EARNING AN UNDERGRADUATE OR POSTGRADUATE DEGREE VS. GETTING A JOB AND MAKING INVESTMENTS INTRODUCTION: "If there's one thing parents think they should save for, it's their children's college education. In 18 years, a degree from a public school will cost around $200,000 and a private university will run closer to $400,000, according to the College Board, which administers the SAT standardized college admissions test." Saving Early for College Pays Later by Stacey L. Bradford. The Wall Street Journal on line Wednesday, June 17, 2009 http://finance.yahoo.com/focus-retirement/article/107198/Saving-Early-for-College-Pays-Later?mod=fidelity-buildingwealth NOTE: In Tables 32 - 44 (the term “postgraduate” is used to indicate any degree that is higher than an undergraduate (bachelor) degree. Examples of postgraduate degrees include: MA -- Masters of Art MS -- Masters of Science MBA -- Masters of Business Administration PhD -- Doctor of Philosophy JD -- Juris Doctor (law degree) MD -- Medical Doctor DDS -- Doctor of Dental Science EdD -- Doctor of Education DVM -- Doctor of Veterinary Medicine Source: http://answers.yahoo.com/question/index?qid=20061228171727AA1cjOn Table 32 Table 32 shows the approximate annual cost for both public and private tuition based on the degree program. Degree Program Number of Years of College Attended Approximate Annual Tuition in $ Undergraduate 4 10,000* to 40,000** *Public college tuition “The debate over the long-term value of a pricey private-school education is heating up, especially in this tough economy. Sure, everyone knows that by sticker price alone, public schools are a sweet deal, with out-of-state tuition and fees that run about 30 percent less than most of their private rivals—and in-state fees running up to three-quarters less. Indeed, the math is pretty jarring; the difference, on average, ranges between $7,700 and $18,600 a year, obviously no small matter with stock market woes depleting so many people's savings.” Reference: Is an Ivy League education worth the money? The Best Colleges for Making Money. Smartmoney.com 16 December 2008 http://finance.yahoo.com/college-education/article/106319/The-Best-Colleges-for-Making-Money **Private college tuition Note: Tuition fees vary greatly, depending on the college attended and the degree sought. The figures in Table 32 above are at the extreme ends of the fees, more or less. Out-of-state students usually pay double the fees of in-state residents for state colleges. For private colleges, fees are the same for both in-state and out-of-state students. According to Shelly Banjo, reporter for the Wall Street Journal: The cost of graduate school has skyrocketed, rising 60% in the past decade according to the Council of Graduate Schools. A one-year master's degree in political management at George Washington University can cost $38,000. Harvard tells law-school students to plan for $62,000 a year for tuition, living and food costs. Source: Betting on Grad School by Shelly Banjo. Tuesday, April 29, 2008, provided by The Wall Street Journal Online. http://finance.yahoo.com/college-education/article/104958/Betting-on-Grad-School OUT OF STATE STUDENTS In 2007, annual tuition for undergraduate studies at a Maryland state college was approximately $10,000 for in-state residents and $22,000 for out-of-state students (four-year totals of about $40,000 and $88,000, respectively). Based on the above figures, a four-year degree will end up costing an out-of-state student about $48,000 more for the same degree as an in-state resident ($88,000 - $40,000 = $48,000). Plus, out-of-state students have additional expenses, such as the cost to travel home and back to college. Taking into consideration the significant difference in the cost of tuition, the obvious question a person needs to ask him or herself before making the decision to attend an out-of-state college is: “Does a degree from an out-of-state college have more value than a degree obtained from an in-state college (e.g., University of Maryland at College Park vs. Virginia Tech)?” To illustrate the difference in the overall cost, suppose an out-of-state student spends $2,000 for travel expenses over a four-year period. The $2,000 added to the $48,000 extra tuition makes the cost of attending an out-of-state college $50,000 more than for an in-state resident, or $12,500 more every year for four years ($50,000 ÷ 4 = $12,500). If the individual had invested $12,500 at 10% interest, compounded monthly, the investment would be worth $64,533.00 at the end of four years. See Table 33. Table 33 shows the end values of an out-of-state undergraduate student’s extra expenses ($12,500/year*) if the money had been invested at 10% interest, compounded monthly, for 4 years. Table 33 Year Out-of-State Student’s Additional Yearly Expenses in $ Annual Investment of Additional Annual Expenses in $ + Year-End Value of Previous Year Year-End Values in $ at 10% Compounded Monthly 1 12,500 XXXXXXXXX 13,808.91 2 12,500 12,500 + 13,808.91 = 26,308.91 29,063.80 3 12,500 12,500 + 29,063.80= 41,563.80 45,916.07 4 12,500 12,500 + 45,916.07 = 58,416.07 64,533.00 Online Calculator: http://www.moneychimp.com/calculator/compound_interest_calculator.htm If an individual was to make a one-time investment of $64,533.00 * at 10% interest, compounded monthly, the investment would grow into $4,672,076.85 by the time the person reaches retirement age 65. This is shown in the Table 44 below. The extra expense incurred to attend an out-of-state college deserves careful consideration before making a decision about where to attend college. Obviously, the award of a scholarship in an amount greater than the extra costs would negate having to forego going out-of-state. There may also be other compelling reasons to attend an out-of-state college that would negate the extra expense. Table 34 Table 34 shows the end values of a one-time investment of $64,533.00 (from Table 41 above, extra tuition cost after investment for out of state students ) for various yearly