Farnoosh Torabi

This is the season when college acceptance letters start coming in the mail and lots of families are trying to figure out how to pay the hefty tuition costs.

With annual in-state tuition costs for public colleges averaging more than $8,000, and private school costs topping $28,000, reports CollegeBoard.org, the thought of covering such an expense can seem hopeless, especially to parents facing budget constraints already.

But never fear, stressed Farnoosh Torabi, personal finance expert, author of “Psych Yourself Rich: Get the Mindset and Discipline You Need to Build Your Financial Life”, and host of "Financially Fit" on Yahoo, who was on hand Wednesday to take online questions from readers during our weekly live chat.

“There is hope if you're willing to be flexible and not rush into the whole college thing,” she said.

“Saving money takes preparation and it takes thinking outside of the box,” she explained. “I will be the first to say that your child doesn't need to head to college right away - especially if the money isn't there. Taking a year off to work, save or enhance your resume with volunteering experiences can boost your chances of not only getting into a good school, but paying for it.”

For those who don’t want to wait, she said, two-year community colleges can be a good starting point. “Smart, talented students are flocking to community college to earn credits, save money and later move over to a full-time 4 year institution,” she noted.

Torabi also weighed in on the question of whether parents should be saving at all for their kids’ education, a topic covered by reporter Allison Linn Wednesday. 

“Some parents see college as a great gift to their children - and if you feel strongly about making this a financial priority, that's great,” she said. “But don't kill yourself trying to send your children to college. Do what you can. Be realistic and involve your kids in the reality. One thing is true, when children bear some of the cost, they tend to appreciate the education more and recognize the value a lot more.”

You can read the full Q&A with Torabi here:

Young adults may be facing their own version of “The Hunger Games” when entering the workforce today because they’re probably going to be hungry for more money.

Wages for young workers have been declining for more than a decade. They fell off a cliff during the Great Recession to levels not seen since the 1970s for certain groups of entry-level workers, according to new data from center-left think tank the Economic Policy Institute.

(OK, maybe it’s not exactly “The Hunger Games” just yet. In that dystopian future, depicted in a trilogy of novels and now a movie, a reality TV show follows teens fighting to their death, with the winner earning food for his/her home state. But you get our point.)

Not surprisingly, the news is worse for those with less education; and the pay gap between entry level men and women no matter what the education level is still alive and well.

Entry-level wages for high school graduates were actually lower than they were in the 1970s. For college grads, starting wages were below what their counterparts pocketed in the late 1990s. Today, the average wage for all these young adults, no matter education level, is about $15 an hour.

And whether they have a college degree or not, women still aren’t bringing home as much bacon as the men, but the gap has been narrowing. The good news, unfortunately, is partly attributable to the fact that the guys are getting paid less because of the economy.

“When the labor market is strong for workers the prospects for young workers are very strong, and when the labor market is weak their prospects are very weak,” maintained the Institute’s president Lawrence Mishel about the data that’s part of his forthcoming book ‘The State of Working America” due out in August. “The recent decade affirms this general finding, as the wages of entry-level workers have fared extremely poorly during this period of general wage stagnation.”

Here’s a breakdown of the numbers:

• The entry-level hourly wage of a young male high school graduate in 2011 was 25.3 percent less than that for the equivalent worker in 1979, a drop of roughly $4.00 per hour in 2011.
• Among women, the entry-level high school wage fell 14.2 percent over the same period, and dropped by $1.64 last year.
• Wages for high-school educated women are still far below those of their male counterparts, a gap of 15 percent.
• In 2011 the hourly wage of entry-level male college graduates was just a bit over $1.00 higher than in 1979, a rise of 5.2 percent over thirty-two years.
• Women college grads did better, with their wages growing by 15.4 percent, or $2.50, from 1979 to 2011.
• The gender pay gap among this group, however, still persists. The hourly wage for college educated men was $21.68 in 2011, compared with $18.80 for women.

