Here are our goals for changing the way people make college choices.  This is important for parents who scrimp and save to provide their children with opportunity; it’s important for all the students out there working their way through school; and it’s especially important for students who need to borrow:

• Encourage more high school graduates to consider alternatives to college.
• Get more college students to study majors that will serve them well in increasing their career earnings.
• Make the economic return of college degrees more transparent and more available to students.
• Make the US more competitive via a workforce better prepared to meet the demands of the job market.
• Discourage students from going deep into debt to obtain degrees with little or no hope of financial value.  In fact, going deep into debt for any reason is almost always a bad idea!
• Get more people to question the assumption that the more one spends on college the more successful one will be.
• Reduce the cost of college – this does not mean providing more college subsidies.  It means putting more economic pressure on colleges and universities to manage their costs much more aggressively. 
• Hold colleges and universities to the same financial standards, expectations, and measurements that the rest of our economy has to deal with.  In short, they need to  provide a better education at a lower cost.
• Help students who do need to borrow money for college, to do so wisely. 

Encourage more high school graduates to consider to alternatives to college.

Today 56% of all high school graduates go on to attend college.  This decision is taken for granted by many middle-class parents and their children.  But there are more wonderful opportunities for 18-24 year olds and college offers many students the poorest returns and the highest costs than ever before. 

Get More College Students To Study Majors That Will Enable Them To Increase Their Career Earnings

Working hard and attaining a college or university can pay big dividends – but it is important to understand (and communicate to future students) that the payback is not universal.  Spending a large amount of money to achieve a degree with minimal practical application is a bad investment.  This is not to say that there is and always will be a segment of our society where these considerations are less important.  If a student’s parents are wealthy and intend to provide for their family regardless of the children’s ability to support themselves, these considerations are less relevant.  But if a student intends to go to college to fulfill his or her version of the “American Dream” – then it is ludicrous to forgo this type of analysis.  Paying too much for an “impractical” degree – particularly when this involves borrowing dollars that need to be paid back – can be a very, very poor decision.   Saying all investments in college education are sound is akin to saying that buying stock in any company is a great investment.  If a student does not intend to study anything practical, then pursue alternatives to the traditional four year college degree program. 

“Intentionally or not, colleges often tend to make students look down on the burning ambition to win money, power, prestige that is indispensable to success.”  Caroline Bird

Make The Economic Value Of College Degrees More Transparent And More Available To Students

We want college students to get better value for what they spend.   Dollars in versus dollars out!  But how do you get this data today?  We are starting to gather this information and will make it more available via this website as we gather it.  But in the meantime, which college grads do you think are getting higher starting salaries – Mechanical Engineering or Sociology?

Now if you simply do not care about getting value for money and time spent, that is your right – just please don’t ask the rest of us to pay for it.  “Those who enjoy studying for its own sake should get no more subsidy for this amusement than those who like to ski, nor should this choice confer on them any special fringe benefit of power or prestige.”  Caroline Bird

Make The U.S. More Competitive

As more students invest wisely in their college educations, (ie, getting maximum value for the dollar spent) the US will become more competitive.  If you had invested in a buggy whip factory 25 years ago how many families would you have supported versus a semi-conductor plant investment?   A poor choice in college investment is today’s buggy whip factory.

College graduates who achieve career success are less likely to default on their loans.  Fewer graduates will be financially strapped by big loan payments, and more graduates will be positioned to create wealth for themselves and other Americans.

Talented engineers, scientists and business people have the power to not only create wealth for themselves but also to create jobs and opportunities for the people around them.  Ray Kroc’s secretary became wealthy by working as a secretary for Ray when he started McDonalds.  Michael Dell created a business that employs tens of thousands of people around the world.  Those who build wealth pay more taxes to support the public good - including, among other things, subsidizing college financial aid - than do non-builders of wealth.

If most of our brightest college freshmen major in Dance, Lesbian and Gay Studies, and Celtic Languages do you think America might have a few problems competing in the Global Economy?

Discourage Students From Going Deep Into Debt To Obtain Degrees With Little Financial Value

If you are going to follow your impractical dreams then part of the preparation is financial sacrifice.  Begin today.  Do not borrow money today and use it for easy living today while you get ready for a life of poverty tomorrow.

