Category Archive

I finally got official word that I was accepted to the graduate program I applied to! It is somewhat anti-climatic for two reasons. First, since my employer is paying I wasn’t hoping for funding and my credentials were quite strong, I sort of expected to get in. Second, several weeks ago, I asked T (who attends this school as a full time PhD student with funding) to check on the status. He found that I had been recommended for admission, so it was a waiting game, really. But a long waiting game, considering they told me I would know in 2-4 weeks in February!

What does this mean for my finances? Not a whole lot, actually. It’s a part time program, so I’ll continue to work. I’ll be really busy starting this fall, so maybe I’ll save even more! Also, I’ll be considered a half time student so my student loans will go into deferment. Since they are subsidized, the rate will be 0%. That’ll free up $141 each month for savings, but I think I’ll continue to put $70 into my student loan payoff account. (This month, only $65 of my $141 payment went to principal!)

Long term, a M.S. degree in my field translates to roughly $10k-$15k more than a B.S. with similar experience. It’ll increase my expertise and help me advance more quickly. It’ll open more doors to have a top school on my resume. I also get some sort of stock options when I complete it, but they vest slowly, so I can’t count on that. I already have 9 credits at a lesser (top 50) institution, so I should finish in less than two years if they accept 6 credits.

T thinks I should take the next step and apply for a full time Ph.D for Fall 2009. I don’t even really want to go for my Ph.D., but I’m laid off in January and the economy is still poor, it is a reasonable back-up plan. Obviously, I wouldn’t go without funding. I know that graduate school should be a passion, not a back up plan, so I’m hesitant. While I may be able to pull off a Ph.D. acceptance, I’m less confident that I could pull off funding at this particular university. My previous graduate university offered me funding for my M.S., which is unusual, so there is a chance. However, the competition is extremely stiff at this level.

I suppose I have until fall to think about it. I have my GRE’s, my professors have electronic letters of recommendation that could be revived easily. No need to decide today.

Instead I’ll relish in my acceptance and enjoy my summer before my free time dwindles to zero!

P.S. - If I hadn’t banned myself from the grocery store, I would make Fettuccine with red pepper feta sauce, complete with homemade whole wheat pasta. The only ingredients I’m missing are chicken stock, eggs, and red peppers. It sounds like a meal T would enjoy as much as I would. He sometimes thinks my ideas of a good recipe to try are odd. I suppose it can wait a few weekends!

P.P.S - Sorry if all the food talk is too much. I am not talented enough to start a food blog, so I just sneak my food thoughts into my personal finance blog!

RacerX and Single Ma both say they won’t (at least not 100%). Shuchong argues that her parents paid for hers and figures it was a good investment for the doors it has opened in her life. I find the whole debate a bit perplexing. It implies that most people have the choice, which I don’t think is the case. Trent makes some points on why you shouldn’t pay, but the only one that holds up as a rule is that it is a burden on the parents. Most parents will help their kids to the best of their ability, and if parents can’t afford to, what is there to argue about? What are we really debating?

Paying for your kids college will no doubt give them an edge in the early stages of their life, and maybe beyond. I find that is difficult to argue. If you take two identical high school senior and pay for Student A’s education at the best school he can get into, and send Student B on his own, in most cases Student A will come out ahead.

But who cares? We’re never talking about two identical students, but individual students with unique talents, goals, and personalities. I want to emphasize that kids can be quite successful in life even if parents “choose not to” (can’t afford to) foot the bill.

Here are my tips on how to make college affordable and still be able to compete with those who had an advantage. These tips are geared at those students who, given different financial circumstances, might have found themselves at a top school. These thoughts are not new, but I want to emphasize that they really do work and won’t put you at a huge disadvantage in life.

Scholarships/Financial Aid
This is obvious. Apply for all the scholarships you can, fill out the FAFSA, and with any luck, you won’t need to do any thing else on this list! However, don’t be fooled–it isn’t as easy as it sounds. Most students will get some help, but few will get everything provided.

