Category Archives: Finance

Illinois, their budget and higher education

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The Illinois Legislature has been locked in a budget stalemate with Gov. Bruce Rauner (R) since last summer. Rauner sought a 31.5% cut to higher education, but legislators wanted to limit the cut to 8.6%. In the meantime, schools have received no funds from the state government, nor have students who rely on state-awarded Monetary Award Program (MAP) grants.

To keep their doors open, schools are deferring maintenance, redistributing funds designated for special projects, laying off staff, cutting sports teams, and considering cutting academic programs.

This is really sad. It’s a microcosm of what’s happened in the country nationally. Two sides fighting over things that do not effect them directly, but they are personally invested in, to the point of where they cannot (or will not) compromise.

And those most ill equipped to endure this kind of high level gridlock, get nothing out of it but suffering. The people who’s lives are being stymied could care less about the ideological battle that politicians are waging, and just want to be able to go to class, tend to the work of educating students and maintaining and operating a university.

This once again shows what our leadership has devolved into, they are so wrapped up in their “anger and ideals” that they are unable to agree on the the basic premise that regardless to how they feel about work still needs to be done. And they’re not getting it done. Most of the time, one’s boss is more interested in the task being completed than anything else. With this kind of failure to carry out their duties, all these “leaders” should be replaced for people who are fit for government, because these people are not.

 

notes: eab

Tuition Exemption for Texas Veterans: Open Discussion

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Some public institutions of higher education in the state of Texas have requested funding from the state legislature to cover or subsidize the cost of tuition for veterans. Under the Hazlewood Act, Veterans and their dependents and spouses are exempt from paying tuition for up to 150 hours at certified institutions. Even though the act is mandated by the state government, the institution or system has the responsibility of paying for the tuition. The University of Houston system has requested full funding from the state legislature because of the great expense the university system has had in the past covering tuition. Here is a link to a story from The Cougar regarding this matter: http://thedailycougar.com/2015/04/29/uh-seeks-hazlewood-funding-legislature/

What do you think: Who should pay for tuition for veterans under the current Hazlewood model? Should it be an institutional or state responsibility? Please feel free to post comments below or tweet them @BigBlackScholar using  #HazlewoodTX

Student Loan Debt Hits a New High

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1.2 Trillion dollars.

Let that sink in and after you get finished with that, this site will help you visualize what a trillion dollars actually is

In one way I reckon that large student debt is evidence that people are seeking their education, which is a wonderful thing. It enriches one’s life in numerous way, not just having the parchment that makes you acceptable to employers.
But on the other hand, I cannot help but ponder why an education is causing so many SO much financial burden. $1000+ student loan repayments, just 6 months after you’ve graduated? What kind of situation do the holders of these loans expect graduates to be in?
If you look at it from a business standpoint, opportunities are rarely richer or more guaranteed than loaning money to people who need to get an education in order to make money and hope to have a middle class lifestyle. It’s almost like ransoming education. School is so expensive, (or should I say the “better” schools)… it might be justified by the quality of education, but its also the weight that the degree holds, which allows for more opportunities for the holder, along with many other factors, but for loaners the more it costs for the learner the higher stream of income that one can expect. On $100,000 in student loans, one can expect a return of perhaps $125,000? Sweet! A college education is supposed to allow one to “make it”, but how can you make it when a mountain of student loan debt is weighing on you before you really have a chance to get started.
The first years of one’s career are the most lean, and they become even leaner when you have a $500 bill coming right along with it.

I propose that student loan debt be treated like a mortgage, because it is more akin to a lifelong investment than it is to a payday loan, which is what it seems like now. It should be structured at an interest rate that is no more that 1.25% and should be spread out over 30 years. That means a student borrowing $100,000 for the life of their education would be paying $105 a month. I think that is fair and solid. It would prevent predatory lending to students and allow them to not be burdened with a huge sum before they are able to establish themselves.

