Abstract and complete bibliography

Abstract:

            With tuition continuing to rise at levels way above the CPI and median family income, more people are beginning to question whether college is still a good investment.  When looking into statistics like student debt and rising tuition we can see the detriment that is put on young adults who wish to further their education.  We can also look at the benefits of college which would include decreased unemployment and an increased salary as compared to those who have chosen to omit college.  When comparing the two we find that college continues to provide a return for those who decide to invest their time and money in pursuing a higher education.  The following paper uses statistics generated from sources such as the Bureau of labor statistics and College Board and analysis of this data by peer reviewed sources.

Complete Bibliography

1. Abel, Jaison R., and Richard Deitz. "Do The Benefits Of College Still Outweigh The       Costs?." Current Issues In Economics & Finance 20.3 (2014): 1-12. Business Source             Premier. Web. 9 Dec. 2014.

2. Adams, Susan. "The Top-Paying Liberal Arts Degrees." Forbes.Com (2013): 48. Business       SourcePremier.Web. 21 Oct. 2014.

3. Arum, Richard, andJosipa Roksa. Aspiring AdultsAdrift. Chicago and London: University of Chicago press. Print.

4. Boehner, J (2004).Bill summary: Affordability inHigher education act, http://ed-                    workforce.house..gov/ (accessed December 2003).

5.  Chen, R., &Wiederspan, M. (2014).Understanding the Determinants of Debt Burden among  College Graduates. JournalOf Higher Education, 85(4), 565-598.

6.   Clark, Jane Bennett. "Does Grad School Pay Off?." Kiplinger's Personal Finance 65.7              (2011): 56-  57. Business Source Premier. Web. 21 Oct. 2014.

7. College Board, The (2004). Trends in College pricing 2004. New York; The College Board

8. Doyle, William R.1. "The Politics Of Public College Tuition And State Financial Aid." Journal   Of  Higher Education 83.5 (2012): 617-647. Education Full Text (H.W.Wilson). Web. 4 Nov.

9. Hershbein, Brad, Benjamin H. Harris, and Mellisa S. Kearney (2014) Major Decisions: Graduates’ Earnings Growth and Debt Repayment retrieved from http://hamiltonproject.org/papers/major_decisions_graduates_earnings_Growth_debt_rep  aymen/

10. Kantrowitz, M. (2002). Causes of faster-than-inflation increases in college tuition. College       and University, 78(2), 3-10. Retrieved from                http://search.proquest.com/docview/225612640?accountid=13626

11. Kaufman,Sarah. "Is a college education worth the big bucks?; Some experts say it's bad  investment." Winchester Star, The (VA)10 Sept. 2010: NewsBank. Web. 9 Dec. 2014.

12. Lillis, Michael P., and Robert G. Tian. "The Impact Of Cost On College Choice: Beyond  The Means Of The Economically Disadvantaged." Journal Of College Admission 200 (2008):              14.ERIC. Web. 9 Dec. 2014.

13. Oreopoulos, Philip, and Uros Petronijevic. "Making College Worth It: A Review Of       The Returns To Higher Education." Future Of Children 23.1 (2013): 41-65. ERIC. Web.    9 Dec. 2014.

14.  Schiffel, Lee, and Coleen Wilder. "IMA 2013 Salary Survey. Rainy Days         Persist.   (Cover  Story)." Strategic Finance 96.6 (2014): 23-39. Business Source Premier.       Web. 21 Oct. 2014

15. Xu, Yonghong. "Career Outcomes Of STEM And Non-STEM College Graduates:      Persistence In Majored-Field And Influential Factors In Career Choices." Research In      Higher Education 54.3 (2013): 349-382. Academic Search Premier. Web. 12 Dec. 2014.