increments, ranging from 0 to 43 years, along with the investor’s corresponding age. The figures below are based on the assumption that the investor graduated from a four-year college at age 22 and that the investment earned 10%, compounded monthly. Number of Years To age End Values of One-Time Investment in $ at 10% compounded monthly From age 19 22 64,533.00 10 + 22 32 174,693.51 15 + 22 37 287,424.79 20 + 22 43 472,902.58 25 + 22 47 778,070.83 30 + 22 52 1,280,166.89 35 + 22 57 2,106,270.03 40 + 22 62 3,465,464.90 43 + 22 65 4,672,076.85 The extra expense incurred to attend an out-of-state college deserves careful consideration before making a decision about where to attend college. Obviously, the award of a scholarship in an amount greater than the extra costs would negate having to forego going out-of-state. There may also be other compelling reasons to attend an out-of-state college that would negate the extra expense. Table 35 Table 35 shows the comparative approximate cost of college tuition per year by state residency for public and private education*. Residency Public College Public College Private College Private College Undergraduate Tuition in $ Graduate Tuition & Beyond in $ Undergraduate Tuition in $ Graduate Tuition & Beyond in $ Resident 10,000 15,000 30,000 40,000 Non-Resident 21,000 30,000 30,000 40,000 * Some private undergraduate just college fees could be close to $40,000 or more Table 36 Table 36 shows the comparative approximate cost of college tuition for four years by state residency for public and private education. Residency Public College Public College Private College Private College Undergraduate Tuition in $ Graduate Tuition & Beyond in $ Undergraduate Tuition in $ Graduate Tuition & Beyond in $ Resident 40,000 60,000 120,000 160,000 Non-Resident 84,000 120,000 120,000 160,000 As shown in Tables 35 & 36 above, the combined comparative approximate expense for tuition (undergraduate and graduate & beyond) is $100,000 ($40,000 + $60,000 = $100,000) for state residents in a public college, $204,000 ($84,000 + $120,000 = $204,000) for non-residents in a public college, and $280,000 ($120,000 + $160,000 = $280,000) for students in a private college. Tuition for medical school varies from $15,000 per year for state colleges to $40,000 per year for private colleges. Total tuition for four years ranges for $60,000 to $160,000. In addition to the cost of tuition as shown in Tables 45 and 46, there are other expenses to consider, such as housing, transportation, and recreation. As an example, imagine that the extra expenses total $2,000 per month, or $24,000 per year ($2,000 x 12 = $24,000). The total expenses would be $96,000 ($24,000 x 4 = $96,000) in four years and $192,000 ($96,000 x 2 = $192,000) in eight years. For ease of calculation in Table 46 below, the figures in the foregoing calculations have been rounded up to $100,000 and $200,000, respectively. When the extra expenses are added to the tuition for eight years of college, the approximate total expense for state colleges is $300,000 ($100,000 + $200,000 = $300,000) for state residents and $404,000 ($204,000 + $200,000 = $404,000) for non-residents and $480,000 ($280,000 + $200,000 = $480,000) for private colleges. Tables 37, 41 and 44 below show the total expenses for a 4-year undergraduate education, a 4-year graduate/postgraduate education, and an 8-year combined undergraduate and graduate/postgraduate education, respectively. Tables 37, 38, 39, and 40 below show the end values of an investment if the totals from the “average yearly cost” columns in Tables 37 had been invested at 10% interest, compounded monthly, for the number of years shown in the respective tables. Table 37 Table 37 shows both the total expenses and the average annual cost of a 4-year undergraduate education based on student state residency status. Student Status Tuition Expenses Undergraduate in $ Living Expenses in $ Total Expenses in $ Average Yearly Cost in $ Resident 40,000 100,000 140,000 $35,000 Non-Resident 84,000 100,000 184,000 $46,000 Private 120,000 100,000 220,000 $55,000 Table 38 Table 38 is divided into two sections. Section 1 of the table shows the end value of an annual investment of $35,000 (from Table 37) after 4 years at 10% interest, compounded monthly. Section 2 of the table shows the end value of a one-time investment of $180,692.39 (from section 1, Table 48) after 40 years at 10% interest, compounded monthly. SECTION 1 Year Annual Deposit in $ for Resident Student Status Annual Investment in $ Year-End Values in $ at 10% Compounded Monthly 1 35,000 -0- 38,664.96 2 35,000 35,000.00 + 38,664.96= 73,664.96 81,378.64 3 35,000 35,000.00 + 81,378.64 = 116,378.64 128,565.00 4 35,000 35,000.00 + 128,565.00 = 163,565.00 180,692.39 SECTION 2 Total Number of Years One-Time Investment in $ Annual Investment in $ End Value in $ at 10% Compounded Monthly 40 180,692.39 -0- 9,703,301.17 Table 39 Table 39 is divided into two sections. Section 1 of the table shows the end value of an annual investment of $46,000 (from Table 37) after 4 years at 10% interest, compounded monthly. Section 2 of the table shows the end value of a one-time investment of $237,481.43 (from section, Table 39) after 40 years at 10% interest, compounded monthly. SECTION 1 Year Annual Deposit in $ for Resident Student Status Annual Investment in $ Year-End Values in $ at 10% Compounded Monthly 1 46,000 -0- 50,816.80 2 46,000 46,000 + 50,816.80= 96,816.80 106,954.78 3 46,000 46,000 + 106,954.78 = 152,954.78 168,971.14 4 46,000 46,000 + 168,971.14 = 214,971.14 237,481.43 SECTION 2 Total Number of Years One-Time Investment in $ Annual Investment in $ End Value in $ at 10% Compounded Monthly 40 237,481.43 -0- 12,752,910.28 Table 40 Table 40 is divided into two sections. Section 1 of the table shows the end value of an annual investment of $55,000 (from Table 37) after 4 years at 10% interest, compounded monthly. Section 2 of the table shows the end value of a one-time investment of $283,945.20.20 (from section 1, Table 