Cash cow: A product, business unit or consumer that generates unusually high profits, enough to keep less profitable aspects of the business afloat.
…and she makes a good case. We all know that college is ridiculously expensive, that universities consistently bloat staff, add facilities and create a cavernous cornucopia of curricula which unnecessarily add to the bill, even outpacing ordinary inflation for the last four decades. In her NYT blog post, the professor raises the additional impact of FOR-PROFIT schools and financially-pressed state universities, both of which need additional revenue to thrive…or just survive. “But,” the prof adds, “in higher education it’s hard for both students and parents to know exactly what they are buying and whether they will get what they pay for.” With college graduation rates hovering at the 50% level, many are spending huge sums of money for a product which will never be delivered.
And…no refunds.
DO a self-check with your kid before choosing a college. At a minimum, I would answer these questions:
As many readers of this blog know, I am CEO of a new financial site which we are finally launching after a year of heaving braining, contenting and programming (yeah, I know those aren’t all real words).
Sign up here www.plentii.com. Better yet, pass this link onto your kid. You’ll be glad you did!
This vid serves as a reminder to me that there are great ways for college kids to get free stuff just by hunting on the web. Sites like totallyfreestuff.com and yesallfree.com offer cash-strapped opportunity for those willing to spend some time at the keyboard. One cautionary note: The bigger the “freebie” the more likely it is to come with a catch. Grocery cards for $250 and Wal-mart gift cards for $1000 require purchases from other vendors. Go for the small stuff…toiletries, grocery coupons, etc. Matter of fact, think I’ll give it at try right now…
Sticker shock is what we experience when reading about the high cost of college…a cash balloon that seems self-inflating to stay just barely beyond the pinprick of unaffordability.
Where should you attend? How should you save? How should you pay? How should you repay (loans)? The questions seem endless, and complicated. And, as it turns out, they are!
In a REPORT just published by the think-tank MassINC, the whole process of determining college affordability is so difficult that they hauled in the old visual of a massive, well-branched tree (p.6) to attempt to illustrate the variables (and hence the difficulties) of the choice process when attempting to cobble together a college budget. And… that is only the intro to the 92 page doc.
More interesting to me, are the calculations (admittedly of a limited number of Massachusetts schools) of the NET price of education. That is, the actual out-of-pocket cost …
Back in the days when our society was exhaling heavily into the wealth balloon, many colleges announced that they would no longer require loans of students, but would take the idea of “need-based” a step further. In this new era, students would be admitted under a “no-loan” policy, which meant that 100% of their education would be covered by grants, scholarships and financial aid. No longer would loan requirements be included in aid packages at private schools like Dartmouth and Williams.
Flash forward a whole three years from announcement of these policies and the system seems to be reverting to its old ways. As reported at Inside Higher Ed, these two colleges, and likely others, are all reverting to their previous incarnation as colleges which require the student to fund a portion of his education…which often means student loans.
This vid from Arizona State University is a pretty decent 5 minute guide to the FAFSA process. I have to say that I heard so many negative things about it that I was apprehensive. But…really it only took 20 minutes or so to complete. I did make the mistake of paying for one of the two applications for my twins at FAFSA.com, thinking they had something special insight to offer. Trust me…they don’t. Definitely DIY. It’s not too difficult.
A new study by Sun Financial reports that most parents of college-bound kids are “in denial” about the cost of college.
89% of parents believe their kids will go to college; but only 50% have researched the costs
32% of parents believe that a scholarship (or two) will offset costs (only 25% of college costs are now covered by scholarships)
71% of parents say that it is their responsibility to pay for college; but 62% have not saved for this purpose
Aren’t we all in denial of some sort? It is hugely unimaginable for most families to consider the tens of thousands of dollars in cost of a college degree. For many the concept of college and cost are widely divergent. It is a lot like buying the best possible house, the house of your dreams, and ignoring the 30 year mortgage. The cost of a house, like the cost of college, is too large to be managed other than with purposeful ignorance…and loans to fill the gap. This disconnect might be excusable in a 19 year old, but…
Obama sets a state-of-the-union goal of having the highest collegegraduation rate in the world by 2020
Yes, U.S. colleges and universities are still ranked vastly higher than their world counterparts (China has none in the top 100); but the evidence of a system in decline can be found with just a little google excavation. In math, reading and science skills, we are woefully inadequate, beginning at the primary school level… and becoming more so. Did you know that the United States is the ONLY country…
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