Too bad young adults don't qualify for child ticket prices anymore. Adult tickets for the upcoming "The Hunger Games" movie are going for $11 a pop.

Census Bureau

The Census Bureau has taken a new stab at answering the age-old question: Just how much is a college degree worth?

The answer: $1 million.

That is a rough average, of course, but data collected in an extensive Bureau study suggests that a college degree is worth about $1 million in additional lifetime earnings compared with a comparable worker with only a high school diploma.

Based on 2008 data, full-time workers with a bachelor’s degree had median earnings of $57,000, compared with $34,000 for workers with only a high school diploma.

That adds up.

For example, white men with a bachelor’s degree who work full-time can expect to make more than  $2.8 million over their 40-year working lifetime, compared with $1.7 million for white men with only a high school diploma, for a difference of $1.1 million. White women with a bachelor’s degree will make about $2 million over their working lifetimes, compared with about $1.2 million for white women who go no further than high school.

A Census Bureau news release said the average lifetime difference for a bachelor’s degree vs. a high school diploma was $1 million.

The results were based on data collected from 2006 to 2008 and were presented in 2008 dollars.

The report shows a “clear and well-defined relationship between education and earnings,” even after considering demographic and other characteristics, write authors Tiffany Julian and Robert Kominski.

While white men generally get the biggest advantage from higher education, all races benefit from advanced study, according to the report. Black men, for example, will make nearly $800,000 more over their working lifetime if they go beyond high school and attain a college degree.

A master’s degree typically adds about $500,000 to lifetime earnings, according to the report, while a professional degree in medicine or law can easily add another $1 million on top of that.

Census Bureau

White men typically earn more than any other demographic groups, but Asian men are not far behind and are even or ahead at the master’s level and above.

Women at virtually every level make considerably less than comparably educated men, the study confirms. White women, for example, typically earn about 70 percent of what white men earn over their lifetimes, although the gap narrows substantially for women with doctorate degrees.

The report also shows that while 85 percent of adults have high-school diplomas, fewer than 30 percent have college degrees.

Just as a reminder, the current average “sticker price” for a college education, including tuition, fees, room and board, is $16,000 a year at an in-state public university and $37,000 at a private school.

So, is a college education worth it?

Complete College America

The stereotypical idea of going to college is to leave home, move into a dorm, attending class full-time and send at least a chunk of the bills to Mom and Dad.

A new report from an organization called Complete College America finds that that stereotype is the exception, not the rule.

Instead, Complete College says, about three-fourths of U.S. college students these days are commuting from off campus, and they are often also juggling family and/or work responsibilities in addition to their classes.

About 40 percent are going part-time, according to the advocacy group, which is working to increase the number of Americans with a college degree. Part-time students are less likely to ever get their diploma, even when given more time than full-time students, they find.

The research is based on data provided by 33 states, including California, Ohio, Indiana and Massachusetts.

The report comes as Americans increasingly struggle with two big issues: How to pay for the rising cost of college, and how to regain the nation’s economic momentum.

Despite the burden of finding time and money for college, many do still think it’s a key way to get ahead in life.

The unemployment rate for people with a college degree or higher was 4.3 percent in August, according to the Bureau of Labor Statistics. For people with just a high school degree, the unemployment rate was 9.6 percent.

What’s to be done? Complete College recommends a number of steps designed to make it easier for people to juggle school and work, such as scheduling classes at predictable times and allowing for more work to be done online. They also recommend finding ways to get people through college faster.

 Related:

You girls need an education!

What's rising faster than health care costs? College costs

What's the point of college? 

Pew Research Center

Perhaps it’s a good thing young women are getting college degrees at higher rates than men, because Americans seem to think women need that degree more.

A new survey from the Pew Research Center finds that 77 percent of Americans think women need a college education to get ahead in life, while only 68 percent think that’s true about men.

