Thursday, June 13, 2013

The College Admissions Scam

College has become a scam in America.

We have all heard the horror stories of crippling student debt and graduates that are lucky to land minimum wage retail jobs. But one part of the college scam not receiving much attention is the admissions process.

No longer are good grades and good test scores enough to get you into a desirable university. No, it takes greater resources, time, and existential insight. These new conditions favor the affluent and unscrupulous.

Rich students dominate most top universities. These bastions of higher learning claim to want “diversity,” and they generally are ethnically, religiously, and even geographically diverse. However, socioeconomic differences are sparse.

Many assert that low-income families are either intimidated by the cost of these schools or simply are ignorant of the financial aid packages available for their children. They blame low-income students and their families rather than the root problem inherent in the system.

That problem is the ever increasing cost of jumping through the right hoops and creating the appropriate narrative in order to gain admittance.

You can pay $30,000 or more a year per child to send them to a top prep school. There they will be properly challenged, get to play a sport like lacrosse, and be offered the chance to build orphanages in Africa so their resume looks properly polished for an Ivy League school.

Unless you are in the 1%, your child is not going to such a prep school.

But there is still hope. In public school, you can push your child to focus on one particular subject which they study in their spare time -- the more obscure the better, like the molecular biology of Surinam cockroaches. Make her play a sport or two, enroll in every other extra-curricular, and send her on a summer trip to build a well in Guatemala.

On second thought, that does not seem like a thrifty alternative either.

Many of the paths to the best schools require unpaid internships, founding charities, academic camps, and excellence in sports. The average child and parent are unlikely to be aware of such requirements, much less possess the resources to pursue them.

What this system has become is affirmative action for rich families. Only they can afford to meet these stipulations or pay others to help their kids meet them.

Unfortunately, if your child studies hard to make good grades and test scores, that is not enough to get into one of America’s elite colleges. Children have to have a narrative arch, like a TV show. There must be an epiphany involved, and not one about the teen himself, rather about the plight of the world and how suffering has touched him to want to devote your life to everyone else.

Teaching youths altruism is not a bad thing, and I definitely encourage it, but there also has to be a realistic expectation about the probability of having such grand revelations at that particular age.

Rather than accepting thousands of teenagers who saw the light on the road to Damascus, universities are inadvertently encouraging candidates to be unscrupulous.

Tell someone that they need to set up a charity to get into a school, and they will set up a charity; the actual effectiveness of that charity is of no consequence, it is about good intentions. Tell a kid that in order to get into Harvard, they need to write an essay about the plight of third world children and how they will dedicate their study of cockroaches to ending world hunger, and they will write that essay. Neither motivation nor truth is as important as perceived nobility.

Encouraging kids to go through the motions of charity is not teaching kids the value of helping others. Rather, this teaches children how to fake sincerity. Charity without the resources and drive to make a real, measurable difference is hollow and worthless.

Universities now actively rebuke applicants from announcing a desire to make money. They claim it is base and empty least until they hit you up for contributions.

Today- all other things being equal- a hard working, responsible teenager from a lower economic class who is taking part-time and full-time jobs to pay for themselves and help their family is worth less to Harvard than a well-to-do student who’s parents had the capability to found a charity in their child’s name.

Teens can no longer have a childhood, they cannot be themselves, and they cannot take time to figure out what they want. Instead, they must be pushed and forced into the mold of a proper applicant. They must, at the very least, pretend to be globally conscious and proclaim their altruism.

The process degrades our children and cheapens adolescence.

Unless we recognize and revise this new layer of undisclosed prerequisites, elite higher education will be unattainable for the vast majority of Americans.


Paying Off Student Debt: Can You Find a Financial Balance?

Carrie Schwab Pomerantz

Dear Carrie, I am relatively new to investing. I have set money aside and plan to take an aggressive approach to paying off my student loans. Can you offer an ideal action plan for both investing and lowering student debt? --A Reader

Dear Reader, With money set aside and wanting to put a plan in action, it sounds like you're already headed in the right direction. Now it's time to get down to specifics so that, ideally, you can accomplish both your investing and debt lowering goals -- and then some.

Student debt can be daunting, and you're right to make it an important economic focus. But student loans are generally low interest and don't appear as a black mark on your credit rating as long as you never miss a payment. So rather than making paying off your loans your primary goal, I'd make it part of a bigger picture in which you take care of current needs as well as plan for the future. Here's what I suggest.

Set a monthly savings goal.

It's great that you already have money set aside. But don't stop there. The key to staying on top of your finances is to make saving as much a part of your monthly budget as paying your bills. Take a look at your current expenses and make saving a line item. Don't think of it as an extra, think of it as a necessary payment to yourself. And be as generous as you can -- because how much you save regularly is fundamental to your financial success.

Cover yourself in case of an emergency.

The first place for your savings is in an emergency fund. You should try to keep at least three to six months living expenses in an easily accessible account like a savings or money market account. With this money tucked away, you'll be better able to cover your bills (and your student loan payments!) in case of a job loss or unexpected illness.

Put your employer to work for you.

If you work for a company that has a retirement plan such as a 401(k), contribute enough to get any company match. Since the money is pre-tax and comes directly out of your paycheck, it's an effortless way to begin to save for retirement -- and the company match is extra money without having to lift a finger.

Consider consolidating your student loans.

