Everything You Wanted to Know about an MBA Degree, But Were Too Afraid to Ask!

MBA TextIn 2002, when I applied to business school, I knew that “getting in” to a top MBA Program was no easy task.  There were so many parts to the process, including:

1) Understanding why I wanted to get an MBA in the first place.

2) Learning about the different types of MBA Programs and various Business Schools.

3) Researching financing options.

4) Approaching recommenders that could detail my strengths.

5) Completing applications and essays.

Once I took care of these parts, I realized there was so much more to do.  From interviews and on-campus visits to actually choosing the right school for me and preparing for academic and networking success, it seemed like a never-ending journey.  But it was one made a bit more manageable due to the influence of a few mentors, including some truly wonderful faculty members at UCLA and at the University of Michigan.

I was fortunate.  Not everyone may have mentors at the schools to which they apply.  As such, it is important for prospective applicants to do their own due diligence.  There is no substitute for research.  Furthermore, the importance of visiting schools and establishing connections with students, alumni, faculty, and staff cannot be overstated.  After all, the culture of the school is largely shaped by its community of scholars, and this culture is something that cannot be researched.  It must be experienced.

The value of an MBA from a top school is immense.  Graduates of the top schools earn salaries that are, on average, double or more of what graduates from other schools make.  Increased salaries are not the end of the story.  Greater career choice, increased job security, faster job promotions, more interesting work, higher status, and numerous other benefits also result from a top MBA, so it is no wonder that so many people want to get into the best school they can manage. Join me on College Smart Radio as we discuss all this and more…it will cover everything you have always wanted to know about an MBA degree, but were too afraid to ask!  If you have any specific questions not addressed on the show, I am happy to address them off-the-air.  You can reach me at npmehta@umich.edu.

This post was provided by Nirav Mehta, Associate Director at the University of Michigan, who was a guest on College Smart Radio “Tackling the Runaway Costs of College” on May 17th, 2014.  Listen to this broadcast on YouTube here.

Photo Credit: OpenSource.com

It’s Never Too Early! Start Creating Your Financial Future Now!

Erasing Debt on a ChalkboardI am the ultimate warning to ANY college student or college graduate!

The big news story over the past few years has been about the student loan debt crisis and how so many college students are graduating in the red.

Well, I was not one of those students, because I was fortunate enough to graduate from college DEBT FREE with $10,000 in the bank! Most college students would look at me as the “one who made it!”, but they would have to understand that life doesn’t end at college graduation, but it is actually just starting!

Life started happening to me fast and not long after graduation I married my high school sweetheart. Shortly after we said “I do” I found out that he had $25,000 in student loan debt for just one year of college!

This number took my breath away because the entire time that we were in college I thought he was there on a basketball scholarship, but come to find out that the basketball coach convinced his parents to pay for the first year and that his scholarship would pick up the next three. There was one problem with that plan, the college cost $25K+ a year!

We were already married so I told him that was “his” student loan which meant “his” money needed to pay the bill each month. We had already been married a month so it was time to build us a house! Not just any house, but I built us a house that was bigger than both of our parent’s homes combined.

I had fallen quickly into the microwave generation where I had to have everything my parents had right now! I convinced myself and my new husband that it made sense for us to move out of our $750 a month apartment with all utilities into a $1500 a month home where will pay ALL the utilities and trash pick-up!

We moved into the house and within the first year my husband’s car began to need repairs. Since we are part of the microwave generation, instead of getting it fixed, we traded it in for a brand new $23,000 Chrysler 300!

As we were driving our brand new car off the lot I let my husband know again that it was “his” car which meant “his” money would pay for it! I still had not grasp what the preacher meant when he said “now you are one”, because that also meant “OUR” debt.

So to recap I graduated college debt free with $10,000 in the bank and within a few years I was more than $48K in the hole! I’m not going to lie I would have kept going further into debt because as long as the bills were being paid I thought we were fine.

We were not fine, life changed quickly and I was laid off from my job. Now I was $48K in debt, income cut in half, and we had a one year old at home! That’s when we woke up and took the necessary steps to get out of that debt in 2 1/2 years!

