DailyFinance.comhttp://www.dailyfinance.comDailyFinance.comhttp://o.aolcdn.com/os/df/2013/img/2-dailyfinance_logo_m.pngDailyFinance.comhttp://www.dailyfinance.comen-usCopyright 2013 Weblogs, Inc. The contents of this feed are available for non-commercial use only.Blogsmith http://www.blogsmith.com/Is an Hermes Bag a Better Investment Than an Ivy League Education? Maybe.http://www.dailyfinance.com/2011/04/05/is-a-hermes-bag-a-better-investment-than-an-ivy-league-education/http://www.dailyfinance.com/2011/04/05/is-a-hermes-bag-a-better-investment-than-an-ivy-league-education/http://www.dailyfinance.com/2011/04/05/is-a-hermes-bag-a-better-investment-than-an-ivy-league-education/#commentsFiled under:

Rob Nelissen and Marijn Meijers, social psychologists at Tilburg University in the Netherlands, recently conducted a series of experiments that sought to measure the effect of displays of luxury goods on how people are treated.

According to Time, "Nelissen and Meijers showed volunteers one of two videos of the same man being interviewed for a job. In one video his shirt featured a logo and in the other it didn't. Volunteers rated him more suitable for the position, and suggested he earn 9% more, when a conspicuous logo was present."

A 9% salary difference -- because his shirt had a nice logo on it. In the midst of college admissions season, there's a useful comparison here: According to research from PayScale Inc., the median starting salary for a graduate of the University of Massachusetts Amherst is $47,000. The median starting salary for a graduate of Brown University -- an Ivy League school -- is $49,400. That's a difference of about 5.1%.

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In other words, wearing a Lacoste shirt to a job interview instead of a no-name shirt would appear to generate a higher starting salary than going to Brown instead of UMass. Another selling point? A Lacoste button-down costs $88 at Macy's, compared with annual tuition and fees of more than $40,000 per year at Brown -- versus about $12,000 at UMass.

One final note: While the Tilburg University study was carefully controlled -- it was the same guy in both videos, with the only difference being the brand of shirt -- comparisons of starting salaries between graduates of different colleges are, as I've written about before, rife with selection bias. So that 5.1% starting salary differential likely exaggerates the benefits of attending an elite college.

So if your kid suggests that you buy him a bunch of luxury clothing instead of sending him to an elite college, don't dismiss him as shallow and shortsighted. He just might be brilliant.

Zac Bissonnette's Debt-Free U: How I Paid For An Outstanding College Education Without Loans, Scholarships, Or Mooching Off My Parents was called the "best and most troubling book ever about the college admissions process" by The Washington Post.

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]]>college tuitiondesigner clothesdesigner clothingdesigner handbagDesignerClothesHermesLacosteluxuryPaying for collegesaving for collegeZac BissonnetteTue, 05 Apr 2011 12:00:00 ESTRutgers: Where You Pay Extra to Learn from Snookihttp://www.dailyfinance.com/2011/04/02/rutgers-snooki-speaker-college-tuition-student-debt/http://www.dailyfinance.com/2011/04/02/rutgers-snooki-speaker-college-tuition-student-debt/http://www.dailyfinance.com/2011/04/02/rutgers-snooki-speaker-college-tuition-student-debt/#commentsFiled under:

Rutgers University Students Pay Extra to Learn from Snooki And now a story from the "things that really shouldn't need to be said" file: No college should require students to take out loans in order to give money to Snooki, the breakout star of MTV's Jersey Shore.

And yet that is exactly what Rutgers University in New Jersey has done. According to U.S. News & World Report, 52% of Rutgers grads leave with an average of $19,760 in student loans.

But as the Huffington Post reports, "The Rutgers University Programming Association paid Nicole "Snooki" Polizzi of the reality TV show 'Jersey Shore' $32,000 Thursday to dish on her hairstyle, fist pumps, as well as the GTL - gym, tanning, laundry - lifestyle ... Money for Polizzi's appearance came from the mandatory student activity fee."

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Now, there's nothing inherently wrong about students wanting to spend borrowed money to hear Snooki speak. Moronic, yes. But not wrong.

But for a public university to require all students to borrow money to cover mandatory fees, and then use that fund to pay for Snooki to speak, is wrong.

With college costs spiraling out of control and student loan default rates soaring, colleges need to be looking at every possible way of cutting their costs -- starting with those that contribute the least to their fundamental mission of educating students.

Not spending $32,000 on Snooki would be a good place to start.

Zac Bissonnette's Debt-Free U: How I Paid For An Outstanding College Education Without Loans, Scholarships, Or Mooching Off My Parents was called the "best and most troubling book ever about the college admissions process" by The Washington Post.

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]]>college tuitionGTLjersey shoremandatory feesMTVnicole polizzirutgerssnookisnooki rutgersspeakerstudent debtstudent loansuniversityZac BissonnetteSat, 02 Apr 2011 08:30:00 ESTAre Young People Too Afraid of Student Loans?http://www.dailyfinance.com/2011/03/28/are-young-people-too-afraid-of-student-loans/http://www.dailyfinance.com/2011/03/28/are-young-people-too-afraid-of-student-loans/http://www.dailyfinance.com/2011/03/28/are-young-people-too-afraid-of-student-loans/#commentsFiled under:

In their recent book Not Quite Adults: Why 20-Somethings Are Choosing a Slower Path to Adulthood, and Why It's Good for Everyone, authors Richard Settersten and Barbara E. Ray make what sounds like an crazy argument: Young people are too afraid to borrow for college.

It sure does sound crazy. And when you dig a little deeper into it, you realize that it actually is crazy.

Three basic facts about higher education in 21st-century America:
  1. People are more likely to go to college than ever before.
  2. People who go to college are more likely to pay for it with loans than ever before.
  3. People who pay for college with loans borrow more than ever.
Taking those three irrefutable truths and conjuring up the argument that excessive fear of student loan debt is the problem in higher education for this generation is actually sort of amazing.

But they manage to pull that off. I'm serious. "One of the key reasons they skate so precariously close to financial ruin seems almost heresy in this age of contraction," they write. "They are afraid to take on debt. That is, they are unwilling, and in some cases unable, to take on the kind of debt that helps to secure a more stable future: debt from a college degree."

There are two fundamental fallacies they use to keep this argument from collapsing:

Don't mention the default rate. One in five federal student loans end up in default within 15 years. But the authors don't mention that. Nor do they mention that student loan debt can't be discharged in bankruptcy. But that doesn't stop Settersten and Ray. They write that "relatively few graduates experience financial straits because of their student loan debt" -- and then provide no evidence that that's true.

That's because it isn't. A new study from the Institute for Higher Education Policy finds that nearly 40% of student borrowers are delinquent on their payments within the first five years of repayment. Lynn O'Shaughnessy has more details on that scary report.

Mislead with numbers. The authors note that "The average student has paid back all but $7,000 of his or her debt just three years out of college." Which would be interesting, if it were true.

It isn't. Mark Kantrowitz of FinAid.org calls the alleged statistic "bogus." When I asked one of the book's co-authors for a response, she seemed to back off that statistic.

"We find that the average young adult household has about $7,000 in education debt outstanding" wrote Ray. "Although this is much lower than others have noted, most of the other figures are for recent college graduates, while our figures are for those at least three years out, and sometimes longer." In other words, the data apparently includes all young adult households -- not just those who borrowed for college -- and includes people who've been out longer than three years as well. Ray did not respond to repeated requests for further comment and clarification. But the bottom line -- when you look at actual data instead of this book -- is this: Most students have paid off only a tiny portion of their debt three years after graduation.