38) after 40 years at 10% interest, compounded monthly. SECTION 1 Year Annual Deposit in $ for Resident Student Status Annual Investment in $ Year-End Values in $ at 10% Compounded Monthly 1 55,000 -0- 60,759.22 2 55,000 55,000 + 60,759.22 = 115,759.22 127,880.72 3 55,000 55,000 + 127,880.72 = 182,880.72 202,030.72 4 55,000 55,000 + 202,030.72 = 257,030.72 283,945.20 SECTION 2 Total Number of Years One-Time Investment in $ Annual Investment in $ End Value in $ at 10% Compounded Monthly 40 283,945.20 -0- 15,248,045.55 Table 41 Table 41 shows both the total expenses and the average yearly costs for a 4-year postgraduate education based on student status. Student Status Postgraduate Tuition Expenses in $ Living Expenses in $ Total Expenses in $ Average Yearly Costs in $ Resident 60,000 100,000 160,000 40,000 Non-Resident 120,000 100,000 220,000 55,000 Private 160,000 100,000 260,000 65,000 Table 42 Table 42 shows the values of a yearly investment of $40,000, $55,000, and $65,000 (from Table 41) at the end of four years at 10% interest, compounded monthly. Student Status Year 1 Starting Balance in $ Annual Investment for Next 3 Years in $ End Values After 4 Years in $ at 10% Compounded Monthly Resident 40,000 40,000 246,505.60 Non-Resident 55,000 55,000 338,945.20 Private 65,000 65,000 400,571.60 Table 43 Table 43 shows the approximate annual investment needed to equal the end value after 40 years of the one-time investment of the end value for the respective student status from Table 42 above. For all examples, the interest rate is 10%, compounded monthly. One-Time Investment of End Values from Table 49 in $ Approximate annual Investment needed in $ for 40 years End Values After 40 years in $ at 10% Compounded monthly 246,505.60 X 13,237,514.20 X 23,766.00 13,237,514.20 338,945.20 X 18,201,582.02 X 32,678.00 18,201,582.02 400,571.60 X 21,510,960.57 X 38,619.00 21,510,960.57 Note: The approximate annual investment amounts needed for 40 years to equal the end values of the “one-time” investment totals would be quite a burden for most people. Table 44 Table 44 shows both the total expenses and the average yearly costs for an 8-year combined undergraduate and postgraduate education based on student status. Student Status Undergraduate & Postgraduate Tuition Expenses in $ Living Expenses in $ Total Expenses in $ Average Yearly Costs in $ Resident 100,000 200,000 300,000 37,500 Non-Resident 204,000 200,000 404,000 50,500 Private 280,000 200,000 480,000 60,000 Table 45 Table 45 shows the values of a yearly investment of $37,500, $50,500, and $60,000 (from Table 42 above) at the end of 8 years at 10% interest, compounded monthly. Student Status Year 1 Starting Figures in $ Annual Investment in $ Values in $ at End of Year 8 at 10% compounded monthly Resident 37,500 37,500 519,436.46 Non-Resident 50,500 50,500 692,581.95 Private 60,000 60,000 831,098.34 Table 46 Table 46 shows the approximate annual investment needed to equal the one-time investment of the end value of the respective student status from Table 43 above. For all examples, the length of time of the investment is 36 years, and the interest rate is 10%, compounded monthly. One-Time Investment in $ from Table 53 Approximate Annual Investment needed in $ for 36 years End Values After 36 Years in $ at 10% Compounded monthly 519,436.46 X 18,728,979.50 X 50,503.00 18,728,979.50 692,581.95 X 24,971,972.78 X 67,338.00 24,971,972.78 831,098.34 X 29,966,367.34 X 80,806.00 29,966,367.34 Note: The approximate annual investment amounts needed for 36 years to equal the end values of the “one-time” investment totals would be quite a burden for most people. A person who attends medical school will graduate at about 26 years of age. Upon graduation, the new doctor must do a medical internship ( low pay), followed by a residency (low pay), which can take another three to four years to complete. On average, residents earn $45,000 per year. If a resident opts to do a fellowship, the residency will last another two years with slightly better pay. Suggested Reading: Educational Portal. Medical Doctor: Step-By-Step Guide for Becoming a Doctor of Medicine. September 21, 2008. http://education-portal.com/articles/Medical_Doctor%3A_Step-By-Step_Guide_for_Becoming_a_Doctor_of_Medicine.html Typically, a medical doctor will be about 35 years old and approximately $150,000 to $200,000 in debt before earning a decent income. If the debt is paid back at $20,000 per year for 10 years (without further compounding of the original principal), the MD will be debt free at about 45 years of age. Realistically, repayment of the debt will probably take longer. According to Shelly Banjo, reporter for The Wall Street Journal (WSJ): A medical degree at Northwestern University? About $241,000, including $168,000 for tuition. The typical 2008 medical-school graduate will start her career about $150,000 in debt, says the Virginia-based American Medical Student Association, and will spend 20 to 30 years paying it off. Source: Betting on Grad School by Shelly Banjo. Tuesday, April 29, 2008, provided by The Wall Street Journal Online. http://finance.yahoo.com/college-education/article/104958/Betting-on-Grad-School Table 47 shows the monthly amount required to repay a student loan, depending on the amount borrowed and the length of the loan. In all examples, the interest rate is 7%. Table 47 Length of Loan in Years $100,000 Monthly Loan Repayment in $ $150,000 Monthly Loan Repayment in $ $200,000 Monthly Loan Repayment in $ $250,000 Monthly Loan Repayment in $ $300,000 Monthly Loan Repayment in $ 10 1,161.08 1,741.63 2,322.17 2,902.71 3,483.25 15 898.83 1,348.24 1,797.66 2,247.07 2,696.48 20 775.30 1,162.95 1,550.60 1,938.25 2,325.90 25 706.78 1,060.17 1,413.56 1,766.95 2,120.34 30 665.30 997.95 1,330.60 1,663.26 1,995.91 Online Calculator: http://www.mortgage-calc.com/mortgage/simple.php Online College Cost Projector: http://www.finaid.org/calculators/costprojector.phtml Note: Mark Kantrowitz, publisher of the finaid.org Website recommends