President Obama's new "Pay As You Earn" plan, introduced in October 2011, included making it easier for recent graduates to consolidate their federal loans and achieve lower interest rates. If you have federal loans, check to see if this might benefit you. You can also look into consolidating private loans, but understand that you can't combine federal and private loans into one. Whatever your situation, it's worth considering -- both to save money and to make it easier to manage your payments.

In financial terms, student loans are often considered "good debt", sort of like a mortgage (and unlike credit cards!). So while it's great to be rid of student debt, you don't need to rush to pay it off. Just make regular, on-time payments while you get the rest of your financial house in order. However, timing is crucial because a late payment will be a ding on your credit rating.

Of course, you can always accelerate your payments if you find yourself with extra money in your pocket. If you do, pay down your higher interest, adjustable rate loans first. You can think of it as a risk-free rate of return. (For example, if you're paying 7 percent interest on your student loan, paying it off is the same as earning 7 percent on an alternative use of the money. Even in the best of times, a risk-free 7 percent rate of return is hard to beat. These days, it's a no-brainer.)

Take a long-term approach to investing.

Now with all of the above in place, you can think about investing. In volatile times like these, your age is your best advantage. Investment choices depend largely on your time frame and feelings about risk. Generally speaking, you can take more risk with money you won't need for many years, so with a long-time horizon, stocks still offer the best opportunity for growth. You might begin with something like a broad based stock mutual fund or ETF. But before you start, take some time to learn the basics of asset allocation and diversification. These are still the building blocks of smart investing, though they cannot eliminate the risk of investment losses.

Your question was a great first step in tackling your financial challenges. Now you have an even greater opportunity to take action. The steps I've outlined may not seem dramatic in themselves but, believe me, when you put them all together they can add up to significant results. Best of luck.


Some Leftist recognition of the need for rigour in British schools

This morning a new romantic scandal is sweeping Westminster. Michael Gove has fallen in love with Diane Abbott. There’s no need for any injunctions on this one: the Education Secretary stood up at the dispatch box bold as brass yesterday and poured his heart out. “Mr Speaker,” he said dreamily, “I'm in love. If I had been a member of the Labour Party, I would have voted for her as leader.”

The basis for this sudden infatuation was Abbott’s gushing praise for the Government’s plans for GCSE reform. “Does he agree with me that an emphasis on rigorous education and an emphasis on attaining core academic subjects is not, as is sometimes argued, contrary to the interests of working class children, and black minority ethnic children?” she asked. “On the contrary, precisely if you are the first in your family to stay on past school-leaving age, precisely if your family doesn't have social capital, precisely if you don't have parents to put in a word for you in a difficult job market, you need the assurance of rigorous qualification and, if at all possible, core academic qualifications.”

It was brave intervention. Diane Abbott fancies herself as an independent Lefty (which is bad news for the love-struck Michael Gove) and her comments won’t have endeared herself to those she regards as her natural constituency. Education is also a sensitive area, given that she ran into trouble during the Labour leadership election for sending her son to a private school.

But it’s also an intervention that causes a bit of trouble for Ed Miliband, because it exposes the gaping hole in his own education policy. Actually, it exposes the fact that Ed hasn’t got an education policy.

Here’s the statement that the shadow education secretary, Stephen Twigg, put out in response to the Gove statement. "We need changes to assessments in schools that will strengthen rigour and reflect the best ways of testing skills and knowledge. Encouraging more shallow learning of facts alone will not help young people to be prepared for the jobs of tomorrow. This will take us backwards.
Michael Gove has had plenty of chances to bring forward evidence-informed policies but I fear he has not learnt from past mistakes. He keeps failing because he hasn't got a thought-through plan to improve exams.”

Labour wants the best ways of testing skills and knowledge. As opposed to what, wanting the worst way of testing them? It wants to “strengthen rigour”. What the hell does that mean? And heaven forbid that our education system would ever stoop so low as to actually start teaching our children some facts.

To be fair to Twigg, it’s not his fault he hasn’t got a policy to speak of, and therefore no means of sensibly critiquing the Coalition’s. It’s common knowledge within the shadow cabinet that if he tried to come up with one, Ed Miliband would sack him. Or rather, Christine Blower of the NUT would be on the phone telling him to sack him. And Ed being Ed, he probably would.

Twigg and almost all of his shadow cabinet colleagues want Labour to adopt a more classically exam-based approach to testing. They want to build on New Labour’s program of Academy Schools, rather than meekly wandering around apologising for them. They’d even like to give Free Schools a fair wind, at least until people are in a position to judge how the programme would play out.

But they can’t. Despite his impressive “pivot” on the economy last week, Ed Miliband still remains wedded to the 35 per cent strategy. And the glue that binds this progressive liberal alliance are perceived by Team Ed to be the teachers and their union reps. He regards taking on the teachers as the political equivalent of landing on the beach at Da Nang. And Christine Blower don’t surf.

Which leaves us with the ludicrous spectacle of the Labour leader and his education secretary being outflanked on the Right by Diane Abbott. The chaste Ms Abbott has taken to the pages of the Guardian to rebuff young Mr Gove’s advances. But to her credit, she’s also sticking to her guns: “An emphasis on academic rigour and core academic qualifications is not against the interests of working-class children. On the contrary, the children who need academic rigour and 'gold-standard' qualifications the most are precisely those who are the first in their family to stay on beyond the official school leaving age, whose families do not have parents 'who can put in a word for them' in today's horrible job market.”

Come on, Ed. Are you really going to let Michael Gove steal your girl?


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