impact of recession on education

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The Recession Hits College CampusesIt could be a turning point in how much it costs to attend collegeByKIM CLARKJanuary 27, 2009RSS Feed Print

Ivy-covered walls, Ph.D. economists, and growing demand for education seem tohave, so far, offered colleges and universities at least a little protection from therecession and market meltdowns, according to several new analyses of colleges'financial health.University endowments, those big pools of "rainy day funds" that were designed tobe so well diversified that they'd protect colleges during bad years, have fallen onlyabout 25 percent in the past 18 months or so. While that has been painful for thecolleges, it could have been worse. The U.S. stock market fell by more than 40percent in the same period.In all, the average college endowment lost 2.7 percent in the fiscal year that endedJune 30, 2008, according to Commonfund, an organization that manages many
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colleges' endowments. A follow-up survey found endowments lost another 22.5percent in the five months that ended Dec. 1, 2008.Most colleges have such small endowmentshalf have $88 million or less,according to the mostrecent endowment analysisby the National Association ofCollege and University Business Officersthat changes in their values don't make a

big difference. But the market meltdown is having an impact on wealthy schools likeHarvard, which typically take 4 to 5 percent of from their endowments to pay forscholarships, buildings, and other projects. While most colleges are refraining fromcutting aid, several have laid off instructors, frozen construction, and cut employees'pay.And there are worries that this is only the beginning of a wider recessionary impacton campuses. State governments are starting to enact higher education budget cutsthat could mean reduced aid, fewer services, and even fewer classroom seats forstudents next fall.The alternative investments that were supposed to protect wealthier universityendowments, such as real estate and commodities, have fallen in recent weeks as

the U.S. stock market stabilized. Yale, which saw its widely diversified portfolioincrease by 1.5 percent in the fiscal year ended June 30, 2008, last month warnedthat its endowment had already fallen 25 percent since then.A few schools, including Tufts, New York University, and Yeshiva University, haverecently reported losses due to the Madoff fraud.Adding all this up, 2009 will be a rough year for colleges, predicts Moody's, a creditrating agency. While higher education "has been more insulated from economicimpact in prior recessions," this cycle might be different, Moody's warned recently.Moody's expects donations, financial aid, and other grants to fall as stategovernments and philanthropists reel from the downturn. And it warns that thecredit crunch is driving college borrowing costs up. Meanwhile, students and

parents may finally rebel against annual tuition increases that used to make up fordeclines in other revenues. Princeton University, for example, recently announced itwould raise its costs just 2.9 percent in 2009, its lowest increase in more than 40years. (Of course, that's still a big dollar increase. For those who don't receive anyaid next semester, the total sticker cost of attendancetuition, fees, room, board,books, travel, and laundrywill exceed $50,000.)"There are a lot of reasons to think this could be a turning point," says RogerGoodman, editor of the Moody's report. Expensive colleges, especially, are holdingtheir collective breath to see whether students start voting with their feet andchoose cheaper schools this fall, he says. But while 2009 will probably be rough forschools that have overborrowed or scared students off with high prices, the long-

term outlook for higher education in general is good, Moody's believes.Colleges are likely to be among the beneficiaries of proposed government stimulusspending. And in previous recessions, college enrollment has risen, since collegegraduates get bigger paychecksand more opportunities.Many college officials remain cautiously hopeful that universities' previousprotections against economic cycles will buffer them from the worst of this storm.At Dordt College in Sioux Center, Iowa, President Carl E. Zylstra says donations areflat, the endowment has suffered, "and we don't have as much freedom to raise
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tuition prices." But applications and deposits for the fall are rising, he says. "Demandfor college will remain strong ....We are not panicking," he says.

http://www.usnews.com/education/articles/2009/01/27/the-recession-hits-college-campuses

Congress Cuts, Obama Attempts to Collect as LoanDefault Rates RiseByEQUAL JUSTICE WORKSOctober 26, 2011RSS Feed PrintYour very own Student Loan Ranger (and many others) have chronicled therapidgrowth of student loansand the associatedrise in default rates(not to mentiondeferment, forbearance, and delinquency rates). This rise in default rates wasreaffirmed by the U.S. Department of Education's release of its fiscal year 2009nationalstudent loan cohort default rate.

The rate of default for the fiscal year 2009 cohort (which consists of borrowerswhose first loan repayments came due between Oct. 1, 2008, and Sept. 30, 2009, andwho defaulted before Sept. 30, 2010) was 8.8 percent, up from 7.0 percent in fiscalyear 2008. (The Department of Education also released an interestinggraph ofstudent loan default ratessince 1989.)

[Read about how torepay student loansbased on your income.]
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Notably, default rates increased across every higher education sector: from 6.0percent to 7.2 percent for public institutions, from 4.0 percent to 4.6 percent forprivate institutions, and from 11.6 percent to 15 percent at for-profit schools.The scary part is that these statistics are two years old and do not includeborrowers who defaulted after Sept. 30, 2010. Given the continuing recession, a

continued acceleration of student loan default rates is probable.[Consider optionsto avoid defaultingon your student loans.]And it's not just individual borrowers that are impacted by the burden of studentloans. According to some reports, the pressure of the increasing debt burden may befundamentally reshaping entire professions. As this article in DVM Newsmagazineexplains, for example,mean debt for veterinariansin 2010 jumped to 198 percent ofstarting salaries due to ballooning tuition.In response, increasing numbers of veterinarians are seeking to become specialistsand experts fear that many veterinarians will struggle to raise children, save forretirement, assist elderly parents, buy a home, or start a practice.Unfortunately, instead of looking for long-term solutions, some of the recent

legislative proposals coming from inside the beltway are deleterious and downrightpunitive.In the House of Representatives, as the Chronicle for Higher Education reported,Rep. Denny Rehberg (R-Mont.)the chairman of the House Appropriations panelthat oversees educationhas proposed tightening theeligibility criteria for Pellgrants, completely eliminating 31 education programs, and cutting spending onmany more.[Learn more about Pell grants and otherways to pay for college.]The cuts would end aid to many minority-serving institutions and reduce spendingby 83 percent to institutions serving Hispanics and by 36 percent to historicallyblack colleges. While the bill may just be an attempt to stake out ground for

bargaining over the omnibus budget package to occur later in the year, the reality isthat these kinds of cuts will force students to take out even more in loans.Meanwhile, President Obama'sdeficit reduction plan(see page 28 of the PDF)proposes allowing private debt collectors to call cell phones to collect debts eitherowed to or guaranteed by the federal government, including student loans.Currently, debt collectors can independently call cell phones, but only after checkinga list of known cell phones and only if the number has been provided as a way ofreaching the borrower.If this proposal becomes law, the debt collection industrywhich received 140,000Federal Trade Commissioncomplaintsin 2010, more than any other industry couldbegin robo-calling the cell phones of delinquent student loan borrowers.

