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[MUSIC PLAYING] KATE SMITH: What is a college degree worth? Families with a college-bound freshman know who's been accepted, where. The next chapter is putting together the money piece, the patchwork of grants, loans, and scholarships that make it all work. So what is the return on investment for a college diploma? That's our conversation next on Midmorning, right after the news.

CARL KASELL: From NPR News in Washington, I'm Carl Kasell. The World Health Organization says it is sending 2.4 million doses of the antiviral medicine Tamiflu to 72 developing countries, including Mexico. This is part of WHO's campaign to try to prevent people from getting ill and dying from the swine flu virus. Lisa Schlein reports from Geneva.

LISA SCHLEIN: The World Health Organization has not disclosed the names of the countries that will be receiving the Tamiflu treatments. But spokeswoman Fadela Chaib says WHO considers all these countries to be in need.

FADELA CHAIB: Part of the stock will be dispatched today, the 5th of May, from Geneva and Basel in Switzerland, Maryland in the US, and Dubai in the United Arab Emirates.

LISA SCHLEIN: Chaib says she doesn't know how long it will take to ship the drugs to the developing countries. Swiss pharmaceutical giant Roche donated the Tamiflu to WHO several years ago for use in a possible influenza pandemic. Although WHO hasn't yet declared swine flu a pandemic, it says countries must be prepared. For NPR News, I'm Lisa Schlein in Geneva.

CARL KASELL: Georgian president, Mikheil Saakashvili, said an uprising at a military base outside the capital has been put down. He said it was a serious threat, as officials say they've uncovered a Russian backed plot to overthrow the government. NPR's Moscow correspondent, Gregory Feifer reports.

GREGORY FEIFER: The authorities say they've arrested the commander of a tank battalion based 15 miles outside Tbilisi, where they said a rebellion had taken place. Earlier, witnesses said tanks and helicopters were seen moving toward the base. Defense Minister David Sikharulidze said the uprising began at dawn and was meant to disrupt NATO peacekeeping exercises set to begin tomorrow.

Separately, interior ministry spokesman Shota Utiashvili told reporters investigators had uncovered a plot to overthrow President Saakashvili, and that the plotters were financed by Russia. Moscow has denied the allegations, but it has called the NATO exercises a straightforward provocation. They come amid rising tensions between NATO and Russia. Gregory Feifer, NPR News, Moscow.

CARL KASELL: Today, President Obama makes an effort to soften resistance from members of his own party on climate change and energy legislation. The president plans to meet with all 36 Democrats on the House Energy Committee to reach agreement on climate and energy legislation. Two of the president's key domestic priorities are legislation to cut in half emissions linked to global warming by requiring cleaner sources of energy and efforts to overhaul health care. Moderate Democrats have raised concerns.

Prices have opened lower on Wall Street at this hour. The Dow Jones Industrial average is down 4 and 1/2 points to 84.22. The NASDAQ composite index is down 14 points to 17.49. This is NPR News.

Support for news comes from REI, providing outdoor adventure gear and apparel for camping, hiking, and cycling in stores and at rei.com.

PERRY FINELLI: From Minnesota Public Radio News, I'm Perry Finelli. The State House and Senate Health Committees this morning are hearing about Minnesota's response to the H1N1 flu. Several officials are speaking, including leaders from Stearns County, where Minnesota's only confirmed case was reported in Cold Spring. Officials from Minnesota and North Dakota are in Washington, DC today lobbying for permanent flood control for Fargo-Moorhead. MPR's Dan Gunderson reports.

DAN GUNDERSON: Minnesota Governor, Tim Pawlenty, and North Dakota Governor, John Hoeven, will lead the delegation of local officials. They will meet with the Army Corps of Engineers and the Minnesota and North Dakota congressional delegations. Moorhead Mayor, Mark Voxland, says one goal of the meeting is to set the tone for what promises to be a long process.

MARK VOXLAND: One of the things we have to show our congressional delegations on both sides of the river is we have the determination to see this through. They have to see that we're united, and we want to move forward. This does have to be a joint effort, and we will get it done together.

DAN GUNDERSON: The Corps of Engineers is expected to complete a study of flood control options for Fargo-Moorhead by late next year. It will likely take 10 to 15 years and more than $1 billion to complete a comprehensive flood control project. Dan Gunderson, Minnesota Public Radio News, Moorhead.

PERRY FINELLI: Iran says an appeals court will hear the case of an American journalist convicted of spying next week. 32-year-old Roxana Saberi is from Fargo. She was convicted last month of passing intelligence to the US. Saberi was sentenced to eight years in prison after a one day trial behind closed doors. An Iranian spokesman says in the appeal, experts from the bar association, intelligence ministry, and the prosecutor's office have been invited to attend.

Right now in the Twin Cities, skies are mostly cloudy. Temperature at 55 degrees. This is Minnesota Public Radio News.

SPEAKER 1: Support for this program comes from. Gertens in Inver Grove, celebrating Mother's Day with Gerten grown hanging baskets and mixed combination flowering pots. Gift cards available in store or online at gertens.com. Gertens, it's only natural to buy from the grower.

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KATE SMITH: How much is a college degree worth? As an investment, will it pay for itself?

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It's Midmorning on Minnesota Public Radio News. Kerri Miller is away. I'm Kate Smith. This week, students around the country and their families begin the next phase of the college acceptance ritual. Now that the letters are out and college-bound freshmen know they're in, the next part is getting together the money to make it happen. Paying for a four-year diploma has always carried a cost. But this year, many families are finding the bottom line harder than they expected.

Investment accounts have shrunk just as many family incomes dropped. So is a college degree a smart move? What impact will the recession have on the class of 2013? President Obama has weighed in. He wants to reform student financial aid. His proposal would end subsidized loan programs in order to put more money into expanding Pell Grants. What would that do?

This hour, we'll talk with Liz Pulliam Weston. She's a personal finance columnist for MSN Money and the LA Times. Her latest book is called Your Credit Score, Your Money & What's at Stake. She's with us this morning by phone from California. Liz, thanks for being with us.