I now show college students all over the country those same steps and principles so that they can avoid the debt nightmare that I found myself in!

This post was provided by Ja’Net Adams, a Professional Speaker at DreamGirl, who was a guest on College Smart Radio “Tackling the Runaway Costs of College,” on May 3rd 2014.  Listen to this broadcast on YouTube here.

Photo Credit: Images Money

The Importance of Early Career Exploration

Candid Career LogoHow did you find yourself in your first job?  Did you take it for the money?  Was it the career your father or mother did?  Or did you simply not have a better idea?

Whatever the reason, it is too big of a decision to take lightly. Far too many students don’t have all the information to make the best choice or the information is hard to come by, boring to review, or even worse, fabricated.  Until now!

CandidCareer.com is the premier provider of career profile videos to educate students on the possibilities.  At Candid Career, we believe that the best career advice comes from the individuals that are actually doing the jobs every day, so that is exactly who we bring to you.  We also believe that young people love video. As video becomes more common for educational purposes, the ability to access honest career information and advice through video becomes essential.  The experience on CandidCareer.com is a convenient and non-intimidating one for students. After all, we know how much time they spend on YouTube!

Candid Career has recently partnered with LEAP (Learning Enrichment and Assistance Program, LLC) to add even more clarification on finding a college major and career path that matches the interests of a student.  CandidCareer.com is now part of the LEAP Fit 2 Flourish program.

For over 50 years, the Birkman Method® has been an industry leader in personality assessment assisting over 3.5 million participants with dialing into their hard wiring. This multi-dimensional tool focuses on measuring usual behaviors, underlying needs, stress behaviors and interests to reveal multiple ingrained personality dimensions. This information combined with a student’s academic profile directs the student in discovering best match, economically safe careers, the college majors that lead to those positions and the schools respected for these majors.

If a student can start college having chosen a major and career path confident needs will be met, interests embraced and stresses avoided then the 4-year graduation rate sky rockets saving thousands in future tuition.

Students take the 45-minute online assessment in the comfort of their home. Once your Birkman and LEAP Student Profile are complete, we marry the two sets of information into best-fit suggestions for the individual student. Families receive via email the full 55 page Birkman® results, the 24 page LEAP Fit 2 Flourish report including 3-5 best fit careers for exploration, 3-5 majors leading to these careers, 3-5 colleges respected for these majors.

Students can take these career suggestions and explore them on CandidCareer.com.  There are multiple search options when browsing through the thousands of videos on the website such as Industry, Career Title, College Major, College Attended, City, and State. Once students have found a career that peaks their interest, learning more is as easy as clicking play.  Industry professionals on the site speak to what they love about their careers and some of the challenges.  Professionals also give advice on how to prepare for their careers, such as college majors, course work and/or internships and training to consider.

CandidCareer.com and LEAP share a passion for helping students graduate on time with a job in a career path that excites them. The future is right around the corner, and those that prepare for success, are more likely to achieve it!

This post was provided by Neilye Garrity, Co-Founder of CandidCareer.com, who was a guest along with Lisa Mader, President of LEAP (Learning Enrichment and Assistance Program, LLC) on College Smart Radio “Tackling the Runaway Costs of College” on March 15th, 2014.  Listen to this broadcast on YouTube here.

Photo Credit: Hofstra Career Center

What Good Is a Liberal Arts Degree?

Lightbulb over person's face.The colleges that I work with tell me that new students are flocking to get business degrees or specialized undergraduate degrees in nursing, education, engineering, or other majors that “guarantee” a job after graduation. Yet many students enter college without a clear idea of what they want to accomplish in their career, and stress over choosing the right major. As a result, half of all students change their major at least once during their college career, according to Dr. Fritz Grupe of MyMajors.com.

Parents are worried about their children’s choices, too. “What kind of job can you to get with an English Lit major?” is a common reaction.

The fact is that a liberal arts degree remains an excellent path to success, according to statistics published by the U.S. Census Bureau. In 2010 and 2011, graduates with degrees in the humanities or social science actually had average salaries that were higher than those for science and math graduates. It is true that those with engineering and professional or pre-professional degrees made more right out of college, but this margin does not appear to hold up over time.