But the best part of my email exchange with Ray was where she explained that "Our larger point -- which debates that zero in on one data point obscure -- is that college pays off in the long run."

Exactly. Having used statistics as a drunk uses a lamppost -- for support rather than illumination, to quote Andrew Lang -- the authors fall back on the last refuge of the scoundrel: claiming the actual data doesn't matter. Just trust us.

Zac Bissonnette's Debt-Free U: How I Paid For An Outstanding College Education Without Loans, Scholarships, Or Mooching Off My Parents was called the "best and most troubling book ever about the college admissions process" by The Washington Post.

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]]>Barbara E. Raycollege tuitionfear of debtFinAid.orgInstitute for Higher Education Policyloan defaultsRichard Setterstenstudent debtStudent LoansZac BissonnetteMon, 28 Mar 2011 16:00:00 ESTTo Ace the SATs, High Schoolers Will Need to Tune In to Reality ... TVhttp://www.dailyfinance.com/2011/03/22/sat-essay-question-reality-tv-high-school-college-board/http://www.dailyfinance.com/2011/03/22/sat-essay-question-reality-tv-high-school-college-board/http://www.dailyfinance.com/2011/03/22/sat-essay-question-reality-tv-high-school-college-board/#commentsFiled under:

When The College Board isn't occupied with misleading Americans about the return on investment that comes with a college degree, you'll be happy to know that it's also busy rewarding students with better SAT scores for their knowledge.

Their knowledge of reality TV shows, that is. One-third of high school students taking the SAT received this question as their prompt for the essay portion of the test.

Reality-television programs, which feature real people engaged in real activities rather than professional actors performing scripted scenes, are increasingly popular. These shows depict ordinary people competing in everything from singing and dancing to losing weight, or just living their everyday lives. Most people believe that the reality these shows portray is authentic, but they are being misled. How authentic can these shows be when producers design challenges for the participants and then editors alter filmed scenes?

Do people benefit from forms of entertainment that show so-called reality, or are such forms of entertainment harmful?

Here's the first problem: There's no option for people who think that reality TV is irrelevant. You're asked to take a position that it's either beneficial or harmful. On what planet watching Keeping Up With the Kardashians would be beneficial, I can't even imagine.

On to the larger point: If your high school junior prefers to spend his time reading, volunteering or (heaven forbid) working so that he can avoid borrowing $24,000 to pay for college, he's likely to be out of luck in answering that question.

Trying to 'Engage' the Students

The College Board's Laurence Bunin recently defended the question in a blog post for The Daily Beast, noting that "Questions raised about the so-called reality-show prompt miss this basic point entirely and confuse the literal topic with the task of writing the essay. Everything a student needs to write a successful essay is included in the prompt itself; one need not have spent any time watching a "reality" television program to write a strong essay."

But he also notes that "Students tell us that they can relate to popular-culture references. Using such references is not only appropriate, but potentially even more engaging for students."

So the question is more engaging for students who are interested in mass consumer culture, which makes it, by definition, less engaging for students who aren't -- even though studies show that people who watch less TV are less materialistic (which is better for the environment) and happier.

But it's not surprising. The college admissions race -- and the desire to do as well as possible on a standardized test in order to get into the "best school possible," whatever that even means -- is really all about conformity, even when it's cloaked in the vocabulary of individuality. The SAT obsession is more sophisticated than Keeping Up With the Kardashians, but not necessarily any less vapid.

And you couldn't pick a better symbol of that than an essay question about reality TV.

Zac Bissonnette's Debt-Free U: How I Paid For An Outstanding College Education Without Loans, Scholarships, Or Mooching Off My Parents was called the "best and most troubling book ever about the college admissions process" by The Washington Post.

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]]>best collegescollegecollege admissionscollege boardcollege entrance examscollege rankingsessay questionessay testhigh schoolkeeping up with the kardashiansLaurence Buninpop culturereality tvSATsstandardized teststelevisionZac BissonnetteTue, 22 Mar 2011 08:30:00 ESTWhy Bill Clinton Should Reconsider Speaking at NYU's Commencementhttp://www.dailyfinance.com/2011/03/13/why-bill-clinton-should-reconsider-speaking-at-nyus-commencemen/http://www.dailyfinance.com/2011/03/13/why-bill-clinton-should-reconsider-speaking-at-nyus-commencemen/http://www.dailyfinance.com/2011/03/13/why-bill-clinton-should-reconsider-speaking-at-nyus-commencemen/#commentsFiled under:

On Tuesday, New York University announced that former President Bill Clinton will be speaking at the university's commencement, which will be held on May 18 at Yankee Stadium.

I wish Bill Clinton would reconsider. NYU students have among the largest debt loads in the country. The university has simply not lived up to its responsibility to leave its graduates better prepared for a good life than when they started.

NYU's decades of soaring debt loads recently culminated in a student protest at the campus. In a country where an ever-increasing number of college grads are finding their life courses irretrievably altered by crushing debt loads -- and where default rates on federal student loans are running at over 20% -- Clinton should not be bestowing his endorsement on a college that is arguably a bigger part of the problem than any other college in America.

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Here's an idea: Instead, Bill Clinton should lend his credibility to a college that has left its grads with a small fraction of the debt loads borne by NYU grads -- CUNY-Baruch. Only 37% of that college's grads borrow for college, compared with a national average of about two-thirds. And the average debt load is $14,676.

Speak at CUNY, Mr. Clinton. Let America know that students who do the smart thing and attend an affordable college are just as worthy of your time as anyone else.

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]]>Bill Clintoncollege debtcollege financecollege studentscommencement speechformer President Bill Clintonnew york universityNYUNYU student protestspaying for collegeZac BissonnetteSun, 13 Mar 2011 10:00:00 ESTWhy Most Colleges Should Give Up Need-Blind Admissionshttp://www.dailyfinance.com/2011/03/07/why-most-colleges-should-give-up-need-blind-admissions/http://www.dailyfinance.com/2011/03/07/why-most-colleges-should-give-up-need-blind-admissions/http://www.dailyfinance.com/2011/03/07/why-most-colleges-should-give-up-need-blind-admissions/#commentsFiled under:

I recently had an opportunity to speak with a high school senior who was evaluating financial aid offers from the colleges he'd been accepted to. He'd applied to a mix of small, private, liberal arts colleges, one in-state public college and a community college.

When the financial aid award letter from one of these private colleges came, it required $6,500 in federal student loans for the first year alone -- and, on top of that, his family would also need to come up with an additional $10,180 to meet the difference between the cost of the college and the amount of grants and student loans the school had set him up with.

Given that this young man qualified for free lunch in school, it seems unlikely that his parents will have the means to come up with an additional $10,180 for the first year, which would mean either more student loans or -- as the school actually suggested in the letter -- borrowing money through something like a PLUS loan.

Is It Really "Right"?

It would likely be a financial disaster for him and his family if he decided to do what he had to do to go to this private college. That left me wondering: Was there really any benefit to the school in accepting him if it knew he didn't have the resources to afford it, and was either unwilling or unable to provide him with sufficient financial aid to make attending a prudent move for him?

The idea of need-blind admissions -- which some colleges have said is simply the "right thing" to do -- is noble: Offering qualified applicants admission to a university, regardless of their financial circumstances. At a handful of highly selective, extremely well-endowed schools, the results of these policies are wonderful, because those schools have the resources to provide sufficiently generous financial aid packages to meet those students' needs. Amherst College, for example, no longer includes student loans in its financial aid packages.