LIZ PULLIAM WESTON: I'm delighted, Kate. Thank you.

KATE SMITH: And Steven Roy Goodman joins us from Washington, DC. He's an education consultant and admissions strategist. He's the author of College Admissions Together-- It Takes a Family. Steven Goodman, good to have you here.

STEVEN ROY GOODMAN: Well, thank you very much.

KATE SMITH: And Sandy Baum joins us as well. She's professor of economics at Skidmore College and a senior policy analyst at the College Board. Sandy Baum, good to have you today.

SANDY BAUM: It's nice to be here.

KATE SMITH: I want to start with you, Liz. You looked recently at college degrees as an investment move and actually assessed how the marketplace returns that investment, sort of sorting out different degrees and different degree programs. What did you find?

LIZ PULLIAM WESTON: What I did was I took a look at the average pay according to Census Bureau. And again, this is an extremely rough estimate. I don't want anybody to pin their college future on this.

KATE SMITH: Not a scientific survey,right?

LIZ PULLIAM WESTON: Not a scientific survey. But what I did is I took the average salaries according to the Census Bureau. I did a net present value. I looked at that stream of income going forward for people who got various degrees. And I took it back to what the lump sum would be. So you could compare that to what you were going to invest into a degree.

And what I found wasn't all that surprising. If you get an associate's degree, pretty much a slam dunk.

KATE SMITH: That would be a two-year degree.

LIZ PULLIAM WESTON: That's a two-year degree. Generally, it raises the lump sum, that it would raise your income. And that calculation I did was $100,000. It costs a couple thousand dollars to get the degree. So that makes sense. If you're looking at higher degrees, some of them make sense, some of them don't. Some of the liberal arts master's degrees didn't increase people's incomes at all.

So I have been talking to folks for a long time about look at the cost and see if it really makes sense. Because if you have to borrow to go to Harvard for four years, and you're going to wind up teaching in a public school, it really doesn't make any financial sense to make that move.

KATE SMITH: Steven Goodman, the factors certainly in whether a college degree pay off would seem to need to factor in some intangibles as well. So how successfully can families use a return on investment strategy to inform their decision? What else do you counsel them to do?

STEVEN ROY GOODMAN: Well, it depends what a student is looking for and what a family is looking for. You can look at jobs. You can look at whether or not a university does, in fact, help to broaden the thinking of the student. You can look at this in terms of upward social mobility. Is the family trying to go to Harvard or any other school due to upward social mobility?

Or in the case of first generation Americans, is the family trying to become more Americanized through this experience? I mean, there may be many reasons that you would go to school beyond just whether or not you would get a job. Although, obviously, more students and more families are focused right now on what the specific return is going to be in terms of cash dollars.

KATE SMITH: Sandy Baum, there have been lots of articles and attention in the past few years about how tuition has been going up. And now, all of a sudden, we're seeing the dynamic shift in terms of people's paycheck. Pocketbook items being able to pay for college. President Obama has weighed in as well. What can you tell us about some of the changes he's proposed? And how does that change the landscape for families all over again?

SANDY BAUM: Well, the many changes have already been implemented. For example, we know that the Pell Grant program, which is the federal government's main grant aid for low and moderate income students, is going to be much higher next year than it was this year. The Obama administration is also working on changing the way the loan programs work and on increasing and making more efficient some of the student aid that students receive from the federal government.

So there are some good news. And it's really important for students to look at the aid packages that they'll get from different institutions. You can't tell from the sticker price where it's going to be more expensive to enroll.

KATE SMITH: Now, even now, as families know who's been accepted and whether a college-bound freshman has been accepted at their favorite. school, there's still some wiggle room in the next few months as families figure out this financial piece. So what's most likely happening in those situations right now as families are maybe even renegotiating some of the financial aid they've already been given?

SANDY BAUM: Well, something that's very important, if family circumstances have changed, you must inform the financial aid office of your changed circumstances. If you didn't get financial aid and then you lost your job, you need to tell the financial aid office. Because many institutions will be able to correct that and give you more aid because of your new, more difficult circumstances.

STEVEN ROY GOODMAN: Well, there's a slightly other way of looking at that, which is that you want to do your best to try to negotiate as best you can. Now, we've missed that negotiating window now. I was encouraging a lot of my students to do that in April. Because you basically have more leverage as a consumer before you actually pull the trigger and decide which school you want to go to.

KATE SMITH: I see. Interesting. It's Midmorning on Minnesota Public Radio. I'm Kate Smith. And we're talking this hour about the worth of a college education. Lots of people this year are finding the bottom line for that tuition bill is something they were-- are having to work on a little harder than in the past. And we would love to hear your experiences at this hour.

Do you have a college bound freshman in your household? What kinds of negotiating are you doing to put together that financial package for their tuition and other costs? Give us a call this morning at Midmorning, 1-800-242-2828. That's 800-242-2828. If you're listening in the Twin Cities, 651-227-6000, 651-227-6000, or go online to minnesotapublicradio.org and click on Send a question.

Sandy Baum, you've written some about the societal benefits from higher education as well as what individuals get from it. But do we need to make some changes based on current trends? Do we need to factor some things, weight them more heavily than others than we would have in the past? I'm thinking for instance of the cachet of the name of the school on your diploma.

SANDY BAUM: Well, it would be great if we had better ways of really measuring the quality of every individual's education. Unfortunately, there's no chance that school reputation and credentials will stop being valuable. I think it's very important for people to understand that a college degree is very valuable.

That for most people, the investment will pay off. That doesn't mean you must go to the most expensive school you get into. But it does mean that the decision not to go to school, that the decision to not get a four-year degree or not go to a school that will challenge you is probably a bad long-term decision.

KATE SMITH: I just want to get a quick answer from each one of you before we start going to calls. How much debt should a student take on to pay for college? Is there any agreement on this? Steven Goodman, let's start with you.

STEVEN ROY GOODMAN: Well, as a rule, it really depends where you're sitting. I think that a student who takes out over $75,000 worth of debt is asking for a little bit of trouble.

