Showing posts with label education. Show all posts
Showing posts with label education. Show all posts

Monday 17 September 2012

The Debt of Medical Students

September 14, 2012, 6:00 AM

The Debt of Medical Students


Correction Appended
DESCRIPTION
Uwe E. Reinhardt is an economics professor at Princeton. He has some financial interests in the health care field.
In debates on health work force policy, it is frequently argued that medical education is a public good, because it benefits society as a whole.
TODAY’S ECONOMIST
Perspectives from expert contributors.
The implication is that tuition charges at medical schools should be zero or close to zero. Many nations in the industrialized world follow that policy, although they have also kept tuition low for most college students.
Most economists disagree with characterizing higher education as a public good. Only the individual receiving a professional education – including the M.D. degree — owns the human capital that the graduation documents certify to exist.
Medical graduates can use their human capital any way they wish. They can treat patients, do medical research or use their knowledge as business consultants to health-related companies or as financial analysts in the financial markets, as some of them do.
There may be some positive spillover for society as a whole from having this privately owned human capital produced, and these effects (calledexternalities by economists) might warrant some public subsidies toward the production of that human capital. That argument could be extended to many other forms of human capital, as well — e.g., engineers, scientists, nurses.

According to a fact sheet published by the American Association of Medical Colleges, annual tuition and fees at public medical schools in 2011-12 amounted to $30,753, and the total cost of attendance was $51,300. The comparable averages for private medical schools were $48,258 and $69,738. To most Americans, these will seem staggering amounts.
Which brings me to the sizable debt with which, almost uniquely in the world, American medical students now graduate. The association routinely collects data on these debts. A good summary of the most recent data, for 2010, can be found on the previously identified fact sheet, and I created this table from that source.
American Association of Medical Colleges
As the table shows, some of the students’ accumulated debt by time of graduation from medical school was incurred to finance a liberal arts undergraduate education. The $18,000 shown in the table is actually on the low side. According to the Project on Student Debt, college seniors who graduated in 2010 had an average debt of $25,250, with a range among campuses of $950 to $55,250 a student. Individual students at private colleges may have even larger debts. And debt collectors are doing a thriving business collecting these debts.
Amortization of the large debt accumulated by medical students will clearly take a bite of the income they will earn in medical practice. But at least there will be a sizable future income stream to absorb the hit. Many other college graduates have much smaller incomes or are in even direr straits.
The table below conveys a rough indication of what the amortization of medical-school debt might mean for individual students.
In this table I have assumed that the student modeled here had average debt of $161,300 upon graduation from medical school. From that debt I deducted $24,400, the amount to which $18,000 of debt upon graduation from a liberal arts college would grow in four years at a compound interest rate of 7.9 percent (that’s at the high end of the interest rate medical students are charged on debt). The remainder is debt related strictly to the medical education of the student.
I assume that after residency, the practicing physician has a starting net income (after practice costs) of $150,000 or $300,000, and that these incomes will grow at an annual compound growth rate of 3.5 percent over time. Physician incomes vary considerably across specialties and even within specialties.
To get a feel for the data, readers may want to look at several surveys ofdoctors’ pay.
According to the association’s fact sheet, students pay an interest rate of 6.8 percent on Stafford loans; for lower-income students, the rate is a subsidized 3.4 percent. For Direct Plus loans, students or their parents pay a rate of 7.9 percent, the rate I used in the table.
Finally, I assume two distinct amortization models. Under one, students pay back their debt with flat annual (or monthly) payments over 20 years. That payment is $13,840 a year. Under the alternative approach, the annual amortization payment rises in step with the assumed annual increase in physician income. The first annual payment in that approach is $10,659.
The data in the table represent these annual debt-amortization payments as a percentage of physician net income in years one, 10 and 20 of medical practice.
Clearly, these payments are a noticeable burden, even over 20 years. For amortization over 10 years, they would naturally be higher. On the other hand, the numbers would decline sharply with reductions in the interest rate charged. The table below illustrates the sensitivity of the first-year payment to interest rates and amortization horizon for the payment stream that increases in step with assumed increases in practice income.
The annual amortization payments would be particularly burdensome for primary care physicians, with their relatively lower incomes. That fact is a potential policy lever Congress might employ if it took seriously people’s lament that America is suffering from an acute shortage of primary care physicians.
I shall muse about that and other options in a future post.

Correction: September 15, 2012

Because of an editing error, an earlier summary with this post misstated the author's view of subsidies for medical education. He writes that medical education is no more worthy of public subsidies than other professional preparation, not that it might warrant subsidies.


http://economix.blogs.nytimes.com/2012/09/14/the-debt-of-medical-students/

Thursday 21 June 2012

Is It Better To Be Book Smart Or Street Smart?



