Escalating tuition, room, board and text book costs combined with a challenging job market have led to a college funding conundrum for many middle class Americans. How do parents who are still paying off their own student loans set aside enough money to pay for their children to attend college? Are we setting up an educational system that encourages infinite debt? The exponential increase in costs associated with earning a higher degree certainly suggests that possibility. Consider recent Bureau of Labor statistics that say college textbook prices have risen over three times the rate of inflation from January 1977 to June 2015, a 1,041 percent increase. According to the National Center for Education Statistics, the average cost of tuition, room and board have risen from $3,877 in 1983 to $34,841 in 2014. As colleges and universities across the country scramble to come up with scholarship money to cover tuition costs that have risen, presumably due to an increasing need to provide scholarships because education prices have grown out of control, middle class Americans are left swirling in that ironic vortex. How, then, can parents today help students pay for a college education? With more than 30 years of experience in college funding, we offer these nine options: Invest in a college savings plan, but know that not all are created equally. It is possible, for instance, to max out your state 529 plan and still not have enough to cover the cost of in-state tuition. Talk to your financial advisor before you invest in any college savings plan to make sure it’s right for you. Set up a Roth IRA account for your student if he or she has wages or self-employment income reported to the IRS. Roths are not included as an asset when you fill out your FAFSA, so it won’t increase your expected family contribution. Apply for grants and scholarships. Take time to ferret out all of… | Read More »
Month: August 2015
“Sharing economy” is becoming increasingly profitable
As we parse the latest employment figures, looking for signs that the job market will recover to its pre-recession levels and lift more people into the middle-class, we’re forced to recognize how the nature of work has changed. That manufacturing jobs of the kind that built the middle class in the mid-20th century are gone, with little hope of ever coming back, is something we’ve known for decades now. How we will replace those jobs remains an ongoing concern. Technological advancements have had the greatest impact on both the kinds of jobs that are available and the way people approach the job market. Economists use the term “information economy” to describe the current conditions in which computers, robotics and interconnectivity affect everything we do, from building airplanes to scheduling a doctor’s appointment. Technological changes have not only affected the number and quality of jobs available, they also have changed the relationship between employers and employees. The rapid changes brought about through technological innovations have caused companies to reinvent themselves on a continual basis, or face obsolescence. This constant change in the organizational structure of a company has frayed the traditional symbiotic relationship of employer and employee. The rise of free-lance and “contract” workers is one result of this change. Contract workers are indistinguishable from any other worker in the firm except in their employment “status.” With contract workers, the company gets the same productivity benefits with fewer liability and “human resource” issues. But, where technological innovations have reduced stability and security among the workforce of medium to large sized companies, it also has created opportunities outside of the traditional workplace. Over the past few years we have seen the rise of what is being called the “sharing economy.” The most well-known examples of the sharing economy are Uber, (a taxicab-like service that uses mobile phones to match people who are looking for a ride with private citizens who are willing… | Read More »