Gloomy outlook for radiologists

“The times of graduating from medical school and driving a Porsche are done,” according to a radiology resident witnessing the gloomy outlook for his medical specialty.

At St. Barnabas Hospital in the Bronx, a dozen radiologists in training, including Dr. Luke Gerges, 28, are suddenly stranded on an expensive road to nowhere. All received termination notices recently because their hospital is ending their residency program next year as part of a plan to replace its radiologists with a teleradiology company that reads diagnostic images remotely.

“Those days of raking in the dough with radiology are gone,” said Dr. Gerges, who is four years beyond medical school and $300,000 in debt. He said he chose a specialty he loves without caring that big salaries were waning, but never imagined it would be this hard to finish his postgraduate training and get a job.

An unsustainable growth in costs has led to the remote reading of radiology images.

Starting in the 1980s, the advent of technology like M.R.I.’s and CT scans, combined with a fee-for-service system, created ballooning demand for imaging and drove the compensation of radiologists to unsustainable heights, he said. “That led to a sense of entitlement in some people’s minds,” he said. “And that led to this development of offshore remote reading of cases.”

By 2001, with the supply of radiologists limited by a 1997 Congressional cap on all Medicare-supported residencies, nighttime demand was unmanageable for smaller emergency rooms. So-called nighthawk radiology services began pooling the diagnostic imaging loads of several hospitals and transmitting them electronically to American radiologists stationed overseas or working from home.

Though outsourcing to India grabbed headlines, the big growth in teleradiology was domestic. Now the nighthawk companies, staffed by recent radiology graduates, are competing for the daytime work, too.

According to one hospital spokesman, remote reading may actually improve the quality of care as well as cut costs.

Other specialties are also seeing restricted growth.

Few specialties have been immune to the same factors depressing radiology: deep Medicare cuts, cut-rate competition driven by technology, doubts about the health value of many tests and procedures and new measures to tilt public money to primary care.

Meanwhile, nurse practitioners are projected to nearly double in number by 2025.

The MBA is no longer considered such a good deal

First, the advice was, “Don’t go law school!”.  Now, it’s also, “Don’t go to business school!”  With stagnating salaries and surging debt levels, the MBA is no longer considered a certain path to financial success.

The reasons are twofold according to Megan McCardle.

It strikes me as a real problem that more people are paying a lot for degrees that don’t necessarily boost their earning potential. It’s a symptom of two worrying economic trends: the relentless push for ever more educational credentials, and the stagnant labor market.

The MBA has been devalued, as pointed out in the Wall Street Journal.

A weak economic climate is only partly to blame for the M.B.A.’s plight. The changing nature of B-school programs, evolving corporate needs—as well as the perceived value of the degree—have all helped dilute the M.B.A.’s allure.

Formerly, the traditional M.B.A. was mainly the product of a full-time, two-year program. But beginning in the early 1990s, many schools created part-time and executive M.B.A. programs, with lower-ranked schools often following in the footsteps of academic leaders. Online degrees also gained in popularity.

As a result, the number of M.B.A. degrees granted has grown faster than the population, says Brooks Holtom, a management professor at Georgetown University’s McDonough School of Business.

“An M.B.A. is a club that is now not exclusive,” he says. “You should not assume that this less exclusive club is going to confer the same benefits.”

A change in hiring patterns indicates bachelor’s degrees are more in demand.

It is unclear how many M.B.A.s the market really needs. Recently, more companies have indicated that “they are moving away from an emphasis on M.B.A.s” and are instead hiring more undergraduates at lower salaries that they can then train in-house, says Camille Kelly, vice president of employer branding at Universum, a firm that advises companies on how to attract and retain the best employees. Companies, she says, “still will do M.B.A. hiring, but it won’t be to the same extent they have in the past.”

Advice from McCardle

… When young people ask me whether they should get an MBA, I give them the same advice that I got in the late 1990s: unless you can get into a top 10* (or have a very specific job that you know you can get by attending a regional program), then don’t. You’re too likely to end up with massive debt and no very good prospects for paying it.

Related:  ‘paper value of an MBA might be overstated’ (Cost of College)

Winners and losers in recent college student loan legislation

Recent legislation saves $7 billion for some college students but creates $20 billion in extra costs for others.

Last-minute legislation to keep the subsidized Stafford student loan interest rate at 3.4% for at least one more year is estimated to save students approximately $7 billion, but the cost of other less publicized changes will cost them “roughly $20 billion”.

