Hello can anyone help with a quick 200 word summary on the pdf article attached. Also included an example of writing In your summary youMust start article with phrase “During
my research “Must discuss what the article is aboutMust discuss what was learned from article.Must include in-text citations and a separate page listing all references used in APA form.* Wiki pedia cannot be used on references.* only news sites cnn or gov site.If you will quote the article it self this is the reference below to useMulig, L. (2014). THE HIGH COST OF GRADUATE SCHOOL LOANS: LESSONS IN COST
BENEFIT ANALYSIS, BUDGETING AND PAYBACK PERIODS. Academy Of Accounting &
Financial Studies Journal, 18(4), 56-60.
contentserver.pdf
during_my_research_example.docx
Unformatted Attachment Preview
Academy of Accounting and Financial Studies Journal
Volume 18, Number 4, 2014
THE HIGH COST OF GRADUATE SCHOOL LOANS:
LESSONS IN COST BENEFIT ANALYSIS,
BUDGETING AND PAYBACK PERIODS
Liz Mulig, University of Dallas
ABSTRACT
Graduate school costs are increasing, as is the amount of interest accrued on any federal
loan borrowed for graduate school. Many graduate students borrow money during their
programs. They need to consider whether this “investment” in their future is worth the cost.
Will they make enough extra by earning a graduate degree to justify the cost? Will they make
enough to be able to pay the money back within a reasonable period of time? What do these
students see as a reasonable payback period? When considering going to graduate school,
students should conduct a cost/benefit analysis including all costs of attending graduate school.
INTRODUCTION
Student debt for students receiving advanced degrees is about one third of the total
student debt, and the number of graduate students incurring loans is on the rise. Due to
subsidized Stafford loans no longer being available to graduate students (starting Summer,
2012), the graduates’ portion of the total debt will no doubt rise (Andriotis, 2012).
Many graduate students borrow money during their programs. They need to consider
whether this “investment” in their future is worth the cost.
BACKGROUND
Expected lifetime earnings for students receiving advanced degrees (masters and
doctorates) are higher than those who receive no degrees or only graduate degrees (Carnevale,
Rose and Cheah, 2011). However, the amount of increase with a graduate degree over just an
undergraduate degree is not always a significant amount, depending on the field and also on the
actual position secured after graduation (Andriotis, 2012).
While having a degree does often assist an individual in earning more money, “student
debt can also negatively impact an individual’s ability to take on other consumer debt – and
therefore place a drag on the national economy” (Student Loan Debt Statistics, 2012). An
example of this happening occurred in 2011 when first-time home buyers, with a median age of
31, fell to the smallest percentage of total home purchasers since 2006” (“Profile of Home
Buyers and Sellers,” 2011).
Some very positive thinking people, for instance Shawn O’Connor, Forbes Contributor,
make it seem really easy to get a high paying position and make as much money in 20 yrs as
those with just undergrads make in 40 yrs, making it very easy to pay back your loans, and
recover from going to business grad school and losing two years of salary in the workplace. He
obviously believes that graduate school is well worth the money (O’Connor, 2012). However,
not all people secure such high paying positions and enjoy such favorable outcomes.
56
Academy of Accounting and Financial Studies Journal
Volume 18, Number 4, 2014
Enrollment in degree granting schools is now at approximately 21 million students. Of
that number, about 60% borrow each year to help cover the costs of their education (“U.S.
Department of Education, National Center for Education Statistics,” 2012).
Among students who earned graduate degrees in 2007-08:
1. 26% had no education debt at all.
2. 14% had undergraduate debt but no graduate school debt.
3. 7% had borrowed $80,000 or more for graduate school.
4. 5% had borrowed between $60,000 and $79,999 (“Student Loan Debt Statistics, “ 2012;
“Trends in High Education Series. Trends in Student Aid ,” 2012).
Also at issue is the rising cost of tuition. Andriotis (2012) highlights reasons for these
costs being on the increase:
Quantifying the financial benefits of a graduate degree has become even harder in recent
years as colleges raise tuition costs. Since the recession, tuition has risen 11%, to nearly
$22,000, on average for private nonprofit graduate programs, about in line with tuition
hikes for undergraduate students, according to the National Center for Education
Statistics. At public colleges, tuition for grad students rose 25%, to $9,247, outpacing
tuition hikes at the undergraduate level.
