Student Loan Blog : BusinessWeek

2009 College Grads: If You Can Find a Job, Expect a Lower Salary

Student Loan Girl — Thu, 16 Apr 2009 21:14:00 GMT

Getting a decent job this spring is going to be tough: not only are employers projecting that they’ll hire 22 percent fewer college graduates, but they also plan to pay those graduates less than their peers were paid last year, according to The National Association of Colleges and Employers (“Most 2009 College Grads Find Lower Salary Offers,” BusinessWeek, April 8, 2009).

Last year, a typical senior graduating in 2008 was offered a salary of $49,624, while a senior graduating in 2009 can expect almost $1,000 less. Just six months ago, the NACE reported that salaries were up 7.6 percent year-over-year. Now, however, the percentage of disciplines reporting a decline in salary offers has tripled, BusinessWeek reports.

Some majors, including engineering and accounting, are doing better than others, says Leslie Kohlberg, the undergraduate career services director at the University of Wisconsin at Madison. Engineering majors, for example, are getting offers that are on average 2.3 percent higher than last year at $58,438, while accounting majors have seen their offers climb by an average of 2 percent to $48,438.

“The projections for the future are that there will be continuing demand for the accounting majors,” says Richard White, undergraduate career services director at Rutgers University.

Business Majors in Demand

Although business majors as a whole showed only marginal improvements in salary offers over 2008 — with the average offer rising just 1 percent to $46,973 — business administration and business management majors did significantly better, with the average offer increasing 3.6 percent to $45,778. Finance majors also reported healthy hikes in their offers, up 2.3 percent to $49,754.

By comparison, recent graduates with liberal arts majors aren’t fairing as well as their business peers, with offers remaining flat at $36,807 compared to 2008 salaries.

And computer science majors, typically among the highest paid professionals, are seeing a drastic 11-percent drop in their salary offers compared to last year, which are down from an average of $65,379 last year to an average of $58,837 this spring.

Internships: Hope on the Horizon

Since graduates will be facing stiff competition when attempting to find full-time employment, some may opt to get their foot in the door with a prospective employer beforehand by landing an internship.

According to figures from their 2009 survey, NACE says that internship hiring is down 21 percent, yet, internship pay is up 5 percent. Pay is up partially because employers, holding out hope that the economy will rebound by next year, want to maintain a strong talent pipeline of new hires, BusinessWeek suggests.

Many employers are bumping up internship salaries and are even considering expanding benefits to ensure they get the best possible candidates for future positions, said Camille Luckenbaugh, who conducted the internship survey for NACE.

“Employers,” she added, “are saying ‘we don't have a lot of jobs but these [internship] programs are still really important to us and we still need to remain competitive.’ ”

Share this post: email this | del.icio.us | reddit

Foreign Graduate Students Say ‘No Thanks’ to U.S. MBA Programs

Student Loan Girl — Fri, 27 Mar 2009 18:44:00 GMT

Concerned about future job prospects, international graduate students are turning down offers from prominent American business schools and instead choosing to pursue graduate programs outside the United States, BusinessWeek reports (“World to U.S. B-Schools: Thanks, But No Thanks,” March 19, 2009).

Nishant Banore, an MBA school applicant from India, received an offer of admission along with a $30,000 fellowship from the Anderson School of Management at the University of California Los Angeles and considered himself one step closer to achieving his dream of an American education.

However, when Banore looked at the deteriorating U.S. economic climate, the new restrictions on hiring foreign workers, and the lack of U.S. job prospects, he decided that an American MBA was simply too risky.

“I don't think I can leave my family’s future on luck and hope,” Banore, who lives in Mumbai, told BusinessWeek. He turned down the admissions offer from Anderson to attend one of the top business schools in his home country, the Indian School of Business.

U.S. Policy Makes Hiring Foreign Students Difficult

Banore’s decision comes at a time when U.S. public policy regarding international students is becoming increasingly unfriendly. When the government bailed out failing financial institutions last year and injected these corporations with taxpayer money under the Troubled Asset Relief Program, it imposed strict limitations regarding the hiring of foreign workers who needed work visas.