that student loan payments should not take more than 10% to 15% of one’s income. Michelle Obama, wife of Democratic presidential contender Barack Obama, made headlines while accompanying her husband on the 2008 campaign trail by complaining about how difficult student loans are to pay back. Mrs. Obama, a Princeton graduate who attended Harvard Law School, told an audience of working mothers at a daycare center in Zanesville, Ohio: College isn’t worth it and you should stay out of corporate America…The salaries don’t keep up with the cost of paying off the debt, so you’re in your 40s, still paying off your debt at a time when you have to save for your kids...Barack and I were in that position…The only reason we’re not in that position is that Barack wrote two best-selling books… (1-3) Mrs. Obama also told the women: …that she’d prefer they not follow in her upwardly mobile footsteps. Better if they stay in their place, back in “the community.” You know, become teachers. Work for the community. Be social workers. Be a nurse. Those are the carriers that we need, and we’re encouraging our young people to do that. (3) Source: 1. NRO (national review online). the corner. Friday, February 29, 2008. Michelle Obama: "Don't Go Into Corporate America" [Byron York] http://corner.nationalreview.com/post/?q=OTViZjhhNGI1Y2QxYjE0ZDc0YmMwMjJiNmUyZjQ3MmU 2. Michelle Obama in spotlight's glare. By Robin Abcarian, Los Angeles Times Staff Writer, February 21, 2008. http://www.latimes.com/news/politics/la-na-michelleobama21feb21,0,5061497.story 3. Michelle Obama Urges The Poors To Stay That Way By Avoiding College And Corporate America. Posted by John Carney, Mar 03, 2008. http://www.dealbreaker.com/2008/03/michelle_obama_urges_the_poors.php As a comparison, assume that a young man leaves school at age 18 and gets a job earning $24,000 per year (plus some overtime income). Further, assume two separate scenarios about the young man as he was growing up. In the first scenario, the young man earned a salary from his parents working in the home-based business or doing home chore, from the time he was five until he turned fourteen. From age 14 to 18, the young man worked a part time job outside the home. During his childhood and adolescence, the young man earned $5,000 and invested the savings. In the second scenario, the young man did not work as a child or adolescent and did not start investing until he left school at age 18 and started working. Tables 58 and 59 below illustrate the two scenarios. Table 48 Table 48 shows the difference in the end values of an investment of the 18-year-old described in the two scenarios above (after 17 years, or at age 35). A comparison is made between beginning balances of zero and $5,000 and corresponding deposits of $100 to $500 per month. In both examples, the interest rate is 10%, compounded monthly. Monthly Deposit in $ Beginning Balance in $ End Values in $ After 17 Years (Age 35) at 10% Compounded Monthly Beginning Balance in $ End Values in $ After 17 Years (Age 35) at 10% Compounded Monthly 100 0 60,056.32 5,000 90,079.79 200 0 120,112.64 5,000 150,136.11 300 0 180,168.96 5,000 210,192.43 400 0 240,225.29 5,000 270,248.75 500 0 300,281.61 5,000 330,305.08 Online calculator: FUNDADVICE.COM TOOLS http://mutualfunds.about.com/gi/dynamic/offsite.htm?zi=1/XJ&sdn=mutualfunds&cdn=money&tm=264&gps=99_1092_1020_587&f=11&su=p649.0.147.ip_p284.5.420.ip_&tt=2&bt=1&bts=0&zu=http%3A//www.tcalc.com/tvwww.dll%3FSave%3FCstm%3Dfundadvice%26IsAdv%3D0%26SlvFr%3D6 Table 49 Table 49 is a continuation of Table 48. The end values in the table below are based on the assumption that the monthly deposits and the interest rate remain the same as above for the next 30 years, or from age 35 to age 65. Monthly Deposit in $ Beginning Balance in $ End Values in $ After 30 Years (Age 35 to 65) at 10% Compounded Monthly Beginning Balance in $ End Values in $ After 30 Years (Age 35 to 65) at 10% Compounded Monthly 100 60,056.32 1,417,410.00 90,079.79 2,012,997.56 200 120,112.64 2,834,819.99 150,136.11 3,430,407.56 300 180,168.96 4,252,229.99 210,192.43 4,847,817.56 400 240,225.29 5,669,640.19 270,248.75 6,265,227.55 500 300,281.61 7,087,050.18 330,305.08 7,682,637.75 The earning power of the 18-year-old in the above example should increase with age, thereby providing more income in which to invest. Further, if the young man earns a college degree while working, the potential to earn more and the ability to invest more is very likely. The importance of starting to invest at a young age is something not many young people often think about. Thoughts about having enough money to retire comfortably, contributing to company pension funds and social security, and having adequate healthcare coverage in old age are distant concerns for a great number of young adults. One way for young people to secure their financial future is to have a mentor who will help them to understand that TIME is the most important factor in the investment equation. Money needs time to grow…The longer the time…the greater the growth. Tables 48 and 49 above show the wealth that an 18-year-old without a college education would accumulate in 30 years by making investments on which the interest is compounded. Question is: Is this practical or just a theory? Table 50 below shows the wealth that a 35-year-old doctor (without medical school debt) would accumulate in comparison. The example below is based on the assumption that the doctor is earning $150,000 to $200,000 per year ($12,500 to $16,666 per month before taxes, or approximately $9,000 to $12,000 net per month). Further, assume two separate scenarios about the doctor’s beginning balance. In the first scenario, the doctor starts with a zero balance. In the second scenario, the doctor starts with $10,000, which he/she has saved during the last 17 years (from age 18). Table 50 Table 50 shows the difference in the end values of an investment of the doctor described in the two scenarios above. A comparison is made between beginning balances of