College Isn't Just for 18-Year-Olds

written by TOM LAURICELLA

Posted by Minjune Kim

Going back to college later in life is a great way to bolster a career, re-enter the job market or simply expand horizons. And it doesn't have to cost a fortune. Not only can adults benefit from most of the same financial-aid programs and college-savings plans as recent high-school graduates, there also are options for older adults alone -- which can significantly reduce the cost of learning.
Tom Miller, a 68-year-old former Marine and art director for a Wall Street firm, is on his second round of going back to school. And that's on top of the master's degree in fine art he earned earlier in life. Between 1997 and 2003, Mr. Miller used his veterans benefits, which help cover the cost of education, to save more than 80% on his tuition as he earned a certificate in entrepreneurial studies and business management at Fairleigh Dickinson University in New Jersey. Today, he takes an art class at that same college for just $250 per semester, through a Fairleigh Dickinson program for older adults called the Florham Institute for Lifelong Learning. A typical class at the university is three credits and costs $2,511, or $837 per credit, though it can vary. Both financially and from a personal fulfillment standpoint, "it's very rewarding," Mr. Miller says.

Finding Funds
For those looking for help with the cost of going back to school, a good first stop is financial-aid site FinAid.org. It provides a wealth of information on loans and scholarships, including a page on financial aid for older students. (Click on a link on the home page that says "other types of aid.")
When it comes to financial aid for older students, "if you're pursuing a degree, just about everything that works for a traditional 17-year-old will work for you," says Mark Kantrowitz, publisher of FinAid.org. He adds that there even are some schools that offer scholarships just for older adults. That said, there are some restrictions that may pose a problem for some senior students. For instance, the federally sponsored Pell Grants program, which provides money to low-income students, is available only to those who don't already have a bachelor's degree.
Older students also may have their own concerns. Mr. Kantrowitz hears from individuals who need a student loan but worry about what would happen if they die before the debt is paid off. "It's a bit morbid, but it is a concern...that the loan will be held against the estate," he says. With the federal Stafford loan program, however, the debt is forgiven should the borrower die.

Senior Discounts
Many older adults will find they may not need to pay full tuition. Purdue University in Indiana, for example, waives half the tuition for people age 60 and older (but with a cap on the number of credits taken with the discount). It's even cheaper for those who don't want to pursue a full degree. Most schools provide bigger discounts for students who "audit" classes; they participate in class but don't take tests or get credit toward a degree. At the C.W. Post Campus of Long Island University in New York, anyone 65 or older auditing a class pays one-quarter of the regular tuition. That lowers the cost of a typical class to about $640, from more than $2,500. And in more than 20 states, including Texas, Florida and North Carolina, public colleges offer free tuition to older adults auditing classes. One thing to remember: Space may be limited, and schools usually give priority to for-credit students. Moreover, some schools restrict when audit students can register. At C.W. Post, for example, registration for audit students is allowed only the week before school starts. "But it usually seems to work," says Rita Jorgensen, director of adult student services at the school.

Consider 529 Plans

It also pays to consider another tool that has become common for younger students: 529 college-savings plans. These accounts allow money used for college expenses to be invested free from federal income taxes. Many states also offer tax breaks for contributing to 529 accounts.
"It's almost a no-brainer," says Joseph Hurley, who runs Savingforcollege.com, a Web site specializing in 529 plans. That said, those planning on attending school within the next several years should be wary of putting money into investments that could lose money. And a handful of states, such as Louisiana, have minimums on how long money has to be in an account before it's withdrawn in order to receive the full benefits of the accounts. Still, Mr. Hurley notes that some state programs, such as Michigan's, have investment options that offer high-yielding but safe accounts. Michigan's Principal Plus Interest Option currently provides a 3.75% guaranteed return from plan manager TIAA-CREF. That rate could change at the end of September. Some people may be able to take advantage of 529 accounts opened for children or grandchildren. "You can always change the beneficiary back to yourself, or you can open [accounts] with yourself as the beneficiary," says Mr. Hurley.

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Credit Card Issuers’ Last Stab at Hooking Your Kid

Posted by: Stefanie Marty

Moises Mari, a 24-year-old senior at Rutgers University, got his first credit card at 16 by lying about his age on the application. “None of my friends had one, and I wanted to be the first,” he says. “I was surprised how easy it was to get through the system. I was issued one within a few days.”