Now a growing number of foreign students are planning to return home after graduation, according to a study by the Ewing Marion Kauffman Foundation released earlier this month, with many students believing that their job prospects may be better at home.

Survey results indicate that students are afraid they won’t be able to land a job in the United States after graduation, and a majority of these students — including 85 percent of Indian students and 72 percent of Europeans — think they may have difficulty getting U.S. work visas.

Lack of Graduate School Funding Limits Students’ Options

In addition to having fewer employment options, many foreign graduate students are facing another challenge: getting the money they need for school. Previously, foreign students could take advantage of loan programs that allowed them to secure as much as $150,000 in student loans without needing a co-signer, BusinessWeek reports. Now, since the banks offering these programs have exited the student loan market and many of the nation’s top business schools have yet to find replacements, foreign students have few options to fund their education.

According to the International Institute of Education, of the 623,805 foreign students enrolled in the United States in 2007, 276,842 were graduate students, more than 16 percent of whom were studying in graduate finance or MBA programs.

This academic year American business schools may see fewer foreign students enroll, said Dave Wilson, president of the Graduate Management Admissions Council, an international association of business schools, particularly from China and India which have historically provided American business schools with a large number of applications.

“You look at the cost, the difficulty of getting financing — and then suddenly our wonderful Congress decides they don’t want you to come,” Wilson said. “I worry people are not going to come at all.”

Share this post: email this | del.icio.us | reddit

Groups Say Forgiving Student Loan Debt Would Boost Economy

Student Loan Girl — Thu, 26 Mar 2009 00:16:00 GMT

As student loan debt continues to rise — jumping to $20,098 per graduating student loan borrower in 2007 from $18,796 in 2006 — and employment prospects continue to worsen, college graduates are experiencing greater difficulty repaying their student loans, and some of them have said enough is enough, BusinessWeek reports ("Asking for Student Loan Forgiveness,” March 24, 2009).

In 2008, borrowers fell behind on nearly $131 billion in private student loan payments, according to FinAid.org. There were $544 billion in federal student loans left outstanding for the fiscal year 2009, up from $502 billion in 2008, the U.S. Department of Education reports.

Student Borrowers Use Facebook to Advocate A Break From Loans

While Robert Applebaum hasn’t fallen behind on his student loan payments from law school, he has become frustrated with his mounting student loan debt. The New York attorney saw his $80,000 student loan debt balloon to $100,000 after he put his loans into forbearance for five years when he was working a low-paying job at the Brooklyn District Attorney’s Office.

Fed up with his rising debt and with recent media reports of banking executives from bailed-out banks receiving hefty bonuses or spending taxpayer money on million-dollar office renovations, Applebaum took his gripes online. He used Facebook as a soapbox to promote his own idea for stimulating the economy: canceling student loan debt. He quickly found out he wasn’t the only one interested in this idea.

Within the first two weeks of starting the Facebook group “Cancel Student Loan Debt to Stimulate the Economy,” Applebaum gained 2,500 followers. Just two months later, the group now has more than 138,500 members.

“Despite having a law degree, I’m middle class and I don’t have any money at all,” Applebaum says. “I don’t own a house or a car. My only assets are my couch and television.”

More Change Needed But Reforms Are Taking Shape

Applebaum hasn’t been the only one to take to the Internet to advocate for student loan forgiveness. Alan Collinge, founder of the website StudentLoanJustice.org, has used his site as well as in-person visits with elected officials throughout the country to increase awareness about the problems in the student loan system. Collinge has advocated for a return of what he calls “basic consumer rights” to student loan borrowers. Currently, student loans are one of a few types of consumer debts that are almost impossible to discharge in bankruptcy proceedings.

“Until someone shows me why student loans should specifically be exempt from bankruptcy protections, it’s definitely a fight worth fighting,” Collinge said.

Although it may be some time before the government agrees to forgive student loan debt, legislators have taken steps to make student loan payments more affordable.

On July 1 of this year, the government will implement the Income-Based Repayment plan, which caps borrowers’ monthly student loan payments at 10 percent of their gross income for 25 years, after which borrowers’ remaining debt will be forgiven. And the government’s Public Service Loan Forgiveness program allows borrowers to make income-based repayments on their student loans and have those loans discharged after 10 years of working in public service.

