Saturday Stew: Technology, Cannibal Rats, &c

Observation StewIt’s Saturday, and you know what that means: time to clear out the links list of articles that never quite formed into themes of three or more articles:

  • The iPod of Prison. An interesting article from the New Yorker on the Sony SRF-39FB, a clear plastic AM/FM radio that is the most popular radio … in prisons. The clear plastic is one factor, the sound quality and reception is another, as well as the price. It is only now starting to be replaced by MP3 players, where the prison controls what can be downloaded.
  • Risks of BYOD. The catchword today in business is BYOD – Bring Your Own Device. Businesses have become more accomodating of employee’s using their personal smartphones and other devices on corporate networks. But there’s a big downside — when you leave the company, typically they have the right to remotely wipe your device. You should read any connection agreements you need to click through carefully, and make an offline archive of any personal information before you leave.
  • Multilingual. Here’s a neat article and video: “Let It Go” (from Frozen) in 25 languages, and how Disney planned the movie for 41 languages. I love how seamless the video is — great job from the sound engineers to get the timing exactly right. I love listening to songs I know in other language, be it “Fiddler on the Roof” in Yiddish, “Hair” in Hebrew, “Les Miserables” in French, the Beatles in German. I blame my high school Spanish teacher, who constantly played “yo no encuentro satisfacción”.
  • Cannibal Rats. There evidently is a ship floating around the northern Atlantic that is filled with cannibal rats. Whether or not you think the story is real, the concept is right up there with “Snakes on a Plane”. Can’t you just see the horror movie now. Our teens on a pleasure cruise come upon an abandoned ship and decide to explore.. and they find…
  • No Ren Faires in Your Long-Term Future. Good news for history, English, and other liberal arts majors: it’s not the career death you’ve been told. Liberal arts majors may start off slower than others when it comes to the postgraduate career path, but they close much of the salary and unemployment gap over time, a new report shows. By their mid-50s, liberal arts majors with an advanced or undergraduate degree are on average making more money those who studied in professional and pre-professional fields, and are employed at similar rates…. with one exception. Salaries still lag behind engineering and math and sciences graduates, who in their late 50s make about $98,000 and $87,000, respectively.
  • A Loss for the Jewish Community. The LA Times and the Jewish Journal are reporting that Harvey Fields has died. Rabbi Fields was just taking over from Rabbi Wolf as senior Rabbi at Wilshire Blvd Temple when we got married; Rabbi Wolf had been senior rabbi for a year after the death of Rabbi Magnin. We were only at Wilshire as Fields was coming in, but he did remarkable things for the congregation during the time — he basically brought the congregation back into modern progressive Judaism, stemmed the membership decline, and completely revitalized the place. I was more involved with the camps, and during much of his time, there weren’t significant changes there (those came near the end of Fields’ tenure as Rabbi Leder was coming in). But Fields still deserves a lot of credit for what he did for Wilshire Blvd Temple and the Jewish community in Los Angeles.



Looking Back: College Planning and Decisions Made

userpic=ucla-csunLast year at this time we had just finished up with college application season, and were starting to deal with the craziness that is college financial aid applications. I mention this because a few days ago, a little bell went off in my head regarding this, saying (in effect), “Hey, you haven’t heard from College Planning Advisors (also here) in a while? Shouldn’t they be contacting you regarding the FAFSA?”. So I dropped them a note.

Their reply, essentially, was that I had only paid them for the freshman year; if I want their help for future years, it’s $497 per year, buddy. They sent me a copy of the contract to remind me. Of course, they were right; I’ll do the FAFSA on my own from now on.

However, this interchange reminded me of one of the few bad decisions I have made: to pay for and use College Planning Advisors (CPA) to help with the college application and financial process. Way back when my daughter was in 10th grade we contracted with these folks for just under $2500. Our hope was that they would help us navigate the college financial aid process, and hopefully make college more affordable. Did this happen? Well, our daughter ended up at UC Berkeley with no financial aid, which I think answers the question.

