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Entries in College (27)

Saturday
May182013

Facebook's First Investor Pays Teens to Not Go to College

David Paul Morris/Bloomberg via Getty Images(PALO ALTO, Calif.) -- 19-year-old Indian immigrant Diwank Singh Tomer has an impressive resume. The accomplished hacker and startup founder who initially enrolled in college in India quickly decided he would learn more by moving here and immersing himself in the Silicon Valley entrepreneurial scene.

And one of the world's most famous entrepreneurs agrees with him.

For the third year running, Peter Thiel, Facebook's first investor and the co-founder and former CEO of PayPal, is giving about 20 teenagers $100,000 each to drop out of college and launch a business.

The German immigrant's Thiel Foundation mentors the young entrepreneurs during the two-year fellowship as they pursue new advances in everything from robotics to fashion. But there's a catch. The recipients cannot be enrolled in school or employed during that time without special approval from the foundation. The idea is for fellows to immerse themselves entirely in the world of innovation.

There are some skeptics who point out that not every one of Thiel's fellows succeed. Some fail miserably. But the beauty of the tech world and those who reside in it is the ability to iterate quickly. Failure and the determination to try again is a huge part of that.

And besides, Thiel would argue that many of his fellows do succeed in spectacular fashion.

In the past two years, the fellows have launched more than 30 companies and raised more than $34 million in outside funding. The new crop of fellows was selected from a pool of more than 500 applicants from nearly 50 nations.

"When we created the fellowship more than two years ago, our intention was to help a small number of creative people learn and accomplish more than they might have otherwise," Thiel said in a statement. "To their great credit, they have exceeded our expectations, and inspired people of all ages by reminding them that qualities like intellectual curiosity, grit, and determination are more important than a degree in determining success in life."

The idea that a college education is highly overvalued sounds controversial. Everyone from the Obama administration to high school counselors seem to push students toward a university degree. And study after study shows that college graduates make more money and advance further than people who don't attend college.

But it's not necessarily for everyone, the Thiel Foundation argues, particularly with many students racking up student debt to pursue degrees that may never be worth the expense.

Thiel Foundation Vice President of Grants Mike Gibson said he can see technical certificates that confirm someone knows how to code, for example, being valuable. But this idea that a college degree makes someone qualified or that someone cannot be qualified without one, is bogus.

Tomer agrees.

He had been at college in India for less than a month when he decided "he had nothing to lose" by dropping out. He'd already launched a startup to help people learn to code, and the computer science major knew he could continue to teach himself how to code.

So, he bought a ticket to San Francisco, hopped on a plane and only called home to tell his parents he'd left for the United States when he landed.

"To drop out in India means failure," he said. But failure doesn't scare Tomer. In fact, he thinks it's an important part of the growing process.

The key to learning, he said, is to ask lots of questions, something he doesn't think traditional schools promote.

"Schools force you to appear smart," he said. "It's bad to ask questions."

People learn best, he said, when they have access to mentors and the ability to learn in a way that suits them. The Thiel Foundation is big on mentors - each fellow meets with them throughout the two-year fellowship.

In Tomer's case, that approach has produced something interesting. The biking enthusiast is using his foundation funding to launch a new interactive learning environment based on his earlier coding venture.

He wants to launch a site that will allow people to learn about different topics - he's focused on coding and applied sciences - at their own pace with the help of his program. He's developed an algorithm that will respond to the user's actions. If someone wants to learn about a small area of coding and then do a deep dive into it before moving on, the program will prod the user in that direction by taking cues from the ways they interact with the site. If someone wants to get a breadth of knowledge before focusing on depth - Tomer's preferred style - that's fine too.

He thinks he'll need to hire a couple of engineers and a designer, but says his ability to code means he's capable of remaining at the helm.

Although he's only been in the Bay Area about eight months, Tomer plans to stay for good. He lives in a "hacker house" in Palo Alto with a bunch of other like-minded young people looking to strike entrepreneurial gold.

