Increasingly, the expectation of many families is that higher tuition costs brings higher quality education, in terms of retention in college and eventually graduation. It is the natural assumption you can make for spending $40,000 to send your child to, say, Harvard. However, this is not necessarily the correct estimation, and it is certainly not the case for all higher education institutions. For instance, some colleges and universities appear to do an exceptionally good job at keeping their graduation rates high, while others suffer from lower graduate rates, even though they may spend more money per student. Recently, a philanthropic organization called The Education Trust came out with College Results Online. A tool that allows users to compare graduation rates of various institutions, it gives a glimpse at the chance that students leave college with a degree. There is so much attention on rising tuition costs, yet it is wrong to think that higher tuition and fees bring higher graduation rate. One outcome of going to an expensive school without doing your research is that your money gets wasted and, worse still, that your son or daughter wastes his / her time and does not graduate. Avoid this mishap and make sure to do your homework, because expensive education does not always get you the best result.

The tool is available at http://www2.edtrust.org/edtrust/collegeresults/

Author: Young Kim - 401kid, Education Advisor

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Does it surprise me to hear about the SEC case against Edward Jones. No, not in the least bit. These types of foul practices by brokers have been going on for years, right under our noses. We are just too blind to see the obvious, or too busy to do anything about it. Unfortunately, the so-called watch dogs who are employed by the citizens’ tax dollars, are supposed to guard us against this fraudulent behavior. While some may say, “whew, thank God they finally got to the bottom of this”, I say “too little, too late, we’ve already been robbed.” As individual investors, we should be weary of trusting the government or financial services companies when it comes to protecting our nest eggs. Does it make all brokers “bad”, of course not. So who can you trust then? Nobody that does not prove themselves over time on lesser stakes, disclose upfront conflicts of interest, and take fiduciary responsibility for your money. Politicians will never do this, so they are the last ones that we should be listening to . Not to say that some are not well-intentioned, but the system on the whole caters too much to financial services companies to supervise them strictly enough. The job is yours, so make sure you do your diligence!

Author: Arman Rousta, President of 401kid

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If you live in Utah, you are fortunate because paying for college is not as problematic as in other parts of the country. According to the most recent research conducted by various academics in the field, Utah is by far the state with the most affordable college expenses, after taking financial aid into account. On the flipside, families living in the northeast generally pay much greater proportion of their annual income to pay for college expenses, partially due to less government support in that region. For instance, to attend a 4-year private college or university in Massachusetts, it requires over 81% of average annual family income. Maine and New York are not far behind, both registering 78%. Scary numbers, huh? On the side of affordability, Utah and Idaho require 21% and 29%, respectively. How can there be such a disparity? Our view is that marketing and reputation have a lot to do with it. The northeast has always been “known”¿ for first rate colleges and the way schools are run, with billion dollar endowments, education marketing is like an arms race, chasing the “best and brightest”¿ students, while the population of higher education aspiring high school graduates is on a steady increase. Here we find the basic laws of supply and demand at work. Schools, banks and governments all know this, and therefore, have mixed incentives to make college more affordable, depending on the particular state and local government policy.

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The Department of Education last week announced a new formula for calculating eligibility for college financial aid, a move that will eliminate the federal Pell Grant scholarships for an estimated 80,000 to 90,000 low-income students and force a modest scaling back of other types of state and federal assistance to broader categories of undergraduates.

All I have to say is this is a shame, but not a surprise. Not that I believe in the motivations of any politician, but the words of one senator seemed on point - “For those working to get ahead, this is a scene from ‘The Grinch who stole my education’.”

The numbers game is pointless because most of us don’t have a true grasp on global and political economics. Nevertheless, I find it curious that the expected government “savings” of $300 million in the 2005-2006 academic year passes through Congress with ease, while we spend billions on wars, above and beyond budget and reason. Truly, our priorities are out of place, but then again, can we honestly say that they ever were in line with what is best for the U.S. or the world?

Wouldn’t it at least make sense to phase in such cuts over a 4-year span, so that current students have a chance to adjust their financial plans? Can anyone who voted for this bill relate to or truly comprehend the impact of such immediate cuts?

Terry Hartle, senior vice president of the American Council of Education, said “I don’t think it means they won’t go to school. But they will borrow more money on credit cards, work longer hours or take fewer classes.” Well, all this does is increase the odds of ever achieving peace of mind or true contentment, while strengthening the shackles of government (work longer hours, more taxes to government) and banks (more credit cards, more fees) on our lives. How long can we stand for such mass control and hypocrisy?

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