June 20, 2012

If you ask most people this question, you're likely to get answers that go down party lines. Those without advanced education will likely say that they've done just fine without spending a lot of time in the classroom, while people with a lot of formal academic knowledge would say that success is largely the result of education. This is more than a trivial debate. Recent statistics from the Federal Reverse show that the American middle class has seen its net income drop 40% from 2007-2010. What was an average net worth of $126,400 shrunk to $77,300 in 2010. Even worse, the Pew Charitable Trusts' Economic Mobility Project found that 42% of people whose father was in the bottom fifth of the earning curve remained in the same earning bracket for life. Only 30% of Britons and 25% of Danes and Swedes were destined to the same fate. This has led some people to believe that America isn't the land of opportunity it once was. Americans in the now-popular 99% are not only upset that the divide between rich and poor continues to widen, they want to know how they can assure a better life for themselves and their families. Is a
better paying job impossible without a formal education, or is there hope for the non-college educated?

Steve Jobs, co-founder of Apple, is widely regarded as one of the best business men of his day. He didn't have a college degree and neither did Steve Wozniak, the other founder of Apple. Other successful businessmen without college degrees include Dell Computer founder Michael Dell, Microsoft founder Bill Gates and Virgin Brands founder Richard Branson. People all over the world have found success without a college degree, but is that the rule or the exception? Unemployment data shows that more than 8% of the population looking for a job can't find one. However, for those with a bachelor's degree, the unemployment rate is only 3.9%. The unemployment rate is 13% for people without a high school diploma. A college degree doesn't guarantee success, but BLS unemployment statistics show book smarts more than double your chances of finding a job.


Who Works Harder?
One side believes that book smarts allows you to get a higher-earning job and work less, while poorer Americans remain poor because they are forced to work more hours for less money. A paper by Orazio Attanasio, Erik Hurst and Luigi Pistaferri found that higher-educated people work more hours than poorer income groups. Although income inequality is growing, leisure inequality is growing, too. While higher earners are earning more, they're losing more leisure time in order to do it. Lower-educated men had 35.2 hours of weekly leisure time (socializing, gaming, watching TV, etc.) compared to 35 hours when the study was last conducted. Higher-earning men had 33.2 hours compared to 34.4 hours previously. Less educated women saw their leisure time grow to 35.2 hours from 35 hours. Higher-educated women went down to 30.3 hours compared to the previously reported 32.2 hours. The study mentions that some of the increase in hours at the lower income levels comes from increased unemployment, but only half of the increase could be attributed to that.


The Bottom Line
Some consumer finance experts believe that becoming more financially prosperous is as much a function of cost control as it is advanced degrees and higher-paying jobs. Statistics seem to indicate that more education dramatically increases a person's chances of achieving financial prosperity, but one basic rule remains largely uncontested: a college degree may help to open doors to a better paying job, but hard work and responsible choices is the best path to career and financial success.

by Tim Parker

http://www.investopedia.com/financial-edge/0612/Is-It-Better-To-Be-Book-Smart-Or-Street-Smart.aspx#axzz1yNRqRlmR

Monday 26 March 2012

Shortage of School Teachers


50 years of Chinese school problems fuels anger at rally

March 25, 2012

An angry crowd jeer at Datuk Wee Ka Siong at a rally in Kajang today. - Picture by Choo Choy May
KAJANG, March 25 — The angry reaction to Datuk Wee Ka Siong at a rally opposing the shortage of Chinese school teachers here is the result of 50 years of frustration, say protestors.
The deputy education minister was greeted with loud jeers calling for him and MCA to step down when he arrived, and someone in the crowd had allegedly tried to punch him as he was being chased out by the crowd when the rally ended. 
Dr Wong Fort Pin (picture) from Malacca said he made the two-hour drive to lend his voice to the anger over the government’s track record over the hot button issue of Chinese language education. 
“This is a 50-year-old problem,” the father of five told The Malaysian Insider. “This problem has been here all along. It feels engineered (by the government) and a calculated move.” 
He said that he was not politicising the issue but felt “fed-up” and frustrated. 
“You think I have no better things to do than to come here?” he said. “For 50 years the issue has been going on, but now the government cannot hide.” 
Chinese schools and issues that plague them are key to the hearts of many Chinese-educated Malaysians. 
The issue is also a thorny one for Umno, MCA’s senior partner in Barisan Nasional, as it has to be seen as championing the Malay language and national government schools. 
For Serdang resident Tan, the issue was that a new Chinese school had been promised for Serdang in 2008 but had yet to materialise. 
“Until now there is still no news of the location,” he said. 
Tan claimed that he had emailed Wee on the matter but had not received a reply to date. 
“I am so sad there was no reply,” he said but added that he was glad that Wee made the effort to attend the rally. 
Later at a press conference at a hotel away from the crowd, Wee said that he was “shocked” and “saddened” by the hostile reaction. 
Wee acknowledged that the shortage of teachers was a problem and said that the government was giving it immediate attention. 
“Of course we know this needs immediate attention, that’s why the cabinet formed a committee (to look into it)”, he said. 
“We will study each of their (Dong Zong’s) resolutions and demands and consider it. We have come up with strategies.” 
He urged patience as the solution needed to be a holistic one. 
“We need to identify the root of the problem. If we don’t know the root, how are we going to solve it? We cannot concentrate on one side and ignore the other side.”

