Research from MIT's School Effectiveness & Inequality Initiative found making college more affordable cut dropout rates and boosted degree attainment.
The benefits bestowed by a college degree are well-known. Degrees open access to job opportunities and, with them, economic stability. The average earning potential of a college graduate is roughly twice that of someone with only a high school diploma. Graduates are less likely to live in poverty, more likely to be married, and more likely to be satisfied with their life and career choices. And the number of jobs that require a degree or postsecondary school training continue to increase.
Many Americans can recite this litany, yet when it comes to attaining college degrees, the United States is woefully behind its Western peers. According to the U.S. Department of Education, America was the world leader in degree attainment by young adults a generation ago. Today, it ranks thirteenth. Nearly half of students who begin college don't finish within six years, with a quarter of low-income students dropping out by their second year.
Meanwhile, tuition continues to rise. Even after adjusting for inflation, the costs of attending a four-year public school have doubled in only three decades. Such ballooning expenses have spearheaded a $1.6 trillion student debt crisis.
For many young people looking toward a brighter future, college has become a gateway locked from the inside. As the Department of Education concluded: "Today, college remains the greatest driver of socioeconomic mobility in America, but if we don't do more to keep it within reach for middle-class families and those striving to get into the middle class, it could have the opposite effect."
Research has looked into the predicament and now suggests a daring, counterintuitive means of increasing degree completion among young people: We make college affordable.
The study groups
An aerial view of MIT and Harvard Bridge. The university's School Effectiveness & Inequality Initiative partnered with the Susan Thompson Buffett Foundation for the study.
Credit: Adobe Stock
The study comes from MIT's School Effectiveness & Inequality Initiative. Its researchers wanted to determine the effect scholarships had on degree attainment. As they put it,
"Financial aid is typically motivated by a desire to increase postsecondary attainment by making college more affordable. This raises the question of whether aid meets this test by boosting educational attainment. As with any sort of award or subsidy, it's worth considering the extent to which financial aid changes behavior. The fact that aid is motivated by the desire to increase schooling does not mean aid programs accomplish this."
To test this question, they partnered with the Susan Thompson Buffett Foundation, an organization that offers scholarships to first-time freshman attending public colleges in Nebraska. The researchers designed a partially randomized study around the Foundation's 2012–2016 scholarship applicants, a cohort of roughly 16,500 students seeking aid.
Because low-scoring applicants were unlikely to complete college, they were not provided a scholarship and were removed from the study. Similarly, while high-scoring applicants were awarded a scholarship, they too were removed from the study as their degree completion was likely with or without the financial abetment. This left a middle pool of applicants, each sporting a comparable level of need and college-readiness.
The Foundation awarded scholarships randomly to this middle group of applicants; those who did not receive scholarships served as the controls. Because the number of applicants far exceeded the available aid, no student was artificially denied a scholarship for the study's sake. All told, the study included 3,699 scholarship-awarded participants and 4,491 controls. Most sought degrees at four-year colleges though some matriculated into two-year schools.
As this group was comparable in areas such as GPA, colleges attended, and expected family contributions, any statistically significant difference between the recipients and the controls would provide some evidence of a causal connection between financial aid and degree attainment.
Easing the six-year itch
The researchers followed the students' college careers, from freshman year to spring 2019, and found that the scholarships did change behavior. Enrollment was only slightly higher for the aid recipients than the controls—98.7 percent compared to 96.1—but as the two groups' college careers continued, a noticeable difference emerged in dropout rates. By the end of their fourth year, only 71.6 percent of the control group remained, a dropout rate of 24.5 percent; meanwhile, the scholarship group only declined by 18 percent.
The scholarships also bolstered degree completion. Though bachelor degree completion was roughly even by the end of the fourth year, the aid recipients began to pull ahead after that. By the end of their sixth year, 71 percent of the award recipients received their degree, 8.4 percentage points more than the control. This suggests that as degree completion began to drag on longer, the infusion of extra financial resources made the final push more manageable.
The researchers not only found that aid promotes full-time enrollment, but that it benefitted historically underrepresented groups most, including non-white and first-generation applicants. These findings support a growing body of research that suggests college affordability directly impacts student decision-making and degree attainment.
The study, titled "Marginal Effects of Merit Aid for Low-Income Students," is part of an ongoing research study. Additional reports will be released as the study continues.
What does college affordability mean?
Scholarships are one way of making college more affordable, but they are part of a much larger conversation as to what affordability means.
