Ho Ho Whore!

Santa is a fat money-sucking Elf.

The Miracle on 34th Street - this

Santa need not apply today!

Back in the day a trip to the Mall Santa was an exercise in innocent hope.  Now it is merely preparatory school to the fleecing of parents.  Until the late 1980s - Mall Santas were hopelessly ersatz with fake beards, hair, and stained outfits.  Malls and large department stores brought in Santa to lure shoppers to their stores - sort of like the the 99-cent shrimp cocktail in the casino bar in Las Vegas.

In The Miracle on 34th Street - Santa was very good and probably real or crazy and flanked by sadistic elves as in A Christmas Story.  A visit to Santa was free with parents taking the snappy-flash photo and for a price - the professionals could take one for those parents who forgot their camera or had the humility to accept that their photos sucked. 

No longer.

Finals Week Care Packages

The Resident Hall Association Strikes Again!

Mrs. Cardona must be very happy to be so loved.  December brings Christmas Lights, Office end-of-the-year parties, mistletoe, and at campuses like VBU across the country - Finals Week.  That end of semester week marks furious studying and writing.  Finals week marks the point when it is less important that the term-paper be perfect, than finished.

Apparently Finals Week also strains the stomach and body as well as the mind.  The VBU Residence Hall Association offers parents to fill out a card of encouragement - to be delivered FREE to our cherub during Finals Week.  For an additional $25.00 to $42.00 we can send one of four suggested care packages filled with "wholesome" and "high energy" snacks.  With names like the "Exam Survival Pack" and "Support Basket Pack & Cup of Inspiration" - the VBU Residence Association promises that not only will ordering be a snap and guaranteed to be loved by our student.

Then I can be just as loved as Mrs. Cardona.

What's College Worth Part III: Jobs you get

Going to College to avoid waiting tables...

Investment Broker and Financial Commentator Peter Schiff put out a devastatingly painful video this week titled "Is a college degree worth the cost? You decide."  Schiff rails against the myth that the college degree is a necessity:

President Obama promotes the myth that everyone must go to college. That if you don't go, your life will be ruined -- that you will end up waiting tables, or trapped in some other mundane occupation. The truth is, even with a college degree, you may still end up waiting tables, you'll just begin your "career" four or five years later, tens of thousands of dollars in debt.

The College Application Checklist

October is College Application Month! 

(It's also National Book; Work and Family; Breast Cancer Awareness; CyberSecurity Awareness; Filibpino American History; LGBT History; Bullying Prevention; Physical Therapy; Pharmacist; Polish American Heritage; Art & Humanties; Domestic Violence; Spina Bifida Awareness; Child Health; Lung & Clean Air; Dental Hygene; Let's Talk; Down Syndrome Awareness; Pastor Appreciation; and ....Arab American Heritage Month)

Perhaps it's not surprising that College Application Month gets crowded out.  

Here is the checklist we are given:

Making College More Affordable

Is Government part of the Problem or part of the Solution?

Few Elections for any executive or legislative office go by without some sort of promise to support education and make College more affordable.  With few exceptions - College Prices have increased at a greater rate than general inflation - often two to four times greater.  

Currently, the Obama White House has a number of programs to make college more affordable.  Most of these plans simply focus on making more money available to consumers to purchase a College Education: (1) Increase Grants; (2) Reduce Student Loan Interest Rates; and (3) Modify Student Loan Payments to be based upon income.  

Although aspirational goals are made to make College's reduce their costs - it is unclear how these incentives will outweigh the greater purchasing power of estimated 14.4 million of College Students.

The College Application Game

It's not as fun as the game called Life!

Our second daughter, H, is a Senior at OUR LOCAL HIGH SCHOOL (OLHS) and this means pursuing her college options.  The Senior Year is a bit schizophrenic - it is the capstone year to put the finishing touches on your High School Life and it is also the time to get ready for the great beyond.  

The College Counselors at OLHS put on a Senior Night and invited parents to attend to find out all about the process and paying for college.  They suggested a few helpful ideas.  

Assisted Living for Young Adults

If only Nursing Homes were like this!

Earlier we talked about how tuition is just a small part of the picture - in our particular case only 40% of the $12,121.00 bill and the rest is all about the fees, insurance, and room & board.  Fees and insurance add their share, but dorm life and cafeteria are 50% of the cost.

$6,018.00 is for room and board this semester.  Semester.  As I have to continually remind myself, this not the cost for a year or even have a year - but a semester which only runs from late August to late December.  This is four months.  

Backing up to my wallet

The Residence Hall Association Strikes Again

Another letter arrived from Residence Hall Association of VBU this time in large shock all cap and bold letters at the top: 

"DON'T LET DATA LOSS RUIN YOUR STUDENT'S GPA."