Let’s Be Candid:  It is one thing to study Medieval Studies at Stanford at a cost of $200,000 when your parents are footing the tab and this is a drop in the bucket relative to their net worth.  But does this make any kind of sense if you have to borrow the whole thing and this is only marginally more interesting to you than studying Biological Sciences?  The rich have more chances to mess up – but if you are poor and trying to gain an education and work your way out of the poorhouse then start practically - Engineering over Art History.  Passion matters but do you really care so much about Music Studies that you are willing to eat rice and beans for the next fifteen years (and have no extra money to buy CDs)?  Remember, one does not need to give up a passion in order to be realistic.  There are many successful engineers, physicians, and accountants out there who sing in amateur rock and roll bands, who take art appreciation courses, and who spend their vacations on volunteer architectural digs, or giving time and other resources to “Habitat for Humanity.”

It may be politically incorrect to differentiate and show by degree what the expected payout will be for many impractical degrees.  Just try gathering this information by calling up a university and finding out how difficult it is to find out what graduates in different majors made in their starting jobs after graduating. 

A typical car buyer cares about two parts of the financial equation: down payment and monthly payments.  If he can meet both he is ready to buy.  But many college student loans have very low down payments (what the student pays himself) and no monthly payments (at least for as long as you continue to be at least a half-time student) – so why not buy the educational equivalent of a gas-guzzling, expensive-to-maintain, but fun Ferrari?

We Want More People To Question The Assumption That The More One Spends On College The More Successful One Will Be.

“Currently colleges are benefiting from an “everyone should have a college education” sentiment that is a holdover from the post-WW2 1940s GI Bill, the Draft, American Dream, and achieve a better life times.  There is a strong emotional “belief” in the college education, but no well defined metrics to evaluate that education or what it provides anymore.” (Berachah Yankama, Director, www.StudentsReview.com)

We believe that the best way to measure the value received is by measuring one’s current  job outlook, and what it would be in four years with and without the degree considered.  This question could be poised in a number of ways, but a very simplistic example might be this:  How would a given student fare,  given a specific IQ and other skill sets do if she gets a History degree from an expensive liberal arts college versus getting a Mechanical Engineering degree from the local state college?

According to a 2002 study by Stacy Dale, a researcher at Mathematica Policy Research in Princeton, N.J., and Alan Krueger, a Princeton economics and public affairs professor:   “It turns out that where students go as undergraduates doesn't help them earn more money over their lifetimes.”  Their study looked at 14,238 full-time workers who were freshmen in 1976. The ones who were bright enough to get into the highest-ranked--but usually expensive-schools but then attended less expensive schools, did just as well in their careers as the students who attended the more expensive schools.

Schools with outstanding reputations, like Harvard and Yale, are able to attract classes drawn from the brightest high school graduates in the country.  High intelligence is a tremendous predictor of career and financial success.   So do Harvard graduates make so much money because they are incredibly intelligent, or because of the education they receive at Harvard?

Reduce The Cost Of College

This does not mean subsidize it more.  In fact many of our existing subsidies tend to increase the demand for college and therefore increase its cost (based on traditional supply and demand theory).  We want economic pressure on colleges and universities to manage their costs substantially better and find ways to offer practical programs in less expensive ways. 

“Of all the forms in which ideas are disseminated, the college professor lecturing his class is the slowest and the most expensive.”    Caroline Bird

The cost of attending college continues to rise faster than inflation.  The overall inflation rate in the US from 1986 - 2007 increased 92.32%.  But during the same time, tuition at US colleges increased 343.81% (www.InflationData.com). Tuition costs at public colleges have grown 69 percent over the past 10 years alone, according to the College Board.  Tuition for private schools has outpaced inflation by 57% during the same period.

If  this trend continue and the cost of George Washington University (four year tuition of $151,280) goes up an additional 343.81% during the next 21 years it will then cost $671,396.  And if the average price of a new car (today about $28,000) continues to increase at the general rate of inflation (92.32% during the same period) an average new car will cost $53,850 in 21 years.  So today’s George Washington tuition bill is equivalent to the cost of 5.4 average new cars.  And in 21 years it will cost the same as about 12.5 average new cars.

