Moving Home or Be Agressive

By: Sarah Reilly

With everything that is happening in the economy today the graduating class of 2009 is entering probably the worst job market since 2001. Some campuses are seeing declines as much as 50%. This means that students have a few options; continue their education and put off a job for a year or two, live at home and with their parents and find jobs that are not necessarily in the field of their education, or go overseas to find a job.

If current graduates who are not going on to graduate school and are unable to take an aggressive approach to networking, unwilling to accept lower salaries than expected, or who will not consider taking jobs that are not exactly what they want they will surly find themselves moving back home with mom and dad. This is even true for graduates who have been on their own but due to employee cuts have found that they are unable to continue to support themselves. This puts a huge financial and emotional strain on both the student and parents. There is hope for some. Students majoring in engineering, accounting, computer science, and business are now in demand. These jobs are looking for new employees who are willing to take the smaller salary and are willing to work hard because they have student loans to pay back.

In order for students to secure a job in today’s market they must network. There are less and less employers coming to campus fairs and this alone means that there are fewer opportunities to secure the interview which could lead to a job offer. Students searching for a job must be more aggressive and show off their fundamental skills, personality, goals, and have a polished resume.

References:
http://www.centralvalleybusinesstimes.com/stories/001/?ID=11253
http://features.csmonitor.com/economyrebuild/2009/03/03/as-job-market-shrinks-so-do-college-grads%E2%80%99-grand-plans/
http://media.www.ucbvu.com/media/storage/paper1235/news/2008/11/14/News/Job-Market.Shrinks-3544183.shtml

Is Graduate School The Right Path For You?

By Kaitlin Lanier

Many college students believe that graduate school is the smartest path to take after graduation. Are they right? With the sluggish economy in a raging recession, is graduate school actually worth the investment? According to Beth Ingram, a professor of economics at the University of Iowa, students that attend graduate school will probably end up with higher salaries in the long run. She continued by saying that graduate degrees definitely pay off in terms of income, although students should not expect to receive significantly higher salaries the moment they graduate.

There has been much debate about the impact of a graduate degree, resulting in the Graduate Management Admission Council sending out a study that says MBA graduates average a starting salary of $70,000, a $20,000 difference from the $50,000 average earned before the extra years of school. However, even if graduate school pays off in the long run in terms of income, there is still a lingering question: are the extra years in school and potential extra money worth the outstanding costs?

The cost of graduate school has risen drastically, forcing potential students to consider all of their options. Depending on the school and the type of degree desired, a year in school can cost somewhere from $38,000 to $241,000. According to the Virginia-based American Medical Student Association, the typical medical-school graduate will start his/her career about $150,000 in debt and spend 20 to 30 years paying it off. Therefore, the decision to attend graduate school should not be a quick decision. Students interested in continuing school should be very focused on what their future plans are and proceed into graduate school with clear intentions and forceful purpose. It is such an expensive risk, so having specific goals can save money in the long run. Therefore, graduate school should be considered carefully, with a student’s future in mind.

Sources:
Graduate Degrees Pay Off in Higher Salaries by Sara Faiwell
Betting on Grad School by Shelly Banjo
Your Education: Is Graduate School Worth It? By Matthew Paulson
Are Graduate Studies Right For You? By Indiana University

Paying for Graduate School

By Lara Turner

There are many forms of financial aid that graduate school students can use to help pay for their education. These consist of grants, scholarships, and fellowships, assistantships, and tuition payments from employers, federal and private student loans, early withdrawals from IRA's, and work-study. Each plan is effective, but depending on what type of situation you are in depends on what plan you need. Grants, scholarships, and fellowships are when the government gives you money so you can accomplish a certain purpose while you are in school. This money is not a loan and does not need to be paid back. An assistantship is when a student's university offers him or her money to help pay for their schooling, but in return that student must aid their institution with teaching or performing research. Tuition payments from employers are when employers pay for the schooling of their employees, but sometimes employers attach certain terms to this benefit, such as requiring passing grades or obligating their employee to work for them for a certain amount of time. A student loan is when the government gives you money, but you have to pay it back with interest at a later time. Early withdrawals from IRA's are pretty self-explanatory and work-study is when the government give you money and in return you must get involved with the community. When looking at all these different plans think about what kind of situation you are in now and where you want to be when you finish school.

http://www.petersons.com/education_planner/paying_article.asp?sponsor=2859&articleName=Paying_for_Graduate_School

http://www.grants.gov/aboutgrants/grants.jsp

http://education.yahoo.com/college/essentials/articles/grad/grad-degree-worth-the-debt.html

Obama's First Hand Experience with Financial Aid

Posted By Lara Turner

Mistakes and Tips on Student Credit Card

By Shu Zheng

Questions about whether college students should have credit cards often arise in the recently years. Surveys and studies show that over 85% of undergraduate students have at least one credit card. It is common that around one third of college students have four or more bank credit cards, at least one gas-related card, plus two stores cards. And it is easy to see how the combination of easy credit can quickly add up to a potential for a bigger financial trouble.