However, according to Margot Saunders, of counsel to the National Consumer LawCenter, robo-calling borrowers on their cell phones isunlikely to raise enough fundsto impact the federal deficit because many borrowers are simply unable to pay theirstudent loans because they have other expenses or they have lost their jobs.Outside the beltway, on the other hand, a growing demand for more fundamentalreform can be heard.A petitionto forgive student loan debt initiated byForgiveStudentLoanDebt.com founder Robert Applebaum has gathered close to ahalf million signatures. And, as we noted on ourTwitter feedand Applebaum
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described in arecent article, frustration with the burden of educational debt is oneof the themes voiced by participants in theOccupy movement.Let us know what you think. Are you worried about the impact of student loans inyour life or profession? And what kind of reform, if any, would you like to see?Isaac Bowers is a senior program manager in the Communications and Outreach

unit, responsible for Equal Justice Works's educational debt relief initiatives. Anexpert on educational debt relief, Bowers conducts monthly webinars for a widerange of audiences; advises employers, law schools, and professional organizations;and works with Congress and the Department of Education on federal legislationand regulations. Prior to joining Equal Justice Works, he was a fellow atShute,Mihaly & Weinberger LLPin San Francisco. He received his J.D. from New YorkUniversitySchool of Law.

http://www.usnews.com/education/blogs/student-loan-ranger/2011/10/26/congress-cuts-obama-attempts-to-collect-as-loan-default-rates-rise

The Great Recession's Toll on Higher EducationThe tight economy has forced many students to fight for anaffordable, quality education.ByKIM CLARKSeptember 10, 2010RSS Feed Print

Illinois, Michigan, and Ohio have run out of scholarship money and are turning downthousands of qualified applicants. Public universities in Georgia, Virginia, and

Washington have all raised their tuition by about $1,000 for the fall semester. Publiccolleges in Florida, Louisiana, and Nevada are canceling hundreds of classes for lackof state funding. California has simply shut the door on hundreds of thousands of itshigh school graduates and workers hoping for new skills.College officials in troubled states such as Louisiana are girding for further cuts thatwill be "difficult, painful, and destructive," John Lombardi, president of the LouisianaState University System, warned recently. Students have no choice but to pack intothe crowded courses that remain, where overloaded instructors are replacing essayassignments with easier-to-grade (but less educationally rigorous) multiple-choicetests.The Great Recession has had a devastating effect on higher education, forcing many

students across the country to pay more for colleges that offer less. Yet thedownturn has also penalized individuals who don't spend the time and money to geta college degree. Even in today's weak job market, the unemployment rate forcollege graduates is less than 5 percent, about half the rate for those with only a highschool diploma. "It's a grim situation," says Lindsay McCluskey, vice president of theUnited States Student Association. "But what choice do young people have?"[Learn howbudget cuts have affected high school counselors.]
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Because of the dramatic budget cuts and tuition increases, she says, today's collegestudents have to work harder to earn degrees than did their older brothers orsisters. Many students are succeeding, but only by borrowing more, finding cheaperor better courses elsewhere, and using their social networking skills to raise money.Perhaps most significantly, they are "being part of the fight" to keep college

affordable, McCluskey says, lobbying for change or to block further budget cuts.College students in this more difficult era will find the going tough. "It is not going tobe easy," McCluskey says. "But there are ways to make it happen."A growing number of students are voting with their feet. Enrollment at the nation'slowest-cost institutions, public community colleges, jumped an average 16 percentlast year and is expected to rise by double digits again in the 2010-11 academicyear. One reason: "reverse transfers." Students at expensive four-year universitiesare switching to lower-cost two-year schools to get their basics completedinexpensively. Many other students are signing up for summer or night communitycollege courses to pack in cheap credits and graduate sooner.These swamped classrooms have spurred community colleges to become more

creative in their course offerings, from promoting online classes to schedulingclasses at nontraditional times. A 20 percent jump in enrollment at Bunker HillCommunity College in Boston last year, for example, prompted the school to startoffering classes in the middle of the night. The 11:45 p.m. to 2:45 a.m. classes weresuch a success that the school has increased its midnight offerings from two coursesto five in 2010.Other students are bidding goodbye to crowded classes and overburdenedprofessors. The University of Oregon, for example, has seen the number ofapplicants from budget-crunched California jump from 4,600 to 7,000. Typical of thenew Oregonians is Nate Gartrell, who lost his enthusiasm for studying journalism atSan Francisco State Universitylast year when he got shut out of his first-choice

courses. He says he sometimes had to sit on the steps in second- and third-choiceclasses. "The state budget cuts were getting ridiculous," he says. One final straw: "Iwrote something hastily 45 minutes before class. I knew it was terrible and was fullof typos. I was expecting a D and still got an A minus" from a professor he says wastoo busy to thoughtfully critique his work.

Most Public Colleges Face Budget Cut Threats in 2011Map shows which state university systems are more likely to suffer budgetcuts.ByKIM CLARK

July 12, 2010RSS Feed Print

As signs of a tentative economic rebound hearten students and parents in statessuch as North Dakota and Arkansas, continuing high unemployment and statebudget crises could lead to funding cuts to public colleges and universities inNevada, Louisiana, Illinois, and many other states. Unless officials in troubled statesfind new tax dollars to support their colleges, administrators will have little choice
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but to impose hefty tuition increases or reduce the number of classes and servicesoffered on campus.To help parents and students understand what they can expect from public collegesaround the country, U.S.News & World Report has combined data on the economicand budgetary strength of each state with funding for each state's public university

system to show which state systems will likely face budget pressure in the coming18 months.Of course, improvements to the economy would lessen the odds of budget cuts. Andstate officials, college administrators, and taxpayers can choose to resist pressure tomake cuts. This numerical index does not take into account political decisions.Arizona, for example, suffers from a troubled economy and a severe state budgetshortfall. But voters there recently agreed to a temporary 1 cent sales tax surchargeto forestall further education cuts. Likewise, the numbers indicate Maryland willlikely deal with some economic and budget troubles in 2011. But the leaders in thatstate have so far shielded public colleges from the deep budget cuts and painfultuition increases that leaders in other states, such as California and Nevada, have

imposed on their public colleges.

http://www.usnews.com/education/articles/2010/07/12/most-public-colleges-face-budget-cut-threats-in-2011

Rich Students Will Get More College Acceptance Letters in 2010ByKIM CLARKJanuary 15, 2010RSS Feed Print

College applicants in 2010 will get a lesson in the real-world version of the goldenrule: the one in which the person with the gold gets to rule.

Admissions officers and counselors say that hundreds of colleges are so desperatefor cash this year that they will be reserving more spots for students who can affordto pay full tuition and don't need financial aid.B students who don't need aid and apply to lots of colleges will likely have more fatacceptance envelopes than ever before. "Full-pay students are getting a break interms of admission," says Judy Zodda, a private admissions counselor inFramingham, Mass. "If they are borderline admits and full pay, they are getting inthis year. That was not true three years ago."Top students, no matter how meager their college savings, will still be heavilyrecruited, counselors said. But less-than-stellar students who don't have muchmoney will have a tougher time getting into many types of colleges this year,

including some flagship public universities and some private colleges. Thus, there isa danger that the economic downturn could reduce college opportunities for low-income students while giving even more advantages to the wealthy.The college news isn't all bad, however. Some of the six big trends for 2010 outlinedbelow could give more students new opportunities and could force colleges to dobetter jobs of teaching and helping students.[Read theComplete Guide to Admissions.]
http://www.usnews.com/education/articles/2010/07/12/most-public-colleges-face-budget-cut-threats-in-2011http://www.usnews.com/education/articles/2010/07/12/most-public-colleges-face-budget-cut-threats-in-2011http://www.usnews.com/education/articles/2010/07/12/most-public-colleges-face-budget-cut-threats-in-2011http://www.usnews.com/topics/author/kim_clarkhttp://www.usnews.com/topics/author/kim_clarkhttp://www.usnews.com/topics/author/kim_clarkhttp://www.usnews.com/rss/educationhttp://www.usnews.com/rss/educationhttp://www.usnews.com/rss/educationhttp://www.usnews.com/education/college/articles/2009/03/24/the-us-news-guide-to-admissions.htmlhttp://www.usnews.com/education/college/articles/2009/03/24/the-us-news-guide-to-admissions.htmlhttp://www.usnews.com/education/college/articles/2009/03/24/the-us-news-guide-to-admissions.htmlhttp://www.usnews.com/education/college/articles/2009/03/24/the-us-news-guide-to-admissions.htmlhttp://www.usnews.com/rss/educationhttp://www.usnews.com/rss/educationhttp://www.usnews.com/topics/author/kim_clarkhttp://www.usnews.com/education/articles/2010/07/12/most-public-colleges-face-budget-cut-threats-in-2011http://www.usnews.com/education/articles/2010/07/12/most-public-colleges-face-budget-cut-threats-in-2011