zero and $10,000 and corresponding deposits of $1,000 to $10,000 per month. In both examples, the interest rate is 10%, compounded monthly, and the length of time is 30 years. Monthly Deposit in $ Beginning Balance in $ End Values in $ After 30 Years (Age 35 to 65) at 10% Compounded Monthly Beginning Balance in $ End Values in $ After 30 Years (Age 35 to 65) at 10% Compounded Monthly 1,000 0 2,260,487.92 10,000 2,458,861.92 2,000 0 4,520,975.85 10,000 4,719,349.84 3,000 0 6,781,463.77 10,000 6,979,837.77 4,000 0 9,041,951.70 10,000 9,240,325.69 5,000 0 11,302,439.62 10,000 11,500,813.62 6,000 0 13,562,927.55 10,000 13,761,301.54 7,000 0 15,823,415.47 10,000 16,021,789.47 8,000 0 18,083,903.40 10,000 18,282,277.39 9,000 0 20,344,391.32 10,000 20,542,765.32 10,000 0 22,604,879.25 10,000 22,803,253.24 Summary of Expense for Private Education vs. Value if Invested The comparison examples below (Tables 51& 52) include the cost of tuition for private education, plus living expenses where applicable (during college education). Example #1 Preschool to Grade 12: Age 3 to 18, Tuition $10,000/Year (from Table 35) Undergraduate: Age 19 to 22, Tuition $55,000/Year (from Table 37) Graduate/Postgraduate: Age 23 to 26, Tuition $65,000/Year (from Table 41) vs. Value if Invested at 10% Interest, Compounded Monthly During the school years (Preschool to Grade 12), only the cost of tuition of $10,000/year is included in the calculations, not living expenses. For undergraduate (Age 19 to 22) and graduate/postgraduate (Age 23 to 26) education, combined tuition and living expenses of $55,000/year and $65,000/year, respectively, are included in the calculations. From Age 27 until Age 65, the end value of a one-time investment is shown in Table 61 below. All calculations are based on 10% interest, compounded monthly. All investment deposits are made in the beginning of the year. Table 51 Age Groups with Corresponding Years of School Yearly Private School Tuition in $ Yearly Private Undergraduate College Tuition in $ Yearly Private Graduate/Post-graduate College Tuition in $ Investment Values in $ for the Corresponding Years of Education at 10% Compounded Monthly Age 3 to 18 = 15 Years of School 10,000/Year for 15 Years X X 334,067.85 Age 19 to 22 = 4 Years Undergraduate X 55,000/Year for 4 Years X 264,795.20 Age 23 to 26 = 4 Years Graduate/ Postgraduate X X 65,000/Year for 4 Years 312,939.78 Balance in $ from Investment Value of 15 Years of School (Age 3 to 18) Age 3 to 22 = 19 Years (15 Years of School + 4 Years of Undergraduate College Tuition) 334,067.85 55,000/Year for 4 Years X 754,576.05 Balance in $ from Investment Value of 15 Years of School + 4 Years of Undergraduate College Tuition Age 3 to 26 = 23 Years (15 Years of School + 4 Years Undergraduate + 4 Years Graduate/Post-graduate) 754,576.05 X 65,000/Year For 4 Years 1,427,594.51 Balance in $ from 20 Years of Private Education Investment No Additional Investment After Age 26 No Additional Investment After Age 26 Investment Value in $ at the End of 38 Years at 10% Compounded Monthly Age 27 to 65 = 38 Years 1,427,594.51 0 0 62,818,206.92 Example #2 The information for Example #2 below (Table 52) is the same as for Example #1 above (Table 51) with the exception that the school tuition has been increased from $10,000/year to $20,000/year. ============================ Preschool to Grade 12: Age 3 to 18, Tuition $20,000/Year (from Table 25) Undergraduate: Age 19 to 22, Tuition $55,000/Year (from Table 37) Graduate/Postgraduate: Age 23 to 26, Tuition $65,000/Year (from Table 51) vs. Value if Invested at 10% Interest, Compounded Monthly During the school years (Preschool to Grade 12), only the cost of tuition of $20,000/year is included in the calculations, not living expenses. For undergraduate (Age 19 to 22) and postgraduate (Age 23 to 26) education, combined tuition and living expenses of $55,000/year and $65,000/year, respectively, are included in the calculations. From Age 27 until Age 65, the end value of a one-time investment is shown in Table 52 below. All calculations are based on 10% interest, compounded monthly. All investment deposits are made in the beginning of the year. Table 52 Age Groups with Corresponding Years of School Yearly Private School Tuition in $ Yearly Private Undergraduate College Tuition in $ Yearly Private Postgraduate College Tuition in $ Investment Values in $ for the Corresponding Years of Education at 10% Compounded Monthly Age Groups with Corresponding Years of School 20,000/Year for 15 Years X X 668,135.69 Age 3 to 18 = 15 Years of School X 55,000/Year for 4 Years X 264,795.20 Age 19 to 22 = 4 Years Undergraduate X X 65,000/Year for 4 Years 312,939.78 Balance in $ from Investment Value of 15 Years of School (Age 3 to 18) Age 23 to 26 = 4 Years Graduate/ Postgraduate 668,135.69 55,000/Year for 4 Years X 1,252,121.35 Balance in $ from Investment Value of 15 Years of School + 4 Years of Undergraduate College Tuition Age 3 to 22 = 19 Years (15 Years of School + 4 Years of Undergraduate College Tuition) 1,252,121.35 X 65,000/Year For 4 Years 2,168,615.65 Balance in $ from 20 Years of Private Education Investment No Additional Investment After Age 26 No Additional Investment After Age 26 Investment Value in $ at the End of 38 Years at 10% Compounded Monthly Age 3 to 26 = 23 Years (15 Years of School + 4 Years Undergraduate + 4 Years Graduate/Post-graduate) 2,168,615.65 0 0 95,425,238.52 Example #3 The information for Example #3 below (Table 53 is the same as for Example #1 above (Table 51) with the exception that the school age group is 6 to 18 years (total of 12 years), not 3 to 18 years. Grade 1 to 12: Age 6 to 18, Tuition $10,000/Year (from Table 25) Undergraduate: Age 19 to 22, Tuition $55,000/Year (from Table 37) Graduate/Postgraduate: Age 23 to 26, Tuition $65,000/Year (from Table 41) vs. Value if Invested at 10% Interest, Compounded Monthly During the school years (Grade 1 to 12), only the cost of tuition of $10,000/year is included in the calculations, not living expenses. For