the dorm, there were private bathrooms in some of the rooms but they didn’t cost extra. There was a “media room” with a big screen tv and there were study rooms strewn throughout the building. All of that for only $3,000-$4,000 a semester.

She will end up paying for that room for the next 10 years thanks to her decision to live there this year. Many students won’t be paying for the dorm with savings, but with loans. That is certainly not the way you want to start your future right after college.

Source

Deduct the interest you pay - You can get a tax break on all that interest you pay – up to $2,500 a year.

Know any benefits you get from your job – If you’re teaching at an inner city school you could end up getting up to $5,000 taken off the amount you owe to you Stafford Loans. You don’t have to pay more than you have to so do some homework before you start paying your loans.

Consolidate! – When it comes to student loans, it is wise to put all your loans in one big loan, as opposed to credit cards where it isn’t considered very prudent to do the same. If you consolidate your loans, you end up being covered if rates go up. However, if rates go down you could end up paying more because of the locked in rate you have. You can ask your lender what is the best option for you.

You need to be aware of your repayment options. – To do this, you need to know exactly how much you owe on your loans. You can check this at the United States Department of Education’s National Student Loan Data System. Once you get the final number, you can talk to your lender about payment options an pick the one that fits the best in with your financial goals.

Know how much you will have to pay each month. – So you’re finally out of college and have that diploma in hand. Right now, in your deferment period, you might not know how much you’re going to end up owing per month, but you should. Interest will cost you more than the amount you borrowed, but paying the loan off faster will help offset some of that cost. If you pay the minimum amount each month, then you’re going to end up being a lot less wealthy in the long run. Then again, if you pay the minimum and put the difference you would have paid in a savings plan with a higher interest rate than your loans, you could end up ahead when you pay off the loan.

You can ask to have your interest rate lowered. – Ask and sometimes, you will receive. This works with some loans and credit cards; if you ask for a lower interest rate, sometimes lenders feel generous and give it to you. It never hurts to ask.

If you can avoid it, don’t ever file for bankruptcy. - Declaring bankruptcy may be able to get you out of credit card debt and past due bills, but it won’t get you out of student loan debt.

It looks like repaying student loans could be getting a bit easier. Beginning this week, those with federal student loans can apply for a program that is offered by the Department of Education that reduces or caps the monthly payments based on income and also forgives any remaining balances after 25 years.

There is a calculator at http://www.ibrinfo.org to help any borrowers determine if they are eligible for the plan.

The program comes from the Cost Reduction and Access Act signed into law in 2007 from the Education Department. The Act authorized the creation of the repayment plan for Federal Family Education Loans and Direct Loan borrowers for those who borrow Stafford and PLUS loans.

So, the Act makes monthly payment amount to less than 10% of income for the 1 million people that are expected to enroll in the program. Payments wouldn’t exceed 15% of any income above $16K a year. Those who earn less than $16K would not have to make monthly payments.

This is a great program for those graduating colleges now simply because it has become harder and harder for new graduates to afford their loans after the deferment period for their loans. As of right now, no matter what, the new graduate has to begin paying back their loans after the deferment period, even if they haven’t had any luck finding a job. So this Act will help those.

With the unemployment rates at the highs it is now and new graduates graduating college with more debt than ever this could really help some people out. If I am unable to find a job, I know that it will definitely help me out.

After I finish this post up, I’m headed over to that website listed above to check my eligibility. I only have one private loan for less than $1,500 and the rest of my loans were Federal Stafford loans (mainly subsidized).

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.

It seems as though the Oil and Petroleum Exporting Countries, or OPEC, has finally gotten exactly what they want. The price of a barrel of oil reached six month highs the other day and now there is a looming meeting of the countries to discuss whether or not to cut production.

At this point in time it appears as though a production cut is not going to happen, and the only reason that anyone can come up with is that OPEC was finally able to get exactly what it wanted. Meaning, the price of oil went up and their wallets started getting fat again.

The price of oil isn’t growing on actual demand for the commodity; the price is rising because stock markets all over the world are rising. Usually the price of oil rises with the markets and the markets usually begin to gain in the months prior to growth in industrial production and a reduction in unemployment.

It is nice to think that the recession could be coming to a close soon. When you look at the price of oil, however, it peaked seven months into the current recession (after all, the recession, according to reports, started in December of 2007).