KATE SMITH: Regardless of the degree?

STEVEN ROY GOODMAN: I'm sorry?

KATE SMITH: Regardless of the degree?

STEVEN ROY GOODMAN: Well, well, we're talking about an undergraduate degree. Let me give you an example. One of my students was admitted to Virginia Commonwealth University and the University of Pittsburgh. Virginia resident, and the price differential over the four years was $80,000. What I worked with the family on was thinking about whether or not that $80,000 was worth it.

And this family concluded that it wasn't worth it simply because the likely career that the student was likely to have wasn't going to pay back that $80,000. In other words, you have to think about it this way. For about every $7,500 you borrow, you're going to find that a recent graduate is going to be paying back $100 a month in terms of student loans.

Multiply that by 10. And that means that a student who may be teaching or doing something that may not be paying that much is now paying $1,000 a month in student loans when they start their careers. And I think that that is something you need to look seriously about.

KATE SMITH: Liz Weston, how about you? How much debt should a student take on to pay for college?

LIZ PULLIAM WESTON: I generally tell my readers if they are considering borrowing more for their education in total, they're going to make the first year out of school, that's a warning sign. And here's the problem. Federal loans are great. They are low cost. They're easy to pay off. They're very flexible. But the problem is they're limited generally to $23,000 for an undergraduate. You can get that up to $31,000 in some situations.

That's not enough for most people. So they go to the private student loan market. Private student loans are much more expensive. They tend to be variable rate. Right now with interest rates near generational lows, the average rate on a private student loan is in the 11% to 12% bracket. So it's going to go up when the economy starts to recover.

That is extremely expensive debt. And you can't get rid of this debt. You can't discharge it in bankruptcy. It can literally follow you to the grave. So that rule of thumb doesn't work for everybody.

Some people are going to get a law degree and work at the DA's office for a while for a low-paying sum, and then go off into the private sector and make much more. But in general, if you're thinking about borrowing more for your education than you're going to make your first year out of school, be very, very cautious. Because you could easily find yourself saddled with too much debt.

KATE SMITH: Sandy Baum, how about you How much debt is OK

SANDY BAUM: I think that Liz's rule about your starting salary is a good one. In many cases, the $31,000 that's available in federal Stafford loans now to undergraduate students, that seems like a good maximum to me. I think people should be very cautious about private student loans. Only under unusual circumstances where you're very secure about what your future will be should you take those private student loans.

That said, people should understand that borrowing for college is a good investment. Borrow moderately. Borrow wisely. But don't have a fear of borrowing so that you say I can't go to the good school for the school that will be best for me because of the debt.

KATE SMITH: It's Midmorning on Minnesota Public Radio. I'm Kate Smith. This hour, the worth of a college education. We're talking with Sandy Baum, who's a professor of economics at Skidmore College. She's also a senior policy analyst at the College Board.

Liz Weston is a personal finance columnist for MSN Money and the LA Times. And Steven Goodman is an education consultant and admissions strategist. And the phone lines have lit up. AJ is on the line from Minneapolis. You're first, AJ. What's your question?

AUDIENCE: OK, my question is, I personally for my situation, I have about two years of college under my belt. I've actually just finished up paying the loans for that. But I had to drop out to help my family. And now, I'm having a family of my own. I'm married and I have one on the way. It's due in October. So it's going to be very, very hard for me to get back into college and to finish the degree.

Now, on the other hand, I have had a very stable job now for five years. And it's not going anywhere anytime soon that I'm aware of. So how is the economy going to treat those of us that have not been able to finish college but have the experience and kind of common street sense that you pick up from the regular business world?

KATE SMITH: Liz Weston, why don't you take AJ's question.

LIZ PULLIAM WESTON: Well, I'm very happy you paid off those loans. Because one of the worst situations you can be in is to have borrowed money for school and then not complete the degree. Because you get very little payoff for that. And I think that's going to be true going forward, AJ. I think it's going to be getting tougher and tougher in this economy to get that differential, to get better pay if you don't have that degree under your belt.

So I'd strongly encourage you, I know it's going to be busy in the next few years in your household. But night school, whatever it takes, to just finish it up. Because it really does make a difference. But you have to have that piece of paper to get the better wages and to be more competitive in this market.

KATE SMITH: Brook, good morning to you on the line from Maple Grove. What's your question, Brook?

AUDIENCE: Good morning. Well, I have a son going into school for the first time. And I'm looking at community colleges were geographically desirable that they're, right down the road. But they look really inexpensive. And I'm wondering if there's some downside. Because for $5,000 a year, he can go to his first two years, live at my house. I'm not in any kind of pain. Will it hurt him when he goes on to his next two years?

KATE SMITH: Steven Goodman, what do you think about that? And I'm going to weigh in too. Some of these two-year programs have grown into four-year programs. You can now get four-year degrees from community colleges. How does that weigh in now?

STEVEN ROY GOODMAN: Well, I actually like community colleges. And I think the community colleges for the right person are the right, are the right choice. Obviously, the reason a lot of people look at community colleges are for cost. But one of the other things the community colleges do pretty well is help, just help, help students actually study things in a practical way. And that can be valuable.

In terms of moving on to a four-year school, very often, a number of states have articulation agreements with various community colleges. And that's really a back door way to get into a number of name brand four-year schools around the country. So I don't think that's such a bad thing to do.

Now, the downside that people have traditionally argued, which I don't necessarily agree with, but that people have argued, is that students going to one school and then transferring to another somehow miss out on the residential experience, the traditional residential experience.

Well, that may be so, and that may have been so in 1950. But we now have, if I'm not mistaken, somewhere between 25% and 27% of Americans going straight on to school in the quote unquote, "traditional way." And I think that those days are moving in a different direction.

KATE SMITH: Quinn--

SANDY BAUM: Can I just add that the community colleges are great for many students. But many students who go to a community college with the idea that they're going to a transfer to a four-year school, don't do it. So it really depends on the student. Maybe your son absolutely will continue on and cross that hurdle of transferring. But many, many students who think they will don't. That's the problem.