The ballooning cost of tuition in recent decades is another concern. Factors for this surge include a massive increase in demand, cuts in state funding, new student services, and bloated administrative compensation. While colleges could certainly rein in some of their more extravagant expenses, and legislators agree to fund more, the question of affordability goes further still.
It concerns the quality of education, whether students are dependent or independent, their resources before matriculating, what they can expect from the investment after graduation, and how much of their future income they are willing (or able) to pay. The calculus must also consider available alternatives, their costs, and their potential outcomes. It's a multifaceted balancing act between what's available, what students can afford, and what schools can offer with the resources they have available—which, of course, ties directly to the funds that schools have available.
In an op-ed for Higher Education Today, Susan Baum, a senior fellow in the Education Policy Program at the Urban Institute, correctly points out that a "low-cost program designed purely to train people for an occupation that is unlikely to exist in 10 years, while appearing 'affordable,' is not affordable at all."
So then, how should we think about college affordability?
Baum recommends we start the conversation with need-based considerations at the forefront. "The financial resources available to a student at the time of enrollment are critical. Students have very different starting points for measuring outcomes and value depending on their circumstances," Baum writes. But it also requires us to think beyond funding; we need to consider the resources colleges need to provide a valuable education as well as the types of experiences that students want.
If we want more students to graduate, we need to discover the right balance between moderate spending, need-based aid, and program quality, a balance that will make college accessible to all who desire to attend.
A new survey found that 27 percent of millennials are saving more money due to the pandemic, but most can't stay within their budgets.
It can be tempting to look at the economic history of the last two decades and derive a certain lesson. That lesson being: The millennial generation is screwed. The Washington Post even tagged millennials as the "unluckiest generation in history."
It's understandable why the punditocracy would think this. Born between 1981 and 1996, millennials exited school and entered work right into the Great Recession. The recession forced many millennials to postpone financial milestones such as marriage, buying a home, retirement savings, or even reliable employment. That global setback quietly became a generational one. While the baby boomers and GenXers recovered their lost wealth relatively quickly, millennials couldn't and became the first generation with a standard of living lower than their parents'.
A decade later, millennials face the pandemic shutdown. Although we can't say with certainty how the pandemic will affect us in the long-term, early forecasts suggest millennials will again take the brunt. Pew Research Center data, for example, suggest that about a third of millennial-aged homes have had someone in the household lose a job, while Bureau of Labor Statistics (BLS) data forecast millennials suffering longer stretches of joblessness.
"Millennials are in a fundamentally different economic place than previous generations," Reid Cramer, director of the Millennials Initiative at New America, wrote in "The Emerging Millennial Wealth Gap. "Relatively flat but volatile incomes, low savings and asset holdings, and higher consumer and student debt have weakened their finances. The Millennial balance sheet is in poor shape."
Taking control of bad luck
According to a recent survey by The Manifest, a business news website, millennials agree with Cramer. The study found that, of millennials surveyed, their largest expenses were housing (66 percent), educational expenses (9 percent), and health insurance (6 percent). In light of the COVID-19 pandemic, millennials are using the remaining 19 percent of their paychecks to budget and increase their savings.
About a third of millennials said they are saving more money in response to the pandemic and creating new budgets for themselves. In fact, of all generations surveyed, millennials felt the most comfortable creating personal budgets. They were also willing to think critically and adjust budgets to match financial changes, both signs that this highly-educated generation is willing to learn and adapt.
Millennials still have a rough road ahead, though. According to the survey, about half of millennials make less than $50,000 a year. That puts them into the upper-lower or lower-middle income class, depending on where in the country they live. That matches BLS data, which shows millennials earning less than older non-millennials. The BLS also notes that while millennials have less debt than GenXers, most of that is student loan debt rather than mortgages.
And despite their budgetary plans, only 11 percent of millennials surveyed were able to stay within budget, while uncertainty still looms in the future job market.
With all this said, there are caveats to The Manifest survey. It hosted a relatively small sample size, only surveying 502 Americans. Of those, millennials made up 22 percent of respondents. They weren't even the largest cohort in the study. That was the baby boomers at 32 percent.
This makes the survey more suggestive than indicative. But the suggestion is that millennials, to borrow a phrase from writer Vicki Robin, are ready to reinterpret their relationship with finances.
A push for financial freedom
While budgeting and financial savvy have always been important, the millennial generation will need to be far more critical of their relationship with the economy. What Robin calls the old roadmap—the idea that "growth is good, more is better, game over"—is unlikely to support millennials as it did past generations. They'll need a new roadmap, charting both a new macro (the relationship between our economic and ecological footprints, for example) and micro (our individual relationships with money).