There are some common mistakes that college students have made with credit cards:
· Opening a credit card for free stuff – In fact, these so-called free stuff are not free. After opening several cards for a few freebies, your credit score will get affected negatively.
· Taking the card out for night on the town – The only thing worse than a hangover is credit card hangover.
· Opening store credit cards for discounts – If you open a card in every store you shop, it will hurt your credit score. Plus if you have all those cards, you are going to end up spending more money.
· Overspending, then reporting your card stolen – this is breaking the law, better not do it.

So how should you manage your credit cards?
· If you think you really need a card, find one with good rate, and avoid annual fees.
· Keep spending on one card, and avoid opening more cards.
· Spend for emergencies, but not on expenses.
· Pay the bill on time.
· Say no to the cash advances.

For students, the debit card is an excellent solution to prevent ruining of credit score and carry strong personal financial responsibility.

Sources:
1. http://money.cnn.com/2006/07/19/pf/college/credit_cards/index.htm
2. http://money.cnn.com/2006/07/19/pf/college/credit_cards/index.htm
3. http://www.foxnews.com/story/0,2933,212984,00.html

Education-related tax breaks grow

Posted by Jen Lynch

By Carolyn Bigda, Chicago Tribune

The average annual cost for tuition and fees at a four-year private college in 2008 was more than $25,000, according to the latest survey by the College Board.

Do you have the cash for that?
Lawmakers are betting no.

As a result, the American Recovery and Reinvestment Act, the giant stimulus bill that President Barack Obama signed into law last month, includes several breaks for families and students paying for higher education.

The timing is auspicious: The deadline to apply for financial aid at most colleges and universities falls within the next month. To apply, you need to fill out the Free Application for Federal Student Aid at www.fafsa.ed.gov.

Click here for Full Article

529 Savings Plan

By Craig Rozelle

A 529 Plan is an education savings plan operated by a state or educational institution that is designed to help families save money for future college costs. It is named after Section 529 of the Internal Revenue Code which created these types of savings plans in 1996. Every state now has at least one 529 plan set up. The 529plan provides special tax benefits to the investor. There are two main kinds of 529 plans a savings plans and prepaid plans. Savings plans work much like a 401K or IRA by investing contributions in mutual funds or similar investments. The plan will offer several investment options from which to choose. Your account will go up or down in value based on the performance of the particular options that are selected. The second type of plan is the prepaid plans which let you pre-pay all or part of the costs of an in-state public college education. They may also be converted for use at private and out-of-state colleges. The Independent 529 Plan is a separate prepaid plan for private colleges. There are two different ways to invest in a 529 plan are by meeting with 529 plan manager or through a financial advisor.

Sources:
https://uii.nysaves.s.upromise.com/
http://www.collegesavings.org/index.aspx
http://www.savingforcollege.com/intro_to_529s/what-is-a-529-plan.php

Special Report: Campuses Hit Hard by Economic Downturn

Written by: Michelle D. Anderson
Posted by: Keun H. Maeng

As the country's sagging economy dominates the headlines, college students are being hit in their wallets along with other members of society. Students say they are struggling with higher tuition, gas and food prices and worry that they will be unable to repay student loans after graduation.

With Federal Reserve Board Chairman Ben Bernanke admitting on April 2 that a recession is "possible," while many economists have declared that it has already arrived, many students are looking ahead with dread.

Dante Williams, a senior at Miles College in Alabama, is considering a change of plans. He has financed his education largely through student loans. "I've been thinking about joining the military -- that's still an option -- so that I can get my loans paid off."

Click to read article

Considering Student Loan?

Written by: Keun H. Maeng

It is still questionable to correlate a relationship between the roiled credit markets with the countless number of students unable to get loans for their fall semester. Even though the deadline for the tuition payments are currently approaching, the lenders do not disburse the funds until dates pass; such as the last drop date or the last date to switch from full time to part time.

