MONEY College

How to Judge a College By Its Career Services Office

ESPN "This is SportsCenter" campaign with Bucky the Badger, the official mascot of the University of Wisconsin–Madison, by Wieden+Kennedy.
Will your child's dream school land him his dream cubicle? Wieden+Kennedy

The placement office is now one of the most important stops on the campus tour.

With loan-burdened students and parents increasingly demanding that a BA lead to a J-O-B, colleges are beefing up their placement services. This year, for the first time since the financial crisis, the typical career office—which has struggled with caseloads of about 1,500 undergrads per staffer—­enjoyed a boost in operating budget instead of a cut, the National Asso­ciation of Colleges and Employers (NACE) reports. “We’re about to experience the golden era of career services,” says Thomas Devlin, director of UC Berkeley’s career center.

To ensure that gold enriches your kid’s job search, look for colleges with good answers to the following questions. Just be sure to temper sales spiels with feedback from students and alumni, plus data from sources like

How is the office staffed? The best career offices have caseloads of fewer than 1,100 undergrads per counselor, allowing at least one staff hour per student per year. Expertise matters too. “It’s a bad signal if a school doesn’t have someone dedicated to encouraging employers to recruit,” says Andy Chan, vice president of career development at Wake Forest. Each office should also have a person who specializes in connecting students with alumni, as well as an expert in technology and social media (like LinkedIn).

What services are offered? Employers prefer to recruit at campuses where students come to interviews prepared and book meetings only for jobs they’d actually consider, says Dan Black, president of NACE and Americas director of recruiting at professional services firm EY. So confirm that the school works with students one-on-one to narrow the
ir career focus and coaches them for interviews, he says. And ask if there are formal ways of networking with alums, like shadowing or mentoring; if academic departments also work on career skills; and what help is offered to grads, whether it’s simply job listings (eh) or counseling (better).

When does career prep begin? Studies show that the sooner students start working on career preparedness, the better they do in the job market. Ideally, the college will be equipped to work with students during their first or second year. Since underclassmen tend to steer clear of career services, though, some schools are experimenting with ways to motivate young’uns to think about vocations. Willamette University, in Salem, Ore., for example, requires freshmen to create a résumé before registering for sophomore classes.

Are internships a priority? On-campus recruiting by prestigious employers is definitely a good sign, but few undergrads get jobs that way, says Bob Orndorff, associate director of employer relations at Penn State. Meanwhile, at least 24% of internships lead to job offers, NACE reports. “Employers are looking for recruits with rele­vant experience,” Orndorff says. So find out how the school helps arrange internships and what percentage of students get them. The more students doing paid internships, especially, the better.

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WATCH: Was your college’s career services office any help?

MONEY 101: How to start saving for college


Are we at risk of another banking crisis?

One bank's failure can take down other banks -- and the economy, says Anat Admati, an economics professor at Stanford's Graduate School of Business. Photo: Joe Pugliese

Anat Admati, professor of finance and economics at Stanford University’s Graduate School of Business explains how to prevent another meltdown from taking place in the U.S. banking sector.

The big question: Are we at risk of another banking crisis?

Oh, yes. Definitely. We continue to have a system that’s way more prone to crisis than it needs to be.

Why are we still vulnerable?

Banks continue to be much too highly indebted and interconnected. That means they all tend to get in trouble at the same time, and the failure of one can take down others. It creates a contagion that spreads through the economy.

As with speeding, everything is fine as long as you don’t have an accident. When you have an accident, others can get harmed.

In your new book, The Bankers’ New Clothes, you and co-author Martin Hellwig say one simple, radical move can help. What is it?

You need to reduce dramatically banks’ indebtedness and increase dramatically the reliance on equity funding. This would make it less likely that the banks get into trouble, need bailouts, or drag down the economy.

So what’s equity funding, in practical terms?

It’s like the equity in your home, which is what you would have after selling the house and paying your mortgage. In accounting, it is the value of assets minus debts or liabilities.

For banks, one kind of debt is your deposits: A bank borrows your money to make loans or other investments. Its equity funding is money that is not borrowed from depositors or other sources, but instead comes from stock sales or retained earnings.

Why do banks borrow so much money instead of selling stock?