Tuesday 7 December 2010

M’sian education sector set for next boom phase

M’sian education sector set for next boom phase
Posted on November 27, 2010, Saturday

KUALA LUMPUR: While the property sector now is in a flurry of consolidation through mergers and acquisitions, kicked off by UEM Land Bhd’s acquisition of Sunrise Bhd, followed swiftly by the just announced mergers of MRCB Bhd with IJM Land Bhd and Sunway Holdings Bhd with Sunway City Bhd, the education sector still remains ‘under the radar’.



MORE STUDENTS: The government is set to intensify its efforts to garner more students from the Middle East, China, Africa and other parts of South East Asia into Malaysia. - Photo from destination360.com
However, the fast growing private education business in Malaysia, which is currently valued to be worth some RM7.2 billion, seems to be stirring of late.

Ekuiti Nasional Bhd’s (EKUINAS) recent 51 per cent acquisition of APIIT/UCTI Education Group from Sapura Resources Bhd is seen as trailblazer for consolidation in the private education sector.

This is because of more outright acquisitions, mergers and the entry of fresh foreign players in time to come.

“There will be more mergers in the works as education entities that don’t merge may risk being left behind.

“There is urgency for smaller players to bulk up for scale and build up quality as the more renowned and established international players which have made their presence in Malaysia pose healthy competition to the growing market,” said Zakie Ahmad Shariff, chief executive of FA Securities Bhd and a former director of EduCity in Iskandar Malaysia.

This is more so as education has been identified as one of 12 National Key Economic Areas (NKEAs), with private education leading the

charge in catapulting Malaysia into the fastest growing education hub in South East Asia.

Malaysia has already become the 11th largest education exporting country with approximately 90,000 international students from more than 100 countries studying here in various international schools, colleges and universities.

Among the listed educational entities are Sapura Resources, SEG International Bhd, Help International Corp Bhd and Masterskill (M) Education Group Bhd.

Associate Professor Dr Rohaida Mohd Saat of the Faculty of Education, Universiti Malaya, lauded the move by EKUINAS and Sapura, saying, “the time has come for private colleges to merge, so as to gear themselves towards creating scale and meeting the increasing demands of foreign students flocking to Malaysia.”

Professor Dr Saifollah Abdullah from the Faculty of Applied Sciences at Universiti Technologi MARA said the Ekuinas Sapura pact was a perfect example of public-private partnership in the education sector.

The Education NKEA has been targeted to more than double the total gross national income to RM60.7 billion by 2020 from the current RM27.1 million.

Commenting on Malaysia’s attraction as an education destination, Dr Muhammad Azhar Zailani from the Faculty of Education, Universiti Malaya, said this is due to the competitive course fees, wide range of study options, many choices of universities and colleges and the existence of branch overseas university campuses.

“This allows students from different parts of the world to come to Malaysia, acquire prestigious qualifications from well-known universities from the West at an affordable price,” he said.

Aside from quality education, experts cite affordable living expenses, an economically sound and safe country and geographically safe environment as the main factors set to grow the education sector.

The government is set to intensify its efforts to garner more students from the Middle East, China, Africa and other parts of South East Asia into Malaysia.

To further build Malaysia’s participation in the global education sector, the government is also encouraging branch campuses of Malaysian educational institutes to go overseas.

Several Malaysian institutes of higher learning have branches overseas, including UCSI University and Limkokwing University in London.

Dr Muhammad Azhar said educational establishments must look towards merging with other established entities or be part of a larger educational network.

A notable example is INTI Educational Group that was acquired by Laureate International Universities from the United States.

With a presence in 21 countries globally, it has now become a leading educational establishment in the Malaysia as well.