undergraduate (Age 19 to 22) and graduate/postgraduate (Age 23 to 26) education, combined tuition and living expenses of $55,000/year and $65,000/year, respectively, are included in the calculations. From Age 27 until Age 65, the end value of a one-time investment is shown in Table 53 below. All calculations are based on 10% interest, compounded monthly. All investment deposits are made in the beginning of the year. Table 53 Age Groups with Corresponding Years of School Yearly Private School Tuition in $ Yearly Private Undergraduate College Tuition in $ Yearly Private Graduate/Post-graduate College Tuition in $ Investment Values in $ for the Corresponding Years of Education at 10% Compounded Monthly Age 6 to 18 = 12 Years of School 10,000/Year for 12 Years X X 223,127.77 Age 19 to 22 = 4 Years Undergraduate X 55,000/Year for 4 Years X 264,795.20 Age 23 to 26 = 4 Years Graduate/ Postgraduate X X 65,000/Year for 4 Years 312,939.78 Balance in $ from Investment Value of 12 Years of School (Age 6 to 18) Age 6 to 22 = 16 Years (12 Years of School + 4 Years of Undergraduate College Tuition) 223,127.77 55,000/Year for 4 Years X 589,346.98 Balance in $ from Investment Value of 12 Years of School + 4 Years of Undergraduate College Tuition Age 6 to 26 = 20 Years (12 Years of School + 4 Years Undergraduate + 4 Years Graduate/Post-graduate) 589,346.98 X 65,000/Year For 4 Years 1,181,509.92 Balance in $ from 20 Years of Private Education Investment No Additional Investment After Age 26 No Additional Investment After Age 26 Investment Value in $ at the End of 38 Years at 10% Compounded Monthly Age 27 to 65 = 38 Years 1,181,509.92 0 0 51,989,787.09 Example #4 The information for Example #4 below Table 54 is the same as for Example #3 above (Table 53) with the exception that the school tuition has been increased to $20,000/year. Grade 1 to 12: Age 6 to 18, Tuition $210,000/Year (from Table 25) Undergraduate: Age 19 to 22, Tuition $55,000/Year (from Table 37) Graduate/Postgraduate: Age 23 to 26, Tuition $65,000/Year (from Table 41) vs. Value if Invested at 10% Interest, Compounded Monthly During the school years (Grade 1 to 12), only the cost of tuition of $20,000/year is included in the calculations, not living expenses. For undergraduate (Age 19 to 22) and graduate/postgraduate (Age 23 to 26) education, combined tuition and living expenses of $55,000/year and $65,000/year, respectively, are included in the calculations. From Age 27 until Age 65, the end value of a one-time investment is shown in Table 64 below. All calculations are based on 10% interest, compounded monthly. All investment deposits are made in the beginning of the year. Table 54 Age Groups with Corresponding Years of School Yearly Private School Tuition in $ Yearly Private Undergraduate College Tuition in $ Yearly Private Graduate/Post-graduate College Tuition in $ Investment Values in $ for the Corresponding Years of Education at 10% Compounded Monthly Age 6 to 18 = 12 Years of School 20,000/Year for 12 Years X X 446,255.54 Age 19 to 22 = 4 Years Undergraduate X 55,000/Year for 4 Years X 264,795.20 Age 23 to 26 = 4 Years Graduate/ Postgraduate X X 65,000/Year for 4 Years 312,939.78 Balance in $ from Investment Value of 12 Years of School (Age 6 to 18) Age 6 to 22 = 16 Years (12 Years of School + 4 Years of Undergraduate College Tuition) 264,795.20 55,000/Year for 4 Years X 921,663.25 Balance in $ from Investment Value of 12 Years of School + 4 Years of Undergraduate College Tuition Age 6 to 26 = 20 Years (12 Years of School + 4 Years Undergraduate + 4 Years Graduate/Post-graduate) 921,663.25 X 65,000/Year For 4 Years 1,676,446.53 Balance in $ from 20 Years of Private Education Investment No Additional Investment After Age 26 No Additional Investment After Age 26 Investment Value in $ at the End of 38 Years at 10% Compounded Monthly Age 27 to 65 = 38 Years 1,676,446.53 0 0 73,768,401.51 Notes: In Tables 51 to 54, no new investments were added to the Age Group “27 to 65 = 38 years” as all schooling had been completed. In regard to the interest rate, even if the interest earned was in the range of 7% to 9%, compounded monthly, the monetary gain from an investment equal to the cost of tuition for 23 years of private education would still have been huge. Table 55 Table 55 is a recap of the end values found in Tables 51 to 54 to emphasize the enormous amount of money that could be generated through investing vs. paying tuition for private school/college education. Table # Age Groups and Years to Retirement Balance in $ from 20 Years of Private Education Investment No Additional Investment After Age 26 Investment Value in $ at the End of 38 Years at 10% Compounded Monthly 61 Age 27 to 65 = 38 Years 1,427,594.51 0 62,818,206.92 62 Age 27 to 65 = 38 Years 2,168,615.65 0 95,425,238.52 63 Age 27 to 65 = 38 Years 1,181,509.92 0 51,989,787.09 64 Age 27 to 65 = 38 Years 1,676,446.53 0 73,768,401.51 Note: The end values in the above table are sizable by any standard and reinforce the concept that POC is the most powerful wealth creation force in the world!Note: There is a rationale for adding “living expenses” to college education and not to school education. At age 18, a young adult is capable of being self-sufficient. Hypothetically, the person could take a job earning $2,000 per month and, after deducting living expenses, still have some money left to investment. An example of actual cost of medical school education for four years. This is not including fours years of under graduate college cost. This excerpt is from: The NEWS HOURS Jim Leherer Jan., 6,2009 Massachusetts Faces Primary Care Doctor Shortage Betty Ann Bowser reports on the lack of primary care doctors in Massachusetts, which has instituted universal health care. “ Family Medicine doctors frequently are on the bottom of the pay scale making an average $185,000 a year. Specialists like radiologist and cardiologists with two to seven years of more training, make two times that much. A primary care physician spending 30 minutes with a