The era of “No Student Left Behind: Credit Card Edition” will come to an end early next year, thanks to the new credit card law. (Starting in February, the law restricts students under 21 from signing up for their own cards.) But, in the meantime, college kids now arriving on campus may see issuers making one last-ditch plastic pitch through offers of free pizza, iPods, or T-shirts. “These are very large businesses, and they can’t sit back and do nothing or their businesses will shrink too much,” notes David Robertson of the Nilson Report, a credit card analyst. So a little friendly parental advice from you couldn’t be timelier.

College students are just as hooked on plastic as their parents. Some 84 percent of college students have credit cards — more than half have four or more — and the average balance is $3,173, according to a survey by student lender Sallie Mae. (That’s on top of the $19,999 median loan debt for undergrads.) Many students seem unable to rein in their card use. More than three-quarters carry a monthly balance, and 60 percent in the survey said they were surprised how high their balances had reached. They are, in short, a card issuer’s dream: young, plastic-addicted, and willing to carry a balance into eternity.

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Credit Cards on College Campuses

Written by: Stefanie Marty

The use of credit cards is not only prevalent in the US households; it is also common on college campuses among students with debt and credit problems. Due to the few financial ties of college students they represent an attractive demographic to banks.
With the increasing cost of college, the use of credit cards by students gets more and more versatile. More than 50 percent of the students pay books by credit card and about 35 percent charges the credit card to pay tuition. Banks contribute a lot to this increasing use of credit cards. Since the introduction of credit cards to students in the late 1980’s banks have gotten more and more aggressive to promote the cards to college students amongst others by distributing free gifts or by negotiating credit card partnerships with colleges.
Research shows that in 1990 about half (54%) of undergraduates held at least one credit card; a number which increased to 83% in 2001. And in 2008 76% of students reported that credit cards have been marketed to them near college campuses.
Research conducted tried to find connections between the credit card use behavior and the financial knowledge. In contrast to the expectations, students with high financial knowledge had higher credit cards balances than students with lower financial knowledge. This fact together with other findings of the study shows that the use of credit cards on college campuses is of more complexity than expected. As Robb and Sharp show in their study, limiting access to cards is not the leading way for preventing students from a financial crisis. It is much more important for the students to make rational decisions.
After conducting the study of credit card attitudes of college students, Joo also suggests further research on this important and complex topic. There are different components that must be taken into consideration when evaluation someone’s credit card use behavior. The impact of components such as gender, academic major, numbers of credit cards owned, parents’ use of credit card or psychological factor is not clear. Joo insists on a good credit education which will lead to better credit card behaviors of students.


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Posted By Adam Lindheim

BusinessWeek asked business undergrads to tell us about their favorite professors. Here's another installment in the series.

Not too many college-aged kids can say they have already created a personalized mutual fund 401(k) plan. But North Carolina State University finance professor Bill Sloan's students can. After developing a diversified portfolio from a menu of 12 to 13 investment choices and quantifying their risk tolerance, these personal finance students are prepared to deal with their retirement savings before they've even joined the workforce.

Preparing students for their future can pay off. North Carolina State undergrad business students who responded to BusinessWeek's 2007 survey, frequently named Sloan as their favorite professor. He has also received the Distinguished Undergraduate University Professor award at North Carolina State. Students say his real-world application of classroom material and depth of knowledge make him a star teacher.



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By Adam Lindheim

With the president’s speech on Wednesday, the debate of a national health care plane has reached its climax. There are two sides to the issue, one being whether or not everyone should be insured by a government supplies health care plan, or if we should continue on our current path of private health care. Those who believe we should have a national plan believe it is necessary because of the lack coverage of their insurance companies. Others would rather control their own medical decisions, and some believe the plan just is not properly formatted to complete its mission.

In a recent study by Drs. David Himmelstien and Steffie Woolhandler of Harvard Medical School, Elizabeth Warren of Harvard Law School, and Deborah Thorne a Sociology professor of Ohio University found that American’s filing for bankruptcy was for the most part solidly middle class before the medical disaster hit. Of those surveyed two-thirds had owned their home, and three-fifths had gone to college. Medical problems caused Sixty-two percent of all personal bankruptcies in the U.S. in 2007 according the Harvard study. Seventy-eight percent of those filers had medical insurance, including sixty point three percent who had private coverage. This is a drastic change if we are to compare these numbers to 1981. Only eight percent of families filing for bankruptcy in 1981 said that a serious medical problem was the cause to their bankruptcy. In a 2001 study done by the same researchers, they found that a serious illness or medical bills had caused fifty percent of all bankruptcy filings. “For middle-class Americans, health insurance offers little protection. Most of us have policies with so many loopholes, co-payments and deductibles that an illness can put you in the in the poorhouse,” said lead author Himmelstien. “Unless you’re Warren Buffet, your family is just one serious illness away from bankruptcy.” This study reinforces President Obama’s call for reform in the medical insurance industry. There is still a strong resistance to this reform by not only those who have private insurance, but doctors as well.