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1. SATs won't count as much. Students who get good grades but score poorly ontests will have a better shot of getting into their dream schools. More than 815colleges have stopped requiring most applicants to provide standardized test scores,says Bob Schaeffer, public education director of FairTest. Several more are expectedto drop the requirement soon, he says. College officials say more students are taking

ACTs. And some college admissions officers say that high Advance Placement testscores wow them more than any other score.2. Students will likely choose better colleges. The Department of Education willnotify students of the freshman retention and graduation rates of each college towhich they apply for financial aid. "This will put pressure on colleges to betransparent, and some will need to articulate why these statistics may not bepositive," says Sandra Bartholomew, dean of enrollment management at GreenMountain College in Poultney, Vt.3. The "public Ivies" will become more competitive. Highly ranked, affordablepublic universities have become the hottest schools for this year's high schoolseniors. "In the past, Ivy League/near Ivy schools set the tone for the admissions

cycle," says David J. Hamilton, director of college advising at St. Mary's Ryken HighSchool in Leonardtown, Md. "This year, I think state schools may hold the key."Examples of affordable public universities that U.S. News ranks highly are theUniversity of Virginiaand theUniversity of North CarolinaChapel Hill.4. Wealthy, good students will be heavily recruited by out-of-state publiccolleges that are hoping to make up for state budget cuts and endowment declinesby getting more students to pay higher tuition. In somebut not allcases, theout-of-staters will take seats away from less wealthy in-staters. Many Californiapublic universities, for example, have announced plans to reduce the size of theirfreshmen classes while raising cash by increasing the number of students who payfull out-of-state tuition.

5. Rich international students, especially students from China, will be heavilyrecruited. In some cases, they will fill seats that would otherwise have gone to lesswealthy Americans. Kevin Spensley, director of international marketing, enrollment,and recruitment at St. Michael's College near Burlington, Vt., says that his school isone of hundreds that is scouring the globe in an effort to raise the number ofaffluent, qualified students paying something close to full tuition. "We don't takepeople we wouldn't otherwise admit," he says. But he says colleges believe that theyhave to cast a wider net because the number of American 18-year-olds is declining.And the recession has reduced the number of families who can afford to pay the fullcost of a degree at a private institution or a public college.6. More applicants will lower their ambitions and choose local colleges so they

can save money by living at home. Sue Bigg, a private counselor in Chicago, says thata growing number of her clients are "limiting their choices to commutingpossibilities only. The great adventure seems to be set aside for some time."

http://www.usnews.com/education/articles/2010/01/15/rich-students-will-get-more-college-acceptance-letters-in-2010
http://colleges.usnews.rankingsandreviews.com/best-colleges/charlottesville-va/uva-6968http://colleges.usnews.rankingsandreviews.com/best-colleges/charlottesville-va/uva-6968http://colleges.usnews.rankingsandreviews.com/best-colleges/chapel-hill-nc/unc-2974http://colleges.usnews.rankingsandreviews.com/best-colleges/chapel-hill-nc/unc-2974http://colleges.usnews.rankingsandreviews.com/best-colleges/chapel-hill-nc/unc-2974http://colleges.usnews.rankingsandreviews.com/best-colleges/chapel-hill-nc/unc-2974http://colleges.usnews.rankingsandreviews.com/best-colleges/chapel-hill-nc/unc-2974http://www.usnews.com/education/articles/2010/01/15/rich-students-will-get-more-college-acceptance-letters-in-2010http://www.usnews.com/education/articles/2010/01/15/rich-students-will-get-more-college-acceptance-letters-in-2010http://www.usnews.com/education/articles/2010/01/15/rich-students-will-get-more-college-acceptance-letters-in-2010http://www.usnews.com/education/articles/2010/01/15/rich-students-will-get-more-college-acceptance-letters-in-2010http://www.usnews.com/education/articles/2010/01/15/rich-students-will-get-more-college-acceptance-letters-in-2010http://colleges.usnews.rankingsandreviews.com/best-colleges/chapel-hill-nc/unc-2974http://colleges.usnews.rankingsandreviews.com/best-colleges/charlottesville-va/uva-6968


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College Costs Jumped $1,000 in 2009On the bright side, scholarships totaling an estimated $71.2 billion werehanded out last yearByKIM CLARKOctober 20, 2009RSS Feed Print

The total sticker price of a year at a typical university rose by more than $1,000 in2009, even though living costs, as measured by the consumer price index, fell.The average asking price for tuition, room, board, books, and all other expenses atpublic universities jumped by $1,062, or 5.8 percent, to $19,388 for the academicyear that has just started. The total student budget for private colleges rose by$1,638, or 4.4 percent, to $39,028, the College Board reported today as a part of itsannual analyses of college prices and financial aid trends.The tuition prices have risen even faster than recent and significant increases infederal grants and education tax breaks, the College Board calculates. That meansthe net out-of-pocket costs of a year at college rose several hundred dollars in 2009,

while families struggled through a recession."Families are facing these prices with incomes that are not making any progress atall," Sandy Baum, a College Board analyst, noted. Considering how public collegesand universities, especially, have had their state subsidies slashed over the years,however, Baum said the tuition increases could easily have been worse.

http://www.usnews.com/education/articles/2009/10/20/college-costs-jumped-1000-in-2009

Budget Cuts Take Toll on Education

Budget cuts have hit public colleges hard, even as the demand for a well-educated workforce soars.ByKIM CLARKAugust 19, 2009RSS Feed Print

San FranciscoEvery chair was taken. Yet more students jammed into theclassroom for the first summer session class of City College of San Francisco'sMicrocomputer Applications for Business 101. By the time the class started, at least12 extra people were standing in the aisles and clustered in the doorway. InstructorHugo Aparicio shouted to the growing crowd that there were only enoughcomputers to accommodate 28 students. Normally, with so many eager learners,

