Kate’s Planning Pays Off

Not able to share her news with Jason and Terrell, Kate went back to her dorm and saw Olivia in the Common Room.

“Hey Olivia! I’ve got some news!” Kate looked as happy and she sounded.

“Okay, girl, tell me, but I think I know what you’re going to say.”

“I got the job!”

“I knew it. I knew it.” Olivia was thrilled. “I’m so happy for you! Now tell me all about it.”

Kate had met Olivia two years ago, when Olivia was a sophomore, and they soon became good friends despite the difference in their ages. Over time they talked a lot about what they would do after college, and Olivia looked to learn from what Kate was doing.

Kate said, “I received a text this morning from BioMed Research asking me to call them. Of course, I called immediately and they offered me a job as a research assistant. I did my best to stay calm and said yes. I can’t believe it! My first choice company!”

“Congratulations! I’m so excited for you. But you know what, you earned it.”

And then came the stream of questions from Olivia before Kate could even begin to tell her the details.

Kate had worked for four years in the university’s biology laboratory, helping set up labs for classes as a freshman and then moving on to assist biology professors and then, in her senior year, assisting three doctoral students in their biological research.

This work was related to her biology technology major in the university’s Honors College. (Kate would graduate with honors – cum laude.) Kate had studied hard, but she also kept time to play volleyball on her dorm’s intramural team and made a lot of friends through working on her class’s Activities Committee.

Kate told Olivia, “They said they loved my work as a lab assistant and thought it would help me as I started work at BMR.” (She was already speaking as an employee.) “References from the professors and grad students I worked for really helped, and I emphasized my lab work during the interview.”

“So, when are you going to start working? And where? You told me they have labs all around the country. What is the job really going to be like?” Olivia’s excitement couldn’t contain her questions long enough to get answers. And then she asked with the kind of hesitation you have when you know you shouldn’t really ask, “How much are they going to pay you? I mean, just generally.”

“It’s a good salary, a little above average for starting. But I’ll also get medical insurance and three weeks’ vacation. But here’s the best part, after six months, they’ll pay tuition for a master’s degree!”

“That’s fantastic! And what about where you’ll work?”

For the first time, Kate seemed a little unsure and a little less happy. “I’m not sure, Olivia. They don’t know for certain, but they said it would be in or near a medium size city and all their locations are near universities where I could take master’s degree courses.”

“Well, that’s good. Wherever you go it’s a great opportunity.” Olivia wanted to sustain the happiness of the moment but couldn’t hide her concern. If Kate had to go very far away, she knew she would not see her very often.

Kate sensed what Olivia was thinking and said, “Listen, wherever I go we’ll stay in touch. Even though I won’t be here, I don’t want to miss your senior year.”

They hugged each other without saying a word, and then Kate said, “I have to go and call my parents. I haven’t told them about the job yet.”

“Oh my goodness, go and call them!” Olivia was all smiles again. “They are going to be so happy. I’ll see you later.”

Kate’s Road to Graduation and Beyond

A great outcome for nearly all college students is landing a good job within six months of graduation.

Kate achieved this, so how did she do it? The answer will surprise most readers because her journey didn’t start in high school, and it certainly didn’t start in college. No, Kate’s journey to success started in middle school or earlier.

Kate’s application to college was good enough to earn her a $10,000 scholarship for each of four years. Very good grades in challenging courses, very good test scores and very good extracurricular activities made her the kind of student the college wanted to attract. A scholarship is one thing colleges use to attract the students they want.

At college, Kate continued her attention to her studies, earned good grades and stayed on schedule in her biological technology major. The result – she will graduate in four years with honors.

Kate supplemented her classroom studies with practical work as a lab assistant. This helped her to focus on her course work and help her to get similar work in good paying summer jobs. And, as Kate explained to Olivia, this practical experience, in addition to her excellent grades, was very helpful in getting her dream job.

Paying for College

Kate’s parents and Kate worked together to make college affordable without any loans.

Kate’s parents started a 529 Plan for Kate when she entered seventh-grade. While this was a late start, it certainly helped them pay the $10,000 expected family contribution (EFC) based on the information provided in her FAFSA form.

At about the time they started the 529 Plan, they started talking to Kate about how the family might pay for college or some other postsecondary education. Kate’s parents were also prudent in their aspirations for Kate’s plans after high school. While Kate was a good student in middle school, her parents understood that Kate might want to pursue an alternative to college.

However, if college were Kate’s choice, her parents also believed that an in-state public college with well-respected majors in fields Kate might choose was a better financial choice for them and Kate.

As for Kate, she did her part by doing her best as a student and by growing in her understanding of personal finance. A key point she understood was that the best choice would be to attend college, private or public, that would provide a good education and also be affordable.