KATE SMITH: Well, and there's always a credit transfer problem that can weigh in too. I don't want to get us off track on that, but it comes up. Quinn is on the line calling from Brookings, South Dakota. Good morning, Quinn.

AUDIENCE: Good morning. I have two comments and they're both related to non-tangibles of the economic factor. I'm a college graduate. And I was told my freshman year that a college degree is also to be looked at as a quality of life investment, which is hard to measure.

And the second comment is, I found in my college experience that the socialization and being exposed to different cultures among other classmates was a valuable lesson that has carried with me the rest of my life. So both quality of life and this social, cultural emancipation of the young student.

STEVEN ROY GOODMAN: And I think, Quinn, that's an excellent point. I mean, in fact, that's the number one thing that drives people to come to see me is because they're actually looking to improve their lives in a way that they can't imagine 10 and 15 years down the road. Absolutely, it's a good investment of time and energy.

The question that I thought we were chatting about today, which I think is important as well, is how to pay for it. And should the universities be spending more money to make sure that more people have access to the terrific exposure to the culture and the quality of life that you mentioned?

KATE SMITH: Sue is calling us from Woodbury. Good morning, Sue. welcome to Midmorning.

AUDIENCE: Hi. I have a daughter-in-law who borrowed money for college for five years to complete a four-year degree, and now has a debt of about $94,000. Now, when she finished, she was able to get a part time, seasonal job. But her income from that, she has to pay about 80% of that income each month to cover her student loan repayments.

And I'm really bothered by the fact that student loans are not protected in any way by the Truth in Lending laws, which protect people who borrow money for mortgages or for credit card debt. And I wonder if your speakers could address that issue, please.

KATE SMITH: Sue, is your daughter in law living with parents, living with, how she's living, how is she living when 80% of her pay is going to pay her student loan?

AUDIENCE: She lives with us for free with my son that she's married to. And we help her by providing her with a car so she can do the job that manages to make enough just to make the payments.

KATE SMITH: Sandy Baum, what about the Truth in Lending question that Sue raises? We have so many students who are getting really underwater before they're even finished. Do you think something needs to change in terms of what students and their families are counseled?

SANDY BAUM: It's very clear that something needs to change. The first thing is that your daughter-in-law needed better advice before she borrowed $94,000. Almost no one should borrow $94,000 for an undergraduate degree. That's the first problem. We need much better information for students before they start out.

And next, it's absolutely true that there are issues. They're not dischargeable in bankruptcy. Private student loans, even if you die, they might not be discharged. And there is a lot of consumer protection, and a lot of that is really necessary.

For federal student loans, beginning this summer, there is an income-based repayment plan where no one will have to pay more than a certain percentage of their income. So again, federal student loans do have much better protection than private student loans.

LIZ PULLIAM WESTON: And I just wanted to add, this is Liz. This is one of the few loans in the world where you are commonly asked to sign a promissory note before you're even told what the interest rate is. I mean, there is a lack of disclosure in private student loans. That's absolutely stunning. So I totally agree with Sandy.

KATE SMITH: Oh, because the interest rate is not set until you graduate and start paying it back?

LIZ PULLIAM WESTON: It would depend on your credit score, your cosigner, a number of things. But they don't have to disclose it upfront. So you don't know what you're getting until you've actually committed to taking the debt.

STEVEN ROY GOODMAN: Which is part of the reason that it's so important to negotiate before you sign-- before you go to that university, commit to going to that university. Which is why and hopefully we can learn from Sue's daughter-in-law here and other listeners can realize that it's really important to look at this before you actually decide where you're going to go to school. And try to negotiate for more cash dollars from the university.

KATE SMITH: Stephen is calling us. He's from Minneapolis. Welcome to Midmorning, Stephen.

AUDIENCE: Well, good morning. I just wanted to comment that I think the entire premise of whether or not you can get a return on your investment in college is wrong. Because the purpose of college is just simply not to make money. I mean, we all have to make money. But there are other ways to make money. And the whole notion of college is that it gives you an education, allows you to critically think for the rest of your life. And it just simply is not subject to this kind of return on investment measurement.

KATE SMITH: So--

LIZ PULLIAM WESTON: Stephen, I'd absolutely agree with you if you could pay cash for your entire education. But when you're borrowing money to pay for education, you have to look at the return on the investment. I just see too many people with six figure debts like the woman's daughter-in-law. Making too little money to make their payments and they're just drowned from the beginning.

They can never save for retirement. They can't save to buy a house. They've just taken on too much debt. So we need to have kids thinking about this because it is a calculation for 2/3 of the students. They need help to get through. And it's usually in the form of loans.

KATE SMITH: Sandy Baum this makes me think of something. I'm going to try and articulate it. I don't know how well I'll do.

There seems to be an off putting notion to some people when we start talking dollars and cents for higher education. Because it flies in the face of this learning for the sake of enlightenment, learning for the sake of knowledge kind of approach to post-secondary education that frankly was alive and well and healthy for a long time. But doesn't it need to be balanced with a little bit of financial planning and investment strategy?

SANDY BAUM: Well, I think the word balance is exactly the right one. I think the caller is correct that too many of our conversations focus only on anticipated earnings. And on the other hand, of course, you can't have every great experience in life without thinking about how to pay for it. One of the concerns that I do have is that people will be focused too much on specific vocational education and thinking about the job for which they're training.

And the reality is that in our current economy, you need to be flexible. You need to think critically. You need to learn to be creative and to communicate. And that's going to make it possible for you to do many jobs well, which will give you both more job satisfaction, more life satisfaction, and better prospective earnings. So I think balance is exactly right.

KATE SMITH: Well, Steven Goodman, I'm intrigued by the point Sandy Baum makes. Because it's a little like playing the market and timing the market. So folks who for the last five or 10 years were getting all these MBAs are suddenly out in the world finding that corporate America has been shedding the word they like to use, shedding jobs, tens of thousands of jobs for the last 18 months. Can you time the career market?