Laureate said the reason why Malaysia was chosen as a preferred destination was its emphasis on infrastructure facilities and the government’s emphasis on developing Malaysia into an education hub.

In recent years, Kuala Lumpur, Petaling Jaya, Subang Jaya and Nilai have seen the mushrooming of many educational enclaves or precincts, attracting many foreign students in the process.

Malaysian educational players have also acquired smaller players and enlarged their base through listing their business as a way of tapping into greater capital resources as well as increasing student enrolment.

A case in point is HELP International Corporation Bhd and INTI Universal Holdings Bhd.

The listed holding companies of these educational establishments have strong collaboration with various overseas universities and attract many overseas students who want to acquire quality education at a reasonable cost.

Sapura Resources, which until recently held 100 per cent of APIT/UCTI Education, decided to divest 51 per cent of its stake to EKUINAS while holding the remaining 49 per cent along with management rights.

Now it appears both SAPURA and Ekuinas are in a better position to take advantage of the growth prospects of the fast-expanding education sector.

While some were quick to point out that Sapura was divesting from education, other observers argue that Sapura had in fact reinforced its commitment to the sector by getting a partner in order to grow its stake in the business. ­­— Bernama

Friday 11 June 2010

'You can beat the stock market!' Invest in a college degree

'You can beat the stock market!' Invest in a college degree

By Casey Selix | Published Thu, Jun 10 2010 9:01 am

Narayana Kocherlakota

My headline is not a subject line from a junk email.
It’s lifted from the commencement speech of Narayana Kocherlakota, the newly minted president (since last October) of the Federal Reserve Bank in Minneapolis.

Kocherlakota delivered a pep talk and a bit of an investment strategy session in May to graduates of the University of Minnesota’s College of Liberal Arts.

Kocherlakota, a former chairman of the U’s Department of Economics, said the annual rate of return on a college degree is better than the stock market’s.

"What is the expected return on investing in a college education — that is, what will you get back in terms of increased wages per dollar that you invested? Recent studies estimate that finishing college over high school delivers a return of somewhere between 8 percent and 10 percent per year. Is this a big number? Well, historically, the rate of return on the stock market is around 6-7 percent per year. So, by investing in a college education, you can beat the stock market! That’s especially true because the return to a college education is much less risky."

If I had been a parent or grad sitting in that audience, I’d have wondered: If that’s true, why’s it so difficult to find a job after plunking down $40,000 or so in tuition?

Kocherlakota anticipates the reactions from the fresh crop of critical thinkers and their parents.

'Complicating factor'

"Now, there is a complicating factor to this somewhat rosy scenario that’s probably occurred to all of you: We are coming out of one of the worst economic downturns since the Great Depression. Jobs are not in abundance."

Then he recalls the job market upon his graduation in 1983, "when the unemployment rate was actually even higher than it is today."

"Now it is true that when I graduated, the slack job market put downward pressure on all wages, including those of college grads. However, over time, the wages of these June 1983 grads did rise, and the negative effects of the recession were largely lost. Even in a tough job market, my cohort found that college remained a good investment."

If any critical thinkers still feel skeptical, Kocherlakota’s speech is available on the Federal Reserve Bank’s website and it includes a footnote citing the source of his investment information — a National Bureau of Economic Research working paper titled "Earnings functions, rates of return, and treatment effects: The Mincer equation and beyond."

While I was in the cyber-neighborhood, I couldn’t resist checking out the president’s online bio. He was born in Maryland. His degrees came from Princeton and the University of Chicago. He’s the 12th president in the history of the Minneapolis Federal Reserve Bank.

But one of the niftiest features is in a summary on another page — an audio pronunciation of Narayana Kocherlakota.

Trust me. This is exceptionally helpful info for anyone who has to interview Nair-ah-yah-nah Koach-er-lah-ko-tah or introduce him to a crowd.

http://www.minnpost.com/nextdegree/2010/06/10/18805/you_can_beat_the_stock_market_invest_in_a_college_degree

Tuesday 11 May 2010

Poly 'reject' off to Harvard


May 4, 2010

Poly 'reject' off to Harvard

Indonesian is the first S'pore Poly student to get into the elite varsity



Harvard-bound Singapore Polytechnic student Kuriakin Zeng with the TR-2010 robot he designed and built with teammates. It will be one of the robots competing in the RoboCup competition next month at Suntec City. Mr Zeng, who is passionate about robotics, has clinched a full scholarship to study liberal arts at Harvard College. -- ST PHOTO: DESMOND FOO

HE WAS once rejected by Singapore Polytechnic (SP), but Indonesian student Kuriakin Zeng, 24, subsequently went on to make history at the institution, not once but twice.
Last year, he became the first SP student to score straight distinctions for all of his 33 modules in his electronics, computer and communication engineer-ing diploma course.
Last week, he became the first student from the polytechnic to be accepted into Harvard College, where he will do a liberal arts course - with the bonus of having a full scholarship from the Ivy League university.