Arthur Feldman a cardiologist and chair of the department of medicine at Jefferson Medical College in Philadelphia, as well as the author of the book Pursuing Excellence in Healthcare: Preserving America’s Academic Medical Centers. Feldman wrote an article in the Washington Post called “10 Things I Hate about Healthcare Reform.” I have chosen the 3 points I agree with the most, but all of them are valid points and should be considered all the equally important. Point Three on Feldman’s list is “Prevention wont magically make cost go down.” President Obama believes by paying for vaccines, and attempting to prevent disease costs will go down. Dr. Feldman believes prevention will actually make costs go up, because you will have to continually provide care for these diseases, and believes as long as things like McDonalds, cigarettes, alcohol, and the pollution of the environment are around so will sickness. Point six was “We have to streamline drug development and shake up the FDA.” There are to many hurdles to get drugs passed, and the FDA is to small to pass drugs threw the system that can help patients. Plus new clinical trials for drugs are now done outside the U.S, which takes money out of the U.S. economy. Point 7 was “We can’t fund health-care reform by cutting payments to doctors.” Dr. Feldman believes we need to pay for quality in order to receive the proper care we need and deserve. Cutting payment to doctor’s can only create a hairy mess. Other than Dr. Feldman’s beliefs, American citizens all over are protesting their beliefs trying to influence the government,

In Raleigh, North Carolina Protestors stormed their capital building expressing their beliefs. There were those who had filed for bankruptcy because of their high medical bills, and those who wanted their medical coverage to stay between their insurance companies and their doctors. Wednesday night President Obama will deliver his speech to the whole nation, and a eventually congress will make a decision, but until there I would suggest trying to stay healthy.


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Americans Worried about their Financial Situation

posted by John Smith

Americans feel far worse about their financial situation than they have in the past seven months and continue to be pounded by financial woes driven by increased credit card, health-care and personal loan issues, according to the Consumer Reports Index September ’09 Report.

The CR Sentiment Index is at 38.1, the lowest level since October 2008. The nonprofit organization also noted that the CR Trouble Tracker continues to increase to its highest level in the past seven months with almost 38 percent of Americans experiencing at least one major negative personal finance event in the past month.

While consumers continue to be distressed about their personal financial situation, there are indications their outlook may have stabilized. The CR Retail Index remained stable from the previous month, while interest in shopping for large-ticket items like a new home, and new and used cars looks strong for the month of September.

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Schools Push Personal Finance Curriculum

Posted by: Lisa Matthys

As the current economic crisis highlights the perils of money mismanagement, local educators are launching courses on personal finance alongside traditional math-curriculum mainstays like algebra, geometry, and calculus.
For the first time this fall, Medway High School will offer a semester-long course, open to all students, that will cover income, spending, credit, saving, and investing .
Wellesley High School will also offer a new senior-level course on personal finance this year, while Acton-Boxborough Regional High School allows students to work at an in-school credit union for course credit.
And the finance teachings don’t always stop in the schools: Today, the Bellingham Public Library is hosting sessions on teaching children about finance, for kids and their parents.

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Should Elected Officials Release Personal Finances Online?

Michigan Attorney General Mike Cox voluntarily posted his personal finances online to support legislation that would require financial disclosure from public officials. With a combined salary (him and his wife, Laura) of over $193,000, Cox called for new laws that will require financial disclosures of all state elected officials and local officials who earn more than $65,000 a year. Michigan is currently one of three states not requiring disclosure. With the personal financials of elected officials withheld, it is uncertain as to which lawmakers may have conflicts of interest on specific issues. By publishing elected officials finances, questionable practices could be reduced. However, opposing arguments do subsist. If such requirement was imposed on Michigan, “everyday folks” who seek office may be discouraged to run. Currently, the House has already passed public disclosure legislation. For the past five months, legislation has been with the Senate awaiting action. Only time will tell as to when all elected officials will need to disclose personal finances, as only three states have opt out. As for the Republican, Mike Cox, if his voice is heard, it will put him in the running for governor of Michigan.