According to the Census Bureau numbers, by age 56 to 60 the humanities and social science graduates made about $2,000 more a year than the professional and pre-professional graduates.

Of course, it doesn’t matter what the average salary is if you can’t find a job. So what is the story for liberal arts majors? It turns out that even in the middle of this awful economy and job market, recent liberal arts graduates had an unemployment rate of just 5.2%, far below the national average for workers overall. This means that almost 19 out of every 20 graduates were able to find work. And this advantage appears to extend later in your career. In the same period, workers 41 to 50 years old with liberal arts degrees had an unemployment rate of just 3.5 percent, which is only slightly higher than those with professional or pre-professional degrees.

The fact is that our nation’s businesses – large and small – depend on a steady crop of young workers who are needed not for the facts that they learned in college, but rather the skills. Companies need employees with a strong work ethic, the ability to conduct research and analysis of information, problem solving ability, leadership and teamwork skills, and the ability to communicate clearly and effectively both verbally and in writing. These are the very skills that a liberal arts degree is design to teach.

Alfred Poor, Ph.D. is a speaker and a writer, and is the author of “7 Success Secrets That Every College Student Needs to Know!” He speaks to high school, college, and corporate audiences about the importance of career skills for young employees’ success at work.

He is dedicated to delivering practical information that you can put to use right away. You can contact him on Twitter at @AlfredPoor, on LinkedIn at linkedin.com/in/alfredpoor, on Google+ at google.com/+AlfredPoor, or through his website at www.alfredpoorspeaker.com.

This post was provided by Alfred Poor, Professional Speaker and writer, who was a guest on College Smart Radio “Tackling the Runaway Costs of College” on March 1st, 2014.  Listen to this broadcast on YouTube here.

Photo Credit: Airik Lopez

Avoiding “The Twilight Zone from College to Career”

Screen Shot 2013-12-13 at 11.13.54 PMEvery fall, three million U.S. high school grads begin their journey into “The Twilight Zone from College to Career”, where 80% of students are unsure about their major, 50% will change majors, and 63% will take 5+ years to graduate. After their college graduation, 50% will accept jobs that do not require their degree, nearly 50% will boomerang back home to ‘recover’, and 70% will average $35,000 in college-related debt.

Despite those challenges, 98% of these new college students lack a documented career plan. Wrongly assuming that a college education is the silver bullet for career success, the primary focus is on funding college and getting in “the right school”. However, both students and parents are distracted from the real goal of a college education: to launch a better career.

Unknown to most parents and students is this fact: for every two college graduates, there’s only one true college-degree level job available in today’s market. Students who want to compete for those few precious jobs will need relevant work experience.  Choosing a career path as early as possible can create opportunities for summer jobs and a stronger professional network, while validating students’ career choices and improving their academic performance.

How do we focus students on the world of work? Stephen Covey said it best: “begin with the end in mind”. Parents should increase the focus on what it takes to get their student out of college. Students should view college as one important step on their journey to a better career, not a destination point to earn a college degree.  The university career center should be the first stop on the college tour, and universities should require freshmen to submit a career plan.

If there’s a smart place to cut college expenses, using free career quizzes is not the answer. Free career tests lack reliability, validity, and precision, and poor advice can be costly advice.  When it comes to college, parents are really angel investors in a very personal start-up venture, yet they spend more money on prom, graduation rings, and luggage than they do on professional-quality career advice. Remember that true financial success is measured by what happens after graduation.

uJourney Career uses the best professional career tools on the market and our system is affordable, because smart career planning is important for students. We help students to create a meaningful career plan uniquely for them, based on their personality type, values, giftedness, work interests, and more.  We help parents by minimizing the time and money spent by students in “The Twilight Zone from College to Career”.  We help universities more accurately match students to majors, gaining more motivated students, more graduates, and wealthier alumni.  Encourage your student to discover a personal, positive vision of their future today!

This post was provided by Jeff Cameron, President of uJourneywho was a guest on College Smart Radio “Tackling the Runaway Costs of College” on December 14th, 2013.  Listen to this broadcast on YouTube here.