research blog 9 counter argument

Argument Counter Argument

                Much of the debate going against higher education being a sound investment focuses on the debt that would be accrued if things do not go as planned after graduation and that there are better things to do with the money that would be spent on tuition.  An article written by Sarah Kaufman highlights these points as they are argued by prestigious individuals in the field of investments.  I find that many of these ideas focus around the more affluent and would not apply to the general public as they accrue much more risk and families without the extra income to spend could be left in an even worse spot.  One interviewee claims, “"You've been fooled into thinking there's no other way for my kid to get a job .. or learn critical thinking or make social connections," says hedge fund manager James Altucher. Altucher, president of Formula Capital, says he sees people making bad investment decisions all the time — and one of them is paying for college” (Kaufman).  His views on this issue appear misguided judging that he is already in a position of power and has plenty of connections that he could pass onto his children in order for them to acquire their first job.  For families of lower or middle class, they might not have these connections and the network their university provides would play an important role in moving up the social ladder for their children.  Altucher also looks at investing the money elsewhere, “There's a billion other things you could do with your money," Altucher says. One option: Invest the money you'd spend on tuition in Treasury bills for your child's retirement. According to Altucher, $200,000 earning 5 percent a year over 50 years would amount to $2.8 million.(Kaufman).  Not only does the average family not have an immediate 200k of disposable income, this money would have to sit untouched while the average million extra earned can be reinvested to yield returns as well as continuing to gain the increased income from the college degree. Depending on the choice of major this could be as much as omitting an extra 23k a year. “First, in the 50^th percentile the annual earnings for high school graduates are about 34k, compared with 57k for bachelor’s degree holders” (Oreopoulos 46). 

            In terms of unemployment it is argued that the decrease in unemployment is not sufficient for the price of college.  “But this year, with unemployment at 9.6 percent, unemployment for college grads has risen in far greater proportion, to 4.9 percent. In other words, it is more than half the rate for the general population” (Kaufman).  While almost half the risk of unemployment seems significant there is also statistics of unemployment rates during economic turmoil that support gaining a bachelor’s degree.  According to the Bureau of labor statistics between the years of 2008 and 2009 unemployment for workers with less than a BA went from 11% to 16% while unemployment for workers with a BA or higher went from 5% to 7% and the peak of unemployment for BA or higher never passed 10% while less than a BA was almost 20%.  This is a significant difference in employment and shows that the marketability for a degree is still high and will help ensure employment during downturns in the economy which are inevitable.

Source for counter argument:

Sarah, Kaufman. "Is a college education worth the big bucks?; Some experts say it's a bad                 investment." Winchester Star, The (VA)10 Sept. 2010: NewsBank. Web. 9 Dec. 2014.

blog post 8 Interview

Interview

For my interview I have decided to interview my housemate Jai Sighn.  I have chosen him because he has a unique story that I thought would help add a perspective of the struggles a student goes through while trying to attend college and keeping their finances in check.  Jai attended Brookdale (a community college near our hometown) in order to save money before coming to finish his education at Rutgers.  He is responsible for his own finances because his parents have decided to move back to Ireland so he now takes care of all his financial responsibilities including student loans.  Here are some points from the interview that I found interesting:

Why did you decide to attend Brookdale for your first year of college?

“ I needed to save money so that I would not have to take out too many loans before attending Rutgers and being able to be home where I already had a steady job that payed well was a big factor in this decision.”

Were you able to pay off your college expenses with the money you made during the year you omitted going to Rutgers?

“Not entirely, most of the money I’m using to pay for college has still come from my parents but it did help me keep my loans down so that I won’t have too much debt once I graduate”

Was attending community college a good experience for you?

“It did help financially and I was able to transfer over all my credits so I basically got a year of schooling at an extreme discount, but the experience of it is not the same as Rutgers and I wish I could have attended here for all four years.”

Is it difficult to manage your finances and attend college at the same time?

“It is definitely a distraction and I feel that the time I do spend applying for loans and going to the financial aid office take away from the time I could be spending towards finding a job once I graduate or even just getting a few more hours in the library each semester.”

From this interview I learned that students who have to take out loans to attend college not only have the stress of knowing they are going to be in debt after they graduate, but also have to spend time during the school year working to keep the loans down and applying for new loans to keep them in school.  Having to take out loans essentially ups the difficulty of college as compared to students who only have to focus on their education.

