1. Rashida Grant Zachary Easterling David Nowlin Sylvia Telesz “Of course there's a lot of knowledge in universities: the freshmen bring a little in; the seniors don't take much away, so knowledge sort of accumulates....” -Dr. A Lawrence Lowell www.basicjokes.com www.basicjokes.com

2. Determining Factors of College Pursuit  Prestige  Expectations of others  Personal value placed on education  Parent educational attainment Returns of College Education  Higher wages  Increased efficiency and production in market  Ability to make better consumption decisions  Better health and access to healthcare  Annual increase of lifetime earnings

3. ∑ CtCt (1+r) t - C 0 T t=1 NPV = Net Present Value: the accumulated value of all net income discounted by the average inflation rate C 0 = L 1 *(1+r) 5 + L 2 *(1+r) 4 + L 3 *(1+r) 3 + L 4 *(1+r) 2 + L 5 *(1+r) Cash flow- initial outflow for a student, L x is annual amount borrowed NLA = {GLA -[(GI * 0.08) – (GLA * 0.0421)]} New Net Loan Amount: equal to the residual monies left over from a payment derived from 8% of total Gross Income after paying 4.21% interest on a federal student loan subtracted from the previous gross loan amount.

4. Topel: The Private and Social Values of Education (2004) Intangible Benefits of College Education More efficient parenting (better develops child’s human capital) Effect of one’s person education is internalized by others (family members, peers, increased workplace efficiency) Trostel: The Fiscal Impacts of College Attainment (2007) College students tend to pay much more in taxes Total government spending per college degree is negative College education pays for itself: increased productivity and standard of living College still remains a good investment…

5. Discount Rate = 2.94% BLS: Consumer Price Index, using average inflation from 1980-2008 Average Salary Increase = 3.9% Ken Abosch, head of Hewitt Associate's compensation practice Entry Level Workers Starting Salary Clerical Workers: $9.83Fast Food: $7.62 Data Processing: $10.40Non-Commission Sales: $19.94 Factory Labor: $14.18Retail: $9.70 College Expense (expected to rise 8% until graduation, model adds 20% to base expenses for a Master’s degree) Per Semester: $5,000 (included $500 for supplies)

6. Bachelor’s Degree - initial salary: $34,000 Retirement age: 67 Present Value= $2,108,935.14 Future Value= $8,286,555.96 Master’s Degree - initial salary: $47,900 Retirement Age: 67 Present Value= $2,574,689.75 Future Value= $10,598,558.20 Loan Amount- Principle= $61,135.85 Interest= $45,468.74 Total= $106,604.59 paid back in 24 yrs Loan Amount- Principle= $96,523.28 Interest= $84,391.62 Total= $180,914.90 paid back in 27 yrs

7. Salaries for Non-College Graduate OccupationsOccupation Hours Worked per Week Average Annual Salary Max Hourly Rate Max Annual Salary Clerical40$12,046.00$20.00$41,600.00 Data Processing 40$20,446.40$20.00$41,600.00 Factory Worker 40$29,494.40$35.00$72,800.00 Fast Food/ Counter Sales 40$15,849.60$12.00$24,960.00 Retail Sales 36$18,158.40$15.00$28,080.00 Sales36$37,327.68$28.00$52,416.00

8. OccupationBA/BS Total Earnings BA/BS Discounted Earnings Master’s Total Earnings Master’s Discounted Earnings Clerical30 Years35 Years30 Years35 Years Data Processing 30 Years35 Years30 Years35 Years Factory45 Years55 Years40 Years45 Years Fast Food/ Counter Sales 20 Years25 Years 30 Years Retail Sales25 Years30 Years25 Years30 Years Non- Commission Sales 40 Years50 Years35 Years45 Years Table 1: Total and Discounted Equal Earnings of College Graduates and Non-Graduates

10. Barrow, L., and C. E. Rouse. 2005. Does college still pay? The Economists’ Voice 2, (4): 1-8. Levin, H., C. Belfield, P. Muennig, and C. Rouse. 2007. The costs and benefits of an excellent education for all of America’s children. Retrieved March 17, : 2007. Bureau of Labor Statistics. Consumer Price Index - All Urban Consumers. US Department of Labor. http://data.bls.gov/servlet/SurveyOutputServlet?data_tool=latest_numbers&series _id=CUSR0000SA0&output_view=pct_1mth (10 November 2008). Bureau of Labor Statistics. National Compensation Survey 2006. http://www.bls.gov/ncs/ocs/sp/ncbl0848.pdf (1 December 2008). Bureau of Labor Statistics. Occupational Employment Statistics. http://www.bls.gov/oes/current/oes_oh.htm#b13-0000 (6 December 2008). Dr. Al, Lee. Finding Percentages in Salary Increase for 2008. Payscale: Ask Dr. Salary. http://blogs.payscale.com/ask_dr_salary/2007/10/finding-percent.html (6 December 2008). Sangrillo, Karen. “All About ‘Free Money,’ and How to Earn It.” Bucks County Courier times, 5 November 2006. Topel, R. 2004. The private and social values of education. Education and Economic Development: 18-9. Trostel, P. A. The fiscal impacts of college attainment. US Department of Education. Federal Student Aid. http://studentaid.ed.gov/PORTALSWebApp/students/english/FFEL_DLInterestRat es2008-09.jsp (3 December 2008).