Tomer wouldn't say so himself - but he's an example of what a young entrepreneur with perseverance and a high tolerance for failure can accomplish by taking an unconventional path. The worst thing that can happen is that he has to go home and back to college. With that knowledge, Tomer said, coming to the hotbed of innovation was worth every bit of risk.

Copyright 2013 ABC News Radio

Wednesday
Feb202013

Harvard Tops List of 15 Schools with the Wealthiest Alumni

iStockphoto/Thinkstock(NEW YORK) -- The old adage, "It's not what you know, but who you know," may ring true when it comes to the universities with the largest number of wealthy alumni.

Research firm Wealth-X compiled a list of the global universities with the largest number of living alumni worth $30 million or more, or ultra high net worth individuals, as they are called.

Based on Wealth-X's research, Harvard University blows the competition out of the water with 2,964 alumni worth a collective $622 billion. That's nearly twice the alumni of University of Pennsylvania, which follows with its 1,502 alumni of ultra high net worth individuals.

"Relationships and networks are so important in terms of career path success and prosperity," said David Friedman, president of Wealth-X.

Only three public universities made the top 15 list, composed of all U.S. schools, which Friedman said has implications for educational opportunities for low-income and middle class families.

"It shows public universities have a great opportunity to build on their strategy," Friedman said about alumnae efforts.

Interestingly enough, the majority of wealthy alumni of both public and private universities were "self made."

"That speaks to the entrepreneurial spirit of individuals attending these schools who are leveraging the robust alumni networks to pull themselves into these networks," he said.

Friedman said this is the first time a group has published a report of such granular data.

Only three universities outside the U.S. -- Oxford, University of Mumbai and University of Cambridge -- made it to the top 20 list.

Here is a list of the 15 universities with the highest number of alumni worth $30 million or more:

1. Harvard University; Private


The oldest university in the country, Harvard University in Cambridge, Mass., also has the wealthiest alumni. The 2,964 ultra high net worth individuals from the Ivy League school are worth $622 billion and include 52 billionaires, the highest number of all the universities in Wealth-X's list.

2. University of Pennsylvania; Private


Based in Philadelphia, UPenn's wealthiest alumni are worth a combined $242 billion.

3. Stanford University; Private


In Silicon Valley's Palo Alto, Calif., Stanford's wealthiest alumni, presumably in the tech sector, are worth $171 billion.

4. Columbia University; Private


Attending an expensive Ivy League school in one of the priciest cities in the country had better yield results for Columbia University alumni. Its wealthiest alumni -- who include Berkshire Hathaway CEO Warren Buffett -- are worth a combined $116 billion.

5. New York University; Private


Boasting a network of business graduates from its Stern School of Business, NYU's wealthiest alumni are worth a combined $110 billion.

6. University of Chicago; Private

University of Chicago's notable alumni include Credit Suisse CEO Brady Dougan and Morningstar Inc. founder Joe Mansueto. Its wealthiest 658 living alumni are worth a combined $144 billion.

7. Massachusetts Institute of Technology; Private


The wealthiest alumni among MIT's Beavers -- engineers in nature and the school's mascot -- are worth a collective $172 billion. The ultra high net worth alumni from MIT, based in Cambridge, Mass., have the highest average net worth of $257 million.

8. Yale University; Private


Yale can boast of graduates like Meryl Streep and five U.S. presidents as well as having the eighth highest number of ultra high net worth alumni. The 568 wealthiest alumni from Yale, based in New Haven, Conn., are worth a collective $125 billion.

9. Cornell University; Private

In Ithaca, N.Y., Cornell's 528 wealthiest alumni are worth a combined $60 billion.

10. Princeton University; Private


The wealthiest alumni from Princeton University in Princeton, N.J. are worth a collective $70 billion.