For private lenders, the ones not guaranteed by the federal government, however, have increased their credit standards. As a result, there will be a significant amount of families applying for the PLUS parental loan program. Unlike private lenders, this program is federally guaranteed and lends the loans up to the full cost of attendance. The requirement for the PLUS loan is to not have an adverse credit history. If, however, you are denied for the PLUS loan, you can obtain the Stafford Loan. Many financial aid officers are urging families to take advantage of the federal borrowing options. The loans offered by private companies should be your secondary choice.

Rates and the required credit scores in private loan companies are indefinitely rising. Sallie Mae, one of the largest private student loan companies has disclosed last quarter, filing the rates on private loans as averaged more than 12 percent. On the other hand, the federal loan is currently capped at 8.5 or 7.9 percent. Without a question in doubt, it is quite obvious to figure out what you need to borrow rather than what you want to borrow.

http://topics.nytimes.com/top/reference/timestopics/subjects/s/student_loans/index.html
http://distancelearn.about.com/lw/Education/Home-schooling-Nontraditiona/Federal-Unsubsidized-Stafford-Loans-Overview-of-Federal-Unsubsidized-Stafford-Loans.htm
http://www.nextstudent.com/articles/Why-Choose-a-PLUS-Loan.asp

B-Schools Wary on Lehman, Merrill Impact

posted by: Thomas Gillick

by Alison Damast

As the financial landscape shifts, B-schools are busy reaching out to nervous students whose job prospects are suddenly far from certain

These are usually the days when business school students are settling into their class routine and awaiting the arrival of recruiters on campus. But with the downfall of two of Wall Street's investment houses and fears that other major companies are on the brink, it's a nervous time at B-schools.

Click Here To Read More

Write Off Textbooks

posted by Shu Zheng

(College Finance 101) Approximately $300 billion of Obama’s $789 billion stimulus bill will consist of tax cuts, and a large portion of that $300B will benefit college students. Enjoy writing off your textbooks, among other things!

Education Credit - HOPE now called “The American Opportunity Tax Credit“
The HOPE scholarship credit has changed a bit. Instead of being able to take the credit for the first two years of college, you can now take the credit for your first four years of college. Instead of being able to take a credit of $1,800, you will be able to take a credit of $2,500, and this amount includes course materials (instead of just qualified tuition expenses). You can now write off your textbooks, dollar for dollar. The bill renames the HOPE credit the “American Opportunity Tax Credit”, and Obama made 40% of it refundable.

A refundable credit means you will get money back even if you don’t owe any tax.

Non-Refundable credit: You owe $500 and get a credit of $600, you now owe zero dollars.

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Trading Room

Posted By: Sarah Reilly


Originally Posted by: AccountingWEB.com

How do you build a better student? Florida Atlantic University (FAU) knows the answer. Three years ago, they created a Trading Room which is as close to the real world of finance as possible.

The Trading Room was the brainchild of the Dean of the College of Business, Dr. Dennis Coates, who realized they needed a better way to prepare students for the realities of the marketplace. In Boca Raton, where the campus is located, there is a heavy finance-asset-portfolio management influence. To answer the needs of those sectors of the economy, businesses have been importing talent from the northeast. The Trading Room gives the College of Business the ability to cultivate in students the skills that are relevant to today's world. Firms in Boca Raton, Ft. Lauderdale, West Palm Beach, and Jupiter will be able to recruit from a more savvy talent pool with real understanding of financial markets.

Rainford Knight, PhD (Finance) is the director of the Trading Room. He says it "bridges theory with practice. Students get a chance to learn about markets and how influential they are. They learn valuation, financial analysis, learn to understand a balance sheet, and how to form an opinion."

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Help Your College Student Learn About Credit Cards

By: Brandon Zimerman

Here is a puzzler your college-age student might not find in a math textbook: How many months will it take to pay off an $8,000 loan, assuming you're being charged 18 percent interest and you're making payments of $150 a month to whittle down the balance?

The not-too-pleasant answer: 108 months. Think about it: nine long years of handing over your hard-earned dollars to the bank.

That's a credit card calculation any prospective or current young cardholder should crunch as a reminder of what can happen if spending with plastic gets out of control

Click Here to read more:

http://www.bnd.com/business/story/673650.html

Paying for college without breaking the bank

Posted By: Bovemsa Cheung

It now costs an average of nearly $13,000 for a full year of tuition, room and board at a public university and nearly $28,000 at a private school. Perhaps all those zeroes don’t faze you because you’ve successfully squirreled away plenty of money for your child’s education via a 529 college savings plan or some other means. If so, good for you!

