Impact of staggering growth of student loans on our children’s future

Here’s a chart based on New York Federal Reserve data for household debt. The red line shows the cumulative growth in student loans since 1999. The blue line shows the growth of all other household debt except for student loans over the same period.

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The 511% growth in student loans since 1999 is staggering and unsustainable.  And here’s the scariest part when I consider my children’s future.

All this college debt could put the U.S. on a slower growth path in the years to come. As Americans grapple with high student loan payments for the first few decades of their adult lives, they’ll have less money to spend and invest. All that money flowing into colleges and universities is being funneled away from other industries where it would have been spent in future years. Of course, this would be a rather unfortunate irony: higher education is supposed to enhance a nation’s growth, but with such an enormous debt burden, graduates might not be able to spend and invest enough to allow that growth to occur.

Source:  Chart of the Day: Student Loans Have Grown 511% Since 1999, The Atlantic

Lackluster results of state-sponsored merit scholarship programs tied to grade inflation?

The results of two state-sponsored college merit scholarship programs are not very impressive.

Merit-based aid programs provide financial assistance to highly academically qualified students entering college regardless of financial need. Merit-based strategies have been adopted by several states with the goal of improving college access and retention rates among the highest achieving students. Several studies of merit-based financial aid programs have concluded that these programs increase college enrollment, but evidence of their impact on degree completion, particularly in Science, Technology, Engineering, and Mathematics (STEM) fields, is scarce. A study by Liang Zhang entitled, Does Merit-Based Aid Affect Degree Production in STEM Fields: Evidence from Georgia and Florida, examined changes in baccalaureate degree completion in two states with well-established merit-based financial aid programs….

The preliminary findings of this study show that state-wide, merit-based financial aid programs may slightly increase baccalaureate degree completion overall, especially for women, but major impacts on STEM fields in particular do not exist. It will be important for policymakers and higher education institutions to consider these data as they evaluate the efficiency of merit-based aid strategies in attracting students to certain fields and improving overall educational attainment levels.

The programs in the study use high school grades as the primary criteria for awarding scholarships.  Two of the three Florida awards  are granted to students with SAT scores below the 50th percentile.  The Georgia HOPE scholarship has no SAT score requirements, only that students graduate with a 3.0 minimum GPA.

Given the grade inflation observed in high schools, I suspect that low academic requirements partly account for the lackluster impact on college completion rates.

‘jobs that pay the most for the least amount of work’

Have I got your attention?

After reviewing data from the Bureau of Labor Statistics, 24/7 Wall St. identified jobs that pay the most for the least amount of work. Most of these positions still require a great deal of training, but once completed, the amount of work drops significantly.

…Highest Paying Jobs With The Most Time Off

If you’re looking for a comfortable lifestyle that offers a reasonable work-life balance, maybe you should be looking at careers like these.

Via TaxProfBlog

Successful media multitasking teens are a myth

We hear it in our classes all the time: students tell us that they can handle Instant Messaging, iTunes, and cell-phone calls and texts while they do their homework, even as they complain about the eight hours it takes them to get the work done…

 “I have to listen to rock and roll on my iPod while I’m studying! It’s the only way I can focus!’”

I hear the same thing from my children, but teacher Karen Bradley writes about how research shows that multitasking is a myth, especially for teenagers.

The costs of media multitasking are considerable. They include a decrease in executive function (such as the ability to prioritize tasks and figure out what information is most valuable), a decrease in the ability to focus on complex tasks, a decrease in long-term memory, and an increase in stress. When we jump from task to task, quickly scan for information, and shift constantly between work and play, we neither learn things in depth nor retain long-term memories about what we have learned, at least not in a way that we do when we single task. And when we learn while multitasking, we are less able to work creatively with what we know, to problem solve “outside the box.”

Learning can be described as moving knowledge from short-term memory to long-term memory, and media multitasking circumvents this process.