I think organizations such as this may be useful if you have unmotivated students who aren’t on top of the application process. Students that need help getting applications polished and done; students that need guidance to make themselves look stronger on paper. Organizations such as this are also useful if you have lots of assets (but still want to get financial aid); in such cases you have the liberty to play with hiding money in annuities and insurance policies that are viewed as retirement funds.

But when you are a family that is squarely middle class (for Los Angeles, which is upper middle class anywhere else), with a motivated student, there is little these folks can do. Part of this is due to the rising problems of private and public college costs. I’ve noted before that this puts you in the situation where you make too much to get any need-based aid, and you make too little (and housing is too expensive) to be able to pay without worry or being able to easily play with funds. Ah, but you say, there is “merit based” aid. My experience is that merit-based aid really isn’t; merit-based aid is a way to get some aid to the middle-class while not calling it need based. If it was truly merit-based, then every private college wouldn’t have given almost exactly the same amount of “merit” based aid, nor would merit-based aid be reduced if you got additional scholarships. In our case, we applied to a load of private schools, and most offered about the same amount, which brought a $60K bill down to about $45K (almost exactly in all cases). This meant that a UC education, even at full ride, was cheaper.

So how is the system gamed? In short, most of the financial aid profiles exclude retirement funds, so if there is a way to find an investment that is considered a locked-in retirement fund, but is actually liquid, you’re golden. Hence, annuities and insurance policies. The problem is that I didn’t trust the liquidity of these options — I couldn’t find it in writing — in fact, what I found in writing often contradicted what I was told. Other people may be more comfortable with these approaches, a word, and a handshake. But I’ve been in the skepticism and “prove it to me” business for too long (my mom was from Missouri, and consider the work I do at “the ranch”), so unless I can independently confirm it, I don’t believe it.

So, the financial advice that CPA provided (and the financial options they offered) didn’t end up that useful — the main service we got from them was filling out the financial forms. Adding to the problems was the fact that CPA did not (and still does not, based on their latest mail to me) understand privacy protection. This is something I’m well aware of because of what I do for a living (and those five letters after my name, CISSP). They were having clients submit financial information (such as scans of tax returns) unencrypted to them via email (something I never did — I always delivered paper copies). They were equally cavalier in their emails (when they sent me a copy of my contract yesterday, for example, it still plainly had my credit card number on it (which luckily has both expired and been changed).

On financial aid, their focus was the financial aid provided through the FAFSA and CSS profiles. They didn’t help find other external scholarships for which she might have been eligible after she didn’t get enough from the schools. They seemed to be of the impression that applying for those would actually hurt in the long run. Of course, none of this was made clear back in 2009 when we signed up.

So they didn’t help on the financial end. They also didn’t help on the college selection end. My daughter ended up picking which colleges she wanted — they forced her to add some to the list that supposedly had easier admission requirements (which added to the application cost), but those weren’t necessarily realistic choices. They were not able to actually advise on particular colleges and their strengths, other than the financial aid aspects and likelihood of admission aspects. They actually didn’t want Berkeley on the list (too hard to get into, and she already had too many “hard to get into” colleges); they were happy with UC Santa Barbara and UC Santa Cruz on the list to satisfy them (and she added Berkeley when she submitted the application just to see if she could get in).

So, looking back, I think what we spent for them was money mostly wasted. They supposedly had a guarantee that they would get you more than you could have gotten without using them, but try to prove what “could” have happened. I think they might work for some families — and do, based on their testimonials. But for us… looking back: given my nature as a skeptic and our daughter’s drive, combined with the specific nature of our finances — they weren’t worth it. But it is a sunk cost for us — money that I won’t get back. I wanted to write this for the other parents out there — parents looking into services such as this. They may not be worth it. Look at your situation carefully — how you are, how your child is, and how much you want to play the games — before you plunk down the money.

In the end, I think we ended up OK despite using CPA. Our daughter is at a great school that is ending up to be perfect for her — the diversity and the challenge is far better than she would have gotten at a more homogenous private liberal arts college. She’ll make connections that will be useful, and in time she’ll get used to the size of the campus. Of her experience to date, she has written, “My academic experience at Berkeley has been nothing but superb, it’s more than I could ask for.” As for price, it is what it is. At least we are state residents, so it is somewhat more affordable (and the passage of Prop. 30 helps with things). She’s certainly getting to go to one of the best state universities in the country without the price tag of a discounted private university.