Now, when the majority of your income depends on the price of commodities, not necessarily oil, it is important for the economy to pick back up. Then again, it is important to everyone for the economy to pick up.

Whether you’re income is tied to commodities, you’re a new graduate who really needs a job to start paying back some of those outrageous student loans, or you’re a home owner who is trying to sell your house to move to a place where you can find a job, the health of the economy is so important.

Hopefully the treasury secretary and Ben Bernanke were right when they said that the recession would be ending by the end of the year. It will be nice to see some economic growth, even if it means higher gas prices. At least when the economy starts picking up, many of us who don’t have jobs right now will have them later, and we can actually afford the gas.

College is supposed to be the next step after high school; it is supposed to be where you become a well rounded individual and educated to get out in the “real world” to earn money and afford the life that you dream of.

This is not so much the case when the economy has gone sour.

I just witnessed firsthand a college graduation; I graduated with my B.B.A. on Saturday. Looking at the future is scary, and not having a job is worse. I will be taking classes through the summer, but August will be here in no time and I will be expected to have something lined up so I can start paying my $30,000 in student loans.

Luckily, I have been fortunate enough to be able to make it through college with only student loan debt and not credit card debt. A recent report has indicated that many students are graduating college with around $7,000 in credit card debt and much more debt in student loans. So of course the rate of default on student loans has increased in the past year.

The entire situation of hundreds of thousands of people graduating is exacerbated by unemployment and employers being far more particular about whom they hire. After looking for jobs in marketing, I’ve realized that if you don’t have at least 3 years of experience in the field, you are unlikely to find something right out of college at a marketing firm (unless you graduated with highest honors it seems).

There is some hope though; in July a new federal program will go into effect that allows graduates to cap his or her monthly loan payment to 15% of his or her income. While the program was created to give some relief to those who go into lower paying industries like teaching, it will help everyone. Another benefit to this program is that in some sectors, public service loan forgiveness will go into effect after 10 years of payments; all graduates’ loans will be forgiven after 25 years of payment.

I can’t imagine still paying back loans after 25 years. I am personally hoping to have my loans paid off in 10 if all goes well. I would love to have them paid off sooner, but I have to make sure that the bills are paid first. I think this is where the problem is coming from when students graduate. Like me, they live with their significant other or spouse, or are on their own and have to make sure that they have a place to live rather than worry about student loan payments.

However, it looks like this federal program will be helpful to graduates that will have a hard time paying back their student loans because of other financial obligations.

If you’re just getting started with your financial future, these steps can be useful. I really enjoyed the part about paying off debt by the time you’re 30. I was recently able to pay off my credit cards and am pretty happy about it…just in time to start paying tens of thousands in student loans!

How many times do we need to be told not to max out our credit cards, after the fact? I’m a 5th year senior, of course my credit isn’t as great as it would be if I was a graduate and paying off my student loans…I have to live with my decisions in these hard financial times, and when I graduate (sometime this summer) I have to go out and find a job that will cover my expenses, or hopefully (at least) cover my loan payments.

I have lived within my means, but at the same time, I will graduate college with a large amount of debt.

I guess I’m just tired of every time I go to Yahoo it tells me that I should live within my means when I know I have such a large debt facing me.

So, how does this all affect the average American? Sure, if you?re completely invested in one of the failing companies it is easy to see, but for someone who isn’t in the market but perhaps has a 401 (k) they may be worried about their financial future.

Because banks are playing defensively, they are doing whatever they can to protect their assets. This causes them to not want to produce any new loans, creating sub-prime loans and mortgages is what got most of these banks into this dire situation to begin with. Even student loans will be harder to receive, which could in itself become a disaster, because college tuition will not be going down any time soon (or ever). If a potential borrower does not have great or perfect credit, loans are and will be very hard to acquire.

When the crunch is over, though, many banks will be able to lend again to those with good credit, and those with great and perfect credit will be able to get their loans at better rates. The hardest part is waiting. It is hard to wait for a loan when you need a mode of transportation and can’t get a car loan though, as not everyone lives where there is a method of public transportation or a place close enough to anything to ride a bike.