Get a job while in college
Working full time is not ideal–school really does have to come first. However, in my part time jobs I never had a problem getting off of work when I needed to study. I hate hearing “my parents really wanted me to focus on school and be involved on campus, so I didn’t work.” My parents also wanted those things for me, yet I still had jobs throughout college and had a great experience. You can “do it all”, so to speak.

Very few kids who didn’t work spent more time studying than I did. For the most part, they just spent more time relaxing and goofing off with friends (which may have it’s benefits, but doesn’t further education/career. You can still “network” without having excess free time.) The worst cases simply spent a lot of time partying or smoking pot.

After the jobs related to my major, waitressing was a the best college job I had. The most money could be made on Friday or Saturday nights, and you would be done in time to go out with friends. Even if you havea job, make time to be involved in campus activities. Even if you are an officer in an organization, being involved on campus isn’t that time consuming. As an added bonus, you can add a nice bullet on your resume: “Maintained a [X] GPA while working 20 hours a week.”

Take Out Student Loans
I’m also tired of “I’m so thankful I’m not burdened with debt”. My $133/mo really is not burdening me, especially when I think of the opportunities it provides me. Don’t be scared of loans, but don’t be careless with them either. You have to be smart about this, but student loans can be a good tool. It is silly to go into a bunch of debt to get a degree that won’t earn you much money. However, it is equally silly to forgo a low interest loan (especially subsidized) if you’ll have a strong earning potential once you graduate.

Pick a marketable major
There is something to be said for studying what you love, but understand the implications. I am not arguing that the world doesn’t need majors in comparative literature. However, studying something that has lower earning potential is a luxury. If you can get scholarships to do this, wonderful! If your parents are footing the bill, great! Have fun! Just don’t go $120k into debt to become a pastry chef (true story, saw it on Suze Orman). You’ll regret it, even if you love baking. (I do love math/science, but not everyone is a nerd like me.)

This isn’t to say you are limited to majors that lead directly to a lucrative career. If you are majoring in something impractical (or actually, anything) have a plan and be able to justify any money spent on that degree. Truly loving what you do can be justification enough, as long as you can afford to pay back any debt you incur.

Don’t go to a “brand name” school (unless financial aid makes it worth it)
I am going to admit it–a good school helps your resume for your first job. I doubt my current job would not have hired me based on my college resume, solely because my undergrad school is unrecognizable outside of the region. However, I’m less than two years out of school and working primarily with people whose college educations cost a lot more money than mine did (and getting an M.S. at top university fully paid for).

Without a brand name school, good grades are especially important. If you have mediocre grades at a mediocre school, you won’t stand out. If you are a bright student at a mediocre school, take advantage of it. Get high marks and get to know your professors. They might be able to hook you up with a grading or TA job, or they may have connections in industry. Be involved on campus, become an officer, and be an outstanding well rounded student.

After college, get your first job at the best company that recruits at your school. Do well in it, get some good experience. Perhaps you’ll find you really like your job and you are well paid, so no need to move on. If not, with a little experience you will have a good chance of getting in to any company you want to work for.

Bottom Line
Kids whose parents pay for college (especially fancy ones) simply do not have to be as motivated and outstanding those who are on their own. I’m not saying that they aren’t (there are many talented and motivated students everywhere). However, average (and below average) students at those schools will likely do better than equally talented students elsewhere simply because of the parental advantage. Doors will be opened for them more easily, but you can open your own doors. If you are committed, hardworking, motivated, and have some sort of aptitude in something, you should be able to do just as well, even without your parents financial support.

What I’ll do for my kids
I’m not sure yet. I’ll help them to the best of my ability if they show the motivation and aptitude for college. If I can’t afford much, I’ll help them in ways my parents did–encouragement and support. I’ll also help them in ways my parents didn’t (because they didn’t know). I’ll be sure they apply for every scholarship they are eligible for. (I would have qualified for free tuition based on my ACT score had I taken them in the right month!) I’ll have solid advice about the admissions process and show them outstanding schools that provide excellent financial aid. I’ll also help them navigate the financial aid office and truly understand any loans they take out. They will be personal finance experts by the time they graduate high school! And I’ll tell them everything I just wrote here (provided it still applies when my theoretical unborn children go to college!)