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But few colleges have the resources of an Amherst, with its $1.3 billion endowment (according to its 2010 annual report). In too many cases, need-blind admissions lead to Catch-22s for many of the students they are intended to benefit: Those young scholars are accepted to their dream schools, but under circumstances that would make it financial suicide for them to attend.

There would be no shame in a college simply admitting: "We would love to be need-blind in our admissions, but the fact is that we simply don't have the resources to provide all the necessary financial aid for everyone we accept. So if the combination of our financial aid program and your family's resources won't be enough to allow you to come to our school without incurring excessive debt, we're going to turn you down and wish you the best of luck at a college that is a better financial fit. We care about you too much to offer you a chance to ruin your financial life."

It lacks the politically correct sound-bite power of "We accept all students regardless of financial resources."

But such benevolence without the resources to back it up doesn't help anyone.

Zac Bissonnette's Debt-Free U: How I Paid For An Outstanding College Education Without Loans, Scholarships, Or Mooching Off My Parents was called the "best and most troubling book ever about the college admissions process" by The Washington Post.

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]]>Amherst Collegecollegecollege admissionscollege loansColumnsfafsafederal grantsFinancial Aidhigher educationneed-blind admissionsNeed-blindAidPell GrantsPLUS LoansscholarshipsStudent LoansuniversityZac BissonnetteMon, 07 Mar 2011 16:30:00 ESTGot College Scholarship Questions? Mark Kantrowitz Has Answershttp://www.dailyfinance.com/2011/03/01/got-college-scholarship-questions-mark-kantrowitz-has-answers/http://www.dailyfinance.com/2011/03/01/got-college-scholarship-questions-mark-kantrowitz-has-answers/http://www.dailyfinance.com/2011/03/01/got-college-scholarship-questions-mark-kantrowitz-has-answers/#commentsFiled under: , ,

One of the most frequent questions I'm asked about my own book on paying for college is this: Why don't you have more information on scholarships?

One of the reasons is that, frankly, Mark Kantrowitz, the founder of FastWeb and FinAid.org, simply knows more about that world than I do. If you want information on scholarships, he's your guy.

Happily, he's out with a new book, Secrets to Winning a College Scholarship, which is available in paperback and on Kindle. The book contains everything you'd ever need to know about scholarships -- and even got an endorsement from Suze Orman.

DailyFinance recently asked Kantrowitz a few questions about the book. Here's what he has to say about winning college scholarships:

DailyFinance: Tell us a bit about your own scholarship story.
Kantrowitz: I was one of those kids who won a gazillion dollars for college -- so much money that I did not qualify for any need-based financial aid. My parents did not have to pay a penny for my college education. I was among the best in the nation on math and science competitions, ranking No. 1 in the U.S. in the Continental Math League, winning four first awards from the Massachusetts State Science Fair and placing seventh in the Westinghouse Science Talent Search, among other awards.

Between my scholarships and working as a software engineer in the summer, I graduated from college with more money than when I started, and no student loans.

One of the problems with scholarships is that they can sometimes get complicated when you're also receiving grant aid from a college. Can you talk a little about that "trap" and possible ways families can avoid it?
When a student wins a scholarship, the college reduces the student's need-based financial aid package to compensate. The colleges call this an over-award, and the scholarship providers call it displacement. The students and parents often have a more pejorative term for it.

Some colleges use the outside scholarship to replace the institutional grants, yielding no net benefit to the student other than a line on their resume. Others, however, have a more favorable outside scholarship policy, where the scholarship is allowed to fill any unmet need and to replace some loans before reducing grants. Eliminating loan and work burden is important because it has an impact on student success. For example, students who graduate from undergraduate school with no debt are almost twice as likely to go on to graduate and professional school as students who graduate with some debt.

There are a few ways of working around the college's outside scholarship policy:
  • If you're bringing in a lot of scholarship dollars, try negotiating a more favorable outside scholarship policy. While federal law doesn't allow private scholarships to replace the family contribution when a student is receiving need-based aid, colleges have flexibility in how they reduce the need-based aid package. They can choose to use the scholarships to replace loans instead of grants. They can also choose to provide the student with nonfinancial benefits, such as their choice of dormitory or the chance to work with a top professor in their field.
  • Enroll at a college with a more favorable outside scholarship policy. Evaluate each college based on your out-of-pocket cost, which is the difference between the cost of attendance and all grants and scholarships. Colleges with better outside scholarship policies often have a lower out-of-pocket cost since they let you use more of your scholarship without reducing grants.
  • Enroll at a less-expensive college, where the scholarship covers more of the college's costs. The Pell Grant is never reduced, not even if the student is over-awarded. Often, however, scholarships help enable choice, so many scholarship recipients choose to attend a more expensive college.
  • Enlist the help of the scholarship provider. Some scholarship sponsors have a lot of pull with the college, especially if their scholars collectively provide millions of dollars of funding to the college. They can also allow you to defer a scholarship from one year to the next or to graduate school.
What are some scholarship scams people should be on the lookout for?
If you have to pay money to get money, it's probably a scam. Legitimate scholarships are about giving away money, not getting money. So if a scholarship charges an application fee or some other type of fee (e.g., taxes or administrative fee, or something else that sounds implausible), it's probably not in your best interest.

Besides these "scholarships for profit," there are a variety of other scams, such as fee-based scholarship-matching services that guarantee success, fake scholarship checks, advance-fee loan scams and financial aid seminars that are little more than a high-pressure sales pitch for a product or service.

Nobody can guarantee that you'll win a scholarship. Never invest more than a postage stamp to find out information about scholarships or to apply for scholarships. Most scholarship scams try to get you to give them money, so beware if you have to pay money to apply for any kind of financial aid for college.

What's the best way for students to search for scholarships that are right for them, as opposed to filling out random applications posted on bulletin boards at high schools, etc.?
The best way to search for scholarships is to use a free scholarship-matching service like Fastweb.com [founded by Kantrowitz]. It takes about half an hour to complete a background profile as part of the registration process. This profile is matched against a large database of 1.5 million scholarships, showing you only the awards for which you're eligible. It's then up to you to apply for the scholarships and hopefully win. Fastweb updates the scholarship database every day and will send you email to notify you about new scholarships that match your profile.

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I recommend searching at least two of the free online scholarship databases, Fastweb and a competitor. Students who do this are less likely to become a victim of a scholarship scam since they'll have more confidence that they've found all the awards for which they are eligible. The best free scholarship matching services are listed at www.finaid.org/scholarships, including Fastweb's competitors.

Do you have any other tips for maximizing your odds of landing a scholarship?
Here's a great tip from Secrets to Winning a Scholarship: You can double your chances of winning a scholarship by completing the personal background profile more thoroughly. Students who answer the optional questions match about twice as many scholarships on average as students who answer just the required questions. It doesn't take much more time, but it's worth the effort. The questions are included in the profile to trigger the inclusion of scholarships that require the particular attribute as a condition for eligibility. If you don't answer the question, you won't match the scholarship.

Another great tip is to start searching for scholarships as soon as possible. Many students wait until the spring of their senior year in high school to start searching, missing out on half the deadlines. Moreover, there are many scholarships open to students in younger grades, even for students in kindergarten through grade 8. (We list these at www.finaid.org/age13, since the Children's Online Privacy Protection Act -- COPPA -- precludes including them in a scholarship-matching service.) You can also continue to apply for scholarships after you're already enrolled in college.