STEVEN ROY GOODMAN: You can't time everything, but you can plan as best you can. And if you find that you're out of a job, a lot of my current students are also graduate students. I help undergraduate students find colleges-- high school students find colleges, and young people find graduate degrees. And some of them are, in fact, out of work. And now they're planning to go back to graduate school.

Unfortunately, the timing didn't work out for them. And that's why they're going back to school. You can't completely time it. But some people do internships. And they do year long internships and gap years in order to try to do that.

KATE SMITH: Sandy Baum, do your academic colleagues have any fear about the return to further education because there's no job to be had syndrome? People who just cycle back in and out of graduate programs.

SANDY BAUM: Well, I think that the biggest fear is that people will read an article about some unemployed college graduate and decide maybe it's not worth it. I mean, the reality is that there are more unemployed people of every type now than there were two years ago. But still, the unemployment rate for college graduates is about half the unemployment rate for those without a college degree. It's really clear that even though it's not a guarantee, a college degree is certainly the best insurance policy people can get in terms of future prospects.

KATE SMITH: Marcia is on the line calling us this morning from Duluth. Welcome to Midmorning, Marcia.

AUDIENCE: Thank you. I'm enjoying your discussion and would like to throw one other idea in there that when you're getting ready to go to college and you're 18 and you've been at home high school, maybe not working or working very minimally, college feels like another chance to have four years without worrying about your financial situation.

Where 30 years ago I went to college and worked a full-time job and also did work study and graduated with a $500 student loan instead of $94,000. And so I just want to throw this out there. You can discuss it, that parents need to be teaching that financial responsibility.

It's too easy to say, let's get all the loans we can get. We'll worry about it later. Or mom and dad will sign. Where's the financial responsibility that the student has a plan for supporting themselves and paying part of their college as they go?

KATE SMITH: Liz Weston, do you have a sense of how many students work while they're in school?

LIZ PULLIAM WESTON: I actually don't because it's such a huge universe. You're talking about everything from kids going to two-year schools to going to Harvard. I know my experience was that I didn't work full time, but I generally worked two or three jobs a semester. And like Marcia, I graduated without student loans. I think the two of us were the last two to graduate college without having debt. But it's a very important skill.

The problem you can run into is if you are working a lot, you're missing some of these experiences that we talked about that are so enriching. You're missing some of the extracurricular things that make a college degree enhance your life rather than just a vehicle to make more money.

KATE SMITH: Steven Goodman, any sense of the clients you work with how many are planning to work either full or part time while they're in school?

STEVEN ROY GOODMAN: Well, most of my students would prefer to avoid working full time if they can. And some of my students actually enjoy working. And a lot of my students enjoy the co-op programs if they can go to schools with those co-op programs because it positions them for jobs.

I don't think planning for the future or financially planning really ought to be a dirty word. Because I think that the-- I don't think we should be able to say as a society, well, let's just hope our young people can go to university, relax for a few years, and then let the system take care of them.

One, that's not happening. And two, it's not really clear what the students are actually learning at the universities. So I think that there ought to be some sort of economic accountability as to what's going on and what the university yields. That doesn't mean that everybody needs to study engineering. And that doesn't mean that we should get rid of all the political philosophers in the country.

But I do think that the outside world ought to really take a much closer look at how universities are spending government money and taxpayer money. And why universities aren't ponying up more money for students. And why students therefore keep having to take more and more debt out.

KATE SMITH: It's Midmorning on Minnesota Public Radio. I'm Kate Smith. And this hour on Midmorning, we're talking about the public perception of whether college education is worth its cost. We'd love to hear from you.

Are you a family with a college-bound freshman? Are you weighing all of the variables in the financial equation? Where should will I be able to get a job? Weigh in for your family making its choices. Give us a call and share that with us, 1-800-242-2828. Or in the Twin Cities, it's 651-227-6000. You can go online, click on Ask a question at minnesotapublicradio.org.

We'll get back to our conversation with Sandy Baum, professor of economics at Skidmore College, and Liz Weston, personal finance columnist for MSN Money and the LA Times, and Steven Goodman, education consultant and admissions strategist right after our newscast break with Perry Fanelli.

PERRY FINELLI: Let's talk a little caution. May be returning to the stock markets today as investors, wait for the results of the government's bank stress tests. They are due tomorrow. The Dow opened with a modest drop after gaining more than 200 points yesterday.

Congress's Joint Economic Committee is hearing from Fed Chairman Ben Bernanke this hour. He is giving his latest assessment of the economy. He's expected to get some tough questions about the Fed's lending programs aimed at freeing credit.

Senate Majority Leader Harry Reid says he hopes President Obama's Supreme Court nominee is someone with real-life experiences. Reid today suggested Obama look outside the legal system, perhaps to a governor or senator to replace retiring justice David Souter.

There are no Cinco de Mayo celebrations in Mexico today. They have been called off because of the H1N1 flu epidemic. But President Felipe Calderon says the outbreak is waning, and it's nearly time for the country to get back to business. High schools will reopen Thursday.

Saint Paul Police say last weekend's Cinco de Mayo festival went off without a hitch. The city had obtained the temporary injunction against 10 alleged gang members barring them from taking part in gang-related activities during last weekend's festival.

The Sappi paper mill in Cloquet is proposing an expansion that would nearly triple production of coated paper without producing more pulp or cutting more trees. According to the MPCA, the new paper machine would require 100 to 200 additional workers at the mill.

Mostly cloudy skies for the state today. Chance for showers and thunderstorms statewide this afternoon. Highs today, low 60s in the north and the low 70s for the south. Right now in the Twin Cities, it's cloudy. The temperature is 55. It's 936. This is Minnesota Public Radio News.

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KATE SMITH: Back to our conversation on Midmorning this morning. I'm Kate Smith. We are talking about the worth of a college education. And we've got a bank of callers. Let's bring them back into the conversation here. Dave is on the line from Rochester. Good morning, Dave. Welcome to Midmorning.