(even if UCLA is better 🙂 )



Bright College Days

As I write this, I’m on the eve of driving my daughter up to UC Berkeley to start her college years. So here are a few college related stories:



College Planning in the News

Today’s lunchtime news chum brings together a collection of articles related to colleges and universities, which of course is of interest to me as my daughter goes off to UCB in less than a month!

  • Dealing With The Expense. USA Today has an article about how the rising cost of college is forcing people to figure out how to cut college costs. For many, that means going to a local school and living at home instead of going away to school (I know about half of our expense for UCB is lodging). Of course, parents will tell you that having a kid at home costs as well. This also shows up in a Time Magazine article that notes that going away to college may now be the exception rather than the rule. I’d also expect to see a trend where more people are going to state schools, simply because the amount of scholarships that the private schools are offering has gone down as well. The articles note how parents are contributing less to their children’s college education. I can see multiple reasons for that: there’s no money to pull out in HELOCs; investments are underperforming; and college costs have gone up much faster than expected.
  • Student Loans. Another topic much in the news is student loans. An interesting article from the LA Times notes that student loan delinquency is higher for people in their 40s. The consensus is that this is due to the combination of having college and high-school children at that age, home mortgages, and the loans.
  • Zombies at UC. No, I’m not talking about the people that can’t pass the physics labs. Rather, a bunch of zombies staged a protest at yesterday’s UC Regents meeting. They were demanding braaaaaaains, but the Regents replied that they didn’t have any. Seriously, the zombies were demanding that the Regents stop fee and tuition hikes and the privatization of state capital debt.
  • Out in 4. The Sacramento Bee had a really interesting chart of the percentage of people from California colleges that actually graduate in 4 years. At the top were Pomona College, Occidental College, and Stanford (at those prices, I can understand why people want to get out). The top UCs (which were #9 and #10, respectively) were UCLA and UCB. The top Cal States (which came in below all UC campuses), at #28 and #29, were San Diego State and Sonoma State. CSUN was near the bottom, at #44. The bottom three were San Jose State, CSU Dominguez Hills, and University of Phoenix. It is interesting to note that University of Phoenix, which came in dead last with under 10% graduating in 4 years, was also one of the for-profits criticized for abusing GI college benefits.



The Next Horror Movie Plot: College Costs and Student Loans

I’m running scared. Why, you may ask. The answer is simple: My daughter is going off to college in a few months. She graduates in two weeks. That means there is one thing, and only one thing, on my mind: How the hell am I going to pay for college?

This is the reason that a number of articles today related to student loans and college costs have caught my eye. First, there was a long article from MSNBC on how soaring college costs have hobbled a decade. The essence of this article is that the next loan bubble to “pop” will be the student loan bubble, and that college costs have gotten out of control. Another article from USA Today talks about how student’s lament the total amount of debt, while Congress fiddles debates how to address the problem. Then there’s the article in the LA Times about the student loan blues, about how students lament taking on so many loans for college. Lastly, Friday’s Planet Money (which I haven’t listened to yet) is on the subject of figuring out the real cost of college: the “sticker price” is often not what families pay. (and of course, for those attending state colleges, this all ties into the state budget woes I’ve previously written about).

So, as this week’s bills are paid, it is time for another rant.

College costs have gotten to be ridiculous, but even more ridiculous is our system of “financial aid”. From the point of view of someone who is solidly middle class, this system seems to be designed to provide little help. If you really can’t afford college — that is, you have true financial need with nothing saved — you’ll get loads of need-based aid. College will be cheap. If you are truly rich, you don’t care what college costs. If you are middle-class? If you are in the position of having a good salary, but a large mortgage and not enough saved? Many private universities offer what are referred to as “merit” scholarships — supposedly academic, based on essays and such. Are they? It is odd that all the colleges seem to offer just about the same amount of “merit” aid. Further, that “merit” aid is reduced if you get other scholarships. I’ve come to a belief that this “merit” aid is just a fancy coupon: a way of reducing the sticker costs for those that take the effort to apply for it.