Banks, like all corporations, get a tax break on their interest payments, just like your mortgage deduction. But that’s not the only way that we subsidize and encourage banks’ borrowing and risk taking.

What do you mean?

People lend to banks at low rates because the banks have Uncle Sam or the FDIC to catch them if they fail. Large banks are not paying for the implicit guarantee to their creditors that the government will bail them out if something goes wrong.

How do you propose banks go about increasing their equity?

The easiest and most straightforward way is to avoid paying cash out to shareholders in dividends. Banks should retain their earnings just like Warren Buffett does. Publicly traded companies can raise more equity by selling more shares.

Wouldn’t shareholders object? Our readers love dividends.

The people who really benefit from bank dividends are bankers or people whose wealth is concentrated in banks. You and I are diversified shareholders. Any happiness you feel when banks pay dividends is shortsighted, because the payments harm the economy by making banks more fragile. And in a financial crisis, a diversified portfolio suffers.

Once banks build up enough equity, they can resume paying dividends.

Banks have rejected calls for increased equity. They say these higher capital requirements will reduce the amount of money they can lend. True?

No! Equity is just like debt: a source of funds for banks’ loans and other investments. If banks retain their earnings or sell more stock, they can use the money to make more loans.

They’ve also argued that it will hurt shareholders by cutting their return on equity — a bank’s profits as a percentage of its equity.

The focus on ROE may have more to do with bankers’ compensation than with shareholders’ wishes, since ROE is often used to calculate bonuses. ROE may fall if a bank uses more equity, but risks will be lower too, so shareholders would require less of a return.

How much equity are banks required to have now?

U.S. rules let banks have as little as 3% to 4% of their total assets as equity. The rest they can borrow.

How much equity do you think banks should have to be safe?

I think 20% to 30% of total assets is appropriate.

That’s quite a jump. Why so high?

Having more equity makes for better lending decisions. Highly indebted banks avoid making boring but productive business loans, because there is not enough upside. It is similar to how a homeowner who has little or no equity left in a house doesn’t put in new windows, because any investment in the house benefits the lender, especially if the homeowner owes more on the mortgage than the house is worth.

Banks funded with more equity will be able to make loans more consistently and they will make better lending decisions that would help the economy.

What do you think, realistically, can actually get done to improve the banking system?

A bipartisan partnership, Sen. Sherrod Brown (D-Ohio) and Sen. David Vitter (R-La.), is pushing a proposal similar to mine: It would require 15% equity for the six largest U.S. banks. This is a sensible, cost-effective measure that would correct enormous distortions. The politics of it are very daunting, and there will be a lot of lobbying. The battle has not seriously begun.

Would it help to make banks keep more money in their vaults?

I’m talking about how banks get their money, whether it’s through borrowing or other means. What you’re talking about are reserve requirements, which limit how banks can use their money. Unless reserve requirements are very high, they don’t reduce banks’ fragility.

Let’s say a bank has $100 in assets, and $10 of that is sitting in the form of cash reserves, earning little or no interest. If the bank invests the other $90 in risky derivatives and loses $20, the bank may not be able to pay its creditors, and will go underwater. Having that $10 on hand won’t keep it solvent.

How is your proposal different from the Dodd-Frank reforms that, for example, give the FDIC the right to take over institutions if their troubles threaten the financial system, as Lehman Brothers did?

Dodd-Frank gave regulators much greater authority. Unfortunately, it was regulators who allowed risks to grow before the crisis, and they still are not protecting us. The Federal Reserve, for example, lets banks pay dividends based on flawed stress tests.

The investigation of J.P. Morgan Chase’s $6 billion derivative loss in 2012 reveals poor risk controls. And Attorney General Eric Holder has said some banks are still too big to prosecute. These are clear indications that something is really wrong.


College is Free! (But Sometimes You’ll Get What You Paid For.)

You can take college courses online for free -- but can you get credit for them? Illustration: Justin Wood

A guide to the frequently awesome, frequently buggy world of massively open online courses.

Two things about higher education have become clear. First, your children need it more than ever to stay competitive — and so might you, if you need to upgrade for a fast-changing job market. Second, the model colleges use to deliver that education is broken. Rising tuition, high student debt, and stingier funding for public colleges are making it more difficult for families to keep up.