Other resources for finding scholarships include scholarship-listing books, which you can find in the local public library or bookstore. Scholarship books are often found near the jobs and careers section. While an online scholarship-matching service like Fastweb can help you find scholarships in a targeted fashion, books are good for random exploration. Before using a book, however, check the copyright date. A book that is more than a few years old is too old to be useful, since about 10% of scholarships change in some material way each year.

While you're in the library, take a look at the bulletin board for scholarships posted by local businesses and organizations. Some of these scholarships deliberately don't allow their scholarships to be listed in national scholarship databases because they're concerned about being inundated with too many applications. These scholarships are smaller, but they tend to be easier to win and add up quickly. They also add lines to your resume that can help you win bigger awards. You can also find local scholarships posted on bulletin boards outside your high school guidance counselor's office and the financial aid office at a local college.

What's your No. 1 best tip for writing scholarship essays?
If you have difficulty writing essays, try recording yourself as you answer the essay question out loud and transcribe the recording afterward. Most people can speak (and think) faster than they can write or type, so the process of writing interferes with the flow of thought.

This tip yields a more fluent and passionate essay. Such an essay will be more interesting to the reader because it's more interesting to you. This will help you stand out from the crowd. Most scholarship essays are a bit boring. So take a few risks and let your personality appear in the essay. Don't edit all of the life out of the essay.

Proofread your essay. Don't rely only on the spelling-correction software built into your word processing program, as these programs don't detect valid word spelling errors such as it's/its or principal/principle. Printing out the essay lets you look at it in a different way with a fresh perspective, sometimes helping your find the spelling and grammar errors.

Also try reading the essay out loud, since you will stumble when the phrasing is awkward or contains errors. An essay that's filled with errors gives a bad impression and is less likely to win a scholarship.

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]]>collegecollege grantscollege loanscollege scholarshipscollege tuitionColumnsfastwebMark KantrowitzPaying for collegeZac BissonnetteTue, 01 Mar 2011 08:00:00 ESTElite Colleges Aren't the Only Path to Elite Paycheckshttp://www.dailyfinance.com/2011/02/23/elite-colleges-not-the-only-path-to-elite-paychecks/http://www.dailyfinance.com/2011/02/23/elite-colleges-not-the-only-path-to-elite-paychecks/http://www.dailyfinance.com/2011/02/23/elite-colleges-not-the-only-path-to-elite-paychecks/#commentsFiled under:

In 2002, economists Stacy Dale and Alan Krueger conducted a study showing that students who were accepted into elite colleges but attended less-selective ones ended up earning just as much money as students who attended elite colleges. That study was one of the motivating factors behind my decision to attend an affordable, in-state public college.

Now, the two economists have updated the study with new data, more detail -- and the results are even more compelling. In the abstract, they report: "When we adjust for unobserved student ability by controlling for the average SAT score of the colleges that students applied to, our estimates of the return to college selectivity fall substantially and are generally indistinguishable from zero."

And, unlike in the earlier study, they didn't find that tuition or a Barron's ranking had a statistically significant impact on earnings.

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In the past, Krueger speculated that by attending a less-selective college, students of high aptitude possibly graduated with higher class ranks and emerged as campus stars.

For some students, the study showed that attending a school with a "better" student body actually correlated with reduced income. Economist Robin Hanson notes that the study "shows that attending a college with higher SAT scores clearly lowered the wages of women 17-26 years after starting college (in 1976) -- a school with a 100-point higher average SAT score reduced earnings by about 6-7%. . . . One obvious explanation is that women at more elite colleges married richer classmate men, and so felt less need to earn money themselves."

It's fascinating stuff, and required reading for anyone considering shelling out a six-figure sum for a fancy diploma.

One important note though, from a financial perspective: Because the most elite schools in the country generally have huge endowments and very generous financial aid, few students emerge from those schools with significant debt loads. Where you get into trouble with debt is the second- and third-tier schools (like that financial aid outhouse New York University).

And for students considering those schools, this research raises an obvious question: If you're unlikely to benefit financially from attending Princeton, who in their right mind would borrow $50,000 to go to NYU?

Zac Bissonnette's Debt-Free U: How I Paid For An Outstanding College Education Without Loans, Scholarships, Or Mooching Off My Parents was called the "best and most troubling book ever about the college admissions process" by The Washington Post.

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]]>collegecollege loansColumnsFinancial Aidpaying for collegestudent loansZac BissonnetteWed, 23 Feb 2011 11:30:00 ESTNYU Students Protested Their Loan Debt Load the Wrong Wayhttp://www.dailyfinance.com/2011/02/17/nyu-students-protest-loan-debt-load/http://www.dailyfinance.com/2011/02/17/nyu-students-protest-loan-debt-load/http://www.dailyfinance.com/2011/02/17/nyu-students-protest-loan-debt-load/#commentsFiled under: ,

NYU Students Protested Their Loan Debt Load the Wrong Way Students at New York University graduate with an average of $33,487 in debt, according to U.S. News & World Report, putting it among the schools with the highest debt load per graduate in the country.

But a group of NYU students is determined to do something about it.

No, I don't mean that they're going to actually do something about it -- like transferring to schools they can actually afford. Instead, they're holding a "Casualties of Debt" demonstration -- complete with its own Facebook group boasting 293 attendees.

The Huffington Post reports that "The demonstration, which was hosted by MTV's Andrew Jenks and NYU Local editor-in-chief Charlie Eisenhood, was designed to raise awareness for the debt crisis at NYU ... After a number of people had gathered, Jenks instructed students to write the amount of debt they will have accrued once they leave NYU on white T-shirts with red dollar signs distributed by volunteers and stand still for a moment."

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No word yet on how the white T-shirts were paid for.

But here's the thing: Protesting the amount of money you decided to borrow in order to go to NYU is sort of like moving to New England in the middle of January and then holding signs protesting the cold temperatures and abundant snow.

NYU students have a legitimate concern -- the amount of money that they're borrowing is insane -- and the way that they should handle it is to vote with their feet. Transfer to another school. Deprive NYU of its source of revenue and save yourself in the process. But voluntarily borrowing huge amounts of money to give it to a school while simultaneously shaking your fist at it doesn't help anyone.

There's a more subtle reason students ought to steer clear of NYU that goes beyond the practical impact of the huge debt burden: Any college whose financial aid office instructs students on how to borrow nearly $100,000 to pay for a bachelor's degree couldn't possibly care about the well-being of its students. To me, that makes NYU an institution worth avoiding.

Zac Bissonnette's Debt-Free U: How I Paid For An Outstanding College Education Without Loans, Scholarships, Or Mooching Off My Parents was called the "best and most troubling book ever about the college admissions process" by The Washington Post.

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]]>college loanscollege tuitionColumnseducationmost expensive collegesnew york universitynyuprice of collegeproteststudent debtStudent Loansstudent protestZac BissonnetteThu, 17 Feb 2011 15:17:00 ESTBoston University Complains About Federal Loan Cuts After Building Luxury Dormshttp://www.dailyfinance.com/2011/02/16/boston-university-federal-Perkins-loan-cuts-after-buildi/http://www.dailyfinance.com/2011/02/16/boston-university-federal-Perkins-loan-cuts-after-buildi/http://www.dailyfinance.com/2011/02/16/boston-university-federal-Perkins-loan-cuts-after-buildi/#commentsFiled under:

The presidents of Northeastern, Tufts, and Boston universities have banded together with other college heads to lobby President Obama to preserve funding for the Federal Perkins Loan Program, which provides college loans with an interest rate of 5% to low-income students.

"Ending this program would be directly at odds with President Obama's ambitious goal for the U.S. to have the highest proportion of college graduates in the world by 2020,'' said a letter to the U.S. Education Secretary that was signed by more than 30 university presidents.