NextStudent, college, college loans, student loans, student loan forgiveness, discharge student loans, student loan debt, college graduates, graduate debt, BusinessWeek, Facebook groups, private student loanns, federal student loans, Finaid.org, U.S. Department of Education, Educaiton Department, Robert Applebaum, Brooklyn District Attorney's Office, cancel student loan debt, canceling student loan debt. Alan Colinge, student loan justice, student loan system, student loan borrowers, bankrupcty debt discharges, affordable student loan payments, student loan legislation, income based repayment plans, public services loan forgiveness

Share this post: email this | del.icio.us | reddit

Ohio High School Seniors Get College Credit for Free

Student Loan Girl — Mon, 09 Feb 2009 21:08:00 GMT

Nearly 400 high school seniors in Ohio are taking advantage of a pilot program that allows them to enroll in and attend college a year early for free, according to BusinessWeek (“Ohio Students Jump Early to College for Free,” Feb. 5, 2009).

Supporters of the Seniors to Sophomores initiative, including Gov. Ted Strickland, hope the prospect of a free education will entice more Ohio students to pursue a college education in a state where only one in five adults is a college graduate.

Currently, 375 high school seniors are participating in the dual-enrollment program, which allows students to receive both high school and college credit for the classes they take on college campuses, but they don’t have to pay a dime of their college expenses. These students take college courses either full- or part-time but are still officially enrolled in high school.

Kristen Figg, associate dean at Kent State University Salem campus, supports the program, but says there is still some risk involved for the students.

“If they don’t pass the course then they are going to have a problem graduating from high school.”

High school senior Catherine Packer describes the program as an academic challenge, “There’s no leeway when you’re taking college classes. The teachers expect more.” But the senior, who is dually enrolled at Mifflin High School in Columbus and at Ohio State University, says it’s worth it because “The environment is different. Students actually want to learn.”

Ohio is not the first nor is it the only state to offer dual-enrollment programs; dual-enrollment was initiated in Iowa in 1997 and currently only four states don’t offer statewide programs. However, BusinessWeek reports, not all programs include free tuition — 22 of the 46 states with dual-enrollment programs require students to pay tuition.

Share this post: email this | del.icio.us | reddit

Commencement Speakers to Remain Upbeat Despite Slowed Economy

Student Loan Girl — Thu, 01 May 2008 21:36:00 GMT

This year’s MBA graduates will be seeing a sluggish economy and perhaps even bleak job prospects. Yet many high-profile business leaders returning to their alma maters as commencement speakers are expected to remain upbeat in their remarks to students, writes Kelly Bronk of BusinessWeek (“Graduation Talks Accentuate the Positive,” April 24, 2008).

Top business schools that have landed Jeff Bezos, CEO of Amazon, or Jeff Immelt, CEO of General Electric for their commencement ceremonies, tend to want their speakers to keep things positive, yet realistic when addressing students this year.

Graduation “is all about the kids,” James Ellis, dean of the University of Southern California Marshall School of Business, told Bronk. Holli Budd, associate dean for MBA administration and external affairs at the University of Rochester Simon Graduate School of Business commented, “It’s a time to celebrate their success and their future.”

In an effort to do just that, J. Peter Simon, son of Rochester business school's late benefactor William E. Simon, will tend toward optimistic remarks as opposed to focusing on the doom and gloom of a potential U.S. recession.

Robert Rodriguez, CEO of First Pacific Advisors and alumnus of USC’s Marshall School, may convey similar sentiments to students. Dean Ellis expects Rodriguez to empathize with students regarding the difficult economy, but also tackle what students can do to conquer the challenges ahead.

Share this post: email this | del.icio.us | reddit

MBAs Want to “Make a Difference,” but Say Pay Is More Important

Student Loan Girl — Wed, 23 Apr 2008 23:46:00 GMT

Today’s MBA students aren’t just out for money — 25 percent of them claim they’re looking for a job that will allow them to impact or contribute to society, writes Kelly Bronk of BusinessWeek about a recent survey by The Aspen Institute (“The Do-Good Disconnect,” April 21, 2008).