So it’s hard not to get excited about this: Right now, for the unbeatable price of $0, Massachusetts Institute of Technology professor Anant Agarwal is teaching a class on circuits and electronics to thousands of people online — no MIT application required. Harvard, Princeton, Michigan, and other top schools have also started open courses for everyone.

The academic world is buzzing with the notion that this could change, well, everything. “We are at a pivotal moment,” says former Princeton president William Bowen. “Two forces are combining: extraordinary technological progress with economic need.”

True, it’s a long way (and many spinning “video loading” icons) from here to a day when students can put together respected degrees with Ivy simulations.

While logging in is free and easy, getting official credit for what you learn still isn’t. Online courses have bugs, including raucous student discussion boards and clumsy grading systems, and for many they are an inferior substitute for real classrooms. Yet there’s promise here for adults who want a new career skill, for traditional students looking for learning aids, and for anyone hoping to speed the path to a degree. More change is coming.

Here’s what you and your kids should know to make the most of it.

You can really sit in on courses with MIT profs

Agarwal’s course is known in education jargon as a MOOC, or massive open online course. Web courses and online degrees have been around for years. As the name implies, MOOCs are different for their size (with tens of thousands of students at a time), their free price tag, and, frankly, the cachet of the schools that started them.

A typical massive online class includes several short recorded lecture modules each week and reading assignments. You’ll chat with other students online, and there’s homework, which may be graded by a computer or by peers. Some classes offer a few online meetings in which professors address questions posed by students. Although there may be a weekly schedule, it’s flexible.

“I completed the first three weeks of classes while patrolling the Bering Sea,” says Coast Guard Lt. Cmdr. Greg Tozzi, who took a finance course taught by a Georgia Tech professor.

Tozzi’s class wasn’t delivered by Georgia Tech, but through a website called, which offers more than 300 classes from 62 schools. Two Stanford professors kicked off the for-profit venture with more than $22 million raised from colleges and Silicon Valley venture capitalists. (Where profits will come from, as with lots of tech startups, is hazy.)

Harvard and MIT have started a similar nonprofit hub at, where you can learn Greek classics from a Harvard prof or quantum mechanics via Berkeley.

Don’t want to wait for a course to start? Carnegie Mellon has free self-paced courses that you can try anytime at, and so does the nonprofit

Another for-profit site,, mostly offers classes without a university’s stamp, but it features star teachers like founder Sebastian Thrun, a co-inventor of Google’s experimental self-driving car, who teaches artificial intelligence for robotics. It was Thrun who sparked the frenzy for MOOCs in 2011, when he opened his 300-student Stanford class to web auditors, and 160,000 signed up.

No, it’s not the same as going to MIT

About 23,000 online students passed Thrun’s computerized exams. Here’s what they got: a sense of accomplishment and a PDF from Thrun suitable for printing and framing.

While Stanford, Harvard, MIT and the like may be building massive classes, they are not interested in letting you get Stanford, Harvard, or MIT credit.

The MIT-built MOOCs offer a chance to earn an”MITx” — not MIT — credential that won’t on its own help you toward a degree but might look nice at the bottom of a résumé next to other continuing-ed classes.

Coursera classes developed by Princeton, on the other hand, don’t even offer a certificate. And while a Duke MOOC on Coursera may earn you a “statement of accomplishment” from the instructor, Duke won’t award its own paying students credit hours for taking one.

Schools are guarding their prestige carefully. One of the valuable things about an MIT diploma, after all, is that it tells people you are one of the brilliant few who got into MIT. But there are also real quality differences between MOOCs and the classroom.

Aaron Krolik is one of 450 Duke students paying about $4,200 in tuition to take an on-campus course on genetics and evolution this semester; Duke has a free online course using the same lectures. Krolik doesn’t feel ripped off.

“I think there is a lot more that you get out of going to a university than the information,” Krolik says. And he does not mean Blue Devils basketball. He and his classmates see professor Mohamed Noor three times a week, and Noor uses extra class time to answer questions and help students with additional exercises.

Noor says five of his Duke students have dropped out or are in danger of failing. By comparison, roughly 10,000 of 12,000 online students who watched the first lecture either are failing or have given up.