1.2 Trillion is a lot of money.

An Open Discussion on Money & Racism in the US

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Rascism

 

 

 

 

money

Racism and Money are both topics that spur much dialogue, debate, research, controversy, and a plethora of emotions.

Although some people believe that we are now a “post racist” society, there are many who still believe that because of historical institutional contexts, racism still very well exists in today’s society.

Moving along to the subject of money,

even typing the phrase “money in America” into Google brings forth a wide array of topics, resources, and information from images of the US dollar, to articles on the use of money as a form of social control, to money and politics, and even wealth inequality in America.

So let’s once again combine the two concepts “Money and Racism.” When I first think of these two concepts together, my mind instantly tries to make a correlation between the two and prompts instant questions like: Is money one of the institutional ideologies that contribute to racism? Is money one of the major reasons for the proliferation of racism in America? How did money and racism contribute to the success and decline of slavery in America? Does racism play into the economic disparities among racial/ethnic groups in the US? Is money a system of social control that involves racism in some way?

Again, there are certainly opposing views and opinions about all of these questions. In my opinion, our capitalist society yields both positive and negative influences on our economic and social positions as a nation, and racism definitely plays into this. We cannot deny that there is economic disparity within this country that is directly tied to racism. We also cannot deny that there are systems of oppression in place that contribute to the disparity of wealth but also contribute to the inability for certain people to progress economically. This means that our ideal of capitalism that we hold so near and dear in society is tainted and distorted.

One thing I believe that we can and should do is discuss this issue in a civil manner. While I continue to explore the correlation between these two concepts, feel free to take a look at other viewpoints/sources of info. on the web and comment that I have provided below.

I believe this to be a fascinating topic of discussion that is long overdue on BBS. Will you contribute to the discussion? Your contributions are strongly encouraged!

  1. American Money: The Economic Origins or Racism from BET News :   http://www.bet.com/news/national/2013/02/05/american-money-the-economic-origins-of-racism.html
  2. Racism is About Money and Power: The Race Card Project : http://theracecardproject.com/racism-money-power/
  3. Racism Influences How People Deal with money: Jezebel: http://jezebel.com/5795514/racism-influences-how-people-deal-with-money

Race and the New Economy

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This is an excellent read from Yes! magazine contributor Penn Loh: What’s the Role of Race in the New Economy Movement?

On a deeper level, race matters because the economy we currently have is deeply racialized. Race and racism are central to how the dominant economy functions, whom it serves, and who pays the costs of obscene wealth accumulation and environmental unsustainability. Race and class in the United States are inextricably intertwined, beginning with slavery and Native American genocide and continuing to this day with the struggle of immigrants. In short, how we live in and experience the economy differs drastically depending on our race and class.

I think that this is something that should surely be addressed because people of color have long been aware that they are ignored at the top and only are consequential when it serves the purpose of people who are already benefitting from the policies in place. Which is why many have no issue with resigning themselves from attempting to do better or insist on working outside of the common wisdom when it comes to finance.

The Crushing Weight of Student Debt

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from this Time article

Households headed by a young college graduate with student loans outstanding have a typical net worth of just $8,700—a pittance compared to the typical $64,700 net worth of similar households only with no student loans outstanding. But that’s just the start. Those with student loans have total debts of $137,010—nearly double the typical $73,250 indebtedness of those without student debt outstanding.

The title is only rich kids should go to college, I might have to agree as I can see for myself and others will be paying back student loans for at least 10 years, while trying to build a life with the education we’ve acquired.

Should the price of education be as much as your monthly rent? How much are we prepared to sacrifice in order to get the parchment that gets us to higher levels of income (hopefully)?

Seattle’s Mayor Proposes $15 per hour for Minimum Wage

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Yesterday, Seattle’s mayor Ed Murray announced a plan to raise the minimum wage to $15 per hour. If implemented, the minimum wage would continue to increase over the next 3-7 years until it reaches $15 per hour for workers. This plan comes as part of a nationwide push from the Obama Administration to combat inequality.