Schools are raising these costs even as enrollment continues to soar. Between 2007 and
2010, enrollment in graduate programs grew 11%, to an all-time high of 2.9 million
students, according to the latest data from the NCES. One reason costs are climbing,
says [Mark] Kantrowitz [publisher of FinAid.org], is a controversial practice called
“differential tuition,” whereby colleges charge higher tuition for programs that are more
popular. Public colleges are also receiving less funding from cash-strapped state
governments.”
The highest priced private business schools have MBA tuition and fees of $53,000 $60,000/yr , while the lowest priced private business schools have tuition and fees of $11,000 $35,000/yr (Wecker, 2012). The highest priced public business schools have yearly (in state)
tuition and fees for their master’s programs that range from $25,000 – $45,000 (Lytle, 2011), and
the lowest priced public business schools have in state yearly costs of $5,400 – $12,000
(Burnsed, 2011).
According to the CollegeBoard, graduate students rely much more heavily on loans than
undergraduate students. In 2009–10, 69 percent of graduate students’ costs were financed with
federal loans, and the average student had about $15,888 in federally subsidized loans (“Trends
in High Education Series. Trends in Student Aid,” 2012). Now, however, graduate loans are not
subsidized.
Under the Stafford loan program, the largest of the government’s school-financing plans,
most full-time grad students have been able to borrow up to $20,500 a year at 6.8 percent
interest, $8,500 of which would be subsidized. (“Subsidized” means that the government pays
the interest while the student is in school and for six months after graduation.) If students require
more money, they can turn to Plus loans, which are unsubsidized and have an interest rate of 7.9
57
Academy of Accounting and Financial Studies Journal
Volume 18, Number 4, 2014
percent. Repayment of Stafford loans may be deferred for six months after graduation, though
the unsubsidized portion accrues interest while the student is in school; repayment of a Plus loan
begins after just 60 days (“The U.S. Department of Education offers,” n.d.).
With the federal government no longer subsidizing graduate Stafford loans, the rules
have changed and graduate students will immediately start accumulating interest on all debts.
“A student who took out just the $8,500 a year in subsidized loans would have repaid $46,953
over the next 10 years. Unsubsidized loans would add an extra $6,385 in interest payments.”
(“Obama to Grad Students,” 2012) Many students, though, take out substantially more in loans
than $8,500.
Another issue with trying to judge the impact and extent of student loans is that students
are not the only ones borrowing money to finance their education. “Student loans support the
education of millions of students nationwide, yet much is unknown about the student loan
market. Relevant data are limited and, for the most part, anecdotal. Also, sources tend to focus
on recent college graduates and do not reveal much information about the indebtedness of
parents, graduate students, and those who drop out of school” (“Grading Student Loans,” n.d.).
Also at issue is, as just mentioned, that sources tend to focus on recent college graduates
yet students with federal loans are allowed 10-25 years to pay back those loans (Clark, n.d.).
DISCUSSION
Budgeting
Students are borrowing money not just for tuition but as much as they can borrow. Are
they perhaps not looking forward to the actual repayment amounts and length of time? Those
who are working and going to school, especially, should consider tightening their budgets vs
borrowing the maximum amounts in loans. Many borrow the maximum in Stafford loans and
then also borrow from other sources. Even those students who are not working should consider
ways to budget and cut expenses versus simply borrowing more money.
The necessity of budgeting in order to reduce loan amounts is even greater because, even
though enrollments are increasing, so are tuitions. In the case of business schools, they often
help fund the other colleges, so that is part of the reason for increase tuitions, but regardless of
the reasons, this translates to higher costs for students and with so many of them borrowing the
money, that translates to even higher loan amounts owed.
Payback Periods
Paying back student loans means that one cannot buy other things. This makes graduates
not actually realize as much the higher salary they are earning, and it also doesn’t help put
money into the economy as the graduates don’t have as much free spending money, money for
housing costs, etc. Considering the ages of undergraduate students paying back loans, the
graduate school students are likely the same age or older. Add to that the fact that loans can be
paid back in 10-25 yrs, and students are looking at a very long payback period.