When we jump and skitter through the Internet, when we multitask in any way, we create at best fragmented long-term memories — often just vague impressions — because working memory is frequently being overloaded and overwritten. If we bombard our working memory with information from a slew of disconnected sources, it is not able to connect them to one another or to bases in long-term memory. Under too much pressure, new information never becomes part of our long-term memory.

Some costs of media multitasking

1. Lost time, inefficiency  —  Switching between tasks “takes time, reduces accuracy, and inhibits creative thought”.  When a student says it takes him hours to do his homework, it’s possible that he is multitasking with visits to Facebook and similar interruptions.
2. Forgetfulness  —  Multitasking usually means you forget what you were doing before the interruption.
3. Decline in flexible knowledge  —  Critical thinking and problem solving are victims of media multitasking, which reduces the ability “to make inferences from memorized information”.  When a student is managing distractions, learning is shifted away from the frontal cortex to other parts of the brain that cannot infer or extrapolate, essential components of deeper and abstract learning.

Adolescents are even less efficient multitaskers than adults are

• The prefrontal cortex is not fully developed until past age 20, leaving adolescents with less impulse control than adults.  Interruptions that generate emotional responses (think Facebook as one example) create more and longer-lasting distractions to focused brain activity.  Males are especially affected since their prefrontal lobe development lags that of females.
• Fluid intelligence* is less developed in adolescents than in adults.  One researcher explained that “older people think more slowly, but they have a faster fluid intelligence, so they are better able to block out interruptions and choose what to focus on”.
• Heavy media multitaskers suffer in their ability to prioritize and sort information, a function of executive function abilities.  Adolescents, with immature judgment skills, are impaired in their ability to filter out irrelevant distractions and perform poorly in task-switching skills.

What schools and parents can do

In her article, Bradley offers a list of suggestions for schools and parents on how to help our students filter out the distractions that impair learning while continuing to function in a digital multi-media environment.

In addition to helping young people become intelligent users of their devices and effective filters of infinite information, schools and families should cultivate the ability to switch gears from multi-focus to single focus, knowing that each has important benefits and different costs. Schools and families should set aside time for loosely structured creativity, which offers the opportunity for flow — the optimal state of learning — and encourages focus. They should emphasize the value of sticking with a hard problem and resisting distractions: this, neuroscientists know, is when humans can access their most creative minds. Schools and families can live in the 21st century and make enthusiastic yet discerning decisions about how we use our devices, access information, and manage our time and priorities so that we fire and wire our brains in ways that will be most productive and creative in the future.

Speaking from experience, it’s not easy to separate a kid from his media.  However, this problem of young people suffering in their abilities to focus and think critically is serious.  I hope to learn more from teachers on what specific actions are recommended, but I suspect a big part of the solution is simply to say no.
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* What is “fluid intelligence?” It means that older brains are more efficient than younger brains, because neural pathways that are repeatedly traced are strengthened both through pruning, in which the unused pathways wither away and the repeatedly used ones grow, and through myelination. In myelination, the neural pathways that are repeatedly used develop sheaths, sort of like electrical insulation, that speed the travel of information down those pathways and discourage alternate routes. This is essentially what fluid intelligence is: adults have practiced certain tasks, behaviors, and ways of thinking, and they can easily access these pathways. Adolescents are still developing those pathways.

Free access to expanded version of U.S. News college rankings

Free access is courtesy of Google.  Hurry, because this offer expires  Thursday, September 15!

Today, U.S. News and World Report released their 28th annual ranking of the top higher-education institutions across the nation. While this list of schools represents traditions of academic excellence that span centuries, these institutions also clearly recognize the importance (and value) of modern technology in academia. Google has just announced that 61 of this year’s top 100 universities have chosen Google Apps for Education to improve communication and collaboration on campus.

Free Access To Rankings From Google

To show their appreciation to these schools, and to help students better explore and evaluate their college options, Google is providing a year’s worth of free access to the U.S. News complete rankings for anyone who registers before Friday, September 16. Just sign up and you’re all set.