Actual insert in the mailer exhorting me to avoid midnight
calls and destroyed Graduate School Dreams from  Data Loss.

The letter gets right to the point: "Over 40% of students experience a data loss during college.  10% of hard drives outright fail each year.  A crash can wipe out months of work, slash grades for the semester and reduce cumulative GPA."   (Italics mine).

Thus the caring folks at the Residence Hall Association have teamed up with the equally compassionate "CAMPUS BACKUP SERVICE" and they will - for $150.00 dollars - backup A's laptop computer for four years.  (Tax not included).  This is - they tell me the "Best Value" because I will save $90.00 compared to paying their yearly rate of $60.00.  

As a computer literate adult I have experienced failing hard drives, so my complaint is not that they raise the issue.  Data protection is almost as important as the other kind of "protection" so I get it.  My complaint is that they don't tell you to check you options.  Dropbox, for example is free, for 2 GB of storage - which I understand is a pittance.  I also understand that $150.00 for unlimited storage for four years is a great deal compared to Carbonite.    As a smug, roll-my-eyes-at-Windows, member of the Apple Computer Cult my back up needs are solved using Time Machine.  Of course that assumes that A will actually attach her external drive to her laptop on a regular basis and both drives will not simultaneously fail or disappear.  

Instead the blatant scare tactics annoy me to no end.  For example,  the Letter ends with this ominous post script:

Apparently after the Campus Pack Selection of the "Specially Sized Sheets" - the next parent favorite is this service which prevents these midnight calls and destroyed futures and prospects when data loss causes GPAs to be cut to the bone.  Frankly if I get a midnight call from A during College I expect it to be from either the Police Station or the Emergency Room - so I am fairly certain buying into this plan won't protect my sleep.  Given that, I am waiting for the Residence Hall endorsed "Legal Defense and Bail Service Program" pitch to come next week.

Fees Glorious Fees!

It's not just tuition that keeps the cost of college humming along, but a litany of fees.  Sixteen items make up the bill for A's VBU and eleven of them are fees.  Two others - the Student Alumni Membership and the Student Bus and Bike Programs might as well be fees.  After all of that insurance, tuition and room & board seem to be an afterthought.  

The fees range from five dollars to $336.04 just for the semester.  Then there additional fees for participating in sports, for declaring certain majors, and certain classes.  For A - the fees alone add an additional 20% to the tuition.  

Bottom line: When planning for college - don't think that the tuition is the end of the story.

Move in Day!

Tomorrow is move in day for the dormitory at VBU, while classes start in earnest next week.  So we will join the thousands of other parents packing the parking lots of dormitories trundling in boxes of clothes, mini-fridges, linens, and electronics into dorm rooms.  Target, Home Depot, and Bed, Bath & Beyond must be giddy in anticipation with parents following their students around the store as small appliances, linens, plastic storage containers are snapped up.  

Roommates will finally meet in person, a mere formality since they have already connected on Facebook.  Parents, those that have gone to College, will feel a mélange of emotions ranging from nostalgia, amazement how quickly time flies, and the unsettling remembrance of how they thought of their parents at this time in their lives, knowing that their child probably feels the same way.  

There will be tears and smiles and soon the parents will drive off and the newest entering Freshman class of VBU will be able to breath a sigh of relief and fill their lungs with the first real whiffs of freedom they have had in the past eighteen to nineteen years.  There will be fairs, student groups, sororities, and fraternities vying for new members.   Causes to be joined.  Music to listen to, and cookouts with the dining hall.  Roommates will cling together in forced companionship until those wings have grown strong enough to fly on their own.  

It's a day that I think all of us who have gone to college recall as such a grand transition day, the beginning of an exciting adventure.  A day when we were both nervous from anticipation and worry.  As a parent, I can't help think about all those years that have passed and wonder if I will ever feel that level of wonder, awe, and giddy eagerness again.

What's College Worth: Diminishing Returns
Part II:  Absent change, College prices itself out of the Market

From www.Inflationdata.com

According to one website, Inflationdata.com, the cost of tuition from 1985 to 2011 has risen 498.49% while the Consumer Price Index (which has its flaws and often overstates inflation) rose only 114.85%.  Writer Gordon Wadworth notes, "For example, if the cost of college tuition was $10,000 in 1986, it would now cost the same student over $21,500 if education had increased as much as the average inflation rate but instead education is $59,800 or over 2 ½ times the inflation rate."

What this means is that, overtime, College will become so expensive that the cost will dwarf any possible hoped for boost in income potential.  The average College Business Graduate earned $28,000.00 in 1986.  In 2011, according to NACE, the same starting salary is $48,144.  This an average increase of 2.769% a year.  Meanwhile college has increased at an average 8% according to FinAid.