Joseph E. Aoun, Northeastern University president, told the Boston Globe, "We need to find ways for families to go to college, and not curtail the opportunities for that.''

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I'd like to propose an alternative solution: Instead of complaining that Congress is -- for the first time in history -- expressing mild reservations about continuing to provide the easy credit that allows colleges to raise their prices at breakneck speed, why don't the colleges find ways to reduce costs so that fewer students will find it necessary to borrow huge sums of money?

In September 2009, for example, Boston University unveiled its new luxury dorm. It bragged about the hotel-quality amenities to the Boston Globe -- the same newspaper that is now airing the university's complaints about a lack of funding:
". . . suites of singles and doubles, with elegantly furnished common rooms, large private baths, walk-in closets, and floor-length mirrors, resemble nothing like what older generations remember of their college housing. Other amenities include soundproof piano rooms that allow students to practice without disturbing those studying in the 24-hour reading room, which is outfitted with plush adjustable furniture befitting a first-class airport lounge. The laundry room -- with washers and dryers programmed to alert students via computer when they are available -- overlooks the athletic field and stadium. A trio of futuristic chandeliers hangs in the stairwell of the airy lobby. Newly potted lady-finger palms and creeping ficus fill giant stainless steel planters."
And then my favorite part:
"'Students want beauty, and they should have beauty,' Kenneth Elmore, BU's dean of students, said during a tour of the dorm."

So, after spending millions on a luxury dorm, BU is now complaining that it needs more money. Their argument is basically this: Students want beauty and they should have beauty; to get it, they will need to borrow tens of thousands of dollars from the government in order to have that beauty for four years, and then they should live in hovels when they graduate in order to pay back those loans -- if they're able to. A third of federal student loan borrowers end up defaulting anyway.

We need to re-frame the debate: Instead of talking about student loans for higher education, parents, students, and taxpayers need to ask this: Does it really make sense to have federally guaranteed loans used to build dorms with "elegantly furnished commons rooms"?

Zac Bissonnette's Debt-Free U: How I Paid For An Outstanding College Education Without Loans, Scholarships, Or Mooching Off My Parents was called the "best and most troubling book ever about the college admissions process" by The Washington Post.

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]]>budget cutscollege loansfederal budgetFederal Perkins Loan ProgramZac BissonnetteWed, 16 Feb 2011 14:00:00 EST'Simple Abundance' Author Bounces Back From Financial Brinkhttp://www.dailyfinance.com/2011/02/12/simple-abundance-author-bounces-back-from-financial-brink-with/http://www.dailyfinance.com/2011/02/12/simple-abundance-author-bounces-back-from-financial-brink-with/http://www.dailyfinance.com/2011/02/12/simple-abundance-author-bounces-back-from-financial-brink-with/#commentsFiled under:

Peace and PlentyIn 1995, Sarah Ban Breathnach's self-help book Simple Abundance was published. It was featured on Oprah Winfrey's show eleven times and went on to sell seven million copies.

Now, all the money is gone. A string of business disasters, a failed marriage in England, and overspending culminated in Ban Breathnach moving in with her sister at the age of 61.

The good news?

The fruit of that journey -- Peace and Plenty -- is, possibly, one of the best personal finance books ever written. Ban Breathnach weaves together the story of her own financial tribulations with inspirational musings, practical advice, and -- this is where this book really emerges as a winner -- timeless quotes from such diverse sources as William Wordsworth, Million Dollar Baby, Maya Angelou, and a slew of women's magazines from the 1930s. The story of Dorothy Parker's lifelong struggle with money is probably worth the price of the book on its own.

Talking with Ban Breathnach

DailyFinance talked to Ban Breathnach by phone last week about her rise, financial downfall, and what she's learned from it.

The path toward her financial downfall began, ironically, with the breakout success of Simple Abundance. The book was released in November of 1995, and began as a strong word-of-mouth book. "There was something different about Simple Abundance because at that first Christmas women were buying like ten copies and giving it to their friends and families," she says. "In the spring, I was on Oprah and we talked about Simple Abundance."

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The book instantly shot to the pole position on the New York Times bestseller list, and stayed at number one for a year.

"Suddenly everyone in the world wanted me to speak and give money and raise money," she says. "There were just so many requests on my time that I needed people to help me. I always wanted to try and keep control but it just blossomed so quickly that there was no control. Suddenly I went from being a freelance mother to having nine assistants."

While her payroll was skyrocketing, her efforts to expand the Simple Abundance brand were flailing. She tried to launch a Simple Abundance magazine, but funded the entire start-up herself. The week she went to try to raise money to roll it out, the dot-com bubble burst. She says she lost a million dollars on that project alone.

"Every money mistake you could ever make -- I made," she says. "I hadn't learned business because women don't learn about money. I didn't know about business. I was a writer. I should have asked for advice."

A Return to Life's Simpler Pleasures

The writer who once enjoyed having Sir Isaac Newton's chapel as her own private writing sanctuary now enjoys life's simpler pleasures -- like antique sewing supplies.

"They're all tokens of the woman I would like to be," she says. "The woman I hope to still become. When I look at vintage sewing supplies, I look at a woman who took very good care of her family and herself. Who believed that beauty could be even in the commonplace. Who tried to surround herself with beauty as much as possible. The way that an inch and a quarter ribbon will be embroidered and wrapped on French cardboard stands. It just makes my heart flutter. I see more beauty in a vintage haberdashery shop than I do at Tiffany's."

"Thrift Is a Rich Word"

It's that decidedly old school focus that makes this book so great: the idea of thrift and not wasting as virtues, a way to live a good life -- not as a means to a materialistic end. "Probably the earliest mention of the word thrift was 'the condition of one who thrives,'" she writes. "But what made thrift such an honorable aspiration was that its bounty was not conveyed by celestial benediction or favor of the crown -- but rather through the everyday choices made by prudent housewives who were neat, clean, industrious, imaginative, honest, clever, enterprising, and generous."

Breathnach says she now views thrift as something wonderful. "We're given the stewardship over our lives" she says. "The word thrift was the right apportionment of energy toward all of life. It wasn't parsimonious and it wasn't frugal and it wasn't cheap. Thrift is a rich word."

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]]>book reviewinterviewPeace and Plentypersonal financepersonal finance bookSarah Ban BreathnachSimple AbundanceZac BissonnetteSat, 12 Feb 2011 10:00:00 ESTVillanova Law School Admits It Lied to Boost Rankings ... But So What?http://www.dailyfinance.com/2011/02/09/villanova-law-school-admits-it-lied-to-boost-rankings-but-so/http://www.dailyfinance.com/2011/02/09/villanova-law-school-admits-it-lied-to-boost-rankings-but-so/http://www.dailyfinance.com/2011/02/09/villanova-law-school-admits-it-lied-to-boost-rankings-but-so/#commentsFiled under: ,

Villanova Law School Admits It Lied to Boost RankingsIn one of the more interesting stories to come out of the world of higher education in awhile, Villanova University Law School has admitted that it has been lying about the statistics of its incoming classes and other data for an unspecified number of years in order to boost its rankings in all-important guides like U.S. News & World Report.

The university has hired the Boston law firm of Ropes & Gray L.L.P to conduct an investigation after the discovery that certain people working at the school were systematically reporting inaccurate data to the American Bar Association.

The blogosphere has erupted with righteous indignation at the lack of integrity but here's the thing: Villanova deserves credit for coming clean about something that a huge number of other schools are probably doing too.