College students are facing a roughly $20 billion increase in the cost of their federal loans, despite a much-heralded deal in Washington to contain the expense of higher education.

Starting Sunday, students hoping to earn the graduate degrees that have become mandatory for many white-collar jobs will become responsible for paying the interest on their federal loans while they are in school and immediately after they graduate. That means they’ll have to pay an extra $18 billion out of pocket over the next decade.

Meanwhile, the government will no longer cover the interest on undergraduate loans during the six months after students finish school. That’s expected to cost them more than $2 billion.

These changes have received little attention as lawmakers instead focus on preventing a spike in interest rates on federal student loans. They are the fallout of earlier political battles and compromises over broader issues such as the federal budget and the national debt ceiling….

Another recent change cut the Pell Grant maximum eligibility period from eight to six years.

Related:  A roundup of pending federal college financial aid changes

No, no, no! – $200,000 in debt after a degree in communications

It almost never makes sense to incur $200,000 in student loans so you can graduate with a master’s degree in communications.

In a story about young women dropping out of the work force to go to school, this anecdote about one student going for her master’s degree in strategic communications caught my eye.

“I was working part-time at Starbucks for a year and a half,” said Laura Baker, 24, who started a master’s program in strategic communications this fall at the University of Denver. “I wasn’t willing to just stay there. I had to do something.”…

… Including the loans that financed her undergraduate education at Wartburg College in Waverly, Iowa, she will complete her master’s program next year owing about $200,000 in debt.

“I have to have faith that I will eventually get a good job that pays enough to pay my living expenses and pay back my loans,” she said, “and hopefully make me happy in the process.”

To pay off a $200,000 student loan you need a $200,000 annual salary

According to this Georgetown University report on the economic value of college majors, the median salary of a worker with a master’s in communications is about $65,000.  Mind you, that average is for all levels of experience, so a new graduate just beginning her career should expect to earn less.  When Ms. Baker begins to pay down her $200,000 student loan after she graduates next year, her monthly payments can be expected to be about $1,775.  Here’s the cautionary language that accompanies the calculation results for that $200,000 loan amount at the FinAid loan calculation website.

It is estimated that you will need an annual salary of at least $213,044.40 to be able to afford to repay this loan. This estimate assumes that 10% of your gross monthly income will be devoted to repaying your student loans. This corresponds to a debt-to-income ratio of 0.9. If you use 15% of your gross monthly income to repay the loan, you will need an annual salary of only $142,029.60, but you may experience some financial difficulty.This corresponds to a debt-to-income ratio of 1.4.

Bad news recap

• When she graduates, the best case scenario will be a job paying about $65,000, which translates into an estimated monthly take-home of $4,165.
• Monthly student loan payments will be $1,775, meaning 43% of her take-home pay will go towards her student loan.  This is considered a financially risky profile.
• Of course, this doesn’t take into account any other debt a new employee typically incurs, such as a car loan or credit cards.  And she should forget about qualifying for a mortgage until she’s in her forties.

I expect Ms. Baker plans to defray some of her loan payment expenses by taking advantage of the Public Service Loan Forgiveness (PSLF) or the Income-Based Repayment (IBR) federal programs.  But given the size of her debt, it’s likely the bulk of her loan obligations would remain intact.

If she were my daughter, I probably would have counseled her to stay at Starbucks for a while longer.

Marriage ‘penalty’ - Another thought comes to mind.  I would be quite concerned if my son were contemplating marriage to someone who owed $200,000 in student loans and whose main marketable achievement was a degree in communications.

Is this young lady another “Occupy” protestor in the making?

$200,000 in student loans - today's communications major may be tomorrow's 'Occupier'

Hybrid learning breaks down geographic barriers for Northeastern University

Northeastern University is expanding its brand of co-op business education across geographic regions by investing heavily in hybrid education, with its first branch campus in Charlotte, NC.

The goal is to offer master’s degrees in industries like cybersecurity, health informatics and project management, matching programs with each city’s industries and labor needs, through a mix of virtual learning and fly-ins from professors based in Boston (tuition will be the same as at the main campus).

And it’s not doing it on the cheap

Northeastern, which is spending $60 million to support the expansion, is perhaps the most ambitious of a handful of brick-and-mortar institutions looking to broaden their footprint in new markets and with new methods of instruction….

