The Real Costs of Education

This week, in only my second week of classes, I have already experienced a major high and low with respect to the length/cost/amount of work to be done for this program. For those of you who are unaware, I'm currently enrolled in a Clinical Psychology PhD program. When I'm done, in 5 years, I'll be a psychologist. My school is pretty flexible in the sense that some people who come in with Masters in Psychology (like I already have) can do the program in 4 years if they have the right classes to transfer. I am not one of the students, but one of the professors and I talked about a possibility that might work in helping me get out early. Long story short, it's not possible because of certain rules about ordering for taking class, doing your practicum, and your dissertation. Coming into the program I already expected to do it in 5 years, but got my hopes up when I thought that maybe my MA might actually be worth the money I paid and put myself into debt over. But when that turned out not to be the case I was extremely disappointed. It's not anyone's fault, I mean, maybe it's the APA's fault for having such strict rules about stuff. But when you go into such a nitpicky profession where people get sued left and right and people's mental health lies in your hands, I can understand the need to regulate and be strict about training.

In any event, because this week I also deposited my loan refund check into the bank (ie. the amount of money I now have to live in for the next 3 months as decided by my federal loan) and it's a lot more money than I initially thought it would be, I've been freaking out a little bit about just how much this part of my education is going to cost me.

Thanks to my mother's unending penny pinching and need to plan everything financial as far in advance as possible, I managed to go to college and not take out any loans. From the moment she discovered she was pregnant (and I am really not lying about this), she began to save for my education. When I was little, we were poor, so she started out small at first, whatever was manageable $5, $10, etc. and grew as her income did. She also saved most monetary gifts we received as children (when you're 5, do you really need the $300 you got for your birthday? Maybe you need $10 or 15, and the rest can be saved). At one of her long term jobs she participated in an income tax free savings program where she took out bonds specifically for education (we paid the tax later when cashing the bonds as opposed to it coming out of her paycheck). And she enrolled us in an amazing program called New York Saves, that is kind of like a Mutual Fund for college. You give them money, they invest, and you get more money back when you cash in for school (many states have 529 programs, not just New York).

While in many areas of life the penny pinching drove me nuts growing up (see my example of back to school clothes shopping), this is one area I hope to emulate when I have kids. This education cost calculator I found really scares me about how much my future child's education might be. But I wonder how much of this is hype and how much of it is true. Right now our economy is in crisis and many schools are raising tuition at alarmingly high rates because the schools are also in crisis. Could things slow down if they get better? Could there be future reform because a degree is so necessary yet only easily attainable by middle and maybe eventually only upper classes? And what about the fact that right now my salary before I stopped working was good by national standards, but ok for local standards. When I am done with school my potential salary could either double or triple depending on the kind of job I get. Even though the bottom line dollar scares the crap out of me, knowing what I could be making by the time I send my theoretical kids to school puts me at ease, but only a little. I have often said that my goal in life (financially) is to make enough money to send my kids to whatever college they want without having to sacrifice other things like a family vacation, or nice Christmas presents, or food on the table. I'm starting to realize now that the combined salary my husband and I will need to be making to do that is going to fall around 300K. Really!? Who can do that?!

But getting back to the story, because I graduated a year early (APs in high school really helped me out), my mother actually had money left over; so after I received my more than generous graduation gift purchased with some of that, my left over bonds and NY Saves money, in addition to the money I got from working part or full time, went towards my Master's Degree. I only took out one small loan at the end because I wanted to pay off the credit card debt I accumulated and start saving for my wedding. I tried my best to avoid taking out a loan mainly because I knew going into my PhD I would be going into some major debt. And I wanted to do my best to avoid any kind of debt before getting here.

Now that I'm here and my first year loan totals are already more than what my mother paid for my entire undergrad education, and are about the same, maybe even more than what I paid for my Masters, shaving off that extra year looked so good to me. I mean, if I could save 50K, why wouldn't I want to do that? One bad thing about my school is they charge you a full time tuition regardless of how many credits you take, so there is no give when you don't register for the full amount. It actually makes me really angry when I think about it, and most of the people who work there agree that it's a bad practice. So it's a little frustrating to me that it won't ever change.

I started to think about my loan repayment options (thankfully I have many loan forgiveness opportunities as a health care worker, or (potentially) a woman in non-for-profit research, and a minority getting a higher level education degree). And since right now my grades are not high enough to qualify for most grants or scholarships this year I have to hold off on applying for things. Websites like Fast Web and Scholarships.com list out tons of scholarships (that are real) that you can apply to each year. (Be warned though that you will be spammed when you sign up for them with other bogus and real but annoying notifications.) I have used the websites in the past and applied for some, but never got anything, or always looked at the wrong times of the year (each scholarship is different so I don't think there's ever a right time to look, unless you're looking for next year. Then at least you have a leg up on when you need to get applications, apply for things, etc. Keeping a scholarship calendar helps). But until I get my grades for this year, and they are hopefully at least a 3.5 or higher, it's not worth doing anything about.

So many articles are out right now about the "real" cost of a college education. Money you lose by not working vs. debt + money you could gain from more competitive job offerings. Money spent on textbooks, room and board or rent. Money spent on paying to print papers, pencils, laptops, and all kinds of things you may or may not need. It's dizzying when you total it up, and think about the kind of loan you'd have to take out just to pay for a coffee, a 3 subject notebook, and 150 pages worth of printing paper to print out your dissertation.

The epidemic of the chaos caused by the need vs. the cost definitely scares me. We are not all independently wealthy and cannot afford 100K+ education costs. In the meantime I am going to cling to my loan forgiveness, get my grades up, then stalk Fastweb.com in hopes something pans out.