U.S. News and other publications that rate colleges base their rankings on self-reported, unaudited information provided by the schools being ranked. (And who would ever lie about something in order to get a huge boost in reputation when there's no chance of ever being caught?)

As I've written in the past, there is absolutely no evidence that attending a higher ranked college is associated with any sort of benefit at all. All Villanova has really done is make a mockery of something that was already a joke.

Consumers rely on these rankings at their own peril. Perhaps this naked emperor moment will encourage people to reconsider their obsession with empty prestige when it comes to education.

Zac Bissonnette's Debt-Free U: How I Paid For An Outstanding College Education Without Loans, Scholarships, Or Mooching Off My Parents was called the "best and most troubling book ever about the college admissions process" by The Washington Post.

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]]>admissionsbest collegesbest Law schoolscollege rankingsColumnsliesrankingRopes Gray L.L.Pstatisticu.s. news and world reportU.S. News and World Reports Best CollegesUS News and World Reportvillanova law schoolZac BissonnetteWed, 09 Feb 2011 13:00:00 ESTHow Many Days Are in a Week of V8 Vegetable Juice?http://www.dailyfinance.com/2011/01/28/how-many-days-are-in-a-week-of-v8-vegetable-juice/http://www.dailyfinance.com/2011/01/28/how-many-days-are-in-a-week-of-v8-vegetable-juice/http://www.dailyfinance.com/2011/01/28/how-many-days-are-in-a-week-of-v8-vegetable-juice/#commentsFiled under:

Did you know that only about 11% of Americans get the recommended number of servings of fruits and vegetables each day? What easier way to get a quick serving than to down a glass of V8? It tastes good (at least I think it does) and it only takes about 20 seconds! Do that once a day, mix in some salad and raw carrots, a couple apples and you've met your fruit and vegetable quota. That makes you a better person than 89% of Americans.

The savvy marketing folks over at the Campbell Soup Company (CPB), which owns V8, have tapped into this daily dose with a line of "V8 Weekly Packs." "Get a Full Serving of Vegetables Every Day!" boasts the package. They're available in low sodium, classic, and spicy.

Except that there are only six cans in each of these "weekly packs."

No vegetables on the Sabbath? Or, does the every day weekly pack refer to five days of the week -- with a generous extra can thrown in?

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Juli Mandel Sloves, a Campbell Soup Company spokesperson, told DailyFinance that the company actually manufactures the weekly packs in two different varieties: six-packs and eight-packs. "They're priced the same but the eight-packs are only available at Walmart and select grocery stores," she says.

Sloves says that while the company recognizes that there are actually seven days in a week (a good sign for shareholders), it isn't possible to manufacture seven-packs in such a way that they can be shipped in an easy and cost-effective manner.

Fair point.

But then why call it a weekly pack?

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]]>Campbell Soup Companyfruits and vegetablesv8 juiceZac BissonnetteFri, 28 Jan 2011 11:00:00 EST'Academically Adrift' Argues College Students Have Plenty of Time to Workhttp://www.dailyfinance.com/2011/01/26/academically-adrift-argues-college-students-have-plenty-of-tim/http://www.dailyfinance.com/2011/01/26/academically-adrift-argues-college-students-have-plenty-of-tim/http://www.dailyfinance.com/2011/01/26/academically-adrift-argues-college-students-have-plenty-of-tim/#commentsFiled under: , ,

Academically Adrift, a new book written by a pair of sociology professors, is generating quite a bit of controversy. Richard Arum and Josipa Roska found that most students aren't learning much of anything in college -- and they're not studying nearly as much as they once did.

Their survey of more than 2,300 students, at a wide variety of four-year colleges, found college students spend 51% of each week on socializing and recreation. 24% of that week is devoted to sleeping, and 9% goes to working and student clubs and volunteering. Time in class and time spent studying outside of class, combined, account for just 16% of the average college student's week.

Here's the conclusion I draw from this study: If you think your kid shouldn't get a job because he or she needs that time to study, you're an idiot. If you want to argue that your kid shouldn't work because he or she needs time to play beer bong, that's much closer to the reality.

Working Towards a Debt-Free Degree

I've written at some length about the benefits of working during college -- students who work actually graduate with, on average, slightly higher GPAs than students who don't work -- but I am always hearing from parents, who complain about the academic dangers of having students work during college.

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What is interesting is you never hear the "students who work during college won't have time to study" argument from anyone who's in college or is a recent graduate. We know that's a bunch of garbage. You always hear that argument from well-intentioned liberals (not that there's anything wrong with being a liberal; they're just the ones who tend to make this argument) who have no idea what's actually going on at college campuses. Hopefully, this new research will stifle that argument.

The average college student who borrows money for school graduates with about $24,000 in debt -- or $6,000 per year, assuming your kid graduates in four years. But If your child works enough to earn $115.38 per week (after-tax), that's enough to reduce that $6,000 per year in borrowing to 0 -- a debt-free college grad.

In summary: shut up and get a job.

Zac Bissonnette's Debt-Free U: How I Paid For An Outstanding College Education Without Loans, Scholarships, Or Mooching Off My Parents was called the "best and most troubling book ever about the college admissions process" by The Washington Post.

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]]>collegecollege jobscollege studentsCollegesfinancial aidscholarshipscholarshipsstudystudyingworking during collegeZac BissonnetteWed, 26 Jan 2011 07:00:00 ESTBig Book Sales for MTV Reality Stars Not a 'Shore' Thinghttp://www.dailyfinance.com/2011/01/19/big-book-sales-for-mtv-reality-stars-not-a-shore-thing/http://www.dailyfinance.com/2011/01/19/big-book-sales-for-mtv-reality-stars-not-a-shore-thing/http://www.dailyfinance.com/2011/01/19/big-book-sales-for-mtv-reality-stars-not-a-shore-thing/#commentsFiled under: ,

Nicole Polizzi, better known as Snooki from MTV's smash hit Jersey Shore, has at last count more than 1,105,000 followers on Twitter.

But that huge Internet platform didn't exactly translate into a monster first week for her punny debut novel, A Shore Thing. The book came out on January 4th and, according to Bookscan, had moved 4,000 copies through January 9th. Bookscan tracks approximately 75% of all retail sales in the United States.

That works out to about one book for every 276 Twitter followers.

The overall track record of Jersey Shore stars selling books has, meanwhile, been unremarkable. Gym, Tanning, Laundry: The Official Jersey Shore Quote Book is available under "Bargain Books" at Amazon.com. It's priced at just $4.80 and makes a wonderful gift for someone you don't especially like.

Mike "The Situation" Sorrentino, the other breakout star of the show, released the 144-page paperback, Here's the Situation: A Guide to Creeping on Chicks, Avoiding Grenades, and Getting in Your GTL on the Jersey Shore back in November. According to Bookscan, that title has sold 12,000 copies to date.

That's not a horrible sales figure -- but given that Jersey Shore's Season Three premiere episode drew 8.45 million viewers earlier this month, it certainly seems lackluster. And you have to think the publishers who bought these books had higher hopes.

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]]>book releasesbooksjersey shoremarketingMTVPublishingreality showreality televisionreality tvRealityTVsnookiteenagersteensthe situationZac BissonnetteWed, 19 Jan 2011 12:00:00 ESTWhen Can a Student Loan Be 'Income'? When Applying for a Credit Cardhttp://www.dailyfinance.com/2011/01/13/students-loans-as-income-to-get-credit-cards/http://www.dailyfinance.com/2011/01/13/students-loans-as-income-to-get-credit-cards/http://www.dailyfinance.com/2011/01/13/students-loans-as-income-to-get-credit-cards/#commentsFiled under: , , , ,

Some students report school loans as income to get credit cards, according to a University of Houston Law Center survey.One of the signature elements of the Credit Card Act of 2009 was a provision that required college students under the age of 21 to have either independent proof of income or a co-signer when signing up for a credit card.

