by Daniel Bennett
A recent article on Purdue student Glen Bradford tells of how he has relied on stock market investments to help finance his tuition. Bradford has developed an investment strategy to help finance his engineering education that even Jim Cramer would bouya. While Bradford has been lucky enough to gain a decade of experience in the stock market and has been successful thus far, stock picking is certainly not a viable option to help pay the tuition for most college students.
The reality is that most students rely on a combination of their parent's hard earned money, financial aid, and the measly wages of student employment. CCAP has begun to investigate student employment and I would like to report some of the preliminary results.
Among full-time students, 10.5% are employed on a full-time basis during the school year. That is, they work 40 hours per week while attending college full-time. Another nearly 33% of full-time students work a part-time job during the school year. This indicates that over 43% of full-time college students are employed during the school year. These figures increase during the summer months (June, July, August), when the percentages increase to nearly 25% employed full-time and over 36% employed part-time. During the summer, nearly 61% of full-time college students are working.
As the recent recipient of a Master's degree, I can certainly speak to the value of gaining work experience while still in school. Working part-time jobs during the school year, and full-time ones during the summer, helped out tremendously with reducing the amount of funds that I had to borrow to pay for college. Not to mention the fact that working in the real world helps to build character, perspective and knowledge of life outside of the classroom.
Knowing that such a large number of students are working to help support the financial burden of college provoked me to find out how much they are earning. A rough measure of student employment earnings can be estimated by using wage and salary earnings of the 16 to 24 year old age group, as reported by the Bureau of Labor Statistics for 2007. Part-time employees in this age group earned a median salary of $158 per week. Full-time employees in this group earned a median salary of $428.50. (note - the figures were reported individually for men and women, so I calculated a weighted average for the entire population). If these employees work 50 weeks per year, then part-timers would earn $7,900 and full-timers $21,425 annually. These salaries are certainly not large enough to pay for a college education, especially once room and board are included, but they can help to reduce the financial burden.
One big cost of working that doesn't show up in these figures is the sacrifice of valuable study time, which will potentially hurt worker's GPA. With students struggling through school by working and incurring huge amounts of debt simply to pay for an education, one would question if there are other ways to help these determined and hard-working students to achieve their goal of obtaining a college degree.
One intriguing possibility is offered by German firm Career Concepts AG. It invites applications from students for financing of any amount. After graduation, the student pays back the loan as a fixed percentage of his income for a period of 60-84 months, depending on the amount of the loan and post-graduation employment. While this approach will definitely have critics, it is a viable alternative that a portion of American students would find attractive.