Education Is Priceless But The Pricetag Is Hefty

A study indicates just half of college graduates, from 2009 to 2011, are finding work within a year. In the meantime, most grads have student loans to replay. Tim Maurer, a financial adviser in Hunt Valley, Md., talks to David Greene about the high cost of getting a college degree.

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DAVID GREENE, HOST:

This bleak picture of the job market after graduation may affect how much families decide to save for college or in some cases whether students even go. We've been examining difficult financial decisions like that in our ongoing series Family Matters, and we continue the conversation today with financial adviser Tim Maurer.

This seems like a pretty stunning number. I mean just half of college graduates, who graduated from 2009 to 2011, are finding work within a year. What do you make of this?

TIM MAURER: Sadly, it doesn't surprise me. It's what I'm hearing from families. It's also what I'm hearing from students. I teach 40 accounting students every semester, and when I ask them what is the reason that you decided to become an accounting major - over a marketing major, over a philosophy major - the answer that they invariably give me, semester after semester, the reason is job security.

GREENE: Their thinking is I'm going to go into accounting because that offers me the best chance for a stable job, you know, in what is a really tough market.

MAURER: Exactly. It's hard. Not so many people want to do it. They realize that. They have the capacity to do it. They may not even love it. In fact, many of them tell me they don't, but they know they're going to have a job afterwards. So they're actually establishing the whole foundation for their lives in the future based on job security today, based on this kind of statistic.

GREENE: Well, I suppose - and these new numbers, I mean some people are going to look at them and more people are really going to begin to wonder if college is worth it and think about other options.

MAURER: Well, there's another factor at play there, and that is the cost of college. There's no question it's been going up between five and seven percent per year for over about 10, 15 years now. It's something that is almost out of reach of so many people these days that there are many saying these statistics, the employment statistics and the cost of school, are going to begin to drive those costs down, which is something that no one would have anticipated 10 years ago.

GREENE: Suppose I'm a 16 or 17 year old, and I read the story about, you know, these new numbers, and I come to you and I say, how do I make this decision, Tim; how do I decide if going to college is a good idea, or how do I decide, you know, maybe it's just not right for me, maybe I should think about something else.

MAURER: Here's what I recommend for students. Take a look at the value proposition. It's true that education is in many ways priceless, but it is not without a price tag. And for that reason, when I'm talking to a student who might be passionately interested in social work, I'm going to recommend that they not consider necessarily going to NYU and racking up a ton of bills that they will not be able to pay back.

You need to gauge how much you're willing to pay for your education based on how much money that's going to help you make in the future.

GREENE: Tim, just so I'm clear, you know, this new study that they were talking about, you know, so few students graduating from college from 2009, 2011, actually getting jobs. Could this just be a bad economy? Or are you seeing some larger changes that are happening?

MAURER: I think it's largely driven by the bad economy. When I was graduating from college in 1998, it was towards the end of the big tech bubble, and I was in the finance world. They were hiring hand over fist. I had a full time job in my last semester of school. So things have certainly changed to a great degree. As I said(ph), now even accounting students are having difficulty getting jobs.

The economy absolutely plays a role, but the lesson is one that's actually valuable to the educators and the educated.

GREENE: There seem to be, though, times when someone getting ready for college just can't put sort of a dollar figure on the value. I mean, they might feel a true connection to an institution. They like its reputation. They like the atmosphere. I mean, isn't that part of the value sometimes?

MAURER: There's no question that the experience is part of it. And I'm not denying that either. When people refer to the most important part about college being the experience itself, I'm totally cool with that. The problem is, we put a price on the other experiences that we undertake in life, do we not? When we go on vacation, we put a price on that.

So I do agree with the experience argument, but I think it's important then to say what is that experience worth? It's not priceless.

GREENE: Tim, thanks so much for sharing your insights with us.

MAURER: Happy to be here.

GREENE: That's Tim Maurer. He's a financial adviser and also an adjunct professor of financial planning at Towson University.

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