CCSF would hire an instructor to teach another section of the class. But the state's$26 billion-plus deficit means there's no money for extra teachers. So Aparicioannounced that only the first 28 students who registered for the course could stay.One young woman began to weep, explaining that this course was the last one sheneeded to graduate. Sophomore Inga Jargal also pleaded. She was having troublefinding any class to fill up her schedule: If she couldn't enroll in another one, shemight lose her financial aid and campus job in the registrar's office. It was no use.There simply wasn't room. So, in a scene that is being repeated increasingly in
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California and other recession-socked states, several otherwise qualified studentswere sent out into the dark, blustery evening."I am worried," says Jargal. "I need an education for my future and my son's future,"says the 26-year-old single mom.The recession, state budget cuts, and hidebound bureaucracies are endangering

some of the most important foundations of the American dreamthe low-cost,high-quality public colleges created to provide anyone with smarts and diligence thetraining needed to succeed.True, a few public higher ed leaders are using the financial downturn as a catalyst topermanently lower costs and increase the graduation rate above today'sunimpressive 55 percent. They are reducing waste, streamlining, and modernizingcourses.But some influential analysts say too many colleges are reacting in shortsightedways that will undermine the institutions themselves, as well as the opportunitiesfor socioeconomic mobility that are at the core of American society. Just when publiccolleges are being swamped by applicants eager for low-cost classes and the nation

needs new ideas to pull the economy out of recession, many schools are shuttingclassroom doors, raising tuition, crowding courses, canceling extracurriculars, andhobbling research."This is an opportunity," says William Bowen, a former Princeton Universitypresident who has written several books examining inequities and quality problemsin higher education. "Some sensible pruning is occurring. Some good could come outof this." But, he worries, colleges are not using the recession as a spur for the kindsof fundamental changes needed to give more Americans better training.The financial troubles of community colleges and state universities are far moreimportant than the layoffs at elite schools such as Harvard and Yale that havegrabbed headlines. Such storied privates educate perhaps 2 percent of America's

18.3 million college students. Public colleges teach 74 percent.The Last Straw. The immediate crisis was sparked by an estimated 5 percentabout $4 billiondrop in the amount of money state governments apportioned tohigher education for the fiscal year that started July 1. Federal stimulus money canclose only part of that gap this year.A drop of a few billion dollars out of the $79 billion or so that states had spent onhigher education in 2008 might not sound severe, but for many colleges, this was alast straw. Even during the boom years, most states weren't increasing collegebudgets to match rising enrollments. The average public research university gotalmost $8,350 per student from taxpayers in 2002. By 2006, that had droppedbelow $7,100, according to the Delta Project on Postsecondary Education Costs,

Productivity, and Accountability.Now, public colleges are receiving even less per student. In hard-hit states such asCalifornia, Nevada, and Oregon, where colleges have had to slash their budgets bydouble-digit percentages in the past few months, educational and political leaderssay they don't have the time or money to do anything but turn away more students.In California, where tax revenues for higher education are expected to plunge byabout $2 billion, the flagship University of California system reduced its incomingfreshman class this year by 2,300 and will probably have to reduce it by thousands


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more in 2010. The schools that are supposed to take the UC overflow, the CaliforniaState University system, cut enrollment by about 4,000 students this year and arelikely to cut 10 times as many next year. The CSU overflow students, along withthousands of unemployed workers hoping for retraining, have been mobbingcommunity colleges. California community college leaders say they simply can't

accommodate the influx with a state budget reduction of more than $340 million.They fear they could end up turning away as many as 250,000 students in thecoming months.That's effectively trapping thousands of Californians, like 20-year-old SarahHendrickson, into unemployment or low-paying, dead-end jobs. Hendrickson, whois wrapping up her associate's degree at a community college in San Luis Obispo,says she broke down in tears when her adviser told her she couldn't transfer intothe overcrowded local state university for at least another year. "I am kind of stuckin all aspects of my life," she says.

California is the most extreme case, but many other states are closing classroom

doors by raising tuition or cutting aid. In Florida, where the higher education budgetthis year is $153 million, or 4 percent, lower than last year's, many publicuniversities will hike tuition by 15 percent. A year at Stony Brook University in NewYork, where state legislators have required public colleges to send some of theirtuition money to the state's general fund to reduce the deficit, will cost students atleast $1,000 more this year. The state of Washington, which has reduced its highereducation budget by $168 million, or 10.6 percent, will raise tuition at publicuniversities by about 14 percent this year. Washington's governor, ChristineGregoire, says that raising tuition was the least bad of all the options to make up a$9 billion shortfall over the next two years.Although the federal government has increased the number and size of the need-

based Pell grants and made it easier to take out and repay federally backed loans,many states, such as Florida and West Virginia, are reining in their financial aidprograms. The net result is that the true cost of college for many students is rising ata time when they have less money.Jon Shure, a tax expert at the Washington-based Center on Budget and PolicyPriorities, says state officials and taxpayers used to "subsidize students because thatwas in the best interests of society. Now the balance is shifting to where studentspay more and taxpayers less." That will mean some low-income students who couldbenefit from college will either be priced out or will hobble themselves witheducation debt, he says.The recession is making classrooms harder to get into, more expensiveand,

possibly, less instructive. Many colleges are saving money by packing more studentsinto fewer courses. Arizona public universities, for example, have laid off thousandsof employees and canceled scores of classes and programs in the past year. "Youdefinitely learn less," University of Arizona junior Kevin Ferguson says of his biggerclasses. "You can't interact with the professor when you are contending with 200 to300 other students." Instructors say increased class sizes mean they work manymore unpaid hours and have much less time to do, for example, thoughtful grading


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of papers, let alone research. Instructors' time shortages are being worsened bymany colleges' requirements that staffers take unpaid furlough days.Even seemingly small cuts might threaten the quality of education. The Kentuckycommunity college system has decided not to offer tenure to new hires, promptingoutcries that the system will lose the best candidates, who prefer colleges that offer

more job security. Florida State University pulled the phones out of English andhistory professors' offices, saving more than $12,000 a year but sparking complaintsthat it will be harder for students to reach professors.No band aid. The cuts also mean fewer choices and opportunities for students.Many colleges are deciding that they can no longer fund less popular courses. IdahoState University, like many other schools, has eliminated some low-enrollmentcourses such as French, German, Russian, Arabic, and Chinese. Many other schoolshave eliminated expensive science classes. The University of Nevada-Las Vegasfictional hometown of television's CSIhas decided to phase out its forensic scienceprogram. Others are targeting the arts: Washington State University is disbandingits theater program. The University of West Georgia has canceled some music

courses. "I don't believe I've ever seen a more troubling situation" for college musicstudents across the country, says Mark Camphouse, interim chair of George MasonUniversity's music department.Activities, too, are disappearing. Florida International University and MinnesotaState University-Mankato eliminated bands. FIU also zeroed out the budget for itscheerleading squad. Many schools are canceling expensive and untelevised sportsteams such as baseball, skiing, wrestling, and swimming. At least 10 schools,including Indiana State and Missouri Southern, have canceled their tennis teams sofar this year.

Such classroom and activity cuts are drawing increasing criticism from students and

faculty who point to what they consider to be continued wasteful extravagance.Florida Atlantic University laid off five computer science and engineeringprofessors, but it is proceeding with construction on a new movie theater. (FAUofficials say the construction is funded with donated and earmarked funds thatcouldn't be used for operations.)North Carolina's legislature has ordered public universities to cut their budgets byabout 10 percent but is still having taxpayers pick up almost $14 million worth oftuition for out-of-state students, including athletes. Amy Perko, executive director ofthe Knight Commission on Intercollegiate Athletics, says many other recession-strapped colleges are spending millions on coaches and stadiums in the hopes ofrecouping big bucks from television contracts or alumni donations. But NCAA

research shows that's a loser's bet, Perko says. "In 2006, only 19 of the 119programs in the most competitive division finished the year with positive netrevenue," she noted. The average shortfalls of nearly $9 million were subsidized bystudents and taxpayers, she says.Lead by example. The news isn't all dire. A few oil-rich statessuch as Texas,Alaska, and North Dakotaare increasing their spending on higher education. Andseveral hard-hit states, such as Michigan and Ohio, have managed so far to avoiddrastic cuts at universities.