AUDIENCE: Good morning. I'm listening to this conversation with interest because my profession revolves around personal marketing. I write executive class resumes for skilled professionals and college students. And what's fascinating about all of this is that I've been to 54 universities. And I have to tell you that every career development office of every single university that I visited will tell you, well, we have 95% to 98%, in some cases, 100% placement. But I challenge those statistics because I don't think that those are accurate.

First, I would challenge every career office. I would want to know the jobs that these students are acquiring, is that within their discipline? And if so, how long did it take after graduation to get that job? And let me point out one other thing that's really interesting. Parents don't send children to colleges because they're interested in some ethereal quest for greater knowledge and insight.

They send them there because they want their children to be gainfully employed when they graduate. And employers generally are not going to hire anybody unless you have a four-year degree. So it's really interesting to watch this. And I would suggest that higher education has got a good gig going on because they've got everybody convinced in the world that you can't get a job unless you have a four-year degree. So anyway.

KATE SMITH: Thanks for the call, Dave. Appreciate it. Sandy Baum, what do you think about what Dave says? I mean, there are a couple of factors here. Have we done too good a job of pushing every student of age into a college experience? And then we'll split off the second question about placement. Are colleges doing due diligence by their kids in terms of placement?

SANDY BAUM: Well, the reality is that we are far from having every student getting a four-year college degree. The reality is that every student really does need some post-secondary experience in order to be marketable in today's economy. But everybody does not need a four-year degree. Everybody needs some credentials. And people need to look at themselves, their interests and their talents, and figure out what is right.

Certainly, the financial return is greatest to a four-year degree. And it's a wonderful experience for those people for whom it's appropriate. Let me also say that, in fact, about a third of college students do graduate with a-- who get a four-year degree, don't have any debt when they graduate. So there are a lot of people doing this in a variety of different ways. And the idea is that people should think carefully about their own circumstances and recognize the opportunities that are available to them.

KATE SMITH: What about career placement? When it comes to your position with the college board, you probably see a range of experiences and practices from colleges and universities across the country. How much of a priority is that?

SANDY BAUM: Well, what's really clear is that there is a wide variety across institutions. And some institutions certainly do have 100% job placement and good jobs. But many have abysmally low job placement. And people should really look carefully at the institution and at the kind of jobs that the graduates get before they commit. Because there's just a whole range. And we have a really varied higher education system.

STEVEN ROY GOODMAN: Well, Sandy is right about that in terms of looking carefully at each institution. Because a lot of institutions really cook the books as it relates to these numbers, as Dave suggested. One of my students just finished a law school. And we had a get together the other day. And he was explaining how the placement director at his school was basically on the phone with everybody making sure that they had something, even if it was a part time, six month job of some sort.

So that way the law school could report that a near 100% placement statistic. The number one thing that universities have to do in law schools and business schools have to do is they have to justify the tuition. And if their graduates aren't getting jobs, then the whole game is over. And so universities will do everything they can to make sure those numbers look as close to 100% as possible, even if in reality, they're not long term, long term sustainable jobs.

KATE SMITH: You know, Liz Weston, you wrote that many families and students who have an expectation that colleges for them also have this sort of inflated expectation that financial aid will make it all possible. That there shouldn't be gaps in financing.

Do we have some sort of Pollyanna-ish expectation around how much financial aid should be out there for each and every student? Because certainly, parents think their student is the best. And even if they've got straight A's, there should be some sort of scholarship for kids born on Tuesday with blue eyes.

LIZ PULLIAM WESTON: Well, I think parents today of the kids that are graduating high school are in for a bit of a shock because when they went to school, there typically was a lot of financial aid in the form of grants. That's free money. And today, it's typically in the form of loans.

So I do think we need to be looking at making sure that a college education is widely available. I don't think that financial aid packages have kept up with the inflation in the cost of college. That's an issue. I don't know that we need to send every child all the way through school although they have a right to.

I think the situation we have now is that too many families haven't thought about this. They get their-- they get into their dream school or the school they want to go. They get their financial aid package. It's mostly loans. And they just decide to pull the trigger and go ahead with it without thinking about the long-term ramifications of taking on all that debt.

And one thing that hasn't been mentioned is there is something about a name brand school. Everybody talks about the connections that you make there and the cachet. But a Princeton professor did a survey and found out that if you were accepted to an Ivy League school, you tended to do well no matter where you went.

So if you had that level of brains and accomplishment that you could get in, you're going to do fine. And I would propose to families that are trying to make that agonizing decision of do I go to Harvard or not, to look at that. That your kid will do fine no matter where they go. And if you don't want to saddle yourself with a lifetime of debt and your child, that that's a reasonable decision to make.

STEVEN ROY GOODMAN: It might be worth pointing out here.

LIZ PULLIAM WESTON: But I just don't. I'm sorry. Go ahead.

STEVEN ROY GOODMAN: It might be worth pointing out that some of the more expensive schools in the United States actually are the ones that give better financial aid packages. And it sounds counterintuitive, but certain universities, if they really want you, will come up with more money. And so when you're looking at-- if you're listening, and you've got a student who's thinking about applying to school next year or the year after, don't necessarily let the sticker shock shock you.

Don't forget that financial aid can come in many forms. And that if you're a strong applicant and the university-- just because a university has a big sticker price doesn't mean that you're not going to get some grant money.

SANDY BAUM: That's a very good point. And I just have to add that, in fact, although people talk about loans replacing grants, the fact is that about half of the aid that undergraduates get is in the form of grant aid. Grant aid has also increased very rapidly. People aren't getting as much as they wish they could get. And we need more grant aid.

But there is a lot of grant aid out there. People should not give up on that idea. It comes from institutions, from the federal government, from states, from employers and other private entities. So please, let's not discourage people from seeking out all the grant aid they can get.

KATE SMITH: We're talking this morning on Midmorning about the worth of a college education. I'm Kate Smith. We've got Sandy Baum, who's a professor of economics with us. She's at Skidmore College. She's also a senior policy analyst at the College Board.