But what if you haven’t come close to pulling that off? Then the following tips can provide you with additional ideas about how you and your child can drum up money for school. The links contained within many of these tips and the resources at the end of this column can provide you with much more detail about specific strategies if you need it.

1. Hunt down scholarships. Scholarships are the best way to go because you never have to repay the money. Contact local organizations in your community about scholarships, and do searches on the Internet through sources such as FastWeb, FinAid, the College Board and the Financial Aid Resource Center.

Click to read more

Paying for College

Posted by Jenny Sutton

Should You Go to Graduate School Now or Wait?

Posted by David Lucas,

You've planned on attending graduate school, but with graduation just around the corner, are you ready for another three to eight years of graduate education? Should you take time off before graduate study? This is a personal decision and there's no definitive right or wrong answer. However, if you have any doubts about your educational and career aspirations take your time and rethink your goals. What are your reasons for taking time off before attending graduate school?

You're Exhausted
Are you tired? Exhaustion is understandable. After all, you've just spent 16 or more years in school. If this is your primary reason for taking time off, consider whether your fatigue will ease over the summer. You've got two or three months off before grad school starts; can you rejuvenate? Depending on the program and degree, graduate school takes anywhere from three to eight or more years to complete. If you're certain that graduate school is in your future, perhaps you shouldn't wait.

You Need to Prepare
There are also many good reasons for taking time off. If you feel unprepared for grad school, a year off may enhance your application. For example, you might take a prep-course for GRE or other standardized tests required for admission. Improving your scores on standardized tests is essential for at least two reasons. First, it will enhance your chances of being accepted to the program of your choice. Perhaps more importantly, financial aid in the form of scholarships and awards are distributed based on standardized test scores.

To read the rest click here

Families say college won’t wait, despite the recession

By Velida Alemic

WENATCHEE — The new car can wait. So can cable television and other niceties. But college? That’s something students and families say they’re not willing to put on hold during a recession.
For Rodolfo Beltran, the only question was where, not if, he goes to college for his engineering degree.
"I definitely would have gone straight to a four-year college if it weren’t for the recession," he said. "I’m a little nervous."
He’s not alone. The 18-year-old Eastmont High School student worked on his Free Application for Federal Student Aid form in a crowded computer lab at Wenatchee Valley College Feb. 10. More than 90 people showed up for financial aid help that night.
Several students at the "College Goal" financial aid night said they were nervous about paying for college. As hardship and enrollment increase, competition for financial aid might be tight this year.
As of last month, about 9 percent more families have submitted FAFSA forms as the same time last year, said Jim Klacik, director of financial aid for the Higher Education Coordinating Board, a state agency that distributes all state and federal aid.
At Wenatchee Valley College, the increase in financial aid requests may be 20 percent more than last year, said financial aid director Kevin Berg.
"We’re definitely seeing a rise of individuals applying for financial aid because a parent lost a job or because the student can’t find work like they used to, but they’re still wanting to go to school," Berg said.

Click to read more.

College Needn't Break You

Posted By Craig Rozelle

For all the scare stories this spring about how hard it was going to be for students to get loans, the loan season is ending quietly with money secured. But I have a different take on this story. Why are we glad that students and parents find it so easy to get further into hock? Students who borrow are graduating with a median $20,000 in education debt that schools know about (that doesn't count direct loans from other places where students borrow, like banks). Kids have no idea how tough it could be to repay or what might happen if they can't (for some horror stories, see studentloanjustice.org). Families starting to think about college should troll for places they can afford, while borrowing as little money as possible.

The colleges themselves know that loans are getting a bad name. Sixteen high-cost schools— including Amherst, Haverford, Lafayette, Oberlin and Stanford—provide financial aid entirely in the form of free grants, even to students with higher incomes. An additional 28 schools have adopted no-loan policies within certain loan or family-income limits.

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Graduating & finding a Job in a Recession

By Rudy Armstrong

As we look at financing in College, our biggest concern is how to pay off loans when we graduate. Know while we are in the Recession and a lot of students are graduating in 2009, there is a lot of concern how we are going to back our student loans, and how long till we get a job. If you would like to hear more take a look at this video I found on CNN.com

More Cash, More Confusion

Posted by: Asim Mohammed


The economic stimulus plan President Barack Obama signed today creates yet another new tax break for college: The American Opportunity Education Tax credit. Even if your family hasn't qualified for earlier college tax credits, this one might provide you with thousands of extra dollars.


click to read more.