At a recent press conference Murray stated that Seattle can potentially “lead the conversation and the nation to address this growing problem of income inequality”.

Seattle is the first major US city to make this kind of commitment but the hope is that others will follow. The plan must still be approved by Seattle’s City Council.  If the plan is approved, it will give small businesses with fewer than 500 workers seven years to implement the plan. Large businesses would have three years.

Harvard Endowment

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Harvard earns enough money on interest from its endowment that it could offer free tuition to all students and still make profit on the interest.

 

I think that says enough on its own. There is also the fact that university endowments are tax exempt, and not required to spend any of its endowment… Harvard is an anomaly among universities, as it is the largest around, but its not unusual for universities to have huge coffers of excess cash:

Rank School Endowment Change from 2012
1 Harvard University $32,334,293,000 6.2%
2 Yale University $20,780,000,000 7.4%
3 University of Texas System $20,448,313,000 12.0%
4 Stanford University $18,688,868,000 9.7%
5 Princeton University $18,200,433,000 7.4%
6 Massachusetts Institute of Technology $11,005,932,000 6.8%
7 Texas A&M University System and Foundations $8,732,010,000 14.3%
8 University of Michigan $8,382,311,000 9.0%
9 Columbia University $8,197,880,000 7.1%
10 Northwestern University $7,883,323,000 10.7%
11 University of Pennsylvania $7,741,396,000 14.6%
12 University of Notre Dame $6,856,301,000 8.3%
13 University of Chicago $6,668,974,000 1.5%
14 University of California $6,377,379,000 7.0%
15 Duke University $6,040,973,000 8.7%
16 Emory University $5,816,046,000 6.5%
17 Washington University in St. Louis $5,651,860,000 8.1%
18 Cornell University $5,272,228,000 6.6%
19 University of Virginia $5,166,660,000 7.9%
20 Rice University $4,836,728,000 9.5%

via: cnn

One might wonder what good is it actually doing to have universities with these kinds of assets NOT doing anything to alleviate any of the financial burden on students that attend there. for instance, if you have 5 billion dollars a year flowing into your school, why are students, (who could eventually contribute back to the endowment in the future) forced to take out loans in the multiples of thousands to attend? It would be trivial to bring the cost down to levels that thousands of alumni have enjoyed in the past, which would help the students, the university, and society and the country as a whole.

Retirement Planning through the Years

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Retirement planning has been at the forefront of my thoughts as of late. As my 30th birthday approaches and I begin to take serious steps to plan for my future, I started doing some research on important information to consider when beginning and continuing savings and retirement plans. Below are some important milestones recently cited in Black Enterprise magazine’s investing section. Kevin Chadwick, Managing Director of Northwestern Mutual in Austin Texas, offered the following advice:

“getting to retirement is no longer the end goal, it’s a turning point onto a new road.  It’s important to know the different milestones of your life and what you can do to keep future goals on track.”

In your 20’s

  • Manage debt
  • Start a 3-month emergency fund
  • Establish a budget (mint.com is a good program designed to help you identify your expenses and create a budget)
  • Invest regularly into a 401(k) (keeping in mind that you should be saving at least 10% of your income)
  • Set money aside for a home purchase and consider life and disability insurance

In your 30’s and 40’s

  • Consider getting life and disability insurance if you’re married or have children
  • Balance college savings for kids vs. retirement
  • Continue building an emergency fund to 6 months
  • Assess long-term care needs

In your 50’s

  • Develop permanent retirement plans
  • Decide when and where you want to retire
  • Determine the maximum retirement contribution amount for your age group
  • Estimate retirement expenses

In your 60’s and beyond

  • Coordinate pension or government benefits with savings to build a retirement paycheck
  • Optimize social security (annuities) (talk with a representative of the social security administration to get full information on eligibility and benefits)
  • Consider paying off mortgage or other outstanding debts

For more information: visit www.blackenterprise.com/money