But a survey conducted at the University of Houston Law Center found that students were still getting credit cards. And 29% of the under-21-year-old respondents who had signed up for cards since starting school in the fall said that they had used student loan proceeds as part of the income they reported to card issuers when they applied.

But does that make any sense? How is owing money proof that you can pay credit-card obligations? On what planet is being tens of thousands of dollars in debt the same as having income?

In an email, Bank of America (BAC) spokesperson Betty Riess told DailyFinance that "We take a conservative approach and generally do not allow student loan proceeds or financial aid to be used as a source of income to pass independent ability to pay."

Application Confusion

But Bank of America's customer service tells a different story.

I logged onto Bank of America's online student credit card application and chatted with "Kymberly," a Bank of America online customer-support representative who told me that I could indeed use student-loan proceeds as a source of income when applying for a Bank of America credit card. [See a screen shot of our conversation, on the right.]

Reiss called the information I received from online customer service "inaccurate" and apologized for it.

But the online application also doesn't specify whether student loans count as income -- nor does it even hint at making any effort to verify students' reported income. You simply put "your income" in one box, and "other income" in another box. With no explanation of what "other income" might be, it's open to interpretation.

There's also a box for "household income," which says "Your Total Household Income is the sum of the all income within your household that could be used to repay your obligation."

How Can a Loan Count as Income?

Other banks have different instructions for applicants. Elizabeth Fogerty, a spokesperson for Citibank (C), told DailyFinance in an email that "If an under-21 applicant applies for a college-card account, the application explains that income can include full- or part-time employment wages, allowance, stipends, grants or scholarships. Student loans are not included as a source of income."

Susan Stawick, a spokesperson for the Federal Reserve Board, told DailyFinance there's nothing specific in the law or in the staff commentaries on the law that governs whether student loan proceeds can count as income for credit-card application purposes.

But do we really need a law stating that money owed isn't the same as money earned? It reminds me of an old line attributed to Abraham Lincoln: "How many legs does a dog have if you call the tail a leg? Four. Calling a tail a leg doesn't make it a leg."

Zac Bissonnette's Debt-Free U: How I Paid For An Outstanding College Education Without Loans, Scholarships, Or Mooching Off My Parents was called the "best and most troubling book ever about the college admissions process" by The Washington Post.

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]]>CARD ActColumnscredit applicationcredit cardsFederal Reserveincome verificationStudent LoansZac BissonnetteThu, 13 Jan 2011 09:40:00 ESTHow to Get a Dance Degree -- and Land on Your Feet Financiallyhttp://www.dailyfinance.com/2011/01/11/how-to-get-a-college-dance-degree-without-student-loan-debt/http://www.dailyfinance.com/2011/01/11/how-to-get-a-college-dance-degree-without-student-loan-debt/http://www.dailyfinance.com/2011/01/11/how-to-get-a-college-dance-degree-without-student-loan-debt/#commentsFiled under: ,

How to Get a College Dance Degree and Land on Your Feet FinanciallyA DailyFinance reader sent this question to me recently: "I believe that any college with a good dance program (I am a dance major) will be expensive. I want to get a good dance education, but I really don't want to be broke either. Do you have any suggestions or ideas of what I should do?"

Answer: You're right to be concerned about the combination of a career in dance and student loan debt. As you probably know, dancers, on average, earn very little money. You don't say what kind of dancer you are, but according to the Bureau of Labor Statistics, the median wage of a professional dancer was just $12.22 an hour as of May 2008.

And even figure that is misleadingly high, because there are far more people who want to be professional dancers than there are people who actually are able to earn a living dancing. Even a gig as a back-up dancer in a music video for a major pop star only pays about $3,000, according to TMZ, and that's the absolute top of the field. Regarding the dance field, the Bureau of Labor Statistics warns: "Employment is expected to grow more slowly than the average. Dancers and choreographers face keen competition for jobs. Only the most talented find regular employment."

The operative phrase here is "most talented." Dancers are hired based on ability (as demonstrated through auditions), not pedigree. Jennifer Lopez attended college for just one semester, but continued taking dance classes to build her ability to the point where she became a back-up dancer for major acts including the New Kids on the Block. It's also a field where you will likely need to continue learning (by taking classes) long after you've graduated from college.

Borrowing a bunch of money to pay for a prestigious degree could easily render you unable to pay for dance classes after you graduate. Dancing is also not generally a full-time job with a set annual salary. Most dancers, even successful ones, are paid by the week or by the show, and move from company to company. This is not a lifestyle that lends itself to handling high fixed costs like student loan obligations.

The problem with borrowing a bunch of money for a great degree in dance is that it could, ironically, leave you with the education you desired but monthly payments so high that you can't possibly afford to pursue dance as a career. I have a friend who majored in theater at New York University. He learned a ton and had a great experience. But he borrowed so much that he ended up having to take a desk job in an unrelated field in order to make his loan payments after graduation. The theater degree ended up preventing him from pursuing a career in theater. That's sad.

Also, Consider a Double Major

My advice to you would be this: Look at dance programs at your in-state public institutions. Attend the best from among them that you can, and use some of the money you'll save by going to an affordable school to take dance classes on the side with a very good instructor. You may well end up learning more that way -- for less money -- than you would by attending on the best degree program possible. If you have the ability and work hard at it, you can become a great dancer without shelling out big bucks for an undergrad degree.

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You also may want to consider double majoring to boost your employment prospects outside of dance. Remember: $12.88 an hour -- if you're lucky. You should really give yourself a fallback position.

Finally, regardless of where you do end up enrolling, you should definitely check out FastWeb's list of dance scholarships.

If you have your own college financing question, please email it to ZBissonnette@gmail.com. If I answer it in a future post, I will send you a free copy of my book.

Zac Bissonnette's Debt-Free U: How I Paid For An Outstanding College Education Without Loans, Scholarships, Or Mooching Off My Parents was called the "best and most troubling book ever about the college admissions process" by The Washington Post.

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]]>best collegescareerscareers in the artscollegeColumnsdancedance scholarshipsdancereducationpayPaying for collegePerforming Artsstudent debtStudent LoanswagesZac BissonnetteTue, 11 Jan 2011 09:00:00 ESTWant to Go to an Elite College? Select Your Parents Wiselyhttp://www.dailyfinance.com/2011/01/08/want-to-go-to-an-elite-college-select-your-parents-wisely/http://www.dailyfinance.com/2011/01/08/want-to-go-to-an-elite-college-select-your-parents-wisely/http://www.dailyfinance.com/2011/01/08/want-to-go-to-an-elite-college-select-your-parents-wisely/#commentsFiled under:

Students looking to get into an elite college might be better off skipping the SAT prep courses -- and instead spend their time and money on an Ancestry.com membership to try to find a long-lost relative who went to the school.

Come to think of it, that project might make a good application essay.

A new study conducted by a Harvard researcher shows that, all other things being equal, a legacy applicant is 23.4% more likely to be admitted to an elite college. If you are a primary legacy -- that is, one of your parents attended the college -- your probability of admission jumps by 45.1%.

Richard H. Shaw, dean of undergraduate admission and financial aid at Stanford University, told the Chronicle of Higher Education that "We consider access and opportunity a very important principle. We also value intergenerational connections to the Stanford experience."