Written by: Lisa Matthys

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Money doesn't Grow on Trees

Start your kids saving early.

Article by: Srividya Srinivasan

How many children are informed about financial planning at an early age? Parents don’t discuss their financial situations with their kids. And usually just shell money out of their wallets. By not teaching them the value of money, children don't realize the importance of every dollar.

According to Todd Mark, Spokesperson for Consumer Credit Counseling Service, "We know that the savings rate in our country is atrocious. As a matter of fact, last year was the first time since the Great Depression that we had a negative savings rate as a country. So, as adults that have obviously very little value on savings, we're not passing it on to our kids - to put much aside in savings - either." If parents were to advise their kids to encourage them about the value of saving money, it will help set them in the right direction initially. They don't have to force their kids to save money, just strongly encourage, which will ultimately go a long way.

Often when teenagers start earning their first paycheck, they become more money conscious. The simple cost for lunch makes them realize the amount of time they have to work just to earn the money. Psychologically, whenever kids earn their own money, they are more cautious when spending rather than when they are using their parents’ money. That is why allowances are often helpful in teaching kids financial concepts at an early age.

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Personal Finance Boot Camps Fight Debt with Hard-Nosed Approach

Posted By: Srividya Srinivasan

Article By: Lisa Rogak

They're probably never going to force you to scrub the latrine, hike for miles in the driving rain or call you a maggot, but personal finance boot camps promise to use some tough love to help you gain control over your finances and debt once and for all.

These boot camps come in the form of online or face-to-face classes, exercises and daily check-ins, but what they all have in common is they have a no-excuses, take-no-prisoners approach. Just like a regular military boot camp, your usual excuses will be laughed at and met with an on-the-spot challenge to cut you personal spending by 10 percent more -- right now. Classes are usually led by one or two hard-nosed "commanders" who challenge you to live within your means, stash the credit cards, cut spending and stick to a budget by confronting you with the cold, hard truth that the numbers can't hide.

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Posted by Adam Lindheim

The credit binge and the crash that followed have left entrepreneurs in a bind. Banks, faced with rising defaults, dramatically tightened lending standards to reduce their risk. Small business owners who borrowed liberally when credit was easy were blindsided by the downturn, and many now find their credit scores wrecked. Those with little debt on their books but facing slipping sales are also perceived as risky: They're shut out of traditional loans and even credit cards, and represent a growing market of businesses that banks won't touch.

Enter the alternative finance companies. They include asset-based lenders (which make secured loans for purchases of equipment or inventory), factors (which buy unpaid invoices at a discount), and merchant cash advance providers (which pay up front for the right to collect a share of a retailer's future credit-card sales). These sources of funds generally cost more, sometimes much more, than bank credit. But businesses that survived the recession will need to buy inventory and equipment, expand operations, and hire workers during a recovery—and they are finding few other options to fund their growth.

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Mixing Personal and Business Credit, and How it can Affect your Future

By Adam Lindheim

A personal credit report holds information that reflects your personal financial decisions. On the contrary a business credit report are meant to reflect the transactions made in the name of the business. Personal credit reports have a wide variety of information that include; your social security number, spouse name and information, your employer, credit and loan accounts, delinquent billing accounts, payment information on all of your accounts, Bankruptcies, and tax liens, and financial judgments against you among the few. People that use this report include creditors, employers, insurance agents, lenders and others to determine if you are trustworthy in terms of financial responsibility. Banks, credit cards, and other lenders use the information to first decide if you can even receive a loan. Next they use your personal credit report to decide what kind of interest rate you will get. The better your credit report the lower your interest rate. Today new technologies are allowing banks and creditors to view your personal financial history in order to determine the likelihood of them giving you a business loan.
Jordan Peterson the Senior Vice President for business banking at PNC Financial services group says that traditionally business loans were considered separate from business owners credit reports, but an advancement in technology is allowing creditors and banks to do cross reporting on potential applicants. “There are business bureau repositories built by companies like D&B that many companies belong to now. They report business loan repayment history, and other members of that repository can look at it as long as they supply data to it,” says Peterson. This practice has been mainly applied to primarily to small privately held companies and startups whose owners are likely to be asked for personal guarantees to obtain credit. There has been no uniform policy created for this issue, it will all depend on the bank you get a loan from, and they type of reporting they do. Personal payment history has proven to be predictive of how likely a business is to pay back its loans, the bank really cannot separate an owner from the business because the owner drives the business”, Peterson continued on to say. Despite this new ability by banks there are ways to keep your credit work for you such as creating strong relationships with local bankers, where they can understand you and your business can really help out.
Jay Goltz of You’re the Boss produced by the New York Times believes credit cards can be an excellent tool add value to your business. Credit cards can increase cash flow, get cash rebates, and merchandise discounts and discounted airfare. Now if a small business owner uses credit to squash underlying problems with a business it can detrimental to the company. Credit cards are an important part of entrepreneurship, because it makes use of all the available cash, but the misuse of credit cards is not the cards fault, rather a lack of financial knowledge. If you are applying for a credit card, try to get under your business name, because it puts the risk on the company rather than you personally, which will make a difference if things go bad. If used properly credit cards are a valuable tool in the business, where as if it is used improperly they can make a bad situation worse.