How much does efficiency matter at expensive colleges and universities?  The objective of many colleges is simply to be the “best” college they can be - regardless of cost.  And the wide availability of student loans reduces cost pressure on its customers (the students).  In a less subsidized market their customers would consider price as a much larger factor in shopping around for the best college investment.

Politicians think that every dollar spent on college education is a dollar well spent.  When did you last hear a presidential candidate say “We need fewer students goofing of at college at taxpayer expense?”  The vast array of student loan programs increase the demand for four-year college (as opposed to trade schools, technical schools, etc.) beyond what a rational market would dictate. 

Successful people are lifetime learners.  Some of this lifetime learning enhances the student’s career income potential.  Other learning is for general interest and might even be classified as “play”.  But generally “play” is an expense and the right career education at the right price is an investment and is hard work.  We want students to recognize the difference.  Our goal is to help students become smarter consumers – and make more informed purchases of college education.  It’s time to start growing up before you begin college, not when you complete it!

If You Are Going To Borrow Money For College, Then Borrow It Wisely – Know The Terms And Shop For The Best Rates.

If you can’t figure out what a financial aid contract says then do not sign it.  In fact, if you do not understand the contract perhaps you are not yet ready for college. 

“Mostly, we were just idiots. I recall a faint, hazy memory of signing something vaguely financial when I was seventeen years old, just arriving at the university. I was more interested in the social scene a few floors up in my dorm and trying to find my sociology class without getting rained on--the financial aid office was stuffy, and I had no idea what the officers were talking about.  I assumed that most of the stuff I was getting were Pell Grants.  I knew that "grant" meant I didn't have to pay it back, but the rest of that form eluded me until I graduated.  But I know what the hell it means now.”  Ian Williams

Recently six lawsuits were filed against Career Education, a chain of for-profit schools (among them American InterContinental University, Briarcliffe College, Brooks College, Collins College, Colorado Technical University, Gibbs College see www.careered.com).  Former students are alleging that they weren’t told they would graduate with high-interest debt exceeding $50,000.

Just because Sallie Mae (the largest student loan lender www.salliemae.com) makes it easy to take advantage of government subsidized and guaranteed education loans does not mean that they are the best choice if you reach your limit on the government loans.

While government subsidized student loan interest rates can be as low as 5% and are usually 6.8% for the most popular, private loans by Sallie Mae, interest rates can exceed 15%.  And some students are not maximizing their low-cost loan options before taking out the more expensive private loans.   And private student loans have been growing since 2001 at the rate of 27% to a level of $18 billion in private student loans per academic year as of the ’05-06 year.

FINAL POINTS

We have modest goals – to influence a few more 18-22 year olds to think practically about college.  Parents have tried to do this for generations with marginal results – so if we can help convince a few more students to make intelligent (but probably harder) choices, we will score that as a success.

We salute the individuals who have gone on to great careers after a liberal arts education.  Clearly it can be done.  Carly Fiorina the former CEO of Hewlett Packard had a BA in philosophy and Medieval History from Stanford but she also went on to get an MBA at the University of Maryland.   But for every example of a liberal arts business success we can also think of many business successes who never graduated from college at all (Bill Gates, Larry Ellison,  Steven Jobs & Ted Turner) who did even better.  One can learn “to learn”, to write better, to think logically.  But we want students to place themselves (and our country) in a position of advantage.  And maybe the Liberal Arts grads may have done even better skipping college all together?

Some of the aspiring guitar players in your old neighborhood may have gone on to stardom and wealth (perhaps if you lived in Liverpool, England down the road from John Lennon & Paul McCartney) – but not many.  So just because a few people with exceptional talent and luck do well pursuing a career does not mean that most of us will.  How many aspiring little league players plan to play in the major leagues?  How many aspiring actors will earn even minimum wage on stage? 

So if you are considering an investment in college first and foremost spend time considering if college is the right choice for you at the right time – there are plenty of alternatives.  If college is right for you then select a practical major that will afford you plenty of job opportunities and choices upon graduation.  And finally based on your selected major choose your college frugally.  If it makes you stand up a little straighter then apply and get accepted to the prestigious school but then attend the one that is a better value.    Whatever you do – do not go deep into debt!