The financial aid letters don’t help. They convince a parent that college is all paid for! But when you read the letters, you see that the bulk of that payment is expected to be student loans… and even more expensive parent loans. This is the loan bubble. Colleges push the loans, and students taken them on and parents take them on. Student loans are unique among loans: there no requirement to have the ability to pay (unlike a car loan, where if you don’t have the income, you can’t buy that $300K car).  There needs to be some form of caps on the loans, based on the intended career of the student, so they don’t get into a position where they owe more than they could make in a reasonable time.

Am I arguing that student loans shouldn’t exist? No. Low-interest and interest deferred loans for students are reasonable, with caps. I’m inclined to use those for Erin, even if we pay them off for her. Helps her credit rating, and if they approve the 3.x% interest rates, the pricing is reasonable. If one doesn’t overextend, possibly using HELOC (home equity loans) may make sense as well, especially if combined with a refinance, as the interest is deductable. But normal parent loans at 7+% are ridiculous, as are private student loans at equally high rates. Further, as I noted above, there needs to be a cap on student loans based on the expected career annual earnings five years after eventual graduation with the final degree. You shouldn’t be able to borrow more than you can reasonably pay back. That’s what created the housing bubble; that’s what’s creating the scholarship bubble.

We also need to address the pricing side of the issue. I think colleges have gotten off track with their pricing, and need to learn to have “everyday low prices”. Much as one complains about the high costs of public colleges, for the middle class, often a UC education at full ride is cheaper than a private education with scholarships. We need to use the money we’re setting aside for scholarships to lower the price for everyone, and make “merit” and “need-based” scholarships in place for the truly merited and truly needy.

We also need to simplify the private scholarship process. Just as we’ve gone to a combined financial aid application, there should be a combined scholarship application where you indicate all the relevant aspects (ethinicity, club membership, and all the other special factors), submit standard letters of rec, submit a standard essay, submit transcripts to one place and it farms it out to all the applicable organizations… who can then follow up with additional questions after doing their triage. It would help them award money to qualified candidates, and help candidates find organizations.

We also need to fix the community college problem. Community colleges can be a great choice to save money. There are, however, two problems (which are related). First, there is the peer problem: all your friends are going to prestigious universities, and you are going to Podunk Community College. The pressure (and the college counselors) force you to apply to the more expensive school for the earlier years. There’s also the problem that there’s no guarantee of transferring into a prestiguous college from a community college. The answer is to having a binding transfer program: a joint application to 4-year institution and a community college, where there is clear coordination and agreement that if a particular program plan is met with appropriate grades, the student can transfer after the general education portion (first two years) is satisfied and can complete at the 4-year institution. This doesn’t exist yet, and would go a long way to reducing education costs.

With respect to general education, colleges also need to pool resources to eliminate redundancy. Again, community colleges can work as a resource here. There’s no reason that general education courses should not be combined across universities that are close to each other. This is what industry does when it does time sharing, and it maximizes effectiveness.

Of course, I haven’t addressed the question of whether most students that go to college belong in college. That’s because I do believe college is important. It teaches critical thinking; it provides a skill base that will serve the student well in the future. Although college is no guarantee of success, surveys have shown that having an AA or BS degree does make someone more likely to be employed than someone lacking a degree, and to be employed in a job that will pay better. The question is: does the increase in pay offset the cost of the education? I think the jury is still out on that one, and the answer changes as college costs rise.

I know I’ve been ranty this morning. One of the reasons I love blogging is that it allows me to work out issues by writing about them, and to share my concerns (which reduces my stress). I thank you for reading, and welcome your opinions.

Music: Emotion (Barbra Streisand): Time Machine


Colleges and Finances

My lunchtime reading has also highlighted a number of articles related to colleges (particularly UC) and finances. Hopefully, they won’t ruin your lunch.