11. University of Virginia; Public


The highest-ranked public university in the list is UVA, based in Charlottesville, Va. Its wealthiest alumni are worth a total of $31 billion. UVA has the highest percentage of self-made ultra high net worth individuals. Notable alumni include talk show host Katie Couric and comedian and writer Tina Fey.

12. Boston University; Private


Boston University's 491 wealthiest individuals are worth a combined $38 billion. The university's notable alumni include radio personality Howard Stern and actresses Marisa Tomei and Julianne Moore.

13. Northwestern University; Private

Northwestern's 451 wealthiest alumni are worth a total of $46 billion. Based in Evanston, Ill., Northwestern's famous Wildcats include a slew of actors like Warren Beatty, plus Chicago Bulls and White Sox owner Jerry Reinsdorf.

14. University of California, Berkeley; Public


Formerly a liberal stalwart of the hippie generation, today Cal is known for its engineering and business programs. Its wealthiest 447 alumni are worth a combined $72 billion.

15. University of Michigan; Public

The University of Michigan's 410 richest alumni are worth a collective $70 billion.

Copyright 2013 ABC News Radio

Wednesday
Jan022013

Federal College Savings Plan Primarily Helps the Wealthy, Study Finds

iStockphoto/Thinkstock(NEW YORK) -- A federal plan meant to help families save for college tuition is overwhelmingly benefiting wealthy families, a federal review has found.

The financial instruments, known as 529 college savings plans, contribute to a billion dollar industry but are utilized by less than 3 percent of families with college students, according to a study released last month by the Government Accountability Office.

And those families, the GAO found, were almost exclusively wealthy.  Families that did have a 529 plan or a similar investment vehicle for college savings had 25 times the median financial assets of families that did not and three times the median income, the GAO said.

Although 529s were created to help families of all income levels be able to afford college, Laura Lutton, director of 529 plan research for investment firm Morningstar, said, "This research suggests that's not the primary use of the plans."

The plans, named after Section 529 of the Internal Revenue Code in 1996, allows parents or grandparents to set up a savings plan for a child right at birth.  In 2001, the federal government allowed distributions from 529 accounts to be entirely tax-exempt if used to pay for college tuition and fees, which have been increasing at a rate of 6 percent.

Lutton said it will be interesting to see how lawmakers in Washington respond to the report.

The foregone federal revenue from college savings plans is about $1.6 billion, according to the Treasury Department in the fiscal year of 2011.

"The fact that wealthier families are taking advantage of these in larger numbers shows it's not a vehicle that is as widely used as many would think as a goal in the industry," Lutton said.

Lutton said she was not entirely surprised by the GAO's report, as she had heard anecdotally about the average account size and customers.  She also said previous research showed that about 51 percent of 529 plans are sold directly to individuals while 49 percent are sold through a financial adviser.

"If you are working with a financial adviser, there are some financial means there.  If that's half the assets in the industry, I think one could logically conclude that is why you see so many wealthy families utilizing the investments," Lutton said.

The report points out that higher income households tend to benefit more from the tax-free earnings from a 529 plan because of their higher tax rate.

The GAO report said that some of the primary reasons preventing families from participating is their ability to save, awareness of 529 plans as a savings option and difficulty in choosing a plan.

In addition, some families are concerned that saving greater amounts of money for college may impact potential financial aid for their child.

Copyright 2013 ABC News Radio

Tuesday
Oct162012

Morningstar Lists Best 529 College-Savings Plans

Hemera/Thinkstock(NEW YORK) -- Investment ratings firm Morningstar released its annual ranking of 529 college savings plan on Monday, noting industry-wide improvements in plan fees and performance.

Almost every state offers a 529 savings plan, named after Section 529 of the Internal Revenue Code, describing how those who contribute to these investment vehicles don't have to pay taxes on proceeds.  Benefactors, such as parents and grandparents, can start a plan for named beneficiary as soon as a child is born.

While you do not have to choose a 529 savings plan offered in your state, many states offer tax breaks if you do invest in their plans.