Soon, Ivy classes may be part of a State U. degree

If massive classes were nothing but an elaborate new adult-enrichment program, the story would end here. But the growth of free online courses is happening at a time when the link between where you learn something and where you get the credit is breaking down.

Even if there’s no cheap and easy back-door into an Ivy like the University of Pennsylvania, a student may soon be able to take what she learns from the Penn-taught calculus class on Coursera and have another college award the credit.

Here is how it might work. In February the American Council on Education, the leading association of colleges, said it would recommend that colleges accept credit for some massive online courses.

Coursera’s Penn calculus class is one of four college-level MOOCs — all on Coursera — with an ACE recommendation as of early April. To get credit, you first must pay Coursera a fee, currently $128, for verifying your identity and proctoring the exams. (This could be one way Coursera someday makes money.) This doesn’t, however, guarantee a college will follow the ACE recommendation and award credit. It’s up to you to persuade your school.

That may get easier soon, and the result could be more-flexible or lower cost degrees. In California, legislators are considering a bill that would push state colleges toward accepting ACE-recommended online courses for credit.

In an experiment, San Jose State is offering credit for three Udacity courses it created, for $150 each. And more colleges are allowing students to study on their own — perhaps with a MOOC — and then pass exams that have been preapproved for credit. The University of Wisconsin system is launching a degree-completion program that will allow people to test their way into a BA.

Most people who try a class don’t finish it

The Duke genetics class’s low pass rate isn’t unusual. Katy Jordan, a Ph.D. student in education technology at Britain’s Open University, says that in 27 massive online courses for which she’s found completion data, some 93% of students drop out or fail.

Those numbers need some context: A free class will draw people who just want to try it out, and it’s easy to walk away when you’ve never written a check. Even so, Jordan, who has finished eight MOOCs herself, says the classes also have some features that turn many students off.

With thousands of students to evaluate, grading can be buggy or just plain wrong. Humanities courses rely a lot on peer grading, which can be tedious to do — and Jordan says some students report “quite rude” graders. In general, today’s MOOCs seem to work best in the sciences and other quantitative fields.

Course providers say they’re working to address such problems. But the track record of the earlier generation of online courses — the for-credit classes offered for years by traditional schools — suggests many students will struggle with them. Researchers at Columbia University have found that community college online students got lower grades and dropped out more often than those in regular classes.

“If we know community college students don’t do as well in online education, does it really make sense to be funneling [more] students into online classes?” asks Shanna Smith Jaggars, one of the Columbia researchers.

Jaggars says younger and struggling students are the least suited to online classes; they need the structure and time-management discipline of a classroom.

Traditional colleges will mix in MOOCs

Even if you aren’t interested in having your kids work toward a degree with online-only classes, what’s happening with MOOCs could nonetheless change their education.

MIT computer science professor Agarwal, who is currently president of edX, says he now assigns his short MOOC lectures to his class in Cambridge, Mass. In building his edX course, he learned that most students’ attention flags 15 minutes into a lecture anyway. Using online tools allowed him to create a “flipped” classroom — lectures are the homework, while class time is for collaborative work.

The flipped model also means that star teachers are now virtually exportable to lower-cost or less exclusive schools. Two Massachusetts community colleges, for example, are blending one of MIT’s free computer programming courses with their own.

The MOOC delivers lectures and sophisticated tutoring programs, but students also attend classroom meetings with instructors they know. “In two weeks we did what it would normally take a semester to do here,” says Mass Bay Community College sophomore Julian Kuk.

Free courses might boost your career

Free massive classes may hold the most appeal for adults looking to reboot their careers or just stay intellectually sharp. Tozzi, the Coast Guard officer, already holds traditional academic degrees, so, like a lot of people in midcareer or later, he’s not as worried about collecting credentials as he is about being able to hone specific skills.

He’s completed three classes on computing and investing and says the content is strong and the price is right. “The courses offered the chance to explore without having to deploy resources beyond time,” says Tozzi.

That may make MOOCs a real competitive threat to pricey professional education. David Seruyange, a software engineer in Sioux Falls, S.D., says he was considering a $32,000 master’s when he decided to try MOOCs instead.

“For-profit education and existing online-only degrees, such as MBA programs, will be most at risk,” says Karen Kedem, manager of the higher education team at Moody’s Investor Service.