Northeastern has hired 261 tenured and tenure-track professors in the last five years, about twice as many as in the previous five, and plans to add 200 more in the next three years — all of whom will be based at the home campus in Boston.

Examining traditional assumption that face-to-face is always better than online

“This is a time of huge transition in an industry that hasn’t changed much since the Middle Ages,” said Charles P. Bird, a former vice president of Ohio University who helped develop the institution’s online offerings and now works as a consultant. “Higher education is going from traditional face-to-face delivery, and the unexamined assumption that that is good, to thinking about delivering a high-quality online experience, whether fully online or hybrid.”

Drexel University has struggled with a similar enterprise it began in 2009, perhaps miscalculating the importance of local relationships.

“Bill Gates says place is going to matter less and less for universities in the future, but I think that’s wrong,” said Mr. Aoun, Northeastern’s president. “I think a successful university has to be part of a community.”

Savings for students, and the question of quality

Tuition costs for Northeastern’s new hybrid master’s are the same as those for its Boston campus program, but the savings for students will be in time, convenience, and living expenses.  I remember years ago when my husband was planning his return to school to pursue an MBA.  Since online was not an option, we had to price out the potential costs in terms of my lost income and moving expenses.  Today, that equation is quickly changing.

An important question that remains unanswered is about how the quality of online education compares with face-to-face.  Northeastern, ranked 56 on BusinessWeek’s list of business schools , would seem to have a good chance of serving up a high quality experience with its hybrid approach.

Related:

• The University of North Carolina’s Kenan-Flagler Business School is taking its brand online.
• M.I.T. adds credentialing to its online course program 

Is data analytics the new ‘plastics’?

…
In “The Graduate”, recent college graduate Ben receives advice from an old family friend.

Mr. McGuire: I just want to say one word to you -just one word.
: : : Ben: Yes sir.
: : : Mr. McGuire: Are you listening?
: : : Ben: Yes I am.
: : : Mr. McGuire: ‘Plastics.’
: : : Ben: Exactly how do you mean?
: : : Mr. McGuire: There’s a great future in plastics. Think about it. Will you think about it?
: : : Ben: Yes I will.
: : : Mr. McGuire: Shh! Enough said. That’s a deal.

Is data analytics the new plastics?  If so, even traditionally math-phobic marketing students may be forced to confront mathematics and statistics courses.

Faced with an increasing stream of data from the Web and other electronic sources, many companies are seeking managers who can make sense of the numbers through the growing practice of data analytics, also known as business intelligence. Finding qualified candidates has proven difficult, but business schools hope to fill the talent gap.

This fall several schools, including Fordham University’s Graduate School of Business and Indiana University’s Kelley School of Business, are unveiling analytics electives, certificates and degree programs; other courses and programs were launched in the previous school year….

Data analytics was once considered the purview of math, science and information-technology specialists. Now barraged with data from the Web and other sources, companies want employees who can both sift through the information and help solve business problems or strategize. For example, luxury fashion company Elie Tahari Ltd. uses analytics to examine historical buying patterns and predict future clothing purchases. Northeastern pizza chain Papa Gino’s Inc. uses analytics to examine the use of its loyalty program and has succeeded in boosting the average customer’s online order size….

Fordham this fall will introduce a required analytics course—Marketing Analytics —for M.B.A. students on its marketing track. “Historically, students go into marketing because, they ‘don’t do numbers,’”said Dawn Lerman, director of the business school’s Center for Positive Marketing. But these days, with so much data available surrounding consumer behavior, “you can’t hide from math and statistics and be a good marketer.”

…
Three more words:  21st Century Skills

ADDED:

As the use of analytics grows quickly, companies will need employees who understand the data. A May study from McKinsey & Co. found that by 2018, the U.S. will face a shortage of 1.5 million managers who can use data to shape business decisions.

Nose under the tent – top business school goes online

The University of North Carolina’s Kenan-Flagler Business School is taking its brand online.

While online programs are still mostly seen as the purview of for-profit schools, like the University of Phoenix and Capella University, UNC is hoping to change that image.

The business school this Monday launched an online M.B.A. program with 19 students, dubbed MBA@UNC, that will offer the same core curriculum as its regular full-time M.B.A. program. It is the first online program of its kind from a top-20 U.S. business school….