Laura Lutton, director of Morningstar's fund research group, said if you are going to consider a 529 savings plan for a child, it's best to start early, given the accelerating cost of college and the fact that there are relatively few years to save, compared to retirement or other savings goals.

If you live in a state where there are tax benefits, in most states you'll give up those benefits if you choose another state's 529 plan.

Only five states allow you to apply that state's tax benefit to any 529 plan, regardless of its origin.  Those states are Arizona, Kansas, Maine, Missouri and Pennsylvania.

Morningstar.com's 529 Plan Center features an interactive map that lists each state's plans and its tax benefits.  For example, Ohio has two 529 plans that offer $2,000 in-state tax deductions for single or joint filers.

This year's list of the best plans are described by a new ranking of gold, silver, bronze, neutral and negative to match Morningstar's analyst ratings for mutual funds, so the descriptions can be more clearly interpreted for different investment vehicles, a spokesman said.  In previous years, Morningstar rated ranked plans in several tiers: top, above average, average and below average.

The rankings are based on characteristics like price and performance, which allow analysts to estimate which plans are more likely to outperform over the long term on a risk-adjusted basis.

The 27 plans that received medals represent more than 95 percent of the $162 billion in 529 plan assets in the country.

Here is a list of the four gold plans and four silver plans Morningstar selected this year:

Gold
T. Rowe Price College Savings Plan
Program Manager: T. Rowe Price Associates, Inc.

Gold
Maryland College Investment Plan
Program Manager: T. Rowe Price Associates, Inc.

Gold
Utah Educational Savings Plan
Program Manager: Utah Educational Savings Plan

Gold
The Vanguard 529 College Savings Plan
Program Manager: Upromise Investments, Inc.

Silver
iShares 529 Plan
Program Manager: Upromise Investments Inc.

Silver
Michigan Education Savings Program
Program Manager: TIAA Tution Financing, Inc.

Silver
CollegeAdvantage 529 Savings Plan
Program Manager: Ohio Tuition Trust Authority

Silver
CollegeAmerica
Program Manager: American Funds

Copyright 2012 ABC News Radio

Monday
Sep242012

Cut Down on College Costs by Applying for Scholarships Early

JupiterImages/Comstock Images(NEW YORK) -- The cost of college can be extremely expensive, but there are many scholarships and grants that can lower the price by thousands of dollars.

So what's the quickest way to start your search for them?  Go online.

"If you want to get scholarships the key is to cast a very, very wide net," advises Farnoosh Torabi at Yahoo! Finance.

She says search the term "free college tuition."

"The earlier you start the better.  One of the mistakes is students often start their senior year or late in their junior year applying for scholarships but many deadlines are in your sophomore or freshman year," says Torabi.

Several websites -- such as fastweb.com, scholarships.com, and finaid.com -- may help, she says.

Copyright 2012 ABC News Radio

Tuesday
Jul242012

Education Department Introduces College Cost ‘Window Stickers’

JupiterImages/Comstock Images(WASHINGTON) -- The Department of Education has released a new tool it says will help consumers understand the costs of higher education before making the choice of whether, and where, to enroll.

Dubbed the “Shopping Sheet,” the Obama administration introduced on Tuesday nationally standardized financial aid award letters they say will lay out all costs associated with a particular school, while tailored to the individual student.  Loan interest rates, scholarship options, housing rent, food, books, and veterans benefits will all be displayed on this single form, serving as a calculator.

The design is aesthetically similar to the costs sheet displayed in new vehicle windows at auto dealerships, and would be distributed by colleges in their financial aid packages.

Colleges and universities already make all of this information available to potential students, but some schools have been criticized for confusing language in awards letters and the difficulty in piecing together the numbers scattered across an abundance of school-related correspondence.