Monday 10 November 2008

Introduction to the Economy - Videos



E1. Introduction to the Economy
E2. The Economy and Earnings Impact
E3. Inflation
E4. Economic Policy
E5. Introduction to Monetary Policy
E6. Introduction to Fiscal Policy

Saving and Investing - Videos



1. Compounding
2. Providers and Users of Capital
3. Providers and Users of Capital:
4. What is Leverage? -
5. Principles of Leverage -
6. Borrowing Money
7. High Credit Card Interest Rates
8. Debt Consolidation -
9. The Income Statement
10. What is a Balance Sheet
11. The Cash Flow Statement
12. Links between Financial
13. What is a Stock?
14. What is a Bond?
15. The Capital Structure of a Company
16. Private Equity, IPO, Public Equity
17. Who issues Bonds?
18. What is a Stock Market Index? -
19. Why do Financial Markets
20. Mutual Funds 1: What is a Mutual
21. Mutual Funds 2: Types of Mutual
22. Mutual Funds 3: Active and Passive
23. Market Efficiency
24. Index Funds and ETFs
25. Hedge Funds 1: What is a Hedge
26. Hedge Funds 2: What is Short-
27. Hedge Funds 3: Different Strategies
28. Hedge Funds 4: Funds of (Hedge)
29. Hedge Funds 5: Prime Brokers
30. The Impact of Time
31. Timing Investments and
32. Taxes and Compounding -
33. First Principles of Taxation
34. Two Generic Types of Pension
35. Diversification - savingandinvest
36. Following the Crowd and the Role
37. Transaction Costs
38. Getting Started
Introduction to Diversification

Introduction to Valuation - Videos



V1. Introduction to Valuation
V1B. Remarks on Valuation
V2. The P/E Ratio
V2B. One Year of Earnings might not
V2C. The P/E to Growth Ratio
V3. The Price/Sales Ratio
V4. The EV/EBITDA Ratio
V5. The Price to Book (P/Book)
V5B. Return on Equity
V6. Introduction to the Dividend
V7. Introduction to the Discounted Cash Flow (DCF) Model
V7B. Discounting
V7C. The Risk-Free Rate
V8. What is Yield?
V8B. Dividend Yield
V8C. Bond Yields
V8D. Earnings Yield

Saving and Investing are very important topics - Introduction Videos

Saving and investing are very important topics!

How savers and investors (as providers of capital), and users of capital (like companies and governments) interact forms the basis of a very large part of the society that we live in today.

This interaction allows companies to raise capital to build factories, create jobs, and deliver better products.

It is this interaction that allows us to enjoy many of the things that we enjoy today.

And this interaction allows savers to compound and grow their money by earning a return for making it available.

Furthermore - stocks, bonds, interest rates, equity and other financial topics surround us in the press, on TV and in conversation all day long – without knowledge of this subject, a huge part of the world just passes us by!

Perhaps most importantly, without some knowledge of this subject, we are unlikely to achieve our saving and investing dreams!!

Key Reasons to focus on saving and investing include:
  • If done properly, it allows money to grow;
  • Consistent saving allows sums to be amassed that it would never be possible to save with a single action;
  • It can be very lucrative, and be a key element of becoming rich;
  • It creates a financial ‘cushion’;
  • It can mean paying less tax because the government wants us to do it;
  • Without investment our financial system would break down;
  • By allocating some capital actively, it allows us to provide capital where we think it should go, and not in areas where we think it is not deserved, thereby making us a participant in the financial system;
  • It is a key element of companies and governments getting access to funding that allows them to provide services, products and jobs for society;
  • By understanding the subject once, we will have demystified are very large part of the world around us.

The beautiful thing is that it is not hard if we get the complete picture once – furthermore a large part of saving and investing can ultimately even be automated.
http://www.savingandinvesting.com/invest.htm




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Videos


Introduction 1 (INT1) - by savingandinvest ing.com
Intro 2 (INT2): SavingandInvest ing.com
INT3. My Background
INT4. Why the Subject is so Important!
INT5. Starting with the Right Thing - savingandinvest ing.com
INT6. 5 Popular Misconceptions Part 1
INT7. 5 Popular Misconceptions Part 2