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In a Sluggish Market, Students Need to Prioritize their Expenses

Posted by Rico K. Setyo

When Paul McGinnis heads back to college in Spokane today, he'll be packing more than his CDs, laptop and favorite sports posters. He's also carrying some newfound financial awareness.

Money's tight this year in the McGinnis family, and it's made the 19-year-old college sophomore think twice before whipping out his debit card for every little purchase. Earlier this year, his dad, Greg, was laid off from a 20-year job in the building materials industry and his mom, Nancy, took a pay cut from her administrative job at Kaiser.

Everyone's watching the wallet, including Paul, who will be living in a dorm at Whitworth University.

"I'm going to be cutting back on the little things, like eating out when I can eat in the cafeteria for free, or going to the mall to buy clothes I don't really need," said Paul, wearing a T-shirt from the campus radio station where he is a disc jockey.

He's seen the financial impact at home and among his college buddies. Six of his freshman-year friends – from Montana to Orange County – aren't returning because of financial setbacks in their families, he said.


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The Time is Right.

By Rico K. Setyo

Buying a house is one of the biggest decisions people make in their lives. Determining to buy a house is a very complex situation because of both its internal and external factors.

Internally, the individual must be able to ensure job-security in spite of the economy (Martin). Debra Dillon, head of a financial planning firm, mentions that the security of jobs varies from one field to another. It is important to know whether you will have consistent income flowing in because you need to be prepared to cover expenses.

Other than security, another thing to look at is whether you know you want to settle down in a house already because it is a long term commitment. Dave Ramsey, a Personal Finance Expert mentions that if you are still young and want to buy a house, there are a lot factors that should be considered before the final decision. Factors like moving away, getting married or even future job opportunity elsewhere are possibilities that can alter your decision (Ramsey).

An external factor would be the condition of the economy and the housing market. Even though there are multiple issues that can arise as you prepare to purchase real estate, the housing market as of now has many opportunities for first time buyers. In a declining economy, the incentive for many first time buyers is the tax credit up to $8,000 (Gadd). In addition, the housing market is actually picking up as unemployment rises. Dillon states that "this could be the opportunity of a lifetime to buy a house [because] in some areas prices are below what they were five or six years ago” (Martin).

Sources:

http://www.daily-journal.com/archives/dj/display.php?id=444847 by Dave Ramsey

http://newsok.com/financial-planners-get-eager-on-homes/article/3397980 by Ellen James Martin

http://www.zanesvilletimesrecorder.com/article/20090906/NEWS01/909060322/1002/Home-ownership-help-available-for-first-time-buyers by Brian Gadd

Should Personal Finance Be taught in School?

Few things are more important than your personal financial situation. Health, of course, is paramount, followed by your personal relationships. But your personal financial situation has to rise above biology, chemistry, and the literature classes I never liked. Trade in the Beowulf for some Buffett and now we're talking about something useful.

While financial planning encompasses a vast number of things, if we just focus on one key element, the importance of teaching it will be readily apparent. That key is the cornerstone of finance – the time value of money.

Financially literate people understand and can calculate the time value of money. That's a huge advantage. If you can't calculate the time value of money for yourself, you'll always need other, more financially literate, people to do it for you and, of course, potentially take advantage of you. Here are a few things this small part of personal finance can teach you to do.

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