The data was part of a survey looking at how men and women perceive the value and benefits of college, and comes as the gap between young men and women completing a college degree continues to widen.

According to Pew, in 2010 36 percent of women ages 25 to 29 had completed a bachelor’s degree. That compares with 28 percent of men in that age group.

AP

The first rule for finding cheap textbooks: Don't go to the bookstore.

By Kara Reinhardt
Cheapism.com

For college students, back-to-school often means an expensive trip to the campus bookstore. The average cost of books and supplies at a four-year public university last year was $1,137, according to the College Board. Savvy students can save money by shopping online at specialized college textbook sites, which claim to offer savings of up to 90 percent. These sites also offer e-textbook downloads for Kindles, iPads, and other e-readers. Students can either rent or buy the books they need. While renting tends to be cheaper, buying is better for those who want to be able to refer back to a book after a course is over or add yellow highlights with abandon. Like bricks-and-mortar bookstores, textbook websites will often buy back books at the end of the term, provided they are still in good condition — typically for far less than the purchase price, of course.

When you shop for anything online, shipping costs can cut into the savings. Some textbook sites offer free shipping if you spend over a certain amount. Return shipping factors in as well if you’re renting or planning to sell books back to a site. Be sure to order ASAP so you’ll have your books in time to start classes.

Most sites offer both new and used books; the better the condition, the higher the price. If you opt for the cheapest books, be prepared for bent corners and doodles in the margins. Many sites also note that they can’t guarantee a used textbook will come with all the original supplemental materials, such as CDs.

A broad selection can allow you to order books for all your classes in one place. A large inventory also makes it easier to find enough books to hit the minimum amount required for free shipping. However, many sites use third-party sellers — aka other students — to widen their selection, which can make them somewhat less reliable.

Here are Cheapism’s top picks for college textbooks sites.

• Textbook rental site Chegg.com offers 2.4 million titles and gives students the option to send books back for free or buy them at the end of the term. Students can also buy and sell books. The site holds renters accountable for the books’ condition upon return, so it may not be the best choice for copious highlighters, but it earns positive reviews for providing books that look like new. Users also praise the site’s customer service. (Where to buy)
• Textbooks.com boasts a selection of 7 million books to buy or rent and offers free shipping on orders of $25 or more. User reviews often cite Textbooks.com as the cheapest option, and the site itself promises up to 90 percent off. Customers also applaud a redesign that makes it easy to find the best deal. (Where to buy)
• ECampus.com offers not just textbooks but regular books, DVDs, Blue-ray discs, and college apparel. The site’s textbook inventory comes from a network of third-party sellers, making it susceptible to complaints about delinquent deliveries. Shipping is free for rental returns and orders over $59. (Where to buy)

More from Cheapism:

Cheap College Textbooks
Cheap Smartphones
Cheap Kids Clothes 
Best Cheap Laptops

Moody's Analytics

Everyone knows that the cost of health care has become a bigger and bigger burden in recent years, but even that pales in comparison to another skyrocketing cost: College.

The folks at Moody’s Analytics crunched some government numbers and found that the cost of tuition and fees has more than doubled since 2000. That’s a bigger percentage increase than, well, pretty much anything else.

Given a chart like this, it’s no wonder we view college as overpriced and unaffordable – but still worth it for the professional and other advantages.

Still, there is a downside to such a pricey education: Debt. The Moody’s paper notes that student loan balances also have risen steadily in recent years, leaving many students starting out their careers with a hefty chunk of money to pay off.

Just because your parents are wealthy doesn't mean they will sign for all your college bills. 

Nearly half of affluent parents did not or will not pay the full cost of their children's college education, according to Bank of America's latest Merrill Lynch Affluent Insights Survey.

The most commonly cited reason was not that they couldn't afford it but that their kids either got a grant or scholarship or were expected to. But many parents said they were making their children pay part of the cost to give them "a greater appreciation for their education" or "teach them about financial responsibility."