Research Blog 7 My Case

My case is to explore the cost benefit analysis of attending college for the average student who must take out loans.  Many factors go into this decision like a student’s previous performance in school, their choice of major and which university are they going to attend.  While not all cases are the same I have found that for the average student it is still beneficial to get a college degree, however, if tuition continues to increase as they have been it may soon be so detrimental to the young graduates finance that it is no longer worth the degree.  The debate centered on my proposal does not focus solely on the monetary aspect of college but also the intangibles such as the networking opportunities, becoming a more well-rounded individual and social benefits from having a prestigious career.  In other words, people always ask what you do and not how much you make.  There are also intangibles against going to college such as the saturation of the graduate market leading to an increase in underemployment leaving young adults with high aspirations in unsatisfying careers.  Much of the research I have found points to college still being a good investment as graduates have a lower unemployment rate and on average make significantly more money per year, especially when comparing workers in the same field.  The benefits become prevalent once an individual reaches their 30s and has a set career path.  For example, a manager with only a high school degree makes on average 50k a year while someone with a bachelors makes just under 80k and someone with a graduates degree makes close to 90k according to the 2010 current population survey.  This result can be found in many other fields to various extremes.  A degree also reduces the risk of unemployment and according to the Bureau of labor statistics unemployment of adults ages 22 to 27 who had less than a BA had a 15% unemployment rate compared to a 6% for those with a BA. 

Details that would be useful to know are the average payments that are made on student loans and how much additional interest is paid on top of the loan once someone is done paying off their student loans.  This would help aid me in my counter argument where I can compare how much of the increased salary would be used to pay off the student loans and where this leaves the remaining salary in comparison to someone with only a high school degree.

Some of the sources included in making this case are , Aspiring Adults Adrift ( a book written by Richard Arum and Josipa Roksa) along with the journal Making College Worth It: A Review of the Returns to Higher Education and Do the Benefits of College still Outweigh the Costs?.  The last two sources can be found on Rutgers Libraries.

research blog #6 Visual

I plan on using many images in my final paper much like the ones above.  Some of the other images will include employment rates immediately after graduation and two years after, student wealth before entering college and dropout rates.  I chose these two images for my blog post because I felt that they wee of extra importance because they compare salaries for recent graduates between majors and those who decided to omit college and go straight into the work force.  They display the benefits of a college education and how different salaries can be depending on major choice.  This is an an important aspect to someone who is planning to take on debt in order to graduate because if their salary isn't increased enough, they could end up worse off than if they had not enrolled in college.  In figure 1 there is a comparison of average annual earnings between different levels of education in the same field.  Categorizing this by field gives a more accurate display of the benefits of a college degree because an industry would be paying all employees the same based on their performance and credentials and would keep the numbers from getting skewed.  For example if we were to combine employees with a high school education to those with a bachelors education in the fields of STEM and blue collar our results would be inaccurate in showing a closer mean between the two.


The second figure in this blog post shows early career earnings and growth for different industries which is crucial to a student who must start paying off student loans the moment they graduate from college.  If a student begins with a low income and slow growth rate they would not be able to pay off their loans as effectively and this would cause them to end up paying a significant amount more in interest which would cut into the profitability of the degree they have earned.

Bibliography

Bibliography

1.      1. Abel, Jaison R., and Richard Deitz. "Do The Benefits Of College Still Outweigh The        Costs?." Current Issues In Economics & Finance 20.3 (2014): 1-12. Business        Source Premier. Web. 9 Dec. 2014.

2.      Adams, Susan. "The Top-Paying Liberal Arts Degrees." Forbes.Com (2013): 48.    Business SourcePremier.  Web. 21 Oct. 2014.

3.      Arum, Richard, and Josipa Roksa. Aspiring Adults Adrift. Chicago and London:                             University of Chicago press. Print.

4.      Chen, R., & Wiederspan, M. (2014). Understanding the Determinants of Debt Burden             among  College Graduates. Journal Of Higher Education, 85(4), 565-598.