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http://www.usnews.com/education/articles/2009/08/19/budget-cuts-take-toll-on-education

School's Out for Summer, LiterallyByZACH MINERS

July 6, 2009RSS Feed Print

The summer months can be a time for the best students to discover new interestsand for struggling students to suffer through remedial classes. But because statesare in the midst of a crippling recession, many such programs are being cut, andlow-income students might be feeling it the hardest, theNew York Timesreports.The federal stimulus bill has injected about $100 billion into public education, but alarge portion of the funds have yet to reach schools. Even after receiving federaldollars, local officials have been forced to make deep cuts to school budgets becausegovernment revenues have fallen so precipitously. In states from North Carolina andDelaware to California and Washington, summer school is being cut to help plug the

gaps.In Los Angeles, school officials are scrambling to shave hundreds of millions ofdollars from a $5.5 billion annual budget. They cut $34 million last month bycanceling elementary and middle school summer school programs except those fordisabled children. The move left 150,000 students without summer classes, andparents frantic to secure child care."We're seeing a disturbing trend of districts making huge cuts to summer school,"said Ron Fairchild, executive director of the National Center for Summer Learning atJohns Hopkins University, in an NYT interview. "It's having a disproportionateimpact on low-income families."In the 1970s, research from a Johns Hopkins professor, Karl Alexander, and other

sociologists showed that the academic achievement gap between poor and affluentchildren widens during the summer. Since then, the importance of summer schoolhas gained increasing attention.The researchers claim that low-income students who hold jobs or are idle during thesummer lose more math and reading skills than their affluent peers, who receiveintellectual stimulation during the summer from canoe trips, language camps, oreven ballet lessons.In North Carolina, the state's school boards association surveyed its 115 districts,and three quarters of those that responded said they would eliminate summerschool or reduce its scope."Things have gotten worse since we did the survey," Leanne Winner, a director at

the association, told the NYT.Richard DiPatri, schools superintendent in Brevard County, Fla., has heeded the callsof the Johns Hopkins research, making summer school classes free in recent yearsand available to all students, both for remedial work and for languages and otherelectives."We built it up, but last year here in Florida, our funding just went over the cliff," hesays.
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http://www.usnews.com/education/blogs/on-education/2009/07/06/schools-out-for-summer-literally

How the Recession Is Changing Students' College PlansByEDDY RAMREZ

April 8, 2009RSS Feed Print

A recent survey found that the recession is forcing more than 70 percent ofprospective college students to alter their plans for the upcoming school year,sometimes in drastic ways. When asked how their college plans might change, 53percent of students said they are considering attending a less expensive college, and47 percent said they are planning to work as freshmen. Many incoming freshmenare also likely to rely more heavily on financial aid counseling (43 percent) and toborrow more heavily (38 percent).Thesurvey, which drew responses from 1,030 households representing a wide rangeof incomes in all 50 states, reveals the heightened anxiety of the 2009 freshman

class. Only 28 percent of the respondents said the recession has no influence ontheir college enrollment plans. Longmire & Co., the educational consulting firm thatconducted the survey, says there is also a great deal of parental confusion aboutfinancial aid. Only 17 percent of surveyed parents said that they are "extremelyfamiliar" with aid available to them.While cost has not become the "overriding factor" in choosing a college, 16 percentof families in the study said it will most likely dictate their decision this year,compared with past years' average of 12 percent. New England has the largestproportion of students (64 percent) who are considering attending a less expensivecollege; the West has the largest share of students (14 percent) who said they willprobably forgo attending a four-year college and instead enroll in a community

college, where tuition is typically lower.Nationwide, 24 percent of surveyed students who were considering enrolling in aprivate college say they are now likely to attend a public one. They also plan to savemoney by attending a college that's close to home (38 percent) or by living at homewhile attending college (21 percent). The margin of error in the survey is plus orminus 3 percentage points.

http://www.usnews.com/education/blogs/on-education/2009/04/08/how-the-recession-is-changing-students-college-plans

So, here are some of the major contributors to rising college costs, and what it mightmean for your budget and planning:InflationInflation generally refers to the natural increase in the cost of living over time. Whileno one loves inflation, it's generally accepted as a fact of life. In the broad economy,
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this annual increase has historically averaged about 2%. In other words, you wouldneed $1.02 today to purchase what $1.00 bought you one year ago.The inflation of college costs has not been so gentle, averaging 4-6% annually. Inother words, a college education costing $10,000 this year will likely increase by$400-600 next year. In a nutshell, this means that college costs are doubling every

12-18 years, compared to everything else in the economy doubling in cost every 32years.Why do college costs inflate so much faster than other expenses? While it's hard toput an exact finger on it, we can see that large portions of a schools budget are more

sensitive to inflation that the typical American household.For example, colleges need to replace technology more often than the typical family.Also, teachers have been historically underpaid, and are finally getting some of theraises they deserve. Lastly, insurance costs for running large institutions andbusinesses have risen significantly since 9/11.DemandOne of lifes basic economic principles is that demand drives up prices. In other

words, the more people want the same thing, the more that its price is likely toclimb. Unfortunately for parents, this holds especially true with colleges.The fact that more students than ever are attempting to get a college degree allowscolleges to be aggressive in how they price their tuition. They do not have to worryabout scaring off a few students with high prices, because there are plenty of otherswilling to pay full fare. This demand is welcomed by schools since it allow them toexpand their programs, add amenities, and raise staff salaries.ScholarshipsIf your student is not one of the lucky few that receives a scholarship, then theybecome one of the unlucky few who helps pay for what others receive. This isespecially true with private colleges and universities that receive little or no funding

from the government.This becomes a perpetual problem that seems to feed on itself. As college costs rise,more students need scholarships. As larger scholarships are given, it continues toraise the price of higher education for the remaining students. This leaves morestudents needing scholarships to meet the skyrocketing costs, and so on.

Availability of ClassesSurprisingly, the popularity of certain majors and classes can lead overall expensesfor certain students to rise. Since colleges often seek to limit their class size,especially with upper-division classes, students may not be able to complete collegeas fast as theyd like. Many students are being forced into completing their degree in

five or more years because they simply cannot get all the classes they need within

the traditional four years.In addition to the 4-6% increase in tuition that students will experience during anadditional year, it also leaves parents on the hook for another year of room andboard. That cost alone can easily exceed $10,000.Bottom LineCollege costs are increasing faster than most of the other areas of life, and show nosigns of slowing. For parents or students within a year or two of starting school, thiscan mean that your last year of college may cost 15-25% more than your first year.


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For parents or students that have a number of years until college begins, it meansyour savings plan needs to account for this gigantic increase in cost.

http://collegesavings.about.com/od/understandingcollegecosts/a/risingcosts.htm

Federally backed student loans have several advantages over private loans andcredit cards:1) The interest rates are fixed, so your payments won't rise if rates rise.2) The government providesfree insurance, so your loan will be repaid if you arekilled or disabled.3) The government allows you todefer paymentsif you go back to school or join themilitary. (Warningoften, however, the government keeps quietly adding on theinterest, which can make this an expensive option.)4) Federal loans can be forgiven for graduates who go into teaching, health, publicservice, or other in-demand fields.

