1/11/2013 11:25 AM ET|
College: Ticket to the middle class
And that ride is becoming too expensive. The cost of higher education is the decisive factor keeping have-not families from giving their kids a better life.
If you want to get ahead financially, it pays to choose your parents carefully.
Simply put, affluent parents are able to provide many of the underpinnings of a middle-class (or better) life for their offspring. Wealthier parents may offer cash for a down payment so their kids can become homeowners, or they may cover health insurance premiums to protect their children from catastrophic medical bills.
Most importantly, though, wealthier parents can help pay for one of the most important factors in economic success: a college degree. Increasingly, that single factor is giving their kids a crucial advantage that seems to be slipping from the grasp of children from lower-income families.
Consider some of the research on economic mobility in the United States:
People born at either end of the economic spectrum are likely to stay there
Research shows that if your folks were rich, you'll likely be rich too, or at least well off. If your folks were poor, you likely will struggle financially as well.
Forty percent of those raised in the top 20% of incomes in the U.S. remain in that high-income bracket as adults, according to research by the Pew Charitable Trusts, and 63% remain above the middle. Similarly, 40% of those raised in the bottom 20% of incomes stay there as adults, and 70% remain below the middle. There's still some economic mobility, of course, but there's less than you'd find in Canada, Western Europe and even traditionally class-bound Great Britain, according to research by Scandinavian economist Markus Jantti.
The Pew study also found that a four-year college degree is an important determinant of economic success. Researchers found that college degrees help prevent "downward mobility," keeping those born in higher-income brackets from falling out, while allowing those in lower-income brackets to move up.
Gap between rich and poor in college attendance, completion is growing
Two University of Michigan researchers studied college attendance patterns of people born between 1961 and 1964 and compared them with those born between 1979 and 1982.
Over the course of one generation, college attendance and completion rates soared among those in the higher income brackets. In the lower brackets, the rate of increase was much less dramatic, widening the gap between rich and poor.
For example, 80% of those in the highest income bracket attended college in the early 2000s, compared with 58% of the same income group 20 years earlier. The highest income bracket included people with incomes in the top quartile.
Only 29% of those in the lowest quartile of income attended college in the 2000s, up just 10 percentage points from the 19% rate seen in the early 1980s.
Even more telling is the rate of college completion. Among young people who came from the highest-income households, 54% completed college, up from 36% two decades ago. Among the lowest-income group, the college completion rate went from 5% to 9%.
Parents torn between providing access and teaching responsibility
Some of my readers say they want their kids to pay for all or some of their own college educations -- to teach them responsibility. Others cite the importance of setting aside money to improve the odds their children will complete school.
For example, Chris Hubbard of Thousand Oaks, Calif., doesn't want his kids to disappear into the work world before they get degrees. Hubbard said his parents and grandparents paid for his and his sister's college education, so they could graduate without student loans.
"I will do my best to do the same for my kids. I want them to be able to go directly to college after high school without first working for a year" or more, Hubbard wrote on my Facebook page. "Once they get used to having some money, it is tough to give up a full-time income and lessen their living standard for improved future income."
Matt Furrier of Boston agrees. He put himself through school, commuting to a state college, an experience he doesn't want his children to repeat.
"(M)y wfe & I absolutely will pay for the bulk of their private colleges! I want much better for them," Furrier wrote on my Facebook page. "We can afford to do it."
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VIDEO ON MSN MONEY
Liz, I guess you haven't been interviewing many candidates for jobs lately. Wal-Mart is paying supervisors with a Master $9.35 per hour. I have fired four college grads in the past four months and my best, smartest and most talented employees are High School grads without a degree...The colleges and the Alum make sure corporations won't even interview anyone without a degree. People are forced to spend $20,000 to $30,000 for an online degree just to get an interview for a job paying $11 per hour....
Liz you and many others are brain washed. How did America ever become the best country in the world? It wasn't with a college educated society as only 26% of adults have a college education.....Yet our so-called college grads are flunking America into debt and poverty by outsourcing and selling America to China and Mexico.
I sold the business for a tidy profit, and decided to put myself through school, because being a
'grease monkey' was not prestigious, I was told. After graduating with full honors and at the top of my classes, I immediately found a very good paying IT Job, and spent the next 12 years strapped to a desk kissing corporate butt. After stressing out to the point it caused high BP and a heart arrhythmia and almost ending my marriage, I walked away from living the lush budget and started another race shop as far from a desk as I could get. Now some 10 years late I am again healthy and my medical issues have gone away, as have the 50 pounds I put on staring at the one-eyed monster. Most important, I love what I am doing, and can't wait to get out in the shop every day.
I will be old enough to retire next year, and have no intention of giving up my work until I'm physically incapable. My only regret is that I gave up almost everything that made my life great to chase $$$. The lesson? Do what you love, and it will make you richer in ways money can't buy.
Oh yeah: always. Great journalism.
I have found that it just about all of the work you put into your job together with a little bit of luck that determines how successful you are not the amount of education you have.
As far as college goes, individual experiences will vary. My wife and I are both engineers and have enjoyed the financial reward of our degrees. I had to work my way through school. The plus was that I developed a strong work ethic. The minus was that my gpa suffered for it. We have 529s for our children and plan to pay for their college. The stipulation is that they work hard, make good grades, and finish undergrad in 4 years. If not, the funding is cut off. I went to a STEM conference this past year and the University of Texas El Paso gave a presentation on their school. They have a program with local high schools that students can follow to already be a sophmore or junior by the time they graduate high school and they can have a masters degree three years after completing high school. Getting college credit in high school is more and more common nowadays and I think it is a great way to get a head start towards a degree. I don't think college is for everyone. A coworker's son spent a year going to trade school as an automotive mechanic and then went on to the mercedes benz mechanic program and is doing well with no debt. Plus he was making money within 18 months of graduation. Every year in college is a year you are not making money.