Liz Weston is a personal finance columnist for MSN Money and the LA Times. And Steven Goodman joins us this morning too. He's education consultant and an admissions strategist. Michael is calling us this morning from Red Wing. Hi, Michael.

AUDIENCE: Hi. Thanks for having me. I was really commenting on not the percentage of Harvard students but just the average college student trying to get into a decent college, a two-year college or a four-year college, and not being able to get a job when they're done. I'm trying to get into the nursing program myself. 500 applicants. Only 100 are accepted. I'm sitting on the shelf for three years in some cases.

I mean, that's insane to me. The amount of demand for LPNs and RNs around the country. I mean, I looked and researched the growth of the medical field and went, hey, that's for me. And then when I, when I finally see the reality, I made the investment. And now, I'm sitting on the shelf.

KATE SMITH: Michael, we talked earlier in the hour about shopping around for jobs and using the job place, the marketplace to determine degree. Did you do that when you looked around at nursing programs?

AUDIENCE: Absolutely. I mean, there was-- the job growth was growing. I mean, with the baby boomers and the health care systems that we're going to be needing in the future. I went, wow, that's a growth market. I'm a family man. I'm going back to continuing education. I have to make wise decisions for my family. So this is the area that I want to go into. But there's not enough faculty out there to supply the demand.

KATE SMITH: Right. When we look at nontraditional students, I wonder, Steven Goodman, do you work with any older students?

STEVEN ROY GOODMAN: Yes, I do. And I think-- and not I think, I know that most of my older students are nontraditional students look at the world like Michael does. And I think, Michael, you're absolutely right that I would keep plugging at this. Unfortunately, there aren't enough programs to go around for things that actually yield immediate or close to immediate jobs.

That's just one of the unfortunate things about it. I mean, I've been speaking out for years about the need for there to be more programs like that and for universities to invest more of their internal funds to set up more and more of those programs. But unfortunately, that hasn't happened.

KATE SMITH: At one point, there was always the expectation that a college degree was the way into the middle class. And I wonder, Sandy Baum, do you think that's still the case? Is there an assumption here that we don't have to change as a result of current climates?

SANDY BAUM: Well, certainly, things have to change. But it's absolutely true that earnings prospects are greatly improved by any kind of post-secondary education, particularly a four-year degree. And that the choices that people will have will be greater the more education they have. And let me just say also that despite this one study that did show that wherever you go to college it doesn't matter, most of the studies on this subject show that it actually does matter.

What the quality of the institution is, the quality of the other students. And there's an increasing amount of evidence that if particularly students from low-income backgrounds go to schools that are not as good as the best ones they could get into, they're much less likely to succeed and to graduate. So it's really important to look for a good match of an institution.

And yes, this is the ticket. It's not for every single individual. Some people are not going to be able to succeed in college. And if they know that about themselves, they shouldn't go. But for most people, yes, it is absolutely the ticket.

KATE SMITH: Good morning, Austin. Austin's on the line from Duluth with us this morning on Midmorning.

AUDIENCE: Good morning.

KATE SMITH: Hi.

AUDIENCE: I just wanted to comment. I've worked in the student loan industry and collections for quite some time. And I've noticed a lot of what you're saying, that parents force their children into taking on this debt and they don't really explain to them what a financial burden it's going to be when they graduate. A lot of parents don't even realize what a financial burden it will be to them if they co-sign.

A lot of parents I call every day and they say, this isn't for me. This is for my child. Well, the fact of the matter is, it's attached to their Social Security number. And they're legally responsible for it. And they don't realize that either. There's just a very big lack of responsibility. And I think a lot of it comes from the college offices not explaining student loans and what an investment that is.

KATE SMITH: Steven Goodman, when you work with families, are you experiencing that at all? There's sort of a tension between what parents want for students and would push them into and what students might want?

STEVEN ROY GOODMAN: Absolutely. Students tend to want everything, of course, because they're students. They tend to be 17. They're excited about their futures. They basically want the best and the best and the best of everything. But they don't really understand what debt necessarily means. I mean, a lot of my students don't even know what their parents do for a living. A lot of my students have never held $500 in their hands.

So they don't really understand exactly what Austin is talking about. He's absolutely right that families do have this debt. But I think the broader question is, why do they have this debt in the first place?

We as a society should be forcing universities to invest more in lowering the tuitions and making sure that universities charge less. We've been talking for a while now about everything except the big elephant in the room, which is why is tuition so high. And that's what changes the calculus about what the value of higher education is.

If the tuition is low, then it's a good risk. If the tuition is really, really high, then this risk becomes greater. But to me, the central question is why doesn't the Obama administration when they try to expand the Pell Grant program for this coming year, also tie this to tuition caps? Because then Austin won't be-- wouldn't be doing as many collecting calls.

KATE SMITH: Pat is on the line calling us this morning from St. Cloud. Welcome to Midmorning, Pat.

AUDIENCE: Hi, Kate. Good. I just had more of a comment, more general, I guess, observation. I have a four-year undergrad from St. Cloud State in mass com. And I'm currently unemployed. I'm going to be going back to school, I think more into a trade program. And it just seems like when I was researching this, it's like the old fallacy in high school. Oh, go to your four-year degree. You're going to-- studies show that on average, four-year degree you make more.

Well, when I was researching this, people with the two year like radiology or sonography, going into sonography program, they're making $25, $26, $30 an hour for two years. And I have a mass comm degree. I was making 18. Something isn't right in the world. It's like, it just why wasn't I told in high school? It's like, four years, yeah. But it's more seems like the industry and the economy, it's global. It's highly skilled, highly trained people.

KATE SMITH: Liz Weston, Pat's comment really takes us right back to where we started this conversation with. Your look at the range of degrees. Do you think that as we see economic factors changing, that there's a flux in that sort of dynamic you might see it play here?

