Like
Canadian geese migrating in anticipation of winter, stock markets moved south
last week in anticipation of monetary tightening. Minutes from the January Federal
Reserve Open Market Committee meeting were released mid-week. After reviewing
them, many analysts decided that quantitative easing may begin to taper off
before the end of the year. Not everyone agreed with this interpretation;
however, it caused major U.S. stock markets, as well as some Asian and European
stock markets, to dip lower. Many markets recovered ground before Friday, but
in the U.S., only the Dow Jones Industrial Index finished the week with a gain.
Interestingly, expectations that
the Fed’s quantitative easing program may end relatively soon had little effect
on Treasury bond markets. This seems counterintuitive because an end to
quantitative easing (the Fed’s program of buying Treasuries to create liquidity
and encourage economic improvement) could potentially lower demand for these securities
and cause Treasury yields to move higher. Instead, yields moved lower last
week. Experts suggested that bond investors’ apparent lack of concern may be rooted
in the belief that the Federal Reserve will not ease interest rates even if it
changes its policy on quantitative easing. In previous statements, the Fed has
said it will not modify interest rates until unemployment rates and inflation
reach specific targets.
Last week, The Conference Board
announced that its Leading Economic Index® (LEI) for the U.S. showed America’s
economy gaining some momentum. The LEI tracks 10 leading economic indicators to
gauge short-term economic outlooks. The Conference Board’s LEI for China also signaled
improvement. While this may prove to be good news, the impact of sequester – $85
billion in automatic spending cuts that are scheduled to begin in early March –
on America’s economic growth remains unknown and highly debated.
It’s important to look at more than tuition and fees when planning
for college. That’s because tuition and fees account for just about 39 percent of
the total budget for students who live on campus at public four-year state colleges
and universities. Tuition and fees are about 20 percent of the budget for
students who live off campus at public two-year state colleges and universities.
If
that’s an unwelcome surprise, you won’t be thrilled to learn that during the
2012-2013 school year the average college budget for a student who lived on
campus and attended an in-state, four-year public institution and was more than
$22,000. That budget included:
·
Tuition
and fees
·
Room
and board
·
Books
and supplies
·
Transportation
·
Other
expenses
On
average, the same items for a student who commuted to a two-year, in-state
public college ran about $15,500. At a private non-profit, four-year college or
university the average budget was more than $43,000.
Making college
possible
So,
how do students and their families afford college? The good news is that
financial aid is available for many. Total financial aid for full-time students
was more than $14,000 on average during the 2011-2012 academic year (the most
recent data available). In addition, according to the College Board,
undergraduate students received financial assistance from a variety of sources:
·
39
percent received federal loans and work/study
·
26
percent received Pell and other federal grant programs
·
18
percent received institutional grants
·
9
percent received federal education tax credits and deductions
·
5
percent received state grants
·
4
percent received private or employer grants
Is it worth it?
Scrimping
and saving to pay for college often has a significant pay off. The median income
for a person with a bachelor’s degree who worked full-time, year-round in 2008
was almost $56,000. That’s about $22,000 more than the median income for a high
school graduate. In addition, the unemployment rate for college graduates was
significantly lower than that of high school graduates during 2008 (the most
recent data available).
Weekly Focus – Think About It
“Education is the
ability to listen to almost anything without losing your temper or your
self-confidence.”
--Robert Frost,
poet
No comments:
Post a Comment