Photo Credit: uJourney

Non-Profit versus for-Profit Colleges: Which School Is the Best Choice for Your Educational Goals and Your Bank Account?

311178_10151094541082693_499512159_nSofia University President Dr. Neal King will discuss the highs and lows surrounding non-profit education. Sofia University is a proud non-profit, western accredited university located in the heart of the Silicon Valley. Dr. King will chat with Beatrice Schultz about the importance of keeping the student’s whole person education at the forefront of the curriculum.

There are many negative stereotypes associated with non-profit schools. They are typically seen as generous and caring organizations; however, they are also seen as incompetent and not financially sound. During this show Dr. Neal King will use Sofia University as an example of how a non-profit school runs successfully, highlighting the exceptional world renowned faculty and small but mighty corporate structure.

Dr. King is a psychologist by training who completed his graduate study at UC Berkeley. Prior to joining the Sofia community, he served as president of Antioch University in Los Angeles. With extensive experience as a psychologist in private practice in Northern California, Dr. King has served in a variety of faculty and administrative positions in non-profit, public and private, for-profit and state settings.

Throughout his career, Neal has championed a vision that emphasizes collaboration, transparency, academic quality, shared governance, and open communication with the campus community.

Dr. King currently serves as president of the International Association of University Presidents (IAUP), and was a member of IAUP’s delegation to the launch of the United Nations Academic Impact Initiative in NYC and to the World Innovation Summit for Education (WISE 2010 & 2011) in Doha, Qatar. He was appointed as a commissioner on the IAUP/United Nations joint Commission on Disarmament Education, Conflict Resolution and Peace. Members consist of representatives from colleges and universities from around the globe.

Dr. King is also a founding member and steering committee member of LGBTQ Presidents in Higher Education, and he serves on the executive board of California Campus Compact.

Dr Neal King, President of Sofia University, was a guest on “College Smart Radio “Tackling the Runaway Costs of College” on November 30th, 2013.  Listen to this broadcast on YouTube here.

Photo Credit: Sofia University

Collegefeed Helping to Solve the Millennial Employment Crisis

Collegefeed is a social network designed solely to help college students and new grads get hired.

Collegefeed is a social network designed solely to help college students and new grads get hired.

If you ask new grads Josh Mitchell from UC Santa Cruz or Matt Tu from Santa Clara University, they’ll both say the same thing – getting noticed by your dream company is almost impossible. But that’s exactly what has happened to both students just months after graduation, thanks to a new social platform called Collegefeed.

We created Collegefeed with one mission – to reinvent the job search process for college students and new grads. In a few short months, tens of thousands of students from 1200+ universities have joined. Career Centers at almost every top school like Stanford and MIT are adopting the platform. Huge employers like YouTube, eBay, Cisco and many more are paying to connect with students. Why?

There is an employment crisis for new college grads. Almost nothing has changed for how new grads start their careers over the past 20 years, despite huge changes with things like social media, the web, mobile, and other new technologies. However college tuition is rising dramatically every year, nearly 50 percent can’t get hired using their degrees and most new grads are saddled with tens of thousands of dollars in student loan debt.

From a business opportunity perspective, the early career marketplace is one of the least served areas – and one that is desperately in need of innovation. Sure LinkedIn is great once you already have some work experience, but new graduates don’t know how to start, who to follow or what to post. Facebook is great for sharing pics at the pub on Friday night, not becoming a professional. And grads send out hundreds of resumes on sites like Monster.com and never hear back.

That’s where Collegefeed comes in. Collegefeed has put a magnifying glass to the problem and developed a solution that is uniquely designed to solve the challenges of only first-time job-seekers.

Users take a few minutes to create a profile and then we work behind the scenes to offer students one-on-one support and actually help them every step of the way to start their careers. New grads and students don’t have a ton of work experience, but they’ve taken courses, done internships, projects, etc. that would be valuable if only they could communicate it effectively to employers. We connect them with jobs, discover cool new companies, start talking directly to employers, build a network of peers in their field and even win awards to pay back student loans.