  • UC Fees Increasing… maybe. Well, that “maybe” is a highly-likely (sigh). If the state doesn’t increase funding by $125 million, it is likely the 10-campus UC system would raise tuition by 6% this fall. Further, if the initiative in November doesn’t pass, we’re looking at a mid-year tuition increase in the “range of double digits” or drastic cuts to campus programs and staffing. With the 6% increase, tuition for in-state undergraduates would rise $731 to $12,923. Sigh. I just keep reminding myself that it is still a lot less than private school tuition, even with merit scholarships. One side effect of the increasing tuition, though, is that more and more California students are going out of state. There are a number of factors that are fallout of that: some are taking advantage of a special program that gives in-state tuition to some out of state students, others are depending more on merit/need scholarships from out of state private schools (which increases their costs, and thus tuition), and it creates more space for out of state students to attend UC/CSU (bringing in out of state resident fees).
  • Paying for College. When you think about paying for college, there are a number of ways to do it. One is scholarships. The other is to reduce parental costs, freeing up cash for college. Erin’s exploring the former, and we’re doing the latter. This includes shopping for the best auto insurance quotes, and exploring refinancing. Alas, since the last ReFi, values had dropped more. This is why I’m pleased to read about the streamlining of HARP. We’re not underwater, but we’re now under 20% equity. Doing a HARP ReFi will go a large way towards making college more affordable. We won’t be able to take advantage of the other program to reduce loan balances because we’re not underwater–but that’s OK.
  • Bright College Days. Thinking about Erin going off to college has me wistfully looking back at my days at UCLA. I uncovered a few articles looking at the history of buildings in Westwood, including the buildings that used to be the Bratskeller and the BofA and the buildings that used to be Maria’s and Bullocks. Ah, the days when Westwood was a real college town…
  • Value of College. Is college worth it? That’s the on-going debate these days. A recent study shows the effect of a college degree: Only about half are working full-time, with the majority starting with less pay than expected while also dealing with huge student debts. Nearly six in 10 think they’ll end up less financially successful than their elders. Workers who graduated during the recession – from 2009 through last year – earned a median starting salary of $27,000 – or $3,000 less annually than earlier graduates. Nearly a quarter of all respondents said their current job pays much less than they’d anticipated.Female graduates earned $2,000 less than their male counterparts. Most fresh college grads said their first jobs didn’t help them advance along a career path – and that the positions didn’t even require a four-year degree. Four in 10 said they took the work just to get by. So does it pay to go to college? Is it worth between $150K-$300K over a lifetime? Well, a survey from 2011 showed that people with a bachelor’s degree make 84% more over a lifetime than high school graduates. In 1999, the premium was 75%. How much do they make? The 2011 survey showed that, on average, a doctoral degree-holder will earn $3.3 million over a lifetime, compared to $2.3 million for a college graduate and $1.3 million for those with a high school diploma. That said, people with less education in high-paying occupations can out-earn their counterparts with advanced degrees, yet within the same industry, workers with more schooling usually earn more. What is unknown is how that changed between 2011 and 2012. Still, these are important things to keep in mind when trying to decide if college is worth what you pay. Lastly, it is important to remember that college is often more than just what you learn: it is the ability to network with alumni that might open the door for you, make the connections to recommend you, or provide you with contacts. Often these are much more valuable in the end run.



Campus News Chum

Sometime, lunchtime news chum themes just jell. Today’s is a good example: we have a collection of lunchtime stories related to college:

