Over the weekend, I was inducted as an honorary professor at Open University Hong Kong.
This reminded me about the movie: Flash of Genius (2008) which shows us why we should get an education.
I am able to run companies, have titles, teach, even do research programs with an independence and at locations that would otherwise not be possible.
The real costs:
However, some students started asking me the real costs of my education. Back in 1992, with scholarships, the total costs per year were $5000. At the same schools, the costs would be 40,000 USD/year:
Schools attended:
www.rpi.edu
www.shu.edu
www.mssm.edu
www.bridgeport.edu
Debt load vs. income considerations:
1. Work income lost during years in school
2. Possible stresses on a relationship due to overtime and student loans
3. Deepening depression on a global level should make students think carefully from the business angle 'where' they place their $$$ aka debt load.
If someone were to repeat my path at today's costs, it would be close to a million dollar investment at 4% FIXED interest rates:
$40,000 USD (avg/yr) x (2006-1992 =14 years) = $560,000 USD total loan necessary.
Assumptions for ease of calculation:
1. 4% interest on loans for 30yrs/360months does not exist (amortization schedule)
2. Sallie Mae doesn't allow for a one time loan of this amount
3. Food expenses and additional costs not included
4. Auto insurance not included
Monthly repayment: 2673.53 @ 4% fixed
Month #1: 559193.14 (remaining balance) 806.86 (principal) 1866.67 (interest) 2673.53 (total payment) 1866.67 (total interest)
Month #360: 0 (remaining balance) 2664.64 (principal) 8.88 (interest) 962,469.24 (total payment) 402,469.24 (total interest)
Questions from today's concerned students (not yet married, already asking):
1. Who is responsible for the debt after the divorce if the Student Loan was secured DURING the time of marriage, BUT the student never finished school and never received any finacial benefit after schooling?
2. Am I liable for anything if I walk away and leave it all to him?
Older student asks: I am choosing to abandon my spouse (both children are over 18) and leave the state. I have debt (equity line) with him I was pressured into signing for a summer residence to be built (the residence is in his name). I want no part of any assets we acquired together and will not seek a divorce, he will have to get it by default. Will I be liable for anything?
Kiplinger's Advice (jbodnar@kiplinger.com), Yahoo Answers
How healthy is Sallie Mae and the accredited companies/institutions?
1. Bear Sterns
2. Merrill Lynch
3. Bernard Madoff
4. Sallie Mae
Possible solutions (if educators got income from external consulting opportunities, universities could charge less to students, the lowered debt load would allow students to be more successful and drive commerce):
1. Educators need to seek compensation and salary outside of schools so that the cost to each student can be significantly decreased
2. Faculty need to be recruited who enjoy and desire teaching with a passion rather than treat this as another job
3. New institutions need to be willing to barter (apprenticeship time as a trade-off for lowered costs of tuition) at earlier levels rather than at post-doctoral levels
4. The costs of education need to be greatly evaluated on their value-added especially in light of rising global unemployment.