patient, talking to them about their health care need would get paid about a third of what a gastroenterologist (bowel specialist) would get paid for spending 30 minutes to do endoscopic procedure. Reporter: Almost all of them will graduate from medical school with college loans that could take decades to pay off. “…. Christine Higum and Ashley are typical of medical students at BU. Every year I take between 65 -$70,000. It is going to be $200,000 before you it count interest If I take the full-time to paying, I could pay half a million dollars. Reporter: Vow!. It is a fair chunk of change . It does not seem possible for me to go into primary care. Which is sad. But I want to have a family, I want to be able to provide for my family. I want to pay off loans quickly. I don’t want to have them for 30 years.” http://video.aol.com/video-detail/massachusetts-faces-primary-care-doctor-shortage/2582195818/?icid=VIDLRVNWS04 http://vvi.onstreammedia.com/cgi-bin/visearch?user=pbs-newshour&template=play220asf_noprefs_ws.html&query=+ClipCategory%3AClipCategory%3Ahealth&squery=%2BClipID%3A3+%2BVideoAsset%3Apbsnh010609&inputField=undefined&ccstart=2281141&ccend=2821813&videoID=pbsnh010609 Is College Worth the Cost? According to Anya Kamenetz’s* article, Is College Worth the Cost? Part 1, posted on finance.yahoo.com on August 28, 2007, there are important intangible benefits of going to college, such as widening cultural horizons and developing critical thinking, civic participation, healthier living, and stronger relationships. In the article, Kamenetz fails to mention that all of the above benefits may be acquired freely or inexpensively by reading books, attending seminars, volunteering one’s time for civic causes, traveling near and far for pleasure or for a job-related purpose, and developing strong, loving relationships with family and friends. Kamenetz further states that it takes self-knowledge to determine if college is going to be worth the cost; therefore, she suggests that “…before enrolling in any higher education program, ask yourself the following questions: What do I want to do? Where can I get in? How much can I pay for it? How well am I prepared to do? [How will I] Make It Pay Off?” In Is College Worth the Cost? Part 2, posted on September 11, 2007 on finance.yahoo.com, Kamenetz addresses the question of whether graduate school pays off, and she provides a discipline-by-discipline breakdown of graduate programs (Business school Medical school, Master’s programs, Law school, Advanced degrees in the humanities, and Advanced degrees from art, culinary, and journalism schools) to make her point. Ultimately, Kamenetz advises prospective students to “choose a program that will widen their options without saddling them with debt.” "Do Elite Colleges Produce the Best-Paid Graduates?" It is understandable that there are many other considerations beside future earnings, as one considers before going to a college to study. One should read the whole article. One can get some idea from the paragraphs below. "According to research from Alan B. Krueger, a Princeton professor and Treasury official who used to contribute to Economix, and Stacey B. Dale at Mathematica Policy Research, attending one relatively elite college (like Harvey Mudd) rather than another (like Harvard) doesn't much affect a student's future income. Rather, it's the student who matters. Hard-working, ambitious students will do well wherever they go. The opposite applies to mediocre or lazy students." The data cover only respondents alumni who had a bachelor degree only. Doctors, lawyers and others in high-paying jobs are not included in the study. "The reason for this, according to Al Lee, PayScale's director of quantitative analysis, is that PayScale is trying to determine which undergraduate educations are the "best investment." According to Mr. Lee, one example is those of alumni teachers with advanced degrees. The teachers get primarily a master's degrees in order to teach. Teachers generally earn less than their classmates. Of the other reasons, the graduates of philosophy major of an elite school may earn less than the graduates of information technology of a less elite school. Reference: "Do Elite Colleges Produce the Best-Paid Graduates?" by Catherine Rampell Tuesday, July 21, 2009 http://finance.yahoo.com/college-education/article/107374/do-elite-colleges-produce-the-best-paid-graduates.html;_ylt=AinO.sX2LU7w3H37_8vsT5S7YWsA?mod=edu-collegeprep From Yahoo Finance section provided by The New Yorks Times. ============ “Is an Ivy League education worth the money? …..70 percent of college students said making more money after graduation was a major reason for going to school…….Along with that diploma comes an average debt of $22,000 (more than double that of 10 years ago),..Indeed, according to a study published in the Harvard Business Review, nearly half the top executives at Fortune 100 companies now hail from public schools.” Reference: The Best Colleges for Making Money by Neil Parmar Tuesday, December 16, 2008 provided by Smartmoney.com Sources and Suggested Reading: Is College Worth the Cost? Part 2 by Anya Kamenetz. Posted on Tuesday, September 11, 2007, 12:00AM http://finance.yahoo.com/expert/article/generationdebt/44474;_ylt=Ao5zaFFx.0JTIFBNdzQ7lf67YWsA Anya Kamenetz Generation Debt. Is College Worth the Cost? Part 1 by Anya Kamenetz. Posted on Tuesday, August 28, 2007, 12:00AM http://finance.yahoo.com/expert/article/generationdebt/43193 * Anya Kamenetz is a journalist, author, blogger, and staff writer at Fast Company magazine, and a Pulitzer Prize nominee.       ========================= READERS RESPOND: Unanswered questions on health reform. Barry M. Weiner. The Baltimore Sun. Friday, August 7, 2009. " ...You advocate that all physicians should be salaried based on the Mayo Clinic/Cleveland Clinic model. Where does that leave the rural, private practice doctor who is usually on call for his patients 24/7? Will the salary be enough to compensate the doctors for the six to 10 years of extra schooling they need following four years of college when they have little or no income? Will they be paid enough to repay the average $200,000 to $400,000 in debt incurred to pay for their medical education?..." 91