(Cross posted at Kitchen Table Math)

More education correlates with more spending on booze

Your Bureau of Labor Statistics trivia fact of the day is that educational attainment is strongly correlated with alcohol expenditures.

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I think that educated people are just drinking more expensive stuff.

How American families pay for college

How the average American family pays for college

Average percentage of total cost of attendance paid from each source

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From Sallie Mae’s “How America Pays for College 2011”

• Virtually all families reported taking cost-savings measures, such as attending lower-cost colleges, living at home, or going to school part time. On average, families reported paying 9 percent less for college than they had the previous year.
• Parent sources, including savings, income and loans, funded the largest segment of the average family’s total college expenses, at 37 percent. Students assumed direct responsibility for about one-quarter of the total cost of college, contributing 11 percent from income and savings and 15 percent through borrowing. Grants and scholarships covered 33 percent of college costs in 2010-2011, up from 23 percent the previous year.

In our family, it appears that our first college student will be borrowing a little more than what the average student does.  According to Mark Kantrowitz, founder of  FinAid.org, a good rule of thumb is that “total debt at graduation should not exceed your child’s expected starting salary” upon graduation.

EngageNY.org – Regents reform agenda website for New York educators

John B. King Jr., the new state education commissioner, released back-to-school messages Tuesday and unveiled a new website — engageny.org — to provide information on the state’s reform initiatives.

He urged parents to ask their children, “What did you learn today? What does that mean?” And he asked educators to ask themselves: “Where are we in terms of our goals and where are we in terms of our students’ college and career readiness and how do we get there?”

Those are excellent questions educators should be asking.  It’s better than simply asking how innovative, how engaging or how technologically advanced they are.  These questions are good, but of secondary importance.

EngageNY is an evolving, collaborative platform for educators. As the Regents Reform Agenda moves forward across the state, we want you to be able to access and share resources that work for you.

A bit more about us: New York’s educators are always investigating better ways to improve what is being taught, how it’s being taught, and what to do about obstacles to student learning.

It was with these concerns in mind that we designed the Content Areas that Network Teams, administrators, principals, and teachers will use to facilitate change in schools:

1. Common Core standards
2. The Data-Driven Instruction cycle (DDI) and School-Based Inquiry (SBI)
3. Teacher/Leader effectiveness (performance management systems)

As reform priorities grow and evolve over time, EngageNY will grow and evolve, too – so that you always have the resources you need to ensure success in your school.

Three years to go before college starts?

Let’s admit that the prudent thing is to start systematically saving for  college when your child is an infant, but for various reasons not all of us do that.  In addition to the following  WSJ suggestions for last-minute college financial planning, parents should remember that a gap year spent earning tuition money and starting out at a less-expensive community college might be ways to make college affordable.
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Highlights from the Wall Street Journal’s Three-Year Countdown to Saving for College

Three Years Out

Savings: While you’ve hopefully been setting money aside since your teen was a baby, this is the time to get your college savings on the fast track….

You can’t afford a lot of investment risk this close to the college years, but unfortunately interest rates on savings accounts and certificates of deposit are pretty paltry these days….

So your best bet for boosting college savings is still a tax-advantaged plan, such as a 529 college-savings plan and Coverdell Education Savings Account….

Many 529 plans took a hit during the recession and the recent market dives. So many states have added safer investments, such as CDs, to their plans….

Financial Aid: It’s never too early to start thinking about how much financial assistance you can get — and from where.

Online tools, such as SimpleTuition.com’s TuitionCoach, can help you figure out where to put your money to qualify for the most aid, depending on the individual college and the methodology it uses for financial aid.

Janet Krochman, a certified public accountant in Costa Mesa, Calif., says you should start juggling money now so it won’t weigh as heavily in the calculation when you apply for aid. But speak to an accountant or financial adviser before making any moves. For instance, discuss whether to keep a child’s money in his or her name or transfer it to your name.