And 18 percent of affluent parents said they didn't or wouldn't have the money to pay the full freight. The Affluent Insights Survey reaches individuals with at least $250,000 in "investable assets," which these days might fund one student in a fancy private college, but not more than that.

Despite the stated desire to teach children financial wisdom, 82 percent said they would support their children financially during their early adult years by allowing them to move back home (with or without rent) or by subsidizing their living expenses.

The study also found that nearly half of affluent parents (48 percent) were more concerned about teaching their children financial responsibility than they were about their children finding the right spouse/partner, choosing the right career path or staying physically fit.

From the “they needed a study for this?” dept.:  Undergrad biz majors need to get over themselves.

The Harvard Business Review reports on a recent study that showed business majors scored much higher than psychology students in an index that measured how narcissistic they are. No word on why they decided to compare them to the psych students.

Far be it from us to pass judgment on the kids. Maybe they’re just preparing for the real world.

"Our future business leaders appear to be even more self-absorbed and entitled" than other students not in business school, the researchers reported.

Sounds like our current business leaders.

Pew Research Center

There’s been plenty of talk lately about the cost of college, and whether it’s worth it.  But here’s another interesting question: What’s the main purpose of a college?

It turns out, we’re pretty divided on this point.

The Pew Research Center surveyed about 2,000 Americans and found that 47 percent think the main purpose of college is to teach work-related skills and knowledge. But 39 percent say the main purpose of college is intellectual and personal growth. About 12 percent said the years we spend at an institute of higher learning should be devoted to both.

Interestingly, those with more education are more likely to view college as a place for personal and intellectual growth.

Peter Thiel

There’s been a lot of talk recently about whether it’s worth it to go to college, given the high cost and potentially heavy student loan burden that comes with that diploma.

Now, an entrepreneur has launched a fellowship that aims to test that theory by paying people not to go to school.

The co-founder of online pocketbook PayPal, Peter Thiel, on Wednesday announced the winners of a fellowship that will pay nearly two dozen students $100,000 not to attend college for two years.

The catch? (There’s always a catch.) The 20 Under 20 Thiel Fellowship winners have to spend the time working on their scientific and technical innovations. They’ll be aided by a host of high-profile advisors who will teach the kids about disruptive technologies, mentor them and provide support and training (but don’t call it school!).

These aren’t just any 20 people, of course.

The foundation’s website said the winners include Andrew Hsu, who started at the University of Washington at age 12 and was, at age 19, pursuing his Ph.D. at Stanford when he left to work on his startup.

Darren Zhu is dropping out of Yale to pursue his interest in synthetic biology, and 19-year-old Eden Full has already founded a solar energy startup. Laura Deming enrolled at MIT at age 14 and is working on ways to extend the human lifespan by hundreds of years.

Thiel announced the fellowship plan last fall, in a press release packed with quotes from tech luminaries who extolled the virtues of dropping out.

Thiel himself seems fairly convinced that his experiment could change the world – or at least empower someone else to. In a statement announcing the contest last fall, he noted some of the major technologies that had been developed by people who dropped out of school, and predicted that his group would do the same.

“The Thiel fellows will change the world and call it a senior thesis,” he said in the statement.

Most recent graduates are stuck taking lower-paying jobs that are less likely to offer health insurance, according to a Rutgers University poll.

Just over half of the 571 graduates of public and private four-year schools surveyed by the school have full-time jobs, while just under half said their first jobs didn’t really require bachelor’s degrees. Nearly half said their parents are helping them financially.

The college graduates in the poll left school between 2006 and 2010. The survey found that those who graduated between 2006 and 2008 fared better than those who graduated in 2009 or 2010. The earlier grads were paid about $3,000 a year more in their first jobs, and 88 percent of them received health insurance, compared with 77 percent of the more recent grads.

The findings of the poll were reported by the Associated Press.