5.      Clark, Jane Bennett. "Does Grad School Pay Off?." Kiplinger's Personal Finance 65.7        (2011): 56-  57. Business Source Premier. Web. 21 Oct. 2014.

6.      Doyle, William R.1. "The Politics Of Public College Tuition And State Financial Aid."        Journal Of  Higher Education 83.5 (2012): 617-647. Education Full Text (H.W.     Wilson). Web. 4 Nov.

7.      Kantrowitz, M. (2002). Causes of faster-than-inflation increases in college tuition. College and University, 78(2), 3-10. Retrieved from         http://search.proquest.com/docview/225612640?accountid=13626

8.      Lillis, Michael P., and Robert G. Tian. "The Impact Of Cost On College Choice: Beyond    The Means Of The Economically Disadvantaged." Journal Of College Admission                     200 (2008): 4-14.ERIC. Web. 9 Dec. 2014.

9.      Oreopoulos, Philip, and Uros Petronijevic. "Making College Worth It: A Review Of The                  Returns To Higher Education." Future Of Children 23.1 (2013): 41-65. ERIC.                   Web. 9 Dec. 2014.

10.  Schiffel, Lee, and Coleen Wilder. "IMA 2013 Salary Survey. Rainy Days Persist.   (Cover  Story)." Strategic Finance 96.6 (2014): 23-39. Business Source Premier.       Web. 21 Oct. 2014

literature review #5

2. Arum, Richard, and Josipa Roksa.  Aspiring Adults Adrift. Chicago: The University of Chicago Press. Print

3. This book focuses on the employment rate of young adults and breaks it down into catagories or employed, underemployed and unemployed in both skilled and unskilled workers.  The study is also broken down into different metrics like choice of major and CLA (Collegiate Learning Assessment) performance when measuring job retention and ability to acquire a job after graduation.  The findings were consistent and the authors were able to deduct that CLA does play a factor in post-graduate employment and performance in their careers. There are many visual aids to support the text and studies were taken from sources such as the bureau of labor statistics along with research conducted by the authors. 

4. Richard Arum has a M.ED in teaching and curriculum from the Harvard University Graduate School of Education and a PH.D in sociology from the University of Caledonia Berkeley and is currently employed at New York University.  He is most famous for his work on the CLA Longitudinal Study.

Josipa Roksa is an associate professor of sociology and education at the University of Virgina. Her work focuses on other aspects of education beyond just the academics and looks at its social context.
5.  CLA- The Collegiate Learning Assessment is a test designed to analyze the “collective and cumulative result of what takes place or does not take place over the four to six years of undergraduate education in and out of the classroom.”
College Selectivity- The prestige of a certain university and used in the context of this study is used as an independent variable when analyzing employment.

6. “Only engineering and computer science majors had significantly improved chances of avoiding unskilled occupations. Indeed, only 4 percent of graduates from those fields of study, net of other factors, were in unskilled occupations” (Arum 65).

“Comparing college graduates who performed well on the CLA to those who performed less well (defined as one standard deviation above or below the mean senior year CLA scores) the likelihood of experiencing unemployment increases from 5 to 7 percent” (Arum 63)

“Considered as a whole, 53 percent of the college graduates who were not re-enrolled full time in school were unemployed, employed part time, or employed in full time jobs that paid less than $30,000 annually” (Arum 57).

7.  This book adds value to my research because chapter three focuses on the employment of young adults and separates them between those with no education, bachelors and masters degrees.  The study compares them with one another along with other factors such as major and performance in school.  Many visual aids are used throughout the work that can be used in my paper to help reinforce my research.

literature review #4

2. "The Impact Of Cost On College Choice: Beyond The Means Of The Economically Disadvantaged.         (Cover Story)." Journal Of College Admission 200 (2008): 4-14. Academic Search Premier. Web. 2             Dec. 2014.