And employers are just as excited about Collegefeed. Even the most established enterprises and the smallest startups have one thing in common – they all struggle to attractively brand themselves and capture the attention of the newest crop of college students and grads that are preparing to enter the workforce. Only a handful of companies have the resources to visit college career centers and campuses – and even they can only visit perhaps a few dozen of the more than two thousand U.S. universities each year.

Plus most companies employ a one-size-fits-all approach to recruiting, yet what is appealing to a professional two decades into their career is different than for a 21 year-old. New grads are curious about the corporate culture, what kind of people they can relate to in the company, the perks they will enjoy, and what kind of career path a company offers, whereas a mid-management applicant expects you to match their 401K and offer a great health plan. The reality is that if a company doesn’t tailor its brand presence in recruiting, they don’t appear relevant to the next generation of talent.

For employers, Collegefeed helps them find the perfect candidates from the newest crop of grads. We are essentially a “virtual career fair” where startups and huge companies can reach new talent. We also enable them to present an engaging brand image to those millennial job-seekers, to help them attract candidates from every school, every major and even every country. And once they sign-up, all of this info is sent to them automatically, so that they don’t have to invest more resources and time in recruiting.

We welcome listeners of College Smart Radio to check us out at www.collegefeed.com. Whether you are looking for work or looking for young talent, Collegefeed can help make the perfect match.

This post was provided by Sanjeev Agrawal, the founder and CEO of Collegefeedwho was a guest on College Smart Radio “Tackling the Runaway Costs of College” on November 2nd, 2013.  Listen to this broadcast on YouTube here.

Photo Credit: Collegefeed

Importance of Financial Literacy With Regard to Students and Student Loan Debt

The average student leaves college with $26,000 in debt

The average student leaves college with $26,000 in debt

If you’ve picked up a newspaper in the last five years you’ve no doubt seen concerning headlines detailing the plight of college students and recent grads that are drowning in the massive amount of student loan debt they’ve accumulated.

With the national student loan debt having reached $1.1 trillion, and the average student walking away with a diploma and $26,000 in debt, these shocking numbers are hard to ignore.

Who’s to blame?
Critics blame the ever-increasing costs of college tuition and related expenses for the country’s massive student loan debt, and while there is indeed validity in this argument, the exorbitant price tag on higher education is only a piece of the puzzle. If you dig a little further, you’ll find the problem has much deeper roots: Students in the U.S. are severely deficient in even the most basic financial literacy. This deficiency hinders them from understanding what they’re getting into when they take out loans, and what their options are when they have to pay them back, further compounding their financial burden even after they leave school.

The many incoming and returning college students who are unprepared to successfully manage their finances reflect a continuing trend of financial illiteracy in our nation’s youth that has been consistent over the past decade. A recent report by USA today evidenced this literacy problem with shocking statistics:

“The Treasury Department and Department of Education have teamed the past three years to assess financial literacy in U.S. high schools, and the results haven’t been pretty: the average score of almost 76,900 students in 2010 was 70%,” USA Today reports. “Last year’s testing of about 84,000 students and this years of about 80,000 students were both a point lower: 69%… A biennial survey by Jumpstart Coalition for Personal Financial Literacy, conducted from 1997 to 2008, showed high school seniors doing even worse. In 1997, the average score on a 31-question financial literacy exam given as part of the survey was 57.3%. In 2008, the average score was at its lowest ever, 48.3%.”

How does financial literacy directly contribute to the student loan debt problem? When a financially burdened student does not fully understand or is not fully aware of the different repayment options available they will sometimes just terminate payments. After nine months of this, the student defaults on their loans. Defaulted loans can negatively impact credit scores, a financial no-no that can do significant damage far into the future; it can lead to wage garnishments; and if left unresolved for long enough, it can minify Social Security checks.

And these defaults are happening a lot.
Between financial hardship and misunderstanding of the repayment process, more than 7 million borrowers are in default on a federal or private student loan, as reported by the Consumer Financial Protection Bureau. In 2012, the Federal Reserve Bank of New York reported that the proportion of delinquent student loan debt had surpassed that of credit card balances, nationally. Further, an Education Sector study published in 2013 reports that student loan default rates have actually surpassed graduation rates at more than 500 American colleges and universities.