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The sad thing about a legacy policy is that it makes admission to an elite college easiest for students who are least likely to benefit from it. One study found that students accepted into elite schools who attend less selective colleges earn the same amount of money as students who attend elite colleges. But that study did find that there was one group of students who benefited from attending elite colleges: students from low-income families.

Finally, I have to ask: If colleges are going to operate as 19th-century social clubs -- where bloodlines rather than ability determine admissions, at least in some marginal way -- why are they still tax-exempt?

Zac Bissonnette's Debt-Free U: How I Paid For An Outstanding College Education Without Loans, Scholarships, Or Mooching Off My Parents was called the "best and most troubling book ever about the college admissions process" by The Washington Post.

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]]>collegecollege admissionscollege admissions helpelite collegesZac BissonnetteSat, 08 Jan 2011 11:00:00 ESTBad News: Defaulted Student Loans Don't Cost the Governmenthttp://www.dailyfinance.com/2011/01/05/bad-news-defaulted-student-loans-dont-cost-the-government/http://www.dailyfinance.com/2011/01/05/bad-news-defaulted-student-loans-dont-cost-the-government/http://www.dailyfinance.com/2011/01/05/bad-news-defaulted-student-loans-dont-cost-the-government/#commentsFiled under: ,

College studentsNew data from the federal government confirms what StudentLoanJustice.org founder Alan Collinge has been saying for years: Defaulted federal student loans don't cost the government.

The Wall Street Journal reports that (subscription required) "After paying the companies that actually collect the loans and other costs, the U.S. Department of Education expects to recover 85% of defaulted federal loan dollars based on current value. The recovery figures are quite generous when compared with other corners of consumer debt. Banks, for example, often retrieve less than 10 cents on the dollar from overdue credit cards."

That sounds like good news. It isn't. Here's why: When lenders don't end up suffering losses on loans that are excessive, they lack any particular incentive to lend responsibly. Why worry about a student borrowing too much for a bachelor's degree when the debt can't be discharged in bankruptcy -- and you can garnish the borrower's wages for the rest of his life while tacking on interest and fees? The result is tragic stories like this one.

Only the Borrowers Pay

Collinge tells DailyFinance that "It's like the Wild West, only it's government-sanctioned." He also takes issue with the 85% figure and says his calculations show that the government is actually making money on defaulted loans. Mark Kantrowitz of FinAid.org notes that the gross recovery amounts are 122.1% for the recently discontinued FFELP federal loan program and 110.6% for the federal direct program -- but that collection costs bring the net recovery rate down to 85%.

He calls the collections costs "very high" and notes that "Collection agencies for student loan debt are all quite profitable, and the government has no real incentive to rein in those costs as they are paid by the borrower, not the government."

Whether it's an 85% recovery rate or north of 100%, the fundamental issues are basically the same. Student lending has developed into a system where no one other than the borrower really loses when people are saddled with excessive debt. Colleges don't care because easily available borrowing smashes the natural ceiling on college affordability -- and allows colleges to continue raising prices at breakneck speed.

How to Lower Tuition

The only way to stop this is to change the bankruptcy laws so that all student loans -- private loans and, more important (because it's a bigger market), federally guaranteed loans -- can be discharged in bankruptcy. Let the banks and the taxpayers take some enormous losses -- and perhaps then reconsider the banks' aggressive underwriting policies. This isn't an ideal solution, but it's the only one that will restore sanity.

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What would happen then? Would no one be able to go to college? Would college lecture halls and recently constructed $200,000 per bed dormitories sit vacant? Please. There's no immutable law that says college costs must rise two to three times faster than inflation. Stop the flow of easy credit, and tuition prices will come down. If you don't believe me, Google "housing bubble."

The relationship between increased funding for higher education and increased affordability is not as linear as many would like to think. Economist Richard Vedder recently explained in The New York Times that "exploding student loan programs have contributed to higher tuition charges" and notes that a larger percentage of college students came from low-income backgrounds in 1970 than today -- in spite of the enormous increases in federal student aid.

But until someone other than borrowers suffers from the consequences of excessive student loan debt, this vicious cycle will not stop.

Zac Bissonnette's Debt-Free U: How I Paid For An Outstanding College Education Without Loans, Scholarships, Or Mooching Off My Parents was called the "best and most troubling book ever about the college admissions process" by The Washington Post.

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]]>bankruptcycollege tuitionColumnsdefaultsStudent LoansZac BissonnetteWed, 05 Jan 2011 15:00:00 ESTAfter 62 Years, a First for Harlequin: A Personal Finance Bookhttp://www.dailyfinance.com/2010/12/27/harlequin-personal-finance-book-for-women/http://www.dailyfinance.com/2010/12/27/harlequin-personal-finance-book-for-women/http://www.dailyfinance.com/2010/12/27/harlequin-personal-finance-book-for-women/#commentsFiled under: , , ,

Woman investorBy the end of 2010, Harlequin Enterprises will have sold a grand total of more than 6 billion books in the company's 60-year history. But on Dec. 28, Harlequin will try to sell its first personal finance book.

The Frugalista Files, written by former Miami Herald personal finance blogger Natalie McNeal, is a diary of the year that one 34-year old spent trying to pay off her credit card debt -- "without giving up the fabulous life."

McNeal's book is written in a diary format, with all the personal details and emoticons entailed in that approach: "I admit it. My name is Natalie. I am a spending slut." It's certainly not a book that targets my college-age demographic, but many readers will find her story inspiring. If Natalie can do it, so can you.

"My book is for anyone who is a promiscuous spender and is looking for real-life tips on how to be financially chaste," McNeal tells DailyFinance. "It's highly personal personal finance."

Katherine Orr, Harlequin's vice president of public relations, sees the move into financial advice as a logical step for the world's largest publisher of romance novels.

Natalie McNeal's "For 60 years, we've provided escape from problems, and now we can help solve the problems," she says. She calls McNeal's book "very prescriptive. It's clear and simple, and it's helping young singles navigate in a tough world."

Harlequin first began publishing nonfiction in October 2008 with a book from syndicated radio host Delilah. Subsequent titles have included fitness guru Tosca Reno's best seller Your Best Body Now: Look and Feel Fabulous at Any Age the Eat-Clean Way, along with titles like The Happy Baker: A Girl's Guide to Emotional Baking; Life Beyond Your Eating Disorder; The Dog Who Healed a Family; and Queen of Your Own Life.

The market for pink-covered personal finance books for women hasn't been especially strong. None of financial adviser Suze Orman's mega-bestselling money books have boasted a pink cover, and none of the slew of recently released girl-talk guides for women have sold well. Titles like Shoo, Jimmy Choo!; Bitches on a Budget: Sage Advice for Surviving Tough Times in Style; andA Purse of Your Own: An Easy Guide to Financial Security have all failed to register much of an impact in terms of sales.

Kimberly Palmer, the personal finance editor with US News & World Report and the author of Generation Earn, says many financial guides for women are marketed as "simplified [and] dumbed-down."

"Women don't like to be talked to as if we're bad with money, because we're not," she says. "Too many books for women assume that we overspend on shoes and cosmos when we're really just looking for the same kind of smart, solid financial advice that men want."

But if there's one publisher in America that knows what women are looking for when they buy a book, it's Harlequin. Perhaps it'll be able to reach a segment of the population badly in need of financial advice -- one that other publishers have so far been largely unable to connect with.

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]]>book publishersbook publishingColumnsharlequinpersonal financepersonal finance for womenromance novelsThe Frugilista Fileswomen and moneyZac BissonnetteMon, 27 Dec 2010 08:00:00 EST