3.  This journal involves a survey of student decision making when it comes to choosing a university and how much cost has an impact on the student’s decision that was collected from 289 different students.  Students were asked to rate on a scale of 5 from strongly disagree to strongly agree on how different aspects of the university affected there decision making.  The students were categorized based on the opening questions of the affluence, gender and race in order to see which groups were most price sensitive.  Questions were asked pertaining to ability to save money by commuting, public or private and majors available along with other questions.  The results show a less elastic demand curve for higher tuition universities among affluent students while a much more elastic curve for those with less assets.  Overall the survey shows a price sensitivity from both groups as tuition continues to rise and students become more price conscious.

4. Dr. Michael P. Lillis- He has a PHD from SUNY Buffalo and is an associate professor and director of Academic Field Placement at Medaille College in Buffalo. 

Dr. Robert Guang Tian- Has a PHD from York University in Ontario and a post-doctoral MBA from Laurier University and has received awards for published papers and from organizations in Canada, China and the United States.

5. Moderating effect of family affluence- The affect a family’s wealth has on the student’s decision making process when it comes to factors like tuition and room and board.

Moderating effect of institutional reputation-  Students are willing to accrue more debt if the institution is prestigious and the likelihood of getting a job that could pay off the additional debt is sufficient.

6. “As of 2002 it is estimated by the ACSFA (Advisory committee of student financial assistance)that 4 million college qualified students of lower and middle class will not be able to attend college within the next decade. (Lillis)

“Tuition and fees at four-year public and private schools continue on a steady pace upward with an average tuition and fees growing by 36 percent in four-year institutions and by 51 percent in public four-year institutions in a ten year period ending in 2004(college board, 2004)” (Lillis 5).

“According to Hossler (2000), 80% of high school students consider the availability of financial aid an important criterion when making decisions about which college or university to attend” (Lillis 7)

7.  The value added from this journal comes mainly from the introduction in which tuition inflation is discussed in detail and compared to factors such as the CPI and median family income.  The focus of the study also supports my argument because it shows how prospective and current college students are also asking the same question of whether college is worth the increasing costs.  The results of the survey show price sensitivity as a whole and the consideration of student loans from the more affluent students as opposed to just the middle and lower class.

literature review #3

2. MIN, ZHAN. "The Impact Of Youth Debt On College Graduation."Journal Of Sociology & Social Welfare 41.3 (2014): 133-156.Academic Search Premier. Web. 2 Dec. 2014.

3.  This journal focuses on the impact of increasing tuition and the deregulation of the financial industry in the 1990s.  The journal recognizes that student debt isn’t only limited to student loans and that it also includes credit card debt from education induced expenses such as textbooks.  With less regulation in the credit card industry, companies are able to administer more cards to young adults who will use these cards to cover the expenses that student loans are unable to.  The journal targets the negative effect of the use of these cards in which some students acquire so much debt that the stress forces them to drop out and now they are worse off than had they never enrolled in college in the first place.

4. Dr. Zhan received her PHD in Social Work from Washington University in 2001 and is now doing research in the School of Social Work.  Her research includes low income families and the barriers they face in postsecondary education.  She mainly focuses on asset development of these lower income families and how they can attain economic security.

5.  Unsecured debt- debt in which there are no assets to hold against it.  For example credit card debt

Differential impact of debt- the different effect of debt on students depending on their parent’s financial background.  Students with more affluent parents will not fear the debt as much because they know their parents can support them.

6. “As of 2010, the average amount of debt for a Bachelor degree graduate from a four-year public college is $12,300 (College Board, 2011)” (Zhan 133).

“Financial aid policy has shifted from need-based aid toward merit-based aid and educational tax credits (Long & Riley, 2007), and federal loans and private loans are becoming more accessible to youth and their families (College Board, 2009). As a result, taking loans has become the “norm” for many families to cover college costs” (Zhan 133).

“Findings from a recent national survey by Sallie Mae (2009) indicate that both credit card ownership and credit card balances have risen sharply during recent years among college students.” (Zhan 134)

7.  This journal adds value to my paper because it adds a new dynamic that I had not taken into account originally.  This dynamic of credit card debt brings a new perspective as to why the dropout rate is so high.  Since credit card debt is immediately collectable it adds pressure to the student who may have to work even longer hours in order to pay it off, therefore affecting their grades negatively and diminishing the students confidence.