The financial mentality that students have developed where their confusion leads to inaction and/or denial has far-reaching repercussions that extend way beyond their student loan debt and into every aspect of their financial well-being.

This issue and the implications of these numbers becomes increasingly significant when placed within the context of the environment that young adults now face after graduation: a competitive job market, rising personal debt, and a complex, credit-dependent world economy that puts huge pressures on students and graduates to plan and manage their financial future. The big picture repercussions of the nation’s financial literacy deficiency are reflected in correlating statistics found in the 20-29 year old demographic:

$26,000: Average student loan debt for class of 2013 (CNN Money 2013)

$35,200: Average amount of college-related debt for class of 2013 (Fidelity survey of 750 college graduates)

$45,000: Average debt for those 20-29; includes everything from cars to credit cards to student loans to mortgages (PNC financial independence survey, March)

$1,800: Average credit card debt for those 20-29 (PNC financial independence survey, March 2013)

12.4%: Unemployment rate for those 18-29, well above the national rate of 8.2%;  (BLS data, March 2013)

4: States that require at least a one-semester course in personal finance for high school graduation (Council for Economic Education, 2013)

13: States that require a high school course in personal finance (Council for Economic Education, 2013)

60%: 18- to 34 year-olds not keeping a budget (NFCC financial literacy survey, 2012)

81%: College students who underestimate how long it will take to pay off a credit card balance. (Council for Economic Education, 2013)

30%: Amount of income the average 18-24 year puts towards debt repayment (Council for Economic Education, 2013)

What can be done?
Experts say teaching students about what their repayment options are before they take out loans can help reduce debt.

“It comes back to a financial literacy issue and making sure students understand what they’re getting into, how much they’re borrowing and understanding there are different options for them at the end,” says Megan McClean, director of policy and federal relations at the National Association of Student Financial Aid Administrators.

President Barack Obama pledged in a speech in August that the Department of Education will reach out to struggling borrowers by encouraging them to enroll in income-based repayment plans. Of the millions of federal loan borrowers currently in repayment, roughly 10 percent are enrolled in one of these plans, according to the Consumer Financial Protection Bureau. When you compare the 10 percent enrollment rate to the number of students going into default, it is clear that these programs are hardly being used to their full advantage, and that is due to the simple fact that students just don’t know about them. It’s imperative that borrowers are getting valuable and up-to-date information about repayment options before they get to the point where they find themselves defaulting. The key is letting students know that these plans exist.

But default rates are only a small part of the financial illiteracy equation. Financial education should start much before the college level, extend much further than the immediate post-graduate level, and cover a much wider base of information than just student loan topics. The level of knowledge needed to understand the principles of student loans, debt, and borrowing evolve from much simpler financial concepts that can be easily introduced, taught and learned at the K-12 level. And according to a Bank of America sponsored poll from Harris Interactive last month, a nearly unanimous 99% of adults now agree that personal finance should be taught in high school.

Several states—including Tennessee, Virginia, Missouri and Utah—have mandated that financial education be included in K-12 curriculum, but in the states where this education is mandated, less than 20 percent of teachers feel competent enough to teach the material, indicating the financial illiteracy issue is not just a student problem.

Shannon Schuyler is the corporate responsibility leader at PricewaterhouseCoopers (PwC), an accounting firm that promotes financial literacy among K-12 students and teachers. Through her company, Schuyler tries to spread the message of the importance of financial literacy and emphasize how it can help individuals lead better lives in the future.  If students understand the financial playing field before choosing a college, they might have a better grasp of the consequences of massive amounts of debt and the effect it can have on their life down the road, like where they are able to live, what type of lifestyle they are able to afford, and even how soon they can get married or start a family.

Again, the numbers can back this up. American Student Assistance, a non-profit organization, conducted a recent survey with shocking results. Nearly three-quarters of students said they’ve put off saving for retirement because of student debt; 43 percent said they’ve delayed starting a family and 27 percent said they found it difficult to buy daily necessities because of loan payments; and close to 70 percent said they were confused about the different loan repayment options.