"It doesn't mean that material success and financial success are not important to them, but there is another goal in there now that needs to be balanced with those," Daniel Diermeier, a Northwestern University Kellogg School of Management professor, told BusinessWeek.

The “Where Will They Lead?” survey asked 1,943 MBA students at 15 of the highest-rated business schools across the United States, Canada and England about their attitudes toward business and society. This year, students who said they wanted to make a difference in the world increased 10 percent, compared to the results of a similar survey conducted in 2002.

However, in spite of the growing number of self-proclaimed do-gooders, 49 percent of these students still ranked pay was an important factor when looking for a desirable job and 63 percent said that finding a position that challenged them was a key issue.

When questioned about business ethics issues, 83 percent of MBA students surveyed said they anticipated being asked to do something on the job that conflicted with their values, writes Katherine Mangan of The Chronicle of Higher Education (“Business Students Say Their Idealism Is Blunted by Corporate Recruiters,” April 21, 2008).

Yet, less than half said they would object to what was being asked of them. Instead, most indicated they would either look for another solution or leave the company.

Share this post: email this | del.icio.us | reddit

Bear Stearns Takeover Leaves Business-School Students Scrambling

Student Loan Girl — Mon, 14 Apr 2008 19:13:00 GMT

BearStearns CEO, Jimmy Cayne, seems to have been the only former Stearns employee to make it out of the JPMorgan Chase buyout relatively unscathed — at least in non-CEO terms — walking away with $61.3 million in sold shares. Even though, in his own high-priced executive world, Cayne took his buyout at a massive loss: Just a year ago, his entire Stearns portfolio was valued at almost $1 billion.

Former Bear Stearns employees, along with Cayne, saw the value of their shares plummet 85 percent in the buyout to a mere $10 a share. Bears Stearns shares were trading at about $67 two weeks before the buyout and as high as $170 a year ago.

Now add to the list of people adversely affected by the Stearns debacle, business-school students whose full-time job and summer internship offers from Bear Stearns have recently been rescinded, according to a BusinessWeek article by Alison Damast (“Bear Stearns Rescinds Job Offers,” April 3, 2008).

A spokesman from JPMorgan Chase won’t disclose how many job offers to soon-to-be college graduates and MBAs have been affected by the dissolution of the firm, at least 12 students at New York University’s Stern School of Business have already received their unhappy phone calls from the company.

According to The New York Times, the final count of rescinded job and internship offers will tally in the dozens (“J.P. Morgan Said to Withdraw Bear Job Offers,” April 3, 2008).

Students Left Out in the Cold

When JPMorgan announced its takeover of failing Bear Stearns on March 16, the status of the student jobs and internships was still uncertain. It wasn’t until April 2 that students who were offered positions in the investment banking, sales, and trading and research units of the former company were notified about the fate of their job and internship positions.

Over the next few weeks, as the school year draws to a close, these students will be frantically trying to nail down offers for replacement positions.

“I’m not sure what we are all supposed to be doing now with the few weeks before start-dates, but I would imagine that, like me, the other 25 or so students who were to start as associates are all in a mad scramble to figure out what the future holds,” one student told BusinessWeek.

In the meantime, students who had their full-time job offers rescinded will be allowed to keep their signing and relocation bonuses and will also be able to use JPMorgan’s career-service resources.

And for those students who will no longer be interning with the company this summer, JPMorgan has offered a full 10 weeks’ pay if they find a new summer position with a nonprofit organization instead.

To Fear or Not to Fear the Economy

Although Bear Stearns is the only investment firm so far this recruiting season to withdraw already-extended job offers, fears about the current state of the economy and its effect, in particular, on the financial-services sector have left business-school students and administrators wondering about the security of jobs and job offers with other firms.

To some, the rescinded Bear Stearns offers recall the results of a similar economic downturn in 2001, Damast writes, when several companies that had hired students were forced to scale back.

Tom Kozicki, board president of the MBA Career Services Council, says he believes the Bear Stearns situation doesn’t necessarily foreshadow what lies ahead for the financial industry, but is definitely something business students need to keep in the back of their mind as they prepare for this particularly shaky job market.