Since there is usually no penalty for paying the loans back earlier, students should
consider doing so as quickly as possible to avoid additional interest expenses. This is especially
important for graduate students who will be paying interest on accrued interest, since their
Stafford loans are no longer subsidized while they are in school.
58
Academy of Accounting and Financial Studies Journal
Volume 18, Number 4, 2014
Cost/Benefit
Graduate degrees afford graduating students the opportunity to earn more money over
their lifetime. However, this varies greatly by field and type of position, even in traditional
business school careers. Despite very positive endorsement (by some) of the significantly higher
earnings with a graduate degree, students need to consider the job market in the area where they
plan to live to decide if they feel they can actually secure a position that warrants the cost of
graduate school.
Students should look at the additional salary they stand to earn versus the cost of the
degree to determine if the benefits (additional amount earned) exceed the costs. The cost should
include more than just tuition, fees and books. It should also include interest on any loans and
also, if a student is going to school full time, the opportunity cost of not having a salary for those
two years.
Business grad schools can cost from $5400/yr full time for tuition and fees to $60k/yr for
an expensive private school. As mentioned above in relation to the payback period for a student
loan, the subsidized Stafford loan program no longer applies to graduate students. Therefore,
graduate students will incur more interest costs on their unsubsidized Stafford loans. The
interest will accrue while they are in school instead of starting after graduation, and will accrue
at the higher unsubsidized rate. This, along with higher tuition, needs to be factored into their
cost/benefit decision about graduate school.
CONCLUSION
Many graduate students borrow money during their programs. At issue is the magnitude
of the amount borrowed. Graduate school tuition costs are rising, and also interest is now
accrued on federal loans for graduate school during the time the student is still actually in school.
In order to minimize the amount borrowed, students should budget better so that they can borrow
less.
When considering going to graduate school, students should conduct a cost/benefit
analysis including all costs of attending graduate school. This would include money on hand that
will be use, loans and interest on those loans, and foregone salary if they choose not to work
during their program. As part of this analysis, they should also ask themselves several questions,
including the following: Will they make enough extra by earning a graduate degree to justify the
cost? Will they make enough to be able to pay the money back within a reasonable period of
time? What do they consider as a reasonable payback period?
Students need to consider whether the total graduate school “investment” in their future is
worth the cost.
REFERENCES
Andriotis, A. (2012, May 16). Grad school: Higher degrees of debt; as congress searches for ways to alleviate the
loan burden for undergrads, graduate students are sinking deeper into debt. SmartMoney.Com, Retrieved
August 1, 2013from http://search.proquest.com/docview/1013734532?accountid=7106
Burnsed, B. (2011, 07). 10 least expensive public business schools for in-state students. U.S.News & World Report, ,
1. Retrieved August 1, 2013 from http://search.proquest.com/docview/884456386?accountid=7106
Carnevale, Anthony P., Stephen J. Rose and Ban Cheah (2011). The College Payoff Education, Occupations and
Lifetime Earnings The Georgetown University Center On Education And The Workforce
Clark, Kim.
Paying back your student loans. CNN Money.
N.d. Retrieved August 1, 2013 from
http://money.cnn.com/101/college-101/student-loan-payment.moneymag/index.htm
59
Academy of Accounting and Financial Studies Journal
Volume 18, Number 4, 2014
Grading Student Loans – Liberty Street Economics. Liberty Street Economics. N.p., n.d. Retrieved August 1, 2013
from http://libertystreeteconomics.newyorkfed.org/2012/03/grading-student-loans.html
Lytle, R. (2011, 07). 10 most expensive public business schools for in-state students. U.S.News & World Report, , 1.
Retrieved August 1, 2013 from http://search.proquest.com/docview/884435212?accountid=7106
O’Connor , Shawn . (2012, April 5). Grad School: Still Worth the Money? Forbes.
Profile of Home Buyers and Sellers, Exhibit 1-9 (2011). National Association of Realtors.
The U.S. Department of Education Offers Low-interest Loans to Eligible Students to Help Cover the Cost of
College or Career School. Subsidized and Unsubsidized Loans. Federal Student Aid. An Office of the U.S.