Financial literacy proponents and experts, Schuyler among them, are confident in the idea that educating students sooner about the cost of college, how much they need to borrow, how to repay loans and what their future earnings may look like could help solve this problem.

Now, more than ever, it is important to encourage financial literacy by empowering our nations’ students with the educational tools and resources necessary to strengthen their understanding of proper money management habits and prepare them for a successful future of financial health.

This post was provided by Rob LaBreche, founder and CEO of iGrad, who was a guest on College Smart Radio “Tackling the Runaway Costs of College” on October 19th, 2013.  Listen to this broadcast on YouTube here.

Photo Credit: Chris Potter

Drunk on Credit and a Vanishing Work Ethic

6881508144_3a4dd3c74a_bWhy does it seem so hard to teach kids about money these days?  It seems no matter what anyone does, it just doesn’t seem to be sinking in.  But, why?

A major part of the problem is that we have a financial culture that is sending mixed messages to kids.  The culture seems to scream – Buy now, pay later, and save never.

It’s becoming an annual occurrence in America to talk about raising the debt ceiling and shutting down the government because of a crushing national debt.  The country is drunk on credit!  16.7 trillion dollars in debt and continuing to rise each day.  The CBO projected in February that the government would spend $223 billion just on net interest payments this year.  Sure!  We’ll have a few more drinks… keep ’em coming!

With that toxic credit environment as a backdrop let’s talk about the other part of the problem – a vanishing work ethic among young people.

Parents aren’t perfect either.  Many parents are living beyond their means and racking up sky high debt- sending the wrong message to their kids as well.  They are saying “do as I say, not as I do.”  Credit card debt in the U.S. is weighing down on parents, with the average balance at an astounding $7,200.

By forking over money willy-nilly, not expecting contribution around the house and allowing the electronic babysitter to take over far too often, well-meaning parents are in essence setting a trap for their kids that sucks the work ethic right out of them.

If parents continue being “ok” with these dangerous trends they shouldn’t be surprised when little Johnny is living in the basement at 32, eating their food and expecting his laundry to be done for him.

I believe that the majority of parents want what’s best for their kids, deep down in their hearts.  They really do.  They just don’t have the right tools to help them.

MyJobChart.com is one of the tools that parents are now using to help combat these trends that are robbing their children of work ethic and making it really hard to obtain the money skills they need to navigate through life’s important decisions.  In just 2 1/2 years over 500,000 members have signed up for this free service.

The country seems drunk on credit and work ethic among kids is vanishing at an every increasing pace.  But there is a silver lining.  Some parents still care enough to seek out the right tools to help them in this important battle.

Visit www.myjobchart.com and read my book. My phone number is (888) 907-7121.

This post was provided by Gregg Murset, Founder and CEO of My Job Chart, who was a guest on College Smart Radio “Tackling the Runaway Costs of College” on October 12th, 2013.  Listen to this broadcast on YouTube here.

Photo Credit: Tax Credits

What You Need to Know and Do about Paying for College: Six Essential Tips

www.edvisors.com

Edvisors

When thinking about paying for college, parents often worry most about what they don’t know. College financial aid is a complicated topic, with an alphabet soup of acronyms and jargon. They fear making a mistake that will ruin their child’s future. Despite the complexity, there are only a few things that most families must do to secure their child’s future.

1. Start saving for college as soon as possible. Every dollar you save is about a dollar less you’ll have to borrow. It’s never too late to start saving, because it is literally cheaper to save than to borrow. Every dollar you borrow will cost about two dollars by the time you repay the debt.

2. Start searching for scholarships as soon as possible. Every dollar you win is about a dollar less you’ll have to borrow. There are many scholarships with deadlines in the fall of the senior year in high school, and several that can be won in younger grades, even in elementary school. Search for scholarships for free at web sites like www.studentscholarshipsearch.com and www.fastweb.com. Answer all of the optional questions for about twice as many matches.

Apply for every scholarship for which you are eligible. Winning a scholarship depends as much on luck as it does on skill. By applying to more scholarships, you increase your chances of winning one. Students often dislike applying for scholarships that involve lower award amounts (e.g., under $1,000) or writing essays. But these are easier to win because they are less competitive, the amounts add up, and they add lines to your resume that can help you win bigger awards. It also gets easier after your first half-dozen scholarship applications, since you will be able to reuse your essays, tailoring them to each new scholarship sponsor.