LIZ PULLIAM WESTON: I think as the economy changes, different professions and different trades are going to come into higher demand and command higher wages. But overall, if you look at what an associate's degree, the two-year degree returns versus the bachelors, there's no contest. I mean, the return over a lifetime on average is about a third for the two-year degree of what a four-year degree can be.

Obviously, there's going to be differences in the mix as the one, the gentleman, that Pat has discovered. But I think, overall, we're going to see an economy that requires more skill, more training, more knowledge, more flexibility in using your skills. So I do think there's still going to be markets for associate's degrees. I just worry that over time, you're going to really need a bachelor's degree more than you even do now.

KATE SMITH: Marcus is calling us this morning from River Falls. Good morning, Marcus.

AUDIENCE: Morning.

KATE SMITH: What's your question today?

AUDIENCE: Well, I kind of a comment. Lots of kids look at the sticker price for the school, but don't really ever factor in the price of living, especially off campus. And that can really raise their student debt.

KATE SMITH: Are you a student at UW River Falls?

AUDIENCE: Yep, graduating in two weeks.

KATE SMITH: Congratulations! Way to go. Is that factoring into some of your finances right now in terms of what you'll have to pay back and what you've had to pay to just to live?

AUDIENCE: Well, just to live. I've been-- I went to school full time the first three years. But then after living off campus, I had to get a part time job. So it's taken a little while longer. But I know lots of my friends just take out loans to live off campus. And they're going to spend thousands of dollars in student loans just, just because the cost of living is so high too. So it's like almost double the tuition.

STEVEN ROY GOODMAN: Marcus, I think that's a terrific point that a lot of people forget to do. And also a lot of families forget to take into account the technology fees, student activity fees, and the general fees above and beyond tuition. Look at the total, what it's going to cost you to go there, not just the tuition. Look at all costs. That's a great point.

KATE SMITH: Liz Weston, I'm wondering, are your readers right now asking the question whether they should consider college for their kids or how they can make it work? Do you get a sense of that?

LIZ PULLIAM WESTON: I get more of the how we can make it work. Another thing that comes up a lot that's kind of interesting is this myth that if they save anything for college, they're somehow going to reduce their future financial aid package. And I have to make the point over and over again. If you can save, if there is any money in your budget to save, you need to save because you're going to be asked to pay a bigger share of your child's education.

It does not put you behind to have that money in the bank. I mean, you want to be smart about where you save it. You don't want to save it in the kid's name. A 529 plan is good, something like that. But you really do. If you can save, you need to be putting the money aside.

So I think people understand that the student loan situation has changed. Private loans are-- the underwriting is a little more difficult. They understand the economy's a little more difficult. But I don't see people saying, you know what, this is just not a worthwhile investment. They're still trying to figure out some way to do it.

KATE SMITH: Sandy Baum, a lot of schools expanded their financial aid pools this year. How much did that help?

SANDY BAUM: Well, it certainly helps significantly. But what it does is it makes a bad situation a little bit better. The fact is that family ability to pay has declined so much that despite the best efforts of many institutions, obviously, more people are going to be struggling. But I do think it's very important to know that institutions are giving more aid.

And I also wanted to go back to the caller's point about living costs. It's so important. And relative to tuition, it's really important to note that even if college were free, many students would be accumulating a lot of debt and struggling to pay because of the living costs. And so we really need to think about how we're going to help people who come from families without adequate resources to live while they're in college, without having to work so much that they can't succeed academically.

KATE SMITH: Steven Goodman, are you seeing people, prospective students, changing the time frame for their decisions, say putting off college for a year just to see whether the financial aid horizon changes in their benefit?

STEVEN ROY GOODMAN: Well, not necessarily. Most of my students are planning two and three and sometimes four years in advance. So what I see my students doing is using their planning process to try to figure out how to leverage more financial aid dollars in terms of grants from the universities than anything else. The name of the game for my families, it comes down to whether or not the university comes up with the cash.

Loans are great, but grants are a lot better. And I help a lot of my students to get into the schools of their choice, whether it's admissions or otherwise. But when it's otherwise, it's a matter of trying to figure out which schools are likely to give them the most amount of money. And I think that's why it's so important that we as a country focus on making sure our universities spend more money on grant aid for students.

KATE SMITH: Liz Weston, you get the last speaking moment for the hour today. I wonder if we have this conversation nine months from now, talking about the class of 2014 instead of the class of 2013. Will a lot have changed in the landscape?

LIZ PULLIAM WESTON: Well, I think we are going to see President Obama push the idea of the Pell Grants and moving student loans more into federal hands, maybe more away from private student loans. I also think, I can't predict the economy, but we may be having a little bit more optimism about people's prospects coming out of school.

So I don't think things are going to change hugely overnight or even in nine months. But I do think there's an awareness that the cost benefit situation is critical. And that we need to look at ways to make education more affordable for more people.

And that's a combined responsibility. That's not just the government. And it's not just universities. It's also parents saving enough and making sure this is a priority throughout the child's life, not just when they've got the financial aid form in their hand.

KATE SMITH: Seems important for families to make decisions, not based on the economy entirely too.

LIZ PULLIAM WESTON: Yeah, because it's an economic cycle if things are going to change.

KATE SMITH: It's been great to have this conversation. I want to thank you all. Sandy Baum, thank you first.

SANDY BAUM: Thank you. I enjoyed it.

KATE SMITH: Sandy's professor of economics at Skidmore College. She's also senior policy analyst at the College Board. Liz Weston, it's been great to have you here this hour as well.

LIZ PULLIAM WESTON: It was a pleasure, Kate. Thank you.

KATE SMITH: Liz is personal finance columnist for MSN Money and the LA Times. Her latest book is Your Credit Score, Your Money & What's at Stake. And Steven Goodman, good to have your voice weigh in this hour as well.

STEVEN ROY GOODMAN: Well, thank you very much. And if I can plug my book, College Admissions Together-- It Takes a Family. I've got a whole section on how to deal with issues when moms--

KATE SMITH: That's it. Got to go. Thanks much.

STEVEN ROY GOODMAN: That was it.

KATE SMITH: He's an education consultant and admissions strategist.