5) Students expecting to go into low-paying jobs can choose to repay their federalloans by committing up to15 percent of their income, instead of a fixed payment.6) Most schools allow students to shop for the best federal loan deal, which meansthey can often find discounts or other bargains.7) Once you're finished with school, it's easy to consolidate all your federal studentloans into one loan for easier payment and bookkeeping. The federal governmentalso lets you stretch out repayment for as much as 30 years, which significantlyreduces your monthly bills (though it also significantly increases the total amount ofmoney you'll pay over the years in interest.)8) Unlike some private lenders, the federal government doesn't charge you anythingextra if you want to repay your student loans early.

To apply for any federal loans, students must fill out aFAFSA.The best federal loans are (in order):Perkins loans: The cheapest federally backed educational loans are awarded byschools only to students with low incomes. Graduate students who qualify can getup to $8,000 a year at an interest rate of only 5 percent. Better yet: The governmentdoesn't charge any interest at all while the student is in school. These loans aremade only through schools, so students do not have a choice of lenders. There is amaximum lifetime limit of $40,000, including undergraduate Perkins debt.Subsidized Stafford loans: The second-cheapest federal loans are awarded only tolow-income students. The interest rate is capped at 6.8 percent, and lenders cancharge no more than 2 percent in upfront fees, which gives a maximum true annual

percentage rate of 7.25 percent. But many lenders will waive some of the fees andknock something off the interest rate, especially for students who pay automaticallyand on time. The reason these are called "subsidized" is that they don't charge anyinterest while the student is in schoola savings of several thousands of dollarsover the life of the loan. The federal government caps graduate student Staffords at$20,500 a year and $138,500 over a lifetime. No more than $8,500 a year can besubsidized. Most schools allow students to shop for the best Stafford deal.
http://collegesavings.about.com/od/understandingcollegecosts/a/risingcosts.htmhttp://collegesavings.about.com/od/understandingcollegecosts/a/risingcosts.htmhttp://www.ed.gov/offices/OSFAP/DCS/forms/disable.pdfhttp://www.ed.gov/offices/OSFAP/DCS/forms/disable.pdfhttp://www.ed.gov/offices/OSFAP/DCS/forms/disable.pdfhttp://www.studentaid.ed.gov/PORTALSWebApp/students/english/repaying.jsphttp://www.studentaid.ed.gov/PORTALSWebApp/students/english/repaying.jsphttp://www.studentaid.ed.gov/PORTALSWebApp/students/english/repaying.jsphttp://www.finaid.org/loans/ibr.phtmlhttp://www.finaid.org/loans/ibr.phtmlhttp://www.finaid.org/loans/ibr.phtmlhttp://www.fafsa.ed.gov/http://www.fafsa.ed.gov/http://www.fafsa.ed.gov/http://www.fafsa.ed.gov/what010.htm#perkinshttp://www.fafsa.ed.gov/what010.htm#perkinshttp://www.studentaid.ed.gov/PORTALSWebApp/students/english/studentloans.jsphttp://www.studentaid.ed.gov/PORTALSWebApp/students/english/studentloans.jsphttp://www.studentaid.ed.gov/PORTALSWebApp/students/english/studentloans.jsphttp://www.fafsa.ed.gov/what010.htm#perkinshttp://www.fafsa.ed.gov/http://www.finaid.org/loans/ibr.phtmlhttp://www.studentaid.ed.gov/PORTALSWebApp/students/english/repaying.jsphttp://www.ed.gov/offices/OSFAP/DCS/forms/disable.pdfhttp://collegesavings.about.com/od/understandingcollegecosts/a/risingcosts.htm


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Unsubsidized Stafford loans: These are awarded to almost every graduate studentwho applies, regardless of income. Lenders can charge graduate students amaximum of 6.8 percent in interest plus up to 2 percent in fees, which gives amaximum true annual percentage rate of 7.25 percent. But many lenders will waivesome of the fees and some will knock something off the interest rate, especially for

students who pay automatically and on time. The reason these are called"unsubsidized" is that the interest keeps building up while the student is in school.Students don't have to make payments while enrolled at least half time, but whenthey do finish school, the total amount they owe has increased, often substantially.The federal government caps graduate student Staffords at $20,500 a year and$138,500 over a lifetime. Most schools allow students to shop for the best Stafforddeal.PLUS: Graduate students who need more money after maxing out their Perkins andStafford loans can borrow their full remaining educational costs (after otherfinancial aid), including basic living expenses such as transportation, child care, etc.,from the PLUS program. Lenders can charge as much as 8.5 percent a year and up to

4 percentage points as fees, giving a true maximum annual percentage rate of 9.42percent. Some lenders, however, will offer discounts for automatic and on-timepayment. Most schools allow students to shop for the best PLUS deal.

http://collegesavings.about.com/od/understandingcollegecosts/a/risingcosts.htm

Is a graduate degree really the best way to get there? Knowing the answer tothis question requires understanding the field you want to work in and having somereal-world experience, whether it's a paying job, an internship, or volunteering. Forsome professions, a graduate degree increases your marketability but isn't anecessity. For others, like certain positions in healthcare or education, an advanced

degree is required.

"Take a step back and make sure this is really what you need," says EmilyWesterman, associate director of the career services office atNew York University'sSchool of Continuing and Professional Studies. "Very often, people [enroll in anadvanced-degree program] prematurely and then they find out it's not the rightdirection for them." One way to avoid finding yourself in that predicament isreaching out to people who have the job you want and asking how they got there,she says.

Will my family support me emotionally? Returning to the student lifestyle isn't

always easy, and you're likely to make a smoother transition if people around yousupport the move. If you have a spouse or children, your decision will affect them,too; it could mean less time together, a tighter grip on your finances, or even a moveto a new city.For Mark Dixon, a first-year MBA student at The George Washington University,going back to school meant big changes for both him and his wife, including movingto Washington, D.C., from Montgomery, Ala. After working in the Alabamagovernor's office for five years, Dixon saw an opportunity to earn his business
http://www.studentaid.ed.gov/PORTALSWebApp/students/english/studentloans.jsphttp://www.studentaid.ed.gov/PORTALSWebApp/students/english/studentloans.jsphttp://www.studentaid.ed.gov/PORTALSWebApp/students/english/PlusLoansGradProfstudents.jsphttp://www.studentaid.ed.gov/PORTALSWebApp/students/english/PlusLoansGradProfstudents.jsphttp://collegesavings.about.com/od/understandingcollegecosts/a/risingcosts.htmhttp://collegesavings.about.com/od/understandingcollegecosts/a/risingcosts.htmhttp://www.scps.nyu.edu/http://www.scps.nyu.edu/http://www.scps.nyu.edu/http://www.scps.nyu.edu/http://www.scps.nyu.edu/http://www.scps.nyu.edu/http://collegesavings.about.com/od/understandingcollegecosts/a/risingcosts.htmhttp://www.studentaid.ed.gov/PORTALSWebApp/students/english/PlusLoansGradProfstudents.jsphttp://www.studentaid.ed.gov/PORTALSWebApp/students/english/studentloans.jsp


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In the end, make a decision knowing you can't anticipate everything. "Sometimesyour interests change," says Smith, who earned his law degree in his twenties andwent back to school in his thirties for his MBA. "You need to make the best decisionsyou can at each juncture."