Beware of scholarship scams. If you have to pay money to get money, it’s probably a scam. Never invest more than a postage stamp to get information about scholarships or to apply for scholarships.

3. File the Free Application for Federal Student Aid (FAFSA) every year, even if you think you won’t qualify for financial aid. The FAFSA is used to apply for financial aid from the federal and state governments and all but about 250 mostly private colleges. It is also a prerequisite for low-cost federal education loans, which you can borrow even if you are wealthy. File the FAFSA as soon as possible after January 1. Several states are on a first-come, first-served basis, awarding state grants until the money runs out. (California’s deadline is in early March.) Do not wait until you are admitted or have filed your federal income tax returns.

It is ok to estimate income based on W-2 and 1099 statements and/or the last pay stub of the year. You will have an opportunity to correct any errors later. You can file the FAFSA for free at www.fafsa.ed.gov. Use the IRS data retrieval tool to update your FAFSA information a week or two after you file your federal income tax return. Call the US Department of Education’s federal student aid information center at 1-800-4-FED-AID (1-800-433-3243) with questions about federal student aid and filing the FAFSA.

4. Compare colleges based on the net price, the difference between the total cost of attendance (tuition, fees, room and board, books and supplies, etc.) and just grants (money that does not need to be repaid). This is the amount you’ll have to pay from savings, income and loans to cover college costs. It is a more accurate measure of the bottom line cost. But beware of two caveats: about half of colleges practice front-loading of grants, yielding a lower net price for freshmen than for upperclassmen, and a college’s outside scholarship policy dictates whether private scholarships are used to replace loans (yielding a lower net price) or the college’s own grants (no change). Relying on the net price will help you make a more informed decision about the tradeoffs between college affordability and other considerations, such as college quality and reputation.

5. Borrow as little as possible. You can economize on college costs by enrolling in a less expensive college, such as an in-state public college or a college with a generous “no loans” financial aid policy. But tuition represents only about half of college costs. Students can also save by buying used textbooks (or selling the textbooks back to the bookstore at the end of the term), living at home with their parents, minimizing trips home from school and economizing on everyday expenses. For example, students don’t like the cafeteria food and so tend to eat out a lot. But a $10 pizza a week will cost you about $2,000 over the course of a four-year college career. If you pay for that pizza with student loan money, it will cost you about $4,000 by the time you repay the debt. So live like a student while you’re in school, so you don’t have to live like a student after you graduate.

Keep your debt in sync with your income. A good rule of thumb is that total student loan debt at graduation should be less than your annual starting salary, and ideally a lot less. If total debt is less than annual income, you will be able to repay your loans in ten years or less. Otherwise you’ll struggle to make your monthly loan payments. Parents should borrow no more for all their children than they can afford to repay in ten years or by retirement, whichever comes first.

As an alternative to student loan debt, consider a tuition installment plan. These spread out the costs over 9-12 equal monthly installments. Tuition installment plans don’t charge interest, but do have up-front fees that are typically less than $100. They are a good way of avoiding long-term debt.

If you must borrow, borrow federal first. Federal student loans are cheaper, more available and have better repayment terms than private student loans. Federal student loans have low fixed rates, while private student loans tend to offer variable rates. Variable rates may initially have lower rates, but those interest rates have nowhere to go but up. Federal student loans also offer income-based repayment and public service loan forgiveness, while private student loans do not.

6. Don’t forget about the education tax benefits, such as the American Opportunity Tax Credit (AOTC), because these are claimed when you file your federal income tax return instead of when you pay the college bill. These tax credits give you up to $2,500 back based on amounts you paid for tuition and textbooks.

This post was provided by Mark Kantrowitz, the Senior Vice President and Publisher of Edvisors.com, who was a guest on College Smart Radio “Tackling the Runaway Costs of College” on October 5th, 2013.  Listen to this broadcast on YouTube here.

Photo Credit: Edvisors