This section shows cost to students to get educated at in state and out of state public education at different universities and colleges. Why should one go for out of sate public education? Why consider going out of sate institution if same education available in an in state institution? Is it worthy for similar education to go out of state and spend double, if not more money for education? Is the financial return from an "out of state education" will pay off more quickly, if similar education received in an in state institution? How much money one will save if studies in an in state institution, and just invest in S&P 500 Index Fund, what will be the return? From: Back to school survey; Parade's College A-List: Sunday, 22 August 2010' Fore the full list: parade.com/colleges "This list is based on the recommendations of 43 top high school guidance counselors across the country. Some entries include comments from the panel." The following high school counselors participated in PARADE's survey of A-List Colleges. http://www.parade.com/news/2010/08/22-a-list-survey-counselors.html Christopher Newport University, Newport News, Va. Newport News, Va. Fall Tuition and Fees and Refund Policy 2010 Includes tuition, full-time undergraduate, comprehensive fee, technology fee and capital fee. All expenses are in $ State Residency Tuition Room 9 months Meal/ semester Teleco/ semester Total In state 4625 3111 1560 100 9395 Out of state 8996 3111 1560 100 13766 ==================== The College of William & Mary Williamsburg, Va. "....U.S. News and World Report ranked us sixth among all public universities" Tuition & Fees http://www.wm.edu/admission/financialaid/tuition/index.php Estimated costs per semester* for the 2010–2011 academic year and vary based on undergraduate/graduate, full-time/part-time, residency and meal plan, housing and course of study. Detailed tuition and fees and room and board rates. UNDERGRADUATE In-State Out-of-State Tuition and Fees Room Board Books, travel and incidentals Total (per semester) 6,094 2,600 1,700 1,375 $11,769 16,882 2,600 1,700 1,375 $22,557 GRADUATE (Arts & Sciences, Education and Marine Science) In-State Out-of-State Tuition and Fees Living Allowance Books & Supplies Total (per semester) 5,384 6,825 650 $12,859 12,319 6,825 650 $19,794 LAW In-State Out-of-State Tuition and Fees Living Allowance Books & Supplies Total (per semester) 11,900 6,825 650 $19,375 16,900 6,825 650 $24,375 BUSINESS In-State Out-of-State Tuition and Fees Living Allowance Books & Supplies Computer Total (per semester) 12,500 6,825 800 1,500 $21,625 18,250 6,825 800 1,500 $27,375 PART-TIME TUITION (per credit hour) In-State Out-of-State Undergraduate Graduate Law Gessraduate Busin 260.00 345.00 630.00 650.00 920.00 920.00 1,050.00 1,050.00 *Room, board and other incidental expenses have been averaged to provide a general estimate of costs. =============================================== OTHER STATE SMALL PUBLIC SCHOOLS Name & Location Undergrad. Student Enrollment Annual Tuition Fee in $ In State / Out of State College of Charleston Charleston, SC 10,147 10,314/23/172 The College of New Jersey Ewing, NJ 6153 13,549/22.935 New College of Florida Sarasota, FL 825 5,347/27.598 St. Mary’s College of Maryland St. Mary’s City, MD 2000 13,630/25,023 SUNY Geneseo Geneseo, NY 5000 6,400/14,300 University of Mary Washington Fredericksburg, VA 4397 7,862/19,590 University of NC-Ashville Asheville, NC 3700 4,722/17,544 ================================================= LARGE PUBLIC SCHOOL Name & Location Undergrad. Student Enrollment Annual Tuition Fee in $ In State / Out of State Miami University of Ohio Oxford, OH 14,671 12,198/26,988 SUNY Stony Brook Stony Brook, NY 16,395 6,488/14,388 University of Georgia Athens, GA 26,142 8,736/26,946 University of Oregon Eugene, OR 18,514 8,190/25,830 University of Texas at Austin Austin, TX 39,000 8.986/29,916 University of Virginia Charlottesville, VA 14,297 10,836/33,782 University of Wisconsin-Madison Madison, WI 28,690 9,050/24,300 ======================================= ARTS PROGRAM Here one example is cited below. Seven more examples in the publication: Tuition fee varies from $26,100 to $$43,990. Same fee for all. Name & Location Specialty Undergraduate Enrollment Annual Tuition Fee In Sate/ Out of State Alfred University Alfred, NY Ceramics 1909 14,762/20,314 ======================================= COMBINED BACHELOR’S/GRADUATE DEGREE Here one example is cited below. Seven more examples in the publication: Tuition fee varies from $17,100 to $$40,282. Same fee for all. Name & Location Undergrad. Enrollment Annual Tuition Fee in $ In State/ Out of State Univ. Alabama at Birmingham 10,646 11,612/26,396 ================================= BUSINESS & ACCOUNTING Here one example is cited below. Seven more examples in the publication: Tuition fee varies from $33.040 to $$40.514 Same fee for all. Name & Location Undergrad. Enrollment Annual Tuition Fee in $ In State/ Out of State Ohio State University Columbus, OH 49,195 8,706/22,278 ======================================== FLEXIBLE SCHEDULING ( Fulltime or Par time, can change status semester by semester) Name & Location Undergrad. Enrollment Annual Tuition Fee in $ In State/ Out of State Georgia State University Atlanta, GE 22,384 8,698/26,908 University of Houston Houston, TX 28,056 16,418/21,994 University of Maryland, Baltimore County Baltimore, MD 9947 9,171/19,108 "Do Elite Colleges Produce the Best-Paid Graduates?" by Catherine Rampell Tuesday, July 21, 2009 http://finance.yahoo.com/college-education/article/107374/do-elite-colleges-produce-the-best-paid-graduates.html;_ylt=AinO.sX2LU7w3H37_8vsT5S7YWsA?mod=edu-collegeprep From Yahoo Finance section provided by The New Yorks Times. -------------------------------------------------