Dept
of
Education
N.p.,
n.d.
Retrieved
August
1,
2013
from
http://studentaid.ed.gov/types/loans/subsidized-unsubsidized
Obama to Grad Students: Pay Up. N.p., 04 Apr. 2012. Retrieved August 1, 2013 from
http://www.villagevoice.com/2012-04-04/news/obama-to-grad-students-pay-up/
Student
Loan
Debt
Statistics
(2012).
N.p.
Retrieved
August
1,
2013
from
http://www.asa.org/policy/resources/stats/default.aspx
The U.S. Department of Education Offers Low-interest Loans to Eligible Students to Help Cover the Cost of
College or Career School.” Subsidized and Unsubsidized Loans. Federal Student Aid. An Office of the
U.S.
Dept
of
education
N.p.,
n.d.
Retrieved
August
1,
2013
from
http://studentaid.ed.gov/types/loans/subsidized-unsubsidized
Trends in High Education Series. Trends in Student Aid (2012). CollegeBoard Advocacy and Policy Center.
U.S. Department of Education, National Center for Education Statistics. (2012). Digest of Education Statistics, 2011
(NCES 2012-001), Chapter 3.
Wecker, M. (2012, 06). 10 lowest-priced private business schools. U.S.News & World Report, , 1. Retrieved August
1, 2013 from http://search.proquest.com/docview/1027875098?accountid=7106
60
Copyright of Academy of Accounting & Financial Studies Journal is the property of Jordan
Whitney Enterprises, Inc. and its content may not be copied or emailed to multiple sites or
posted to a listserv without the copyright holder’s express written permission. However, users
may print, download, or email articles for individual use.
During my research in Grantham’s Library I came across a great article that discussed the need
for global experience in graduate education. The title of this article is Beyond Borders: “The
Importance of Global Experiences in Graduate Student Education” written by Ewles, Grace;
Sasso, Thomas; Sorenson, Jessica. This article discusses the need for graduate students to engage
more in international global experience during graduate school. The authors of this article stated:
“With the number of demands facing graduate students, it’s likely that many of us have not
considered engaging in international relationships or experiences, let alone researched what
opportunities are available”. (Ewles, Sasso, & Sorenson 2016). This is true in our economy
today. There are many graduate students that have not experienced education on international or
the global job market or even thought about pursuing a career in a job that was overseas. With
the increase in jobs being transferred to countries overseas this can be an interest of graduate
students doing some research and taking the time to consider a career internationally. According
to the authors “the Office of Career Strategy at Yale University highlighted the top consulting
firms by industry in 2015 and noted that 22 out of the top 24 management consulting firms
emphasize a global presence as a key part of their consulting practices.” (Ewles, Sasso, &
Sorenson 2016). More companies are increasing their business and expanding globally. I feel
that there should be more courses offered in graduate schools that involve learning the global job
market overseas and not just the job market in the U.S. International jobs are increasing in our
economy with the help of advanced technology. This gives graduate students the experience they
need and understanding of how the global job market works and expand their opportunities. This
also can help with the increase of the number of students that have graduate degrees but yet are
still struggling to find jobs to start a career. They may want to consider working overseas. With
the increase of advance technology some individuals are already working for companies that are
overseas. For example look at how popular distance education is today. There are many students
that attend college online and do not live in the U.S. However, this has been very successful and
has worked out great for individuals that work full time and have a family. With the increase of
students enrolling in college this has also created more jobs both in the U.S and globally.
After reading this article I have a better understanding for the need graduate students to have
international experience during graduate school. Until today I never really thought of how
important it is and how much it really can help you be successful in your career. The most
important concept in this article is that I learned if we do not expand our knowledge
internationally we can risk missing out on opportunities and understanding. I think it is a real
need for this to be fostered into graduates. It will help them increase their knowledge on the
global market.
References:
Ewles, Grace; Sasso, Thomas; Sorenson, Jessica. TIP: The Industrial-Organizational
Psychologist. 2016, Vol. 53 Issue 4, p46-50. 5p.
…
Purchase answer to see full
attachment
Recent Comments