College and student loan.jpg

Almost 40 percent of high school graduates accepted for college admission ultimately do not attend the following year. The reason? College is expensive: The average college graduate emerged with about $30,000 in student loans in 2015.1

So you’ve got to wonder, is it worth it to graduate with that much debt, especially these days when job security can be a challenge? Parents all over America may ask themselves this question. After all, for decades a college education has been considered the key to getting a good job and pursuing an upper-middle-class lifestyle. But with stagnant wages, many college students may not find jobs that pay enough to cover those student loans while still paving the way for their financial future.

Thankfully, there is a movement to open up access to college education. One online education phenomenon that has exploded in popularity since 2011 is the MOOC, or “massive open online course.” They started out being free, short courses available to anyone with access to the internet. Today, many prestigious universities offer these courses, including Caltech, Harvard, MIT, Stanford, Oxford and the Sorbonne.2

With such widespread, even global, acceptance, many in education are pondering whether MOOCs offer a solution to two common problems with our higher education system: access and cost. Today, 93 percent of the global population lacks the ability to receive a higher education for geographic or economic reasons, and MOOCs can help to avoid conflict with both.3

There are several reasons why college tuition has increased so much. One is that individual states used to cover up to two-thirds of state-funded university budgets. Now they cover only about half, which means parents, students and student loans must cover that deficit. A second reason is that more money is allocated to pay for non-academic staff at colleges and universities; twice as much as in the past. A big part of that represents what many believe to be unreasonably high compensation for top university administrators contributing to higher education costs, especially relative to what professors are paid.4

This may be why massive open online courses have become so popular in recent years; there is less administrative and bureaucratic involvement in these courses. Between 2015 and the end of 2016, the number of users who registered for at least one massive open online course grew from 35 million to 58 million worldwide.5 More than 700 universities now offer 6,850 online courses, with business and technology being the most popular subjects. In fact, what started out as a free education movement has now added paid certificate and degree programs. This shift in business model is beginning to redefine MOOCs’ role in the education marketplace.6

Even campus-based colleges have joined the online education bandwagon. Today, most courses comprise online and classroom lectures; face-to-face and Facetime meetings with professors; online interactions with instructors and classmates for study sessions and projects; social media discussions and other web-related activities.7

As for the implications of completing a degree online, what was once a heavy stigma may be changing as more employers get their own experiences with online coursework. In fact, research has found that many online graduates from respected brick-and-mortar universities have the same chances of finding a job, getting a raise or being promoted as students who earned their degree on campus.8

Of course, any education technology, innovation or tool will have its own set of drawbacks and limits. However, it is promising to see universities adjusting the traditional model to help make college more affordable and accessible. Whether your child or grandchild prefers a traditional college education or is open to nontraditional types, we can help you create strategies utilizing insurance products to help put college within financial reach.

{{cta(‘d55738b2-141c-4f75-8c13-27fc947dd75e’)}}

Content prepared by Kara Stefan Communications

1 Robert Ubell. IEEE Spectrum. Jan. 23, 2017. “Can MOOCs Cure the Tuition Epidemic?” http://spectrum.ieee.org/tech-talk/at-work/education/can-moocs-cure-the-tuition-epidemic. Accessed Jan. 31, 2017.

2 Rosamond Hutt. We Forum. Dec. 13, 2016. “You can now take a course at the world’s best universities for free.” https://www.weforum.org/agenda/2016/12/you-can-now-take-a-course-at-the-world-s-best-universities-for-free-here-s-how-that-happened. Accessed Jan. 31, 2017.

3 Diane Luckow. Simon Frazier University. Jan. 3, 2017. “SFU MOOC a new route for students.” https://www.sfu.ca/sfunews/stories/2017/sfu-mooc-new-route-for-students.html. Accessed Jan. 31, 2017.

4Robert Ubell. IEEE Spectrum. Jan. 23, 2017. “Can MOOCs Cure the Tuition Epidemic?” http://spectrum.ieee.org/tech-talk/at-work/education/can-moocs-cure-the-tuition-epidemic. Accessed Jan. 31, 2017.

5 Natalie Marsh. The PIE News. Jan. 4, 2017. “MOOC users reach 58 million globally.” https://thepienews.com/news/edu-tech/mooc-users-reach-58-million-globally/. Accessed Jan. 31, 2017.

6 Ibid.

7 Robert Ubell. IEEE Spectrum. Jan. 30, 2017. “What Do Employers Really Think About Online Degrees?” http://spectrum.ieee.org/tech-talk/at-work/education/what-do-employers-really-think-about-online-degrees. Accessed Jan. 31, 2017.

8 Ibid.

 

We are an independent firm helping individuals create retirement strategies using a variety of insurance and investment products to custom suit their needs and objectives. This material is intended to provide general information to help you understand basic financial planning strategies and should not be construed as financial advice. All investments are subject to risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. 

The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions. If you are unable to access any of the news articles and sources through the links provided in this text, please contact us to request a copy of the desired reference.

Was this information helpful? Should we publish more like this?
YesNo