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bjbj Hello everyone and welcome to another episode of EricksonTV. Curtis here with Lauren.
In our last 2 episodes, which I advise all of you to take a look at if you haven t yet,
we talked about the college funding crisis and how the student loan balance is bigger
than the credit card debt. We also talked about some specifics concerning how difficult
it is to get out of student loans. I thought we d now turn the page and take a more proactive
stance about how to make college a better investment. If you have a child, grandchild,
or family friend that is looking into colleges, we ll help you understand how to make it a
better investment and get a better return. There are some obvious ones that we are not
going to cover such as if you have a great student that qualifies for scholarships and
grants. That s great and takes care of itself. We re talking about the student that is a
decent student but not able to get those types of scholarships and grants and how they can
student loan debt. My son, Austin, is a junior in high school this year so he s got another
year to go but we re already starting our plan of attack. There are studies showing
that the value of getting an undergraduate degree from an Ivy League school or a prestigious
school, in terms of median salary income and the jobs they are taking upon graduation,
doesn t differ that much from going to a state school. It s more important that they graduate.
That s the key determinant. The way they did the study was by looking at people who had
been accepted to Ivy League colleges. They followed the people that went to the Ivy League
colleges and the people that went to state universities. Basically, if you were good
enough to get accepted to an Ivy League college, it didn t actually matter whether you went
to one or not. The earnings were very, very similar. It can be different if you are going
for very specialized graduate school instruction. But for undergraduate schools, and especially
for the really expensive universities that aren t Ivy League schools, it s not really
paying off for people. At least in strictly economic terms, you re not getting a return
on that investment. People here in Washington State have been complaining that, for instance,
our state schools are going up to $13,000, $14,000 per year in tuition. Well most of
the Ivy League schools and most of the private schools that are trying to be Ivy League-type
schools, they re at $40,000 to $50,000 per year. If you multiply that by 4 or 5 years,
that s a significant difference. Taking it to a more extreme view, this is what I did.
I was able to get a basketball scholarship at a junior college. So I went to junior college
the first 2 years and then I went over to a 4 year state school. I was able to leave
school with very little in debt. What was your experience? I also went to community
college. I think that community college is especially a good idea when you are dealing
with a student that really doesn t know what they want to do. I think it s a really bad
idea to go into a ton of debt to get an education when you don t know what you want to do in
the world because then you might decide: well maybe I don t really want this education.
Education is a lot more effective if you have experience and then you go to school and learn
based on that experience. I was also somebody who went out into the real world and did all
kinds of things before I went back and finished my education. And it changed the way I looked
at education a lot. I didn t just look at it the way I looked at high school which was:
I have to be here. There was a specific goal. I think I also worked a lot harder than a
lot of the people that were there just as an extension of their public school experience
which seemed to be: well I m just doing this because I have to. If you go into it with
that attitude you re going into a lot of debt just because you have to. Right now there
is a lot of pressure for parents to encourage their child to go to college and to go a supposedly
prestigious college because there is such a scary job market out there. I think that
the job market doesn t get any less scary just because you re in debt. In fact, I think
it becomes more difficult and more of a high pressure situation. For a lot of people there
is that element of wanting to go to a high ranking school. In purely economic terms,
that isn t always all that valuable. If you d like a consultation to talk about this in
terms of your specific situation, please contact either Lauren or myself at Erickson Wealth
& Tax Management. Thank you very much and we ll see you next time. ui]J7J7 p]M]pA5 hY'l
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