If you’ve been working and deducting some of your paycheck into a 401 (k) for any length of time, the financial crisis is something to take a serious look at. According to financial adviser Jill Schlesinger in a CBS interview, you should not stop payroll deductions into your 401 (k) just because of a sudden drop in the market, rather now is the time to be putting more money into the fund. Russell Pearlman from SmartMoney magazine also says that investors shouldn’t pull all of their money out of the market and to not panic. She states, ?As bad as things look today, they are just going to be a blip on the radar 10, 20 years from now.? As hard as it is to watch the stocks fall more every day, advisers and market analysts are saying to stick with it and that what is happening now could be the worst of it.

Not all news is doom and gloom however. Some of the brighter side of it is oil has fallen from $147 a barrel to under $70 in 3 months. When things start to shake up Wall Street, it appears that investors will begin looking for something more stable than what they are currently invested in (which probably lead to yesterday?s record jump in the price of an ounce of gold). The fall in oil definitely eases some of the financial burden facing the average consumer in the U.S. The lower oil prices will help ease inflation on all the goods that we buy.

Hopefully Russell Pearlman is right and we will all look back on what is going on now and say it is a blip. We can also hope that the worst of it is over. However you look at what is happening on Wall Street, the biggest thing to do is wait.

Recently, I went searching for open positions related to my field of study (marketing and communications) for when I graduate in May. Even when searching through the countless positions on websites like Monster.com, most positions for my major requires years of prior experience. I also visited a college career fair, and most of the companies were not looking for business graduates, but were more interested in pharmacists. Unfortunately, four or five years of sitting through endless lectures and classes devoted to the very position they are seeking does not count toward any experience.

The odds are not in their favor either. In the second quarter of 2008 the Labor Department gave the unemployment rate for those in the 20 ? 24 year old group (the age range is the most likely for new graduates). Unemployment had risen from 7.7% last year to 9.8% this year.

Most colleges require students to intern and/or take career counseling to give them an idea of what to expect after graduation, but they still do not guarantee a job after graduation.

So you are a new graduate and cannot seem to stand out of the crowd? Here are a couple of tips to make you and your resume more noticeable to potential employers.

- Network. Networking helps you stand out to an employer. If you are currently a student, become involved in plenty of events and groups related to your major.
- An impressive resume. Making your resume stand out is not as hard as it may seem. Little things such as adding a picture of you or using positive phrases can add luster to an otherwise vanilla resume. An example of a use of positive language is instead of saying you have no experience in a certain area, saying that you are willing and open to learning is obviously more constructive. Employers are always more open to someone who is willing to conform to their job descriptions, rather than a position having to conform to an applicant.

Student loans are creeping up and you still have not gotten the position to build your career on? Some people have begun to take a more unconventional attitude on job hunting: Create their own career by starting their own business. Once thought to be something only highly experienced professionals do, new graduates are starting businesses related to their fields of study.

If you have the ambition to start your own business, either a new graduate or someone who just has some new or great ideas, here are a few pointers that may help you start:

- Since you are probably bogged down with debt (thanks to student loans), try to limit your start up costs. Internet companies generally have very low startup costs, as long as you have an idea as to what you?re doing. Starting a business with a friend can also limit your costs and you will have more than one person working toward a goal.
- Remember those old textbooks that you could not or did not sell? Some of them have some great ideas in them. I have kept marketing books just because I thought in the future they could come in handy.
- Have a business plan. If you have a business plan, even a simple one, you always have a reference point. Eventually we all hit road blocks, like writing essays and having an outline, a business plan can keep you in order.
- Finally, do not give up and work hard to achieve your goals. Getting through college was not easy (or cheap), so do not be discouraged if your business does not take off immediately. Successful businesses take patience, time and a LOT of hard work.

It is not hard to become discouraged by the declining job market. Plenty of people I know are working in fast food restaurants while waiting to land ?the job.? When the economy is good, graduates may get multiple offers with competing salaries, but now these offers are not landing in people?s laps like they once were. An applicant must do more to be noticed in today?s job market. So good luck graduates, I will be seeing you in May.

I am not the only person with this problem. There are plenty of new grads out there hopelessly looking for professional entry level work, who just aren’t finding it. We’re told when you graduate high school, the next step is OBVIOUSLY college, but does it have to be?

People are getting laid off, unemployment is up and student loans are needing to be paid. This is why you’ll find new grads working as delivery drivers for your local Domino’s. They can’t find work anywhere else.

Perhaps its time to give high school students time to really think about what they want to do with their lives rather than sending them blindly into college. Not everyone knows what they want to be when they grow up.