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It’s time to go back to school

It was my birthday earlier this week, and have spent a lot of time reflecting on what I’ve done so far in life. When I was younger, I always thought I’d be married with kids, and have a beautiful house as well as a flourishing career by the time I was 30. Well, I don’t have any of these things, but life isn’t so bad. :)

I don’t have a house, but I do have a townhouse. Buying my own home was a goal I’ve had for many years, and paying for it myself makes it extra special. It took me 6 years to save for that down payment, but when I finally had those house keys in my hand… it was definitely worth it. As for owning a house? That’s a dream I’m going to have to let go for a long time if I want to stay in the Vancouver area. I’m not willing to live any further out in the suburbs than I already am, and in fact my next move (whenever that is) will likely be closer into the heart of Vancouver.

I’m thankful that I still look young enough to get ID’d buying lottery tickets and alcohol. And while my field hockey skills are definitely fading, every year (when I’m not injured), I’m able to run faster and longer distances. I’m also healthier than I’ve been in years, and have successfully transitioned to a vegetarian diet, which I’m happy about.

I’ve had some pretty great relationships even though I’m not married. Some ended poorly, yes, that’s true. But some ended well, and I got to explore the world, learn about myself, and figure out exactly what I want. Which leads me to today, where I’ve been dating a great guy and we just celebrated one year together. :)

As for my career, that’s a funny one. I used to think I was doing really well for myself. I was confident in my full-time job, and I was working hard at my side projects. But then, life happened. I started focusing on buildng stronger relationships with my friends and loved ones. And then all of a sudden, I didn’t have time to work 80 hours a week anymore. Or rather, I didn’t want to.

And now, I feel like my career has stalled a bit. Sure, I still believe I’m employable. I have well-rounded skills, and even in a tough job market, I’m always able to find work with good companies. But I’m not growing, and I’m beginning to realize that in order to be happy in my career, I need to continue to learn and develop my skills. I’m not satisfied where I am, and education will help me take the next step in my career.

One of my goals for 2014 was to start looking into management programs, and I think I’ve narrowed my choices down to two programs at two different universities. Both are part-time (one is completely online, and one is evenings and weekends), and both will give me a business management certificate.

To be honest, the major reason why I haven’t aggressively pursued further education until now is the cost. I’m not willing to take out student loans, and I’ve had so many other life goals I wanted to achieve before I put my money into myself. But now’s the time, and thankfully it looks like my employer is willing to entertain the idea of helping me with some of the cost.

I’ve signed up to attend information sessions for both of these programs, and have emailed briefly with the coordinators. There are significant differences to these programs – the major one being the length of time required. One is 6 courses, and the other is 14. I’m leaning towards the longer one, but can’t say for sure until I learn more about them at the info sessions.
My goal is to be taking classes as early as January (more realistically, the spring/summer), and by this time next year, I’ll be well on my way to bettering myself and my future.31 was a fun year, but I think 32 is going to be pretty great as well. :)

Where did you live during university?

Where did you live while you were going to school, and if you had to do it over again, would you do it any differently?

This post was inspired by the Globe’s recent article: Want to save $45,000 in university costs? Live with Mom and Dad

When I was 17, I received a scholarship to study (and play field hockey) at a university in Michigan. The total value of that scholarship was approximately $20,600 per academic year ($11,000 tuition, $8,600 on-campus housing, $1,000 books). And that was when $1 CAN was the equivalent of $0.67 US.

Had I not gotten a full scholarship, there was no way I could have gone. Even if just my tuition was covered, coming up with $8,600 per year for housing (that’s $34,400 for a 4-year program)? Not possible unless I took out massive student loans.

When I was 22, I decided to go back to school in my hometown. I was living in a downtown apartment at the time, paying $625/month rent. As soon as I knew I was going back to school, I moved home and into my parents’ basement. In the two years I was in college, that saved me $15,000.