Academic Endowments: The Downside

Posted by Kaitlin Lanier
Article by Peter Coy

Something seems wrong with the way elite U.S. universities finance themselves. The problem: They're addicted to multibillion-dollar endowments. When the endowments suddenly shrink, they can seem more like curses than blessings. Harvard University, the richest institution of higher education on the planet, gets about one-third of operating funds from its endowment.

Now that Harvard is expecting a roughly $11 billion endowment decline over the current academic year—30% of the total—the university is in such a financial squeeze that it has frozen faculty salaries and offered early retirement to 1,600 employees. Princeton is even more addicted to its endowment, which provides about 45% of its operating budget. Princeton Provost Christopher Eisgruber warned in February: "We are beginning to live in the 'new normal' and we should not expect to go back to how we operated in the last 10 years."

Is there a better way? There could be. Here's an idea: Maybe rich universities should act more like companies, which somehow manage to operate without endowments. Universities could raise just as much money from wealthy alumni and other donors as they do now, but they wouldn't hoard it in a great big piggy bank. They'd spend it as it came in, the way companies spend their revenue on current needs.

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The most important things to consider when saving for college

By Nicholas Hall

Probably the most important thing to know is that saving for retirement is far more significant then saving for college. So under no circumstances should you reach into you hard earned and hard saved retirement funds. There are plenty of sources your children can use to get some extra money for college if they need it; it is much harder to get that kind of help when you’re older.

Obviously, the sooner you start to save the better, so get on it as soon as you are able. The best kinds of investments for your college portfolio are stocks. With tuition costs rising faster than inflation, a portfolio tilted toward stocks is the best way to build enough savings in the long term.

Another thing to remember is that you don’t have to save the whole 4 year amount; federal, state, and private grants and loans can bridge the gap between your savings and tuition bills. Also, 529 savings plans are a good way to save for college and they offer great tax breaks. The approval process for college loans is more lenient than for other loans so don’t worry about being able to make up that last little bit toward the end. Taxpayers with student loans get a tax break as well; so don’t be afraid to see what is out there.

Sources:
http://money.cnn.com/magazines/moneymag/money101/lesson11/
http://money.cnn.com/magazines/moneymag/money101/lesson11/index3.htm
http://money.cnn.com/2008/03/21/pf/college/chernoff/index.htm

Should your kid work in college?

Posted by Nicholas Hall

Before you suggest your son or daughter become a barista to help fill the market-size hole in his or her college fund, consider the downsides of taking on a job in school.

An American Council on Education analysis of several studies indicated that students who work more than 15 hours a week are less likely to graduate in four years, which means even more tuition to pay.

Also, "students who work too much may not be able to schedule the classes they need, and their academic performance is more likely to suffer," says Kal Chany, author of "Paying for College Without Going Broke."

So what do you do to make up the difference in tuition? Here's the best plan.

Click here to read the full article.

How the stimulus will change college loans

By Jen Lynch

The current system has "needlessly cost taxpayers billions of dollars" and has subjected students to "uncertainty because of turmoil in the financial markets," the proposal said.

In President Obama's most recent legislation concerning college financing, the government has decided to discontinue subsidizing banks, and provide student loans directly. There are currently two ways college students receive loans, either borrowing directly from the government, or taking out loans from private lenders that are government subsidized. In Obama's 2010 budget proposal, he asks Congress to change the entire college-loan system to direct government loans and eliminate bank subsidies. 

According to an article by the New York Times, this will be the biggest change in federal student aid programs since the Higher Education Act was enacted in 1965. Experts say that eliminating federal loans through banks could save the U.S. approximately $4 billion a year. However, this proposal for direct government funding of student loans will completely cut out an entire private industry of companies like Sallie Mae, Student Loan Corp. and Nelnet Inc. All of these stocks fell sharply after the proposal was announced Thursday. This will be the likely  source of argument coming from Republicans in Congress when the proposal is debated. 

Overall, the stimulus plan will have several very positive effects on college financing. The plan is contributing an additional $200 million to the work-study program, which allows working students who are often paying their own tuition, to make more money per semester. Tax credits for college students will also now cover 100 percent of the first $2,000 of college-related expenses and 25 percent of the next $2,000 in the next two years. So regardless of the effects on private industry, the proposal will be of more benefit to college students overall.

Shares of student lenders fall on Obama proposal

Student loan companies' shares plunge on Obama proposal

Big Changes on the way in Lending to Students
Expanded college financing part of federal stimulus package