UNC officials say that admissions standards for the new program are just as high as for an on-campus M.B.A. UNC students in the class of 2012 had a median Graduate Management Admission Test score of 700 and a grade point average of 3.3.

The cost is $89,00, just under the $98,000 for the on-campus program.  Meanwhile, other top schools seem to be in a wait and see mode.

So far, other top schools, including Harvard and the University of Chicago, say they don’t have formal plans to create their own programs.

While the Anderson School of Management at the University of California, Los Angeles, has offered “a handful” of hybrid or fully online versions of short electives in recent months, they’re still “experimental at this stage,” said Carla Hayn, senior associate dean for the fully employed M.B.A. and executive M.B.A. programs. “We’re wading very gently into these waters.”

Ms. Hayn said “there are other aspects to education”—such as networking and learning to read social cues, “that are kind of hard to get online.”

UNC Makes Risky Online Bet

‘paper value of an MBA might be overstated’

“I think the paper value of an MBA might be overstated,” said Taft. “For it to be useful, it needs to form part of a wider package of skills and attributes, and more than a mere credential next to your name.”

John Taft is the Chairman of the Securities Industry and Financial Markets Association (SIFMA) and the CEO of RBC U.S. Wealth Management.  He is predicting more layoffs in the financial services industry next quarter, affecting even employees with expensive MBA degrees and years of experience.

Taft said on the job experience in the capacity to perform in the workplace is more important than whether or not you have your MBA.

His thoughts come as enrollment at the nation’s top business schools is growing—as well as online MBA programs that cost tends of thousands of dollars. In fact, Kenan-Flagler Business School at the University of North Carolina began its first ever online MBA program this month. Students have been shelling out $89,000 in tuition for it.

Even though an MBA degree will not necessarily protect your job or revitalize your salary, Taft acknowledges there is an argument supporting the usefulness of MBA degrees. He said they are often best used to reposition yourself and redirect your career.

New York leads with oversupply of lawyers

Just how bad is the job outlook for lawyers? According to our quick analysis, every state but Wisconsin, Washington, D.C., and Nebraska produced more — in some cases, far more — bar exam passers in 2009 than the estimated yearly openings for lawyers in those states….

As is the case in every state, not all of these new grads will practice in New York. But the data still points to a surplus….

On the national level, there were nearly twice as many bar exam passers (53,508) in ’09 than openings (26,239).

Everything I’ve read indicates that the job situation has only deteriorated since 2009.  Going into debt to attend law school can be a very risky proposition.

Data for each state, including median wages, is at EMSI.

ADDED, relevant advice:  Do Not Go to a 3rd or 4th Tier Law School Unless You Are ‘God’s Little Snowflake’

More parents help pay for MBAs

Economic uncertainty, younger students going to business school instead of finding employment and the spiraling cost of tuition all seem to be factors in this change.

From 2003 to 2007, the number of prospective students who said they expect their parents to help them pay for business school doubled, and was approaching 40 percent in 2010, according to a 2011 survey by the Graduate Management Admission Council….

“Any time there is economic uncertainty like there is now, there is a general reluctance to borrow,” Chitty says. “Borrowing from Mom and Dad is going to seem a lot safer than borrowing from the government and taking on a loan which likely can’t be discharged in bankruptcy and can follow you for the rest of your life.”…

Driving the need for parental aid is an uptick in the business school pipeline of younger students, especially those in the 24-years-and-under age bracket, says Michelle Sparkman-Renz, GMAC’s director of research communications….

U.S. students are less dependent on parental support than their European and Asian counterparts, but those under 24 still expect to finance about 20 percent of their degree with help from family. Students from ages 24 to 30 intend to have parents pay for about 10 percent of their tuition, GMAC says…

The spiraling cost of tuition is one of the reasons students may be relying more on parents to pay for business school, says Dan Thibeault, president and co-founder of Graduate Leverage, a student loan consolidation and debt management company in Waltham, Mass. Of the MBA students he works with, about 15 percent to 20 percent have $150,000 worth of debt when they graduate, he says.

“That was unheard-of five or six years ago. Maybe a student in a four-year dental program would borrow that much, but for a student to come out of a two-year MBA program with that much debt is almost shocking,” he says. “It may lead a sympathetic parent to say, ‘Wow, that is a suffocating amount of debt. I have to get involved.’ “ 

Source:  Bloomberg Businessweek