Currently four years of College Tuition at VBU cost $36,608.00 In ten years that cost will be $79,034.00, while the starting salary (for a business degree) growing at the historical 2.769% will only be $63,265.00.  Twenty years from now the cost will rise to $170,628.  Business starting salaries will be $83,135.18 on average.  

Thus the CollegeTuition Dollar to Starting Salary Dollar went from:

• 1986 $1 to $2.1
• 2011:  $1 to $1.3
• 2021: $1 to 80 cents
• 2031: $1 to 48 cents

Free markets require that, in general, consumers will stop purchasing a product that fails to bring in more perceived value than the cost.  What happens when people start questioning the value of a college education as it relates to earning potential?  Will college be forced to ratchet down services, costs, and payroll in order to reclaim market share?  It is difficult to see what else can be done, since the Federal Government in 2020 and beyond will be faced with enough fiscal demands from the looming Social Security and Medicare demands.

What's College Worth?
Part I:  There are no easy answers

The very act of purchasing is an affirmative statement that what you get in return is worth more than the money expended.  While College offers a number non-monetary intangible values such as knowledge gained and the University experience - the main argument for College, and any other type of higher education or training, is the increase in earning potential.  

The Very Big University touts its graduates' successes in the marketplace, citing PayScale.com, claiming that median starting salary for VBU graduates is $46,000.00 starting, and a median $91,600.00 career salary.  Politicians and Universities also liked to tout that four-year degrees resulted in a million dollars more earned over the graduate's life although this number has been questioned.  

Which School you attend matters.  PayScale puts things in starker context.  While VBU touts the $91,600.00 median earnings, the obvious question is - compared to what?  PayScale puts the cost of attending VBU at $103,900 in 2011.  PayScales estimates the additional lifetime earnings over 30 years at $361,600.00 for a 9.1% return.  Other schools have worse returns.  That's a bit sobering when you consider that the thirty year return on the S&P 500 is 10.8%  

In fact, when you consider that the $103,900.00 cost of college does not include the lost opportunity of wages that could have been earned during that period - the return may be even less.

In addition to the School - what degree you obtain also impacts the value of your education.  Not surprisingly, Business, Engineering, Computers and Mathematics; and Medical degrees earn more than other degrees.  Finally, the numbers can be skewed by graduates who go onto (and complete) graduate studies.

Bottom Line:  Don't blindly buy into the College hype that any degree automatically will result in a good return of your time and investment. 

What do you think College was worth to you financially? 

Student Loans & Slavery
Good Luck Getting Rid of The Albatross 

In the Rime of Ancient Mariner, Samuel Taylor Coleridge writes of the protagonist's struggle to get rid of an Albatross that literally, hung around his neck.  Coleridge might as well have been talking about government backed student loans.  

Saving the discussion of whether getting more money into the hands of buyers makes College less expensive, we have created a system where nineteen year-olds are permitted to borrow hundreds of thousands of dollars (in effect the cost of a median home in most markets) without any sort of credit, collateral, or demonstration of an ability to repay.  The lenders don't care, because the Federal Government has guaranteed the loans eliminating any sort consideration about the wisdom of making the loan.

According to the Wall Street Journal (citing the Progressive Policy Institute) the average debt load of all new graduates rose 24% from 2000 to 2010 even after adjusting for inflation.  Graduate students are leaving school - sometimes without finishing - with $150,000 and $200,000 in debt.  They call it a "noose around my neck" and "enslaving."  27% of borrowers who have begun re-payment are classified as delinquent.  It is the new fiscal time bomb of our own making over the past thirty years. It is so massive that the Consumer Financial Protection Bureau pegs the total outstanding student loan debt in the United States at $1 Trillion dollars.  

Guaranteed Student Loans are not dischargeable in bankruptcy (because then the Federal Government - that is federal income taxpayers like 53% of us - pays the loan) there is no way - other than death - to get rid of them other than to pay them off.  Other than Credit Card Debt, the single most common problematic debt callers of the Dave Ramsey Show face is Sallie Mae and student loans.  Ramsey strongly - if not categorically - recommends and rails against taking on student loan debt - encouraging students and parents to explore other options.

It is a crazy senseless situation, and unfortunately the politicians will likely be unable to craft sustainable economic solutions because it seems heartless and hostile toward students.  Student Loans are like crack cocaine - too easy to get and get hooked on - and a whole lot of work needed to get off them.  Doing the hard work now, saving for College, making cost-conscious decisions about school, and working while in school is the smartest decision.  Go to Community College for your first two years of Core Education Requirements, go to a state school, work like a banshee for three years in your chosen industry and save money for College - all of it can be yours if you are willing to wait.

Specially Sized Sheets for my Pocket Book
The linen Assault on my Wallet from the left flank

I naively thought that I only had to worry about coming up with the cost of tuition, fees, books, Residence Hall, and Dining Hall charges.  