Did Kate’s parents make any mistakes along the journey? Probably yes. But there are many things they and Kate did right.

As you look to the road beyond high school, you’ll find it has many turns and many forks. Which way do I go? What should I do? Kate’s parents helped her, but they had their own doubts and worries and often simply didn’t know the right answer.

Together they sought information, figured out answers and found their way as they travelled the long, uneven road that offered choices instead of promises. The straight and narrow road of yesterday was easy and safe, but it went to only one place.

The road Kate and her parents traveled – the road you and your parent(s) and family will travel – goes to many places, and it’s for you to decide where you want it to take you and how best to get there.

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For Terrell, the Party Comes to an End

Terrell always wore the latest fashion, had lots of girlfriends – and he drove a red sports car. Not a new one, but it was a sports car. Terrell had paid to have it painted red.

The smart kids didn’t like him because he had what they wanted and he didn’t want what they had.

“What’s up, T?” Terrell knew Jason would be at the snack bar around this time, so he came by to ask him some questions. As cool as Terrell always appeared, the discussion the other night about their student loans had bothered him.

“Well,” Terrell said sheepishly, “I went to the financial aid office this morning and it wasn’t good. They told me I had $31,000 in federal loans and that I should call my parents to ask about any other loans. I called and talked to my mother. She said they had taken out PLUS loans for $40,000 and that my aunt had cosigned a $10,000 loan for me.”

“Wow. That’s a lot. I always thought your family had lots of money.”

Jason had never seen Terrell look so depressed. Even when he failed a course, it didn’t seem to bother him much.

“I guess the party is over. I’m going to have to have a long talk with my parents and figure out how to make this right.”

Jason was still incredulous, and said, “If I can be of any help, you know where I am,” as Terrell turned to leave.

Just then, Kate came over. “Hey, I’ve got great news!”

Barely audible, Terrell looked away and said, “I gotta go.” Puzzled, Kate look at Jason. “That’s great, Kate. Could you tell me later? I have to run.”

“That’s weird,” Kate thought. “I hope nothing’s wrong.”

Unfortunately for Terrell, there was a lot wrong. And it wasn’t all his own fault.

When Terrell said, “I guess the party is over,” he was right in characterizing the last six years as a kind of party. Except for having to change majors twice and failing some courses, he had enjoyed his friends, his sports car, his dates and spending money without any worries.

Of course, at times, Terrell knew things weren’t right, but simply ignored those moments of doubt.

Terrell’s mistakes are fairly obvious, but the mistakes behind them are less so. They were made by his parents.

Parents want what is best for their children and sometimes that leads them to say yes when no is what is needed. However, there are two other even bigger causes for mistakes parents frequently make in guiding their children’s postsecondary education choices. The first is being overwhelmed by the complexity of postsecondary choices and the second is having too little understanding of personal finance.

Postsecondary education is a complicated matter. For the most part, the guideposts from kindergarten through 12th grade are clear while the road beyond 12th grade is filled with guideposts that are confusing and often contradictory. Judging by the continuous articles in newspapers and online as well as the talk in most high schools, all roads lead to college. Not a two-year community college but a four-year college. Teachers, school counselors, parents and students all speak glowingly of attending college.

Of course, they all acknowledge that there are other choices. For example, a trade school or an apprenticeship is good for some. Entering the military or going to work is good for others. But “That’s not for me,” Terrell probably said, and his parents probably said, “Not for our son.”

“What shall I do after I graduate from high school” is possibly the most important question to ask, and it is likely a question without any certain answer. This is because the road from kindergarten to the present is so clearly marked, even if not always easy. But now, you must build your own road. A daunting task but one that can be made at least manageable with a store of knowledge about personal finance and about the primary postsecondary opportunities that are available (college, community college, a job, the military, apprenticeships and technical school).

We have said before that personal finance is perhaps the most important course you were never taught. If that is so for you, there are many self-help resources to improve your financial literacy. A good way to do this is to make it a family affair.

Terrell and his parents had too little understanding of personal finance. While at college, his parents provided him with a credit card and no restrictions on its use. He regularly spent more money than he or his parents had, and yet they continued to pay his credit card bills, pay for his sports car and continued to pay for college through six years.

To do this, Terrell’s parents repeatedly took out parent PLUS loans and even asked his aunt to cosign a loan for him. Neither Terrell’s parents nor his aunt understood the consequences of cosigning a loan.

Terrell isn’t a bad young man and his parents aren’t bad parents. Instead, they are simply examples of students and families who make serious mistakes because they lack the knowledge to avoid them. For this reason, it is important to begin acquiring this knowledge as early as possible so that parents and their children can grow together in an understanding of the terribly complicated landscape beyond high school, a landscape that is full of opportunity waiting for those prepared to seize it.