You've got a college degree. And a good job. But wheels are turning in your headabout the possibility of going back to school, maybe even fueled by the release of ourBest Graduate Schools Rankings. Is it time to earn an advanced degree?Deciding whether to go back to school isn't easy, particularly if you have a reliablepaycheck, which is more than many Americans can say in this struggling economy.But consider how education has shielded the more educated members of theworkforce from the recession. In February, when the nation's unemployment ratewas at 8.9 percent, workers with a bachelor's degree or more faced a jobless rate ofless than half that, 4.3 percent."There is no question that, on average, people who have more education earn moreand are unemployed less frequently," says Michael Greenstone, director ofThe

Hamilton Projectat The Brookings Institution, a non-partisan think tank. "Educationis the classic way for people to invest in themselves."But therein lies the catch: It's an investment. Advanced degrees can be pricey andtime-consuming, and earning one often means stepping away from the life you'vecreated.So when's the right time to leave your job to pursue a degree? Or to start takingevening or online classes in addition to your day job? If you already have anundergraduate degree, is more schooling really necessary?Regardless of the type of degree you're considering, here's what you shouldask yourself when weighing the option to go back to school:What do I want to do? Going back to school can be an effective way to advance

within your field or jump-start a career change. In either case, go into the decisionknowing your goals. Do you have a specific job you aspire to? A company you wantto work for? A salary you'd like to make? Figuring out what you want can be thetoughest part, but it's crucial to your success; if you know what you want, you canmore easily figure out how to get there.[SeeThe 50 Best Careers of 2011.]Above all else, make sure you're not going back to school because you're not surewhat else to do, saysAlexandra Levit, author of New Job, New You: A Guide toReinventing Yourself in a Bright New Career and member ofDeVry University'snewly launched Career Advisory Board. "A lot of young professionals ... go back toschool because it's comfortable," Levit says. "You want to make sure you're really

doing some soul-searching before making that move."Even those who end up at an unexpected destination usually benefit from having aninitial goal in mind. Sabrina Balmick, 29, worked as an executive assistant for arecruiting company for two years after college before deciding to get her master's inpublishing, the industry she hoped to work in. But after three years of studying fulltime, she completed the degree during the recession and couldn't find a publishingjob that paid enough to live in New York City. So she returned to her formercompany in Ft. Lauderdale, Fla., as a marketing manager. "It was kind of a
http://grad-schools.usnews.rankingsandreviews.com/best-graduate-schoolshttp://grad-schools.usnews.rankingsandreviews.com/best-graduate-schoolshttp://www.brookings.edu/projects/hamiltonproject.aspxhttp://www.brookings.edu/projects/hamiltonproject.aspxhttp://www.brookings.edu/projects/hamiltonproject.aspxhttp://www.brookings.edu/projects/hamiltonproject.aspxhttp://money.usnews.com/money/careers/articles/2010/12/06/the-50-best-careers-of-2011http://money.usnews.com/money/careers/articles/2010/12/06/the-50-best-careers-of-2011http://money.usnews.com/money/careers/articles/2010/12/06/the-50-best-careers-of-2011http://www.alexandralevit.com/index.htmlhttp://www.alexandralevit.com/index.htmlhttp://www.alexandralevit.com/index.htmlhttp://www.devry.edu/http://www.devry.edu/http://www.devry.edu/http://www.devry.edu/http://www.alexandralevit.com/index.htmlhttp://money.usnews.com/money/careers/articles/2010/12/06/the-50-best-careers-of-2011http://www.brookings.edu/projects/hamiltonproject.aspxhttp://www.brookings.edu/projects/hamiltonproject.aspxhttp://grad-schools.usnews.rankingsandreviews.com/best-graduate-schools


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roundabout way of basically getting promoted in the same company," says Balmick,who's happy with how her situation turned out. "I'm definitely glad that I went back[to school]."Is a graduate degree really the best way to get there? Knowing the answer tothis question requires understanding the field you want to work in and having some

real-world experience, whether it's a paying job, an internship, or volunteering. Forsome professions, a graduate degree increases your marketability but isn't anecessity. For others, like certain positions in healthcare or education, an advanceddegree is required.

http://money.usnews.com/money/careers/articles/2011/03/24/is-it-time-to-go-back-to-school?PageNr=1

What is the definition of "U-6 Unemployment Rate"?

The Bureau of Labor Statistics releases a bunch of different unemployment numbers

every month.

The unemployment number that is most often used in the media (and by thegovernment) is known as the "U-3". This number was 8.1% in February of 2009.

The "U-6" is considered to be a broader measure of the unemployment situation inthe United States.

The "U-6" includes two groups of people that the "U-3" does not:

1. "Marginally attached workers" - people who are not actively looking for work, but

who have indicated that they want a job and have looked for work (without success)sometime in the past 12 months. This class also includes "discouraged workers"who have completely given up on finding a job because they feel that they just won'tfind one.

2. People who are looking for full-time work but have to settle on a part-time jobdue to economic reasons. This means that they want full-time work, but can't find it.

Two pretty important groups of people, no?

The "official" unemployment number is the "U-3" - this was 8.1% in February.

The "U-6" was an eye-opening 14.8% in February.

http://www.davemanuel.com/investor-dictionary/u6-unemployment-rate/
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Major Trends in Employment: College Graduates Now Facing HigherUnemployment, U-6 Rate now at 14.8%, and 4.3 million jobs lost during thisRecession.Posted by mybudget360 in Employment, banks, bls, budget, economy, government,psychology, recession

2 Comment

The BLS has put out its monthly employment report and the data is once againshowing weakness in the U.S. employment market. What we are now seeing isconformation that this will in fact be the deepest and longest recession since theGreat Depression. What is more troubling is in light of the multiple bailouts andmarket alchemy, not much seems to be boosting the confidence of averageAmericans. This is probably due to the fact that employment is contracting andmost families facing unemployment have a hard time dealing with anything elsethan trying to find an additional stream of income for their household.

It is too simplistic to simply look at the 8.1% headline unemployment number. First,we need to look at the acceleration of monthly job losses. Over the past 4 months,cuts have been picking up:

In the last 4 months alone, we have seen 2,584,000 jobs cut from oureconomy. That is a large number and causes for concern since itdoesnt seem like this will be abating anytime soon. The headlineunemployment rate of 8.1% now puts us back to 1984:
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Yet this rate as I have talked about before does not highlight themagnitude of the problems in the economy including the fact that weare deleveraging from a 30 year housing and debt bubble. Amuch better measure of unemployment is the U-6 data found in tableA-12 which includes part-time workers and those who have given upfor work:

The U-6 unemployment data is more reflective of the actual feel ofunemployment for the average American. Most of us would agree that
http://www.mybudget360.com/the-housing-bubble-started-in-1979-the-3-stages-of-the-housing-bubble-from-birth-to-bust-housing-collapse-is-30-years-in-the-making/http://www.mybudget360.com/the-housing-bubble-started-in-1979-the-3-stages-of-the-housing-bubble-from-birth-to-bust-housing-collapse-is-30-years-in-the-making/http://www.mybudget360.com/wp-content/uploads/2009/03/u6.pnghttp://www.mybudget360.com/wp-content/uploads/2009/03/u3.pnghttp://www.mybudget360.com/wp-content/uploads/2009/03/u6.pnghttp://www.mybudget360.com/wp-content/uploads/2009/03/u3.pnghttp://www.mybudget360.com/the-housing-bubble-started-in-1979-the-3-stages-of-the-housing-bubble-from-birth-to-bust-housing-collapse-is-30-years-in-the-making/