[CLICK HERE TO SEE AN EXAMPLE OF A "SHOPPING SHEET"]

In a conference call with reporters, Education Secretary Arne Duncan said the lack of uniformity in how schools provide the information “makes comparison shopping, which we think is important, almost impossible.”

“These letters all look different, contain different information, and often do a poor job of making clear how much a student will receive in aid, in grants, in scholarships, and how much they will have to take out in the form of student loans,” he said.

Participation in the program by colleges and universities is voluntary, but the government hopes schools will view it as a way to bring in students who may otherwise fail to understand what options are within their reach.

This fall, millions of students will begin freshman classes at colleges around the country.  But between rising tuition rates and calculating student loan interests, more Americans are coming to believe those costs aren’t worth the payoff.  The federal government reports the average cost of public education rose 15 percent between 2008 and 2010, with two thirds of students owing more than $26,000 in loans upon graduation.

“Too many students I meet across the country tell me the first time they really understood how much debt they were in was when the first bill arrived,” Duncan said.  “And clearly, that’s far too late and is simply not fair.”

Richard Cordray of the Consumer Financial Protection Bureau joined Duncan on the call.

“There are now more than $8.1 billion in defaulted private loans, and even more are in delinquency,” he said.  “The bottom line is that no consumer should take on a large amount of debt without understanding the costs and the risks up front.”

Copyright 2012 ABC News Radio

Wednesday
Jul182012

More Americans See College as Bad Investment, Survey Finds

Ryan McVay/Digital Vision/Thinkstock(NEW YORK) -- The college degree continues to lose its value in the face of costs that overwhelm the finances of many American families.

That’s the finding of a national survey of 3,000 Americans commissioned by Country Financial.  According to the poll, the number of adults who think college is a good investment plummeted from 81 percent in 2008 to just 57 percent in 2012.

While recognition of the value of a college education was on the upswing from 2007 to 2008, rising from 78 percent to 81 percent, since the Great Recession began the figures have dropped like a stone.  The steepest decline came in 2008 and 2009, when the number of people that saw college as a good investment dropped from 79 percent to 64 percent.

Despite the pessimism surrounding college education as an investment, the survey found that Americans were willing to spend more for a college degree.  In 2012, four in ten Americans viewed student loan debt of $20,000 or more as acceptable, up from three in ten Americans in 2011.

“Even with the cost of college rising faster than inflation, a college degree is more valuable than ever,” Joe Buhrmanan, a manager at Country Financial said in a statement.  ”And, an aggressive plan for funding your child’s education can help eliminate the burden of unmanageble student loan debt.”

In the survey by Country Financial Security, the majority of Americans found the quality of education to be the most important aspect when evaluating colleges, while 25 percent considered the cost of college to be more important.

According to the U.S. Department of Education College Affordability Center, the most expensive four-year non-profit college is Connecticut College with a whopping tuition price tag of $43,990.  At $15,250, Pennsylvania State (Main Campus) holds the number one spot for least expensive tuition at a four-year public institution.

The individuals most likely to be saddled with the rising cost of college are parents.  According to the survey, 80 percent of Americans believe that mom and dad should be partially responsible for footing the bill.

Copyright 2012 ABC News Radio

Tuesday
May152012

Job Market Improving for New Grads

Tim Boyle/Getty Images(BOSTON) -- Employment prospects for new college graduates are better now than at any time since the start of the recession, say college placement directors, employment experts and students themselves.

In fact, a just-released study of 225 employers by Boston research company Millennial Branding finds 87 percent of employers say they will hire more new graduates this year than last.  Almost as many say that in the past six months they have already hired up to 25 new graduates each.

The study is a first for Millennial, which consults companies on the characteristics of Generation-Y.  The survey drew on data compiled by Experience, Inc., a provider of career services for some five million current students and recent graduates.

Dan Schawbel, Millennial's founder, says that while the job picture is brightening, it's not yet back to where it was before the recession. Young job seekers, he says, still need to be realistic about their prospects.