When the letter arrived from the Residence Hall Association of the Very Big University addressed to the parents of A - I thought, "Finally, someone is going to tell me how much I have to pay."  I opened the envelope and was immediately assaulted with this headline shocker:

Don't Make the Mistake of Thinking your Regularly Sized Sheets will fit our Specially Sized Mattresses!

I read further, the VBU has "specially sized: mattress that my poor inadequate home sheets just will not fit.  "Don't get caught empty handed," the letter warns me, "of try to find specially sized sheets on move in date" and more ominously the letter warns of several poor students whose thoughtless parents let them suffer through sleepless nights on ill-fitting sheets.  

I am told that for a mere $83.15 (shipping is included!) I can purchase the Complete Campus Collection of "Specially Sized" Linens that are not only guaranteed to fit but also guaranteed to last until graduation.  This prompt the disturbing self-inquiry into what do they think our little cherub A will be doing on those sheets that might wear them out before four years have passed.

If that were not enough incentive, the letter promises me by ordering now, my wife and I will be able to smugly shake our heads on move in day at other parents who paid too much and over bought for their incoming student.  This last bit then completes the assumed trifecta of undergraduate marketing psychology: (1) Fear of our cherub suffering like HC Anderson's the Match Stick Girl; (2) The ability to fearlessly purchase with a guarantee; and (3) A promise to be able to one-up our parent peers on moving day as our sheet purchase reveals their cluelessness and our obvious intelligence.

Alas for the Residence Hall Association - it only succeeded in making me so mad, that my poor wife had to hear me rant about it most of the evening.  You may see sheets and $83.15 - but I see the start of the fiscal rape by a thousand tiny withdrawals.

Saving for Kid's College
Why I am not driving a Lexus any time soon

So the good news first, we have about $51,000.00 saved for College Tuition - which considering the doldrums of the market is not shabby.  The bad news is that I have to split that amount five kids - four of whom will be going through College throughout the next seven years.  

2012 - 2013 One Child - A

2013 - 2014 Two Children - A and H.

2014 - 2015 Three Children - A, H and E

2015 - 2016 Four Children A, H, E and M (This is the year my my wallet catches fire.)

2016 - 2017 Three Children H, E and M (Ready or not A is off the list!)

2017 - 2018 Two Children  E and M

2018 - 2019 One Child M

For the past seven or so years I have been putting away about $100.00 per child each month - the equivalent of a healthy car payment and I am in the all-too common position to know that while I can help pay for things - I am not in a position to promise to pay every expense over the next seven years.  

Yes, the little cherubs will need to find employment.

Theoretically I have enough saved to to pay for three semesters of tuition for A without needing to reach into my pocket.  That is misleading though.  It is like having enough to pay for the fare for a cheap airlines and then watching all the baggage, 9/11 Security, Taxes and airport fees suddenly materialize.  Then they want $4.00 for a can of soda during the flight.  

Tuition, Fees, Housing and Meal Plan at VBU (Very Big University) is roughly $26,600.00 for business majors.   This does not include the captive financial molestation that occurs at the Book Store at the beginning of each semester. Currently we have about $12,000.00 saved for A's college.  (Strangely for non-business majors the cost is $22,000.00 so I have to ask what is the extra $4,600.00 purchasing?)

So the bottom line is start saving early!

Seven Years of Fiscal Rape
An Introduction of how all of this Started

Things really started much longer ago when I decided to have children in the first place.  I grew up with  mindset that College was as much of a necessity as clothing and food, but that would go back way too far.  Instead we will just start with the normal beginning.  Once the first of our quartet of children graduated from High School and was accepted into College, then distant thought became reality.  

It is time to pay for College.  

This Blog is devoted to one parent's efforts and travails in paying for not one, but four children's college educations.  My wife and I are a blended family with two sons and two daughters.  There is a brief window during summer when their ages this year are 15, 16, 17 and 18.  More precisely, especially in terms of the looming financial time bomb for me - this year I have a 10th Grader, 11th Grader, 12th Grader and a College Freshman.  

In other words, the next seven years are going to be a financial shit storm and fiscal rape.

I am fortunate in three respects.  I started saving for college on a sustained basis for ten years.  I earn an above average income.  I have had the force (and peace) of mind to limit my exposure to in-state tuition here in Colorado.  

I have also made a few decisions and commitments that will make things harder on my pocketbook.  I am determined that my children avoid debt and particularly student loans.  I have the continued fantasy that my children will move out and stay out of the house (holidays and vacations excepted) when they graduate high school - so room and board will be part of the equation.  I have also determined that I will not go into debt as well.

So this year starts with our first little cherub, who I will call "A" who has been accepted to the Very Big University.  This is year one of the next seven years of paying for College for four young adults.