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those working part-time but wanting full-time employment cannot beconsidered as fully employed. We can also agree that those who havegiven up looking for work should also be considered asunemployed. Hopefully, the media will shift their focus from the U-3number to this more broader and more accurate reflection of the

employment situation. As the U.S. Treasury and Federal Reservefocus on more bailouts, very little has been done to create sustainableindustries for future job creation. In fact, the Fed is actually hopingthe dollar collapses so we can then (ideally) be more competitive on aglobal scale yet the global economy is falling on hard times as well.Another important indicator in the employment report isunemployment by educational level. Of course, by all means the moreeducation you have the higher your chances of being employed. Letus look at some figures here:

The unemployment rate of high school graduates is 8.2% which tracksthe headline U-3 number. Let us now look at the unemployment rate

for college graduates (4 year degree and higher):
http://www.mybudget360.com/us-treasury-and-fed-determined-to-destroy-dollar-and-force-savers-to-spend-investing-in-a-government-hoping-for-a-us-dollar-collapse/http://www.mybudget360.com/us-treasury-and-fed-determined-to-destroy-dollar-and-force-savers-to-spend-investing-in-a-government-hoping-for-a-us-dollar-collapse/http://www.mybudget360.com/wp-content/uploads/2009/03/high-school-employment.pnghttp://www.mybudget360.com/us-treasury-and-fed-determined-to-destroy-dollar-and-force-savers-to-spend-investing-in-a-government-hoping-for-a-us-dollar-collapse/


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Even college graduates are falling on tougher times and this is seen inthe data. The rate for college graduates has doubled in one yearmeaning that higher paying jobs are now falling in largenumbers. This also means that states and the federal government willbe hurting further with falling tax revenues from these higher incomegroups.Yet one of the more startling stats of the day is we have surpassed the

number of unemployed from the Great Depression:
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During the peak of the Great Depression we had 12 million peopleunemployed in America. Now, we have 12,467,000. Of course ourpopulation is much larger, 3 times as much but this is simply anothercold statistics showing us how dire the situation has gotten.

http://www.mybudget360.com/finance-economy-major-trends-in-employment-college-graduates-now-facing-higher-unemployment-u-6-

rate-now-at-148-and-43-million-jobs-lost-during-this-recession/

HOUSEHOLD DATATable A-4. Employment status of the civilian population 25 yearsand over by educational attainment[Numbers in thousands]

Educational attainment

Not s

Nov.2010

Less than a high school diplomaCivilian labor force 11,730

Participation rate 46.3

Employed 9,943

Employment-population ratio 39.3

Unemployed 1,788

Unemployment rate 15.2
http://www.mybudget360.com/finance-economy-major-trends-in-employment-college-graduates-now-facing-higher-unemployment-u-6-rate-now-at-148-and-43-million-jobs-lost-during-this-recession/http://www.mybudget360.com/finance-economy-major-trends-in-employment-college-graduates-now-facing-higher-unemployment-u-6-rate-now-at-148-and-43-million-jobs-lost-during-this-recession/http://www.mybudget360.com/finance-economy-major-trends-in-employment-college-graduates-now-facing-higher-unemployment-u-6-rate-now-at-148-and-43-million-jobs-lost-during-this-recession/http://www.mybudget360.com/finance-economy-major-trends-in-employment-college-graduates-now-facing-higher-unemployment-u-6-rate-now-at-148-and-43-million-jobs-lost-during-this-recession/http://www.mybudget360.com/wp-content/uploads/2009/03/total-unemployed.pnghttp://www.mybudget360.com/finance-economy-major-trends-in-employment-college-graduates-now-facing-higher-unemployment-u-6-rate-now-at-148-and-43-million-jobs-lost-during-this-recession/http://www.mybudget360.com/finance-economy-major-trends-in-employment-college-graduates-now-facing-higher-unemployment-u-6-rate-now-at-148-and-43-million-jobs-lost-during-this-recession/http://www.mybudget360.com/finance-economy-major-trends-in-employment-college-graduates-now-facing-higher-unemployment-u-6-rate-now-at-148-and-43-million-jobs-lost-during-this-recession/


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High school graduates, no college(1)

Civilian labor force 37,794


Employed 34,178


Unemployed 3,616


Some college or associate degree



Employed 34,247


Unemployed 3,090


Bachelor's degree and higher(2)



Employed 44,101


Unemployed 2,228


Footnotes(1) Includes persons with a high school diploma or equivalent. (2) Includes persoNOTE: Updated population controls are introduced annually with the release of January dat

http://www.bls.gov/news.release/empsit.t04.htm

Why Did 17 Million Students Go to College?October 20, 2010, 9:53 am

ByRichard VedderTwo sets of information were presented to me in the last 24 hoursthat have dramatically reinforced my feeling that diminishing returns

have set in to investments in higher education, with increasingevidence suggesting that we are in one respect overinvesting in thefield. First, following up on information provided by former studentDouglas Himes at the Bureau of Labor Statistics (BLS), my sidekickChris Matgouranis showed me the table reproduced below (And formore seethis).
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Over 317,000 waiters and waitresses have college degrees (over 8,000of them have doctoral or professional degrees), along with over80,000 bartenders, and over 18,000 parking lot attendants. All told,some 17,000,000 Americans with college degrees are doing jobs thatthe BLS says require less than the skill levels associated with a

bachelors degree.

I have long been a proponent of Charles Murrays thesis that anincreasing number of people attending college do not have thecognitive abilities or other attributes usually necessary for success athigher levels of learning. As more and more try to attend colleges,either college degrees will be watered down (something alreadyhappening I suspect) or drop-out rates will rise.

The relentless claims of the Obama administration and others thathaving more college graduates is necessary for continued economicleadership is incompatible with this view. Putting issues of studentabilities aside, the growing disconnect between labor market realitiesand the propaganda of higher-education apologists is causing moreand more people to graduate and take menial jobs or no job at all.
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This is even true at the doctoral and professional levelthere are5,057 janitors in the U.S. with Ph.D.s, other doctorates, orprofessional degrees.

This week an extraordinarily interesting new study was posted on theWeb site of Americas most prestigious economic-researchorganization, the National Bureau of Economic Research. Threehighly regarded economists (one of whom has won the Nobel Prize inEconomic Science) have produced Estimating Marginal Returns toEducation, Working Paper 16474 of the NBER. After verysophisticated and elaborate analysis, the authors conclude Ingeneral, marginal and average returns to college are not the same.(p. 28)

In other words, even if on average, an investment in higher educationyields a good, say 10 percent, rate of return, it does not follow thatadding to existing investments will yield that return, partly forreasons outlined above. The authors (Pedro Carneiro, JamesHeckman, and Edward Vytlacil) make that point explicitly, statingSome marginal expansions of schooling produce gains that are well

below average returns, in general agreement with the analysis ofCharles Murray. (p.29)

Now it is true that college has a consumption as well as investment

function. People often enjoy going to classes, just as they enjoywatching movies or taking trips. They love the socializationdimensions of schoolingparticularly in this age of the country-clubization of American universities. They may improve their self-esteem by earning a college degree. Yet, at a time when resources arescarce, when American governments are running $1.3-trillion deficits,

when we face huge unfunded liabilit

impact of recession on education

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