"The message of our survey is that you can't rely on anything anymore.  Getting a degree doesn't mean you'll get a job.  Getting an internship doesn't mean you'll get a job," Schawbel says.

The most successful candidates, he says, are those who, as undergraduates, pulled out all the stops: "You've got to get as many internships as you possibly can.  Use social networks.  Use your family and your friends."

As far as skills and attributes, what are employers looking for?  Schawbel says 29 percent of companies say they want somebody with entrepreneurial experience.

"Ten years ago," he says, "that number wouldn't have been anywhere near as high."  What's changed, he says, is that companies now need "to innovate or die."  There's more pressure on them to come up with new products and services.

Successful seekers, says Schawbel, don't necessarily have to have started a business.  They just need to present their experience in a way that shows they have initiative and creative ability -- that they are "independent minded."

"Maybe you started your own blog.  Maybe you've freelanced or you created your own internship," Schawbel says.  Any of those, he explains, would carry weight with an employer.

Copyright 2012 ABC News Radio

Monday
May142012

Gap Year Gaining Momentum Among College Freshmen

Ryan McVay/Digital Vision/Thinkstock(LOS ANGELES) -- An estimated 1.2 percent of first-time college freshmen take a gap year, most of them male students, according to the Higher Education Research Institute at the University of California Los Angeles.

"These are still small percentages," said John Pryor, director of the cooperative institutional research program at HERI.  But college admission officers say the gap year is gaining momentum.

In Britain and Europe, the gap year has been de rigueur for decades, but a 2011 survey of American colleges estimated only about 18,000 of the 1.5 million freshmen had taken a year off after high school.

But now, some of the nation's most competitive colleges -- Harvard, Middlebury and Princeton, among others -- have adopted formal policies to allow students to defer their admission.

And public colleges like the University of North Carolina offer a Gappl to pursue academics and service abroad.

"Admission offices tell you is that the gap year increases independence and self-reliance and students have a confidence about them," said Julia Rogers, director of Vermont-based EnRoute Consulting.

In a persuasive column in the Burlington Free Press, she paraphrases Middlebury's acceptance letter to those who have asked for a gap year deferment:"Congratulations, you're in.  Now go away."

Her students have spanned the globe.

Right now, Cindy Li of Chesterbrook, Penn., is interning for a radical art collective in Mexico.  Mica Thompson of Cape Elizabeth, Maine, is working on an elephant conservation project in South Africa and Tegan Henderson, an American living in London, is learning fashion alongside designer Stella McCartney.

"We live in an increasingly digital world and are existing more virtually than before," said Rogers.  "The gap year forces them into a real experience -- learning a language on the ground, meeting people, engaging in situations -- all of which is becoming more and more rare among their peers."

The gap year is also an attractive option financially, costing an average of $10,000 to $25,000 compared to college tuitions, which are now upwards of $55,000 a year, according to Rogers.

Copyright 2012 ABC News Radio

Friday
May112012

Only Half of Recent College Grads Employed Full Time

Goodshoot/Thinkstock(NEW BRUNSWICK, N.J.) -- The great recession has taken a heavy toll on college grads, with only half of those who graduated between 2006 and 2011 reporting they have full-time jobs, according to a new study.

The survey by Rutgers University’s John J. Heldrich Center for Workforce Development was based on a random sample of nationwide interviews with 444 people who graduated from college during the period.

“Although many have had a full-time job since graduation, only half the sample was employed full time at the time of the survey,” the report’s authors said. “College graduates are unsure about their ability to move up. Only one-fifth believed that their generation will be more successful than the one that came before them. Well over half said they will be less successful.”

Fifty-one percent of responders had full-time jobs, the survey found, while 20 percent were in graduate school. Part-time workers made up 12 percent, and 11 percent were unemployed.

Read the full report.

The median starting salary for those surveyed was $28,000, some $3,000 less on average than pre-recession grads.

Copyright 2012 ABC News Radio







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