Sure, I missed out on some things. Bonding with my classmates (who were also roommates), and having the independence of living on my own. I really liked living on-campus when I was in Michigan. I didn’t have a commute (which meant I could roll out of bed at 10:45 for my 11am class), and all my meals were made for me at the cafeteria. But it just didn’t make financial sense to keep my apartment – or even live closer to campus. Even if I really wanted to. Living in the same town as my parents, they were happy (but maybe a little reluctant) to let me live with them again. I had moved out twice before, after all. :)

The $15,000 I saved while living with my parents likely would have been a lot more if I had lived somewhere else. It’s pretty easy to get tempted with dinners out, drinks, parties, etc. when you’re surrounded by friends … or living on campus, where there are always temptations to help you spend your money. And since I graduated over $20,000 in debt, it’s obvious I already had problems keeping my spending in check.

So, where did you live while you were going to school? Did you live with your parents, and regret not having the freedom? Or did you move out on your own (or to a different city), only to have accumulated more student loans than you thought you would?

Would you want free tuition, in exchange for a percentage of income?

I read this interesting article yesterday about Oregon’s “Pay it Forward, Pay it Back” pilot tuition plan. Basically this means that students will be allowed to go to a public university or community college tuition-free, in exchange for a binding contract that they will pay a small, fixed percentage of their annual gross income for 20 years after they graduate.

In this financial model, there was a proposal that all community college students pay 1.5% of their income, while all four-year public university students pay 3% of their income – both for 20 years after graduation. The pilot program will likely choose one university and one community college to experiment with.

In theory, this is a pretty good plan. It lets students get an education without worrying about carrying a debt load after graduation. They can start their lives sooner, and not be bound by massive student loan payments every month.

But once I started to really think about this program and what it would mean financially, the more I realized how much I disliked the idea. Here’s why:

3% of your income over 20 years will likely be more than the degree would cost

Let’s say as a new graduate, you make $40,000 at your first job, and then your salary goes up from there so that 20 years later, you are making $90,000.

Your tuition for a 4-year degree from Portland State University will cost you $25,500 ($2,125 per quarter x 3 quarters/year = $6,375/year x 4 years). However, if you were to pay 3% over 20 years of your career, you would end up paying $35,700 – which is $10,200 more than what the degree is actually worth.

YEAR SALARY 3% OF SALARY YEAR SALARY 3% OF SALARY
Year 1 $40,000 $1,200 Year 11 $60,000 $1,800
Year 2 $40,000 $1,200 Year 12 $60,000 $1,800
Year 3 $45,000 $1,350 Year 13 $65,000 $1,950
Year 4 $45,000 $1,350 Year 14 $65,000 $1,950
Year 5 $45,000 $1,350 Year 15 $70,000 $2,100
Year 6 $50,000 $1,500 Year 16 $70,000 $2,100
Year 7 $50,000 $1,500 Year 17 $75,000 $2,250
Year 8 $55,000 $1,650 Year 18 $75,000 $2,250
Year 9 $55,000 $1,650 Year 19 $80,000 $2,400
Year 10 $55,000 $1,650 Year 20 $90,000 $2,700

You’re not allowed to pay it off earlier

A big problem I have is that you don’t get to decide when you pay off your loans. So if you start earning staggering amounts of money over your career (or if you really just hate the idea of owing money to somebody for that long), there’s no way to pay off the tuition you owe – you will be perpetually “in debt” for 20 years of your life with no way to get out of it. That sucks.

It’s still a student loan

A professor at PSU was quoted in the article as saying, “essentially what [the program] does is allows you not to carry a debt load. It’s not a debt you graduate with.”

Umm… debt is debt. Whether you owe $25,500 immediately after graduation, or $35,700 over 20 years, you still owe the money to somebody, and you’re still obligated to pay it. The Pay it Forward, Pay it Back program just prolongs the length in which a student needs to make payments for their education, without actually calling it what it is: a student loan.

Here are a few selected comments from the article:

tuition_comment1

tuition_comment3

tuition_comment2

As someone who had to work extremely hard to get $20,000 out of student debt, I can appreciate what they’re trying to do with this program. But, I would rather have higher payments and a higher interest rate if it means I can get rid of my debt in a few years, instead of a few decades. I want to decide where my money goes. I want to be debt-free on my own terms. And if I make more money in the future, I don’t want it going towards something I purchased in the past. But, that’s just me.

What are your thoughts on the Pay it Forward, Pay it Back program?

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