  • Automating Your Room. A UC Berkeley freshman has completely automated his dorm room in Unit 2 at UCB (presumably, in the high-rise tower; I can’t see this in a mini-suite). There’s an even more detailed article in the Daily Cal. Features of the room include a strobe light, a black light, a laser light and a disco ball, all of which can be turned on with buttons throughout the room, as well as with voice recognition software on his computer or an i-Phone app. The voice commands also activate different modes such as a party mode, which syncs dance music to green lasers that begin to flash at the press of a emergency red button. Did he get in trouble? According to the Daily Cal article,the residence hall policy states “misuse or tampering with fire safety equipment including, but not limited to, removal of doors, door closures, and unapproved posting is prohibited.” Because the student had various extension cords and light fixtures affixed throughout the room, a UCB electrician was sent Wednesday afternoon to assess the space, but nothing deserving of a violation was found.Despite the creative measures he took, residence hall officials have asked the student to appear at a judicial hearing this week because he is allegedly in violation of housing policies, and the room is a potential fire hazard.
  • Commencement Speeches. An interesting article in the WSJ looks at things they won’t tell you in your college commencement speech. Examples: #1 “Your time in fraternity basements was well spent”; #2 “Some of your worst days lie ahead”; #7 “Your parents don’t want what is best for you” (they want what is good for you, which is a different thing); and #8 “Don’t model your life after a circus animal”. Well worth reading for the explanations.
  • Community College Transfers. A common tactic here in California is for students to go to community colleges and then transfer to a UC. This saves a lot of money. But… it may not always work. UCSD has joined UCB and UCLA in no longer guaranteeing acceptance to community college transfers.
  • Loan Hostages. Lastly, student loans have been in the news of late. Here’s an interesting aspect that hasn’t been covered as much: Colleges often hold transcripts hostage when loans are unpaid. This can be a big deal if you need that transcript to get a job or apply to graduate school. Colleges don’t even need to do this, as they have already gotten the money.

Colleges have been on my mind of late as we prepare Erin for UC Berkeley. I don’t know if she’s excited to go; right now, she’s pissed that she didn’t get into her first choice schools (in particular, Reed in Portland OR). I do think Berkeley will be the best place for her given her quirkyness and variety of interests, but she doesn’t see that yet. I’m not sure when she will get excited about the school; I’m hoping it will be as we visit it a few times over the summer and after orientation.

Music: Rock & Roll With It (Billy Burnette): Keep On Keeping On


The Loan Arranger

Right now, student loans are a big campaign issue. Today’s lunchtime news chum brings together a few articles on the subject:

  • What We Owe. NPR’s Planet Money has an interesting blog entry on what we owe on student loans. It is an interesting example of how statistics can mislead*. For example, we all know that Americans now owe more on student loans than they owe on their credit cards, and that the amount is increasing every year. What isn’t mentioned is the “why”: more students are attending universities than ever before. Average debt per college graduate is rising — but not nearly as fast as total student debt. There are some interesting charts in the blog entry.
  • When We Pay. I was lucky enough not to have student loans, but many aren’t that lucky. President Obama went to Occidental. Erin applied there–they are over $68K/year! So it is not a surprise to read that President Obama didn’t finish off paying his student loans until 8 years ago!
  • What We Pay. The Huffington Post has a nice article on something college parents know: those financial aid letters lie! Specifically, when they are presenting how much aid “the college” is giving, they include in that aid both college-offered and federal loans. I’m sorry, but a loan (unless it is 0%) isn’t aid–it actually makes college cost more when you include the interest. How does this make college more affordable? We saw this with Erin’s aid letters: One university (it was either American or Occidental) indicated we had something like 40K in aid… $15 K in merit scholarships (good), and the rest in parent loans (bad). I’m pleased to see that work is being done on a standard, non-misleading form of aid letter.
  • What It Costs. USA Today has an interesting piece on how some universities are charging more for “harder” majors (translation: those that will earn more money). That’s just wrong. Given how students change majors and take minors and such, plus all the breadth requirements, the major shouldn’t affect the cost (with the exception of certain self-supporting programs).

*: Another example of misleading statistics. We’ve all been seeing the reports about how over half of college graduates are either unemployed or underemployed. People are taking this data, combining it with the student loan statistics, and saying that we don’t need as many people going to college. But that’s misleading. What they aren’t doing is comparing it to people with just high school educations or without high school diplomas. I couldn’t easily find current numbers, but in July 2009, the unemployment rate for high school dropouts was 15.4 percent, compared to 9.4 percent for high school graduates, 7.9 percent for individuals with some college credits or an associate’s degree, and 4.7 percent for those with a bachelor’s degree or higher. Extrapolate that out. Those without college degrees are doing far worse than half under- or un-employed. Further, they didn’t look at the salaries earned — I’d be willing to guess that, on average, those with college degrees earn more than those with high-school degrees. They may even earn enough to pay off their loans 🙂

Music: Drive Time (Doyle Lawson and Quicksilver): The Greenbrier Hop