I'm a high school teacher and all my low income kids receive free education in the local college and some of my students don't have very good GPA's but belong to minorities so I think the middle class is the only one who can't provide with a good future to their children because we have to pay for all.
I come from a working class family and my parents are illiterate but I worked so hard to get grants and scholarships to afford school and I graduated and studied and got two Master degrees with zero debt.
The primary problem with College today is that so much money is available. And people are so stupid that they take it! There is no excuse for graduating with a Student loan debt. If you can't afford the school you're at, you're at the wrong school! And then people will say, "but I need to go to this school because it has the program I need'. Right! And several other schools had it too. You just wanted the degree to have a certain name on it, when the ONLY name on it that mattered was yours!
Then they will say. 'But schools is so expensive now'. Right! Because people are so stupid they rack up tens of thousands of dollars in debt to pay for it. When the same degree was available for FAR LESS. But if you are willing to pay a fortune, why should they charge you a fair price? If you come out of college with a debt load equal to (or God forbid greater than) your entire first years income, you were entirely too stupid to be in college in the first place!
Now thumbs down this post all you want, it doesn't change the truth!
- Not bound by the successes or failures of my parents
Not that my thoughts make any difference, but I did attend college and I then i quit, I could not find a job that I was happy in. I went back to college, and finished and am now at my career.
I do think college is a great experience to have, however it is not for everyone and in no means does it mean that with out it you will be poor.
Join the military. Once you reach E-4 or above you can live very comfortably with pretty much everything paid for plus a little cash for spending and saving. Paid college benefits are not to shabby either.
Go to tech school or a union apprenticeship program. Regardless of what you think of unions manufacturing and construction jobs pay $25 to $35 and hour depending on your location and field.
Get a better grip on your PBR! If you think that America's college graduates are selling off our country to China you should take a closer look at how your precious Wal-Mart became the global retailer it is now. Remember when they went national their motto was "Buy American"? When their customers were not willing to pay the prices asked they began to buy imports to satisfy the customers demands and soon that became all they carried for most consumer goods.
I do agree that a college degree is not the end all solution to the employment situation many face currently. It never has been. Not everyone is cutout for being a business manager anymore than they are for being an electrician or plumber or soldier. Some just need to wakeup and realize their own strengths and weaknesses and deal with it. If they don't like what they see change it for the better in a manner consistent with their desired goal. Money isn't everything, yeah it helps but it's just the grease that makes your world a little smoother and nothing else.
Before you write me off as some ignorant dipstick I will tell you this much, I started college fulltime in 1976 while working a fulltime job for not much over minimum wage at the time. I was pushed into applying at GM and Ford assembly plants shortly after my second semester. On April 1 1977 I was offered a job at the local Ford plant and started at @ $10.00/hr. After the economy went sour in the early 80's I could no longer stand to be a part of the Trade Readjustment Allowance Act that President Jimmy Carter sold America on. For those of you who have no knowledge of this it provided for auto workers to collect a total of 95% of their 40 hour week wages while they were laid off from their jobs. The only requirement for them to collect was to apply for any job once a month and if the position paid less than they were making at their job they could turn down the offer and continue to receive their checks for the 95% 40 hour pay. I watched my best friend collect this for over 3 years even though he had only actually worked there for slightly over 16 months. So I quit after having been laid off myself for a third time in less than 3 months and pursued a career in the automotive collision industry. I went from a monthly income of over $2500.00 to less than $400.00 overnight. It sucked but I learned fast and things slowly got better. It was after having some personal issues that I threw all that away and joined the service. Yes it really sucked to start all over again, but, after 23 years the things I did and experienced taught me many things. First and foremost is be a part of the solution and not the problem!
Sorry if I offend you or any of the readers but I also learned to not BS around. If there is something in our part of the world that you don't agree with do something constructive about it. Be that person who makes a differnce not the one who wondered what happened.
Yes, it's frustrating to see so much of your earnings go into paying for welfare and "free" healthcare for the non-working. But having a strong work ethic is its own reward.
That said, my biggest struggle is how to get my daughter an education so she can enjoy the benefits of middle class down the road. We are saving every month, but it won't be near enough, and practically all of the financial aid is earmarked for "leg-up" programs so I know she'll be saddled with debt. I will encourage her to get a degree in something with a responsible financial ROI, but with education costs rising and no help from grants, how are middle class kids supposed to continue that upward trajectory? It always seems the system is set up for middle class to get knocked down, never helped up.
Here is the employment problem in the US....we are more concerned with personalities, relations, and appearances than we are with real knowledge of anything. They will hire idiots with attractive mannerism and appearances over someone who might actually know what they are doing. Then, there is some jealousy from the hiring managers and perhaps some fear that their new hires might turn into competitors.
Education is about learning, but employment is very political and it is biased in favor of the socialites who have connections. There is more BS in getting employed than a student could ever imagine. They need to have courses on adapting to America's phony social culture...and on the mannerisms you need to develop to impress your potential employers.
The system is set up for you to stay in your place. Upward mobility is largely a fantasy to motivate the ignorant masses to work their hardest as slaves. Maximization of output and revenues.
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