“It sounds like the shoe has dropped. I think it’s unfortunate, but I don’t think it comes as a surprise to most people,” Kozicki told BusinessWeek. “The economy is shaky, [Fed Chairman Ben] Bernanke has indicated that he thinks we are going into a recession and I think that students need to be prepared for some uncertainty in the market.”

Share this post: email this | del.icio.us | reddit

By the Numbers: Top 10 Undergraduate Business Schools

Student Loan Girl — Fri, 11 Apr 2008 18:53:00 GMT

Are you a future MBA who sees yourself building the next Trump–like empire or heading up the new 21^st-century tech giant that will finally unseat Microsoft?

If you’re planning on joining the 20 percent of college students who major in business and you’re on the hunt to find the best business school for undergrads that could give you your head start on mega-mogul success, here’s some help.

We’ve got the vitals on the 10 best from BusinessWeek’s list of the country’s Top 50 Undergrad Business Programs for 2008.

The Wharton School of the University of Pennsylvania
Philadelphia

The world’s first collegiate business school, established in 1881, and BusinessWeek’s number-one program for the third year in a row.

Previous Rank: 1
Tuition: $35,916
Full-Time Enrollment: 2,519
Undergraduate Admission Rate: 16%
School Mascot: the Quakers

McIntire School of Commerce at the University of Virginia
Charlottesville, Virginia

Previous Rank: 2
Tuition: $8,690
Full-Time Enrollment: 652
Undergraduate Admission Rate: 34%
School Mascot: the Virginia Cavaliers

Mendoza College of Business at the University of Notre Dame
South Bend, Indiana

The Mendoza College offers undergraduate degrees in accountancy, finance, marketing, and management (with your choice of management track in consulting, entrepreneurship, or information technology).

Previous Rank: 7
Tuition: $35,187
Full-Time Enrollment: 1,626
Undergraduate Admission Rate: 29%
School Mascot: the Fighting Irish

Cornell University
Ithaca, New York

Previous Rank: 10
Tuition: $19,291
Full-Time Enrollment: 708
Undergraduate Admission Rate: 37%
School Mascot: the Big Red Bears

Goizueta Business School at Emory University
Atlanta

Previous Rank: 4
Tuition: $34,336
Full-Time Enrollment: 622
Undergraduate Admission Rate: 44%
School Mascot: Dooley, the Spirit of Emory

Ross School of Business at the University of Michigan
Ann Arbor, Michigan

Combining a liberal arts and business education, the three-year Bachelor of Business Administration program allows you to apply during your freshman year of college and begin the BBA program as a sophomore. If you’re a high school senior, you may be still be able to apply for the Ross BBA program through the Preferred Admissions process.

Previous Rank: 5
Tuition: $12,585
Full-Time Enrollment: 1,069
Undergraduate Admission Rate: 49%
School Mascot: the Wolverines

Marriott School of Management at Brigham Young University
Provo, Utah

Earn your Bachelor of Science in accountancy, management, or information systems.

Previous Rank: 8
Tuition: $3,840
Full-Time Enrollment: 1,616
Undergraduate Admission Rate: 74%
School Mascot: Cosmo the Cougar

New York University Stern School of Business
New York

Previous Rank: 9
Tuition: $36,524
Full-Time Enrollment: 2,335
Undergraduate Admission Rate: 24%
School Mascot: the Bobcats

Massachusetts Institute of Technology Sloan School of Management
Cambridge, Massachusetts

Previous Rank: 6
Tuition: $34,986
Full-Time Enrollment: 246
Undergraduate Admission Rate: 12.5%
School Mascot: the Beaver

McCombs School of Business at the University of Texas at Austin
Austin, Texas

Choose a major in accounting, finance, international business, marketing, management information systems, management, supply chain management, or engineering route to business for your BBA.

According to the McCombs website, more current CEOs in the S&P 500 have graduated from McCombs than from any other public business school.

Previous Rank: 13
Tuition: $8,908
Full-Time Enrollment: 3,969
Undergraduate Admission Rate: 52% (in 2006)
School Mascot: Bevo the Longhorn

Share this post: email this | del.icio.us | reddit