Start searching and applying for scholarships and grants….

Two Years Out

Savings: Continue funding your 529 and other savings accounts, upping the amount if possible. This also is the time to start taking a serious look at potential schools — and estimating the cost of each.

Starting in October, schools that award federal financial aid are required to publish a net price calculator (most on their websites), which lets you enter basic financial information to get an estimate of the school’s bottom-line cost of attendance and how much need-based aid a student could get.

Financial Aid: If you’re planning to sell assets to help pay for college, and will have capital gains, some financial advisers say now is the time to do so. You don’t want to show a big capital gain on tax returns you’re going to submit to the school, Ms. Krochman says.

When planning campus visits, make an appointment with the financial-aid office to learn how the school determines financial need….

Loans: You still don’t know how much you’ll need to borrow, but you should start looking at your loan options …

One Year Out

Savings: By this point, you should have the bulk of your money in less-risky investments, such as money-market funds, CDs and Treasurys, since you won’t have much time to recoup any losses….

Financial Aid: Your child will be applying to schools and filling out the Free Application for Federal Student Aid, or Fafsa….  Delays could hurt your chances of getting money since some schools dole out aid on a first-come-first-served basis. If you haven’t already done so, apply for grants and scholarships.

Loans: Once you’ve figured out how much you’ll need to borrow, first look into federal loans, which typically have the lowest interest rates….

When it comes to borrowing, “a good rule of thumb,” Mr. Kantrowitz says, is that the “total debt at graduation should not exceed your child’s expected starting salary” upon graduation.

New York public schools face a 29% increase in pension costs

School districts are being socked with a 29 percent increase in their pension costs this school year.

The increase means schools will pay 11.11 percent of their payroll toward retirement costs in 2012, up from 8.62 percent in the prior school year, which ended June 30, the teachers’ retirement system announced this week. It’s the first double-digit rate in 22 years….

School officials said growing pension costs were equal to the total increase in school spending this year, up about 1.3 percent. The increase caused homeowners’ tax levies to grow on average about 3.4 percent this year.

This is not new information  – I learned about this last spring when we voted on school budgets.  In my local school district, taxpayer-funded pension costs will increase about 37% over last year’s, representing more than 50% of the total budget increase.  Pension/health/salary costs went up, while the total of all other school expenditures had to be cut as a way to keep the total budget increase to a manageable 3.9% that translates into an estimated 7% tax levy increase.

The pension expense comes as schools in July 2012 will have to abide by a property-tax cap.  The cap will limit tax increases to 2 percent a year or the rate of inflation, whichever is lower….

Pension costs are expected to grow further. In a memo to schools this month, the New York State Teachers’ Retirement System said it expects next year’s costs to exceed this year’s rate. It won’t have those estimates until November….

The Empire Center For New York State Policy, a conservative think tank, estimated in a report last year that taxpayer-funded contributions to the teachers’ retirement system will more than quadruple over the next five years. The group estimated pension costs for state and local government workers would more than double over the same period.

“It’s something everybody has to get ready for,” said E.J. McMahon, the group’s senior fellow.

School boards should provide taxpayers with longer-term budget projections

Mahon questioned why the teachers’ retirement system doesn’t provide districts with long-term outlooks on pension costs.

“You have districts that are negotiating contracts for three or four years, so why not tell them?” McMahon said.

Cardillo said they give districts about 18 months’ notice and can’t project rates further because economic conditions could change.

Multi-year projections are the norm in the business sector, for good reason.  Most taxpayers understand that  “economic conditions could change” and deserve to have this type of critical information when voting on budget issues.  Chappaqua Central School District is one that does a good job offering five-year budget projections.

Also, New York urgently needs to rein in its “skyrocketing” public employee pension costs.

Related:  Passing the pension time bomb in New York State

You can read the entire LoHud.com article, which received 119 comments from readers, after the jump.