Certainly it’s easy to see how a one-time liberal arts major who ended up in a numbers-driven business career might benefit from Carnegie Mellon’s open courses on statistics, or Udacity’s class on building an entrepreneurial startup.

Udacity and Coursera are trying to make MOOCs even more attractive to job seekers by getting into the recruiting business — flagging top students who opt in to employers.

David Luebke, senior director of research for Nvidia, who is co-teaching an Udacity class on programming, says he is watching student performance as well as interaction on discussion boards. “I see students who not only know exactly what is going on, but are being super-helpful,” he says. “That is exactly the kind of employee you want.”

This might wreck college — or save it

Massive courses open up higher ed to the price-slashing economics of the web. Building an online class isn’t cheap: A good one can cost $100,000, college leaders say. Yet once a school has a class for 1,000 students, the cost of letting in the next 100,000 is small. It’s the same effect that’s put free news on your computer — and is putting newspapers out of business.

George Mason University economist Alex Tabarrok, who has launched a MOOC platform called Marginal Revolution University with colleague Tyler Cowen, warns that some less prestigious but still expensive colleges may not survive. “I can go to the local university and take a class from an adjunct, or I can go online and get something from one of the best teachers in the world,” he says.

A bigger worry is that colleges that are desperate to hold down costs, especially state schools, may try to shunt students into cheap, low-quality online courses that will do more harm than good.

“A more expensive course might be a better value in the long run,” says Jaggars, if it helps more people pass and go on to graduate. She adds that the students who most need lower-cost options often don’t have reliable computers or broadband Internet access.

On the other side, the new technology could help universities hold down some teaching costs, keeping high-quality, brick-and-mortar college affordable for more people. (For example, a professor might leave lecturing to a MOOC to free up more time with students.) Or it could cut students’ costs by letting them pare frills or finish a degree faster.

“In the medieval period, the university was a citadel, walled off and separate,” says Jeremy Adelman, the Princeton professor who taught history’s first history MOOC. “We are post-citadel. It is wires, not spires, that define a university now.”

MONEY College

Taking Five Years to Earn a B.A. is Common—And Costly. Here’s How To Get Out in Four

Stressing out about how you’ll pay for four years of college? You should be so lucky. Most students take five to six years to earn an undergraduate degree, the Department of Education reports. That adds about $35,000 to the sticker price of attending a typical in-state public university and much more to the cost of most private colleges.

These moves will help your child get to the finish line in four years.

Pick a Supportive School

Colleges with much-better-than-average graduation rates—look for 50% and up at public colleges, 70% at private schools—often have adopted strategies to help students finish in four years, says Tom Sugar of Complete College America, which works to boost the number of Americans with degrees. Among them: capping graduation requirements for most majors at 120 credit hours; making sure students aren’t crowded out of required courses; and identifying kids in danger of falling behind early on and assigning advisers to help them. Still unproved are the graduation “guarantees” that a growing number of schools offer—essentially, if your kid doesn’t earn a degree in four years, the remaining tuition is on us. Be skeptical, Sugar says.

To identify schools with superior track records, search for your target college’s four-year grad rate at Then hit the “similar colleges” tab to find competitors with better outcomes. (A list of graduation rates at the country’s largest schools is at right.)

Don’t Lighten the Load

Your student’s first college math lesson: Divide the 120 credits typically required for graduation into eight academic semesters, and he’ll see that he needs to take at least 15 credits per semester, not the minimum 12 usually allowed. To make sure Junior has plenty of time for academics, have him limit jobs to 12 hours or less a week. Changing majors, which can involve a new set of required courses, may also set a student back. A possible solution: Go with a related major that will accept many of his existing credits.

Get Back on Track Cheaply

If a change of major or overcrowded courses threaten to delay graduation, your child may be able to fulfill requirements by taking summer or community college classes or a growing number of accredited online tests and courses. Hundreds of colleges give credit for passing grades on the College Board’s 33 College Level Examination Program (CLEP) tests or the competing DSST’s 38 exams. Cost: $80 per test. Traditional colleges have been slow to grant credit for online or alternative tests or courses, so students should check with their registrar and department head before committing time or money to an off-campus class.


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