It’s a well worn refrain by now that the cost of a college education has risen far more than the general rate of inflation for decades, but no one really talks about why.
In fact, the majority of discussion about the cost of college tuition usually focuses on increased funding, or changing student loan programs, usually under the guise of “making college more affordable” while really only driving the cost up more.
The root reason college tuition outpaces inflation year after year is because people keep paying it.
It’s largely driven by supply and demand, but it’s real cost is masked by grants, scholarships and loan programs – it’s the same reason health care costs keep rising so much faster than inflation. When the consumer is shielded from paying the direct cost, then costs rise much more quickly. It almost becomes a victimless crime.
Couple that with the fact that so many people see a college degree as essential to having a high paying job, and you see why the demand keeps increase despite the meteoric rise in costs. It’s easy to see why a college degree is viewed as essential when you look at data like this. As of August, 2010, the unemployment rate of those with a Bachelor’s degree was 4.6%, while those with less than a high school diploma had a 14% rate of unemployment!
I just put my daughter on the bus for kindergarten for the first time this week, and I can’t imagine what the cost of college is going to be when she graduates high school. Couple that with the fact that so many people will likely be entering the workforce with bachelor’s degrees by that time that she’ll likely have to get a master’s degree just to remain comparable to what her old man got with his bachelor’s and it’s not a happy thought.
Words alone cannot describe the sense of elation I feel. I’ve been stuck at a dead-end job now since 2008. I have had very mixed emotions about the whole situation for quite sometime. I have been extremely thankful to have a job in this recession, but I’ve also felt like my financial plans have been stuck in neutral. I knew I should be grateful that we weren’t falling behind financially, but it just felt so depressing to be getting nowhere after doing so well.
Like many who managed to avoid being laid off; I’ve had to take unpaid time off, lost my employer contribution to my 401k plan, had no raise bonus or similar salary increase.
But all that has changed.
I got a great new position at a new company in almost a new field, but it’s everything I wanted – and I know how lucky I am in this economy.
But there have been a lot of interesting remarks made by people when I tell them my news. I realized that I view things differently than others, and I thought I share some of those observations here.
Thoughts on money, benefits and what really matters.
But how much more are you making?
Believe it or not, I’m a pretty private person despite having a blog. And one of the things I’ve never felt comfortable talking about is income. It’s just one of those things that makes me feel awkward discussing with others. It’s like personal hygiene of the personal finance world.
So, I told my wife’s family about the job and her aunt asks me if I’ll be making more money. It’s a logical, common and completely expected question. It doesn’t bother me at all. But I also know she’s looking for more than a simple “yes”, but as I mentioned I don’t want to give her a dollar amount.
So, being the geek that I am, I give her a percentage.
“I’ll be making 12% more a year,” I tell her.
She just blinks and stares. “Yes, but how much is that?”
Now, I know her pretty well so I feel confident in saying that she wasn’t simply being nosey and trying to weasel my annual salary from me. She really just had no idea what to make of my response. 12% meant nothing to her.
But ask yourself, when was the last time you got a 12% raise?
The dollar amount isn’t important, it’s the percent that matters. It’s the percent that tells you how big, or how small a leap you’re taking relative to where you are, not compared to where someone else is.
How much does it pay?
I got this question from my younger cousin. Again, he wasn’t trying to be nosey, he’s just graduated high school and has no idea what real jobs pay. But the problem with this line of thinking is that salary is everything, and it’s not. It’s also about the bennies!
I support my family of four on my salary, so things like health insurance, time off and a decent 401k are important to me. More so than when I was my cousin’s age. But I think a lot of people just never get past the salary figure when considering jobs.
The other huge benefit to my new job is that I think I’m going to like it very much. And when you actually like what you do for a living, it’s a lot less like work and a lot more like living! And that’s something money can’t buy.
Bankrate.com’s Steve Bucci recently answered a question from a reader about whether bad credit can hurt your job prospects.
The reader’s roommate defaulted on 2 payday loans while he was out of work (ouch!), and subsequently relocated to Washington, D.C. (debtor’s capital of the world!). He managed to get a job, but two months into it his background check came back and showed the defaults. His employer then let him go. I can’t imagine why they hired him before the background check was cleared, but that’s just me.
The reader wanted to know if this is legal and how he can clean up his mess.
The short answer is that the employer can absolutely terminate his employment for the past delinquencies – provided he was notified of that possibility. Since they did a background check on him, he was likely notified.
He made his mess, now he has to deal with the repercussions.
As for getting out of the mess, he has to get a less desirable job (that doesn’t do background checks!) and pay off the outstanding balances on his defaulted payday loans. It’s likely to be a long, tough road.
Let this be a reminder to all of us that:
Despite recent government efforts to the contrary, we are responsibly for our actions.
If you have some black marks on your credit history and you are applying for a job that requires a background check, be up front and honest about it – and proactive. Explain your situation and show what steps you’re taking to correct the issues before the background check.
I stumbled across this a few days ago, and thought I’d share it. It’s CNN/Money’s list of 15 jobs that offer high stress, and low pay.
I’m not sure what their criteria were or how they determined the amount of stress. The low pay aspect is fairly easy to determine, each is below the median household income and most require a degree or two. But I question some like Commercial photographer. I mean, is the % who say their job is stressful really 100? There are no commercial photographers who don’t find their work to be high stress?
And what does high stress mean? I love my job. I think I have things pretty easy, compared to many. I’m in the IT field, but I still have stressful days. I suppose the best way to look at this list is that a percentage of the people who hold these jobs find the rewards do not outweigh the stress.
Still, that seems odd since Minister is also on the list. I’m not surprised they don’t make big money, but you can’t tell me their job doesn’t have moments of satisfaction that can’t be found in other careers that outweigh the stressful times.
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