Because the macro is a whole other article, we'll stick with the micro here:
1) Track and cut your spending
The first step to financial freedom is to track your spending and cut unnecessary purchases. For Robin, these are often the things, services, and subscriptions that we buy out of habit, but we no longer consider whether they add value to our lives.
A pernicious modern example is the subscription economy. We subscribe to services for food, clothes, television, exercise, self-help, video games, bric-a-brac, computer programs, and on and on. These services quickly fade into the financial background as just another bill we pay.
But if we watch Netflix nine times out of ten, why pay for Hulu and Disney+ and HBO Max and CBS All access? Instead, every month or so, we should scrutinize our subscriptions to ask whether they still add value to our lives. If they don't, unsubscribe.
2) Kill your debt
Debt doesn't just take away money we could save elsewhere; it's also a self-replicating devourer of wealth. Your debt interest rates are almost certainly higher than your investment returns, especially on credit cards. Because of this, no matter your saving rituals, you're likely bleeding wealth the longer you remain in debt.
Instead, focus on removing debt from your life. Again, credit card debt especially. The good news is that most companies have hardship programs to help debtors. You can call them to see if they can lower your interest rates or provide other helpful services.
"Financial accommodations are generally readily available right now," Amy Thomann, the head of consumer credit education at TransUnion, told the New York Times. "Lenders, just like consumers, understand the hardships that are going on in the economy."
3) Have an emergency fund
Of course, you'll need some savings when the unexpected happens. Say—I don't know—a worldwide pandemic? Experts like Robin and Thomann recommend people have three to six months' worth of expenses on reserve. These should be in liquid assets so you can access them easily and quickly.
Of course, that's not always feasible, but you should save what you can.
4) Find social outlets that don't cost
The economic shutdown has offered one financial boon: It has revealed ways we can enjoy each other's company with overspending. We can host movies remotely with our friends. Play video games online. Enjoy physical-distance strolls through the park. And a host of other creative connections. After the pandemic, the occasional bar hop or Friday dinner out can still be a guilty pleasure. But unlike sitcom characters, we shouldn't be spending our social lives on the set of our favorite coffee shops or local watering holes.
5) Reconsider your relationship with money
Robin pushes her readers to be financially free. That is, to understand that there's an economy, people have a relationship with it, but it shouldn't become an obsession that runs their lives. As she told Big Think: "It's like there are so many presumptions that drive us into wage [slavery], and it doesn't matter whether you are at the low end or the high end. If you are engaged in that sort of anxious process of 'more, more, more,' you are not free."
The millennial generation has certainly been dealt a bum hand, but it's perhaps defeatist, and more than a little premature, to label them the unluckiest generation. Perhaps after being led astray by the old roadmap, they will be the generation to reconsider their relationship with money—not as an end itself but a means to a healthier and more beneficial life.
Finances can be a stressor, regardless of tax bracket. Here are tips for making better money decisions.
- Whether you have a lot of money or a lot of debt, it matters how you handle your personal finances. A crucial step when it comes to saving is to reassess your relationship with money and to learn to adopt a broader, more logical point of view.
- In this video, social innovator and activist Vicki Robin, psychologist Daniel Kahneman, Harvard Business School professor Michael Norton, and author Bruce Feiler offer advice on achieving financial independence, learning to control your emotions, spending smarter, and teaching children about money.
- It all starts with education and understanding. The more you know about how money works, the better you will be at avoiding mistakes and the easier it will be to take control of your financial circumstances.
Johann Hari knows that mental health is really a social issue.
- Johann Hari believes we need to treat universal basic income as an antidepressant.
- In his book, Lost Connections, he writes that 65-80% of people on antidepressant medication are still depressed.
- Instead of treating depression as a chemical imbalance, we need to look at the social causes really driving it.
In 2015, a team of researchers led by Brett Ford at the University of California, Berkeley (now at the University of Toronto), asked a seemingly simple question: Can you consciously make yourself happy? Populations in Japan, Russia, Taiwan, and the United States were studied. It turns out that you can will yourself into happiness—except if you live in America.
As the team writes,
"This pattern of results suggests that a culture's degree of collectivism may play a role in shaping the correlates of pursuing happiness."
In his book, Lost Connections, Johann Hari discusses this landmark study with Ford. The differences between individualistic cultures like America and collectivistic societies, such as Japan, China, and South Korea, have long been investigated by social scientists. Time and again, the latter produce better outcomes in terms of happiness, well-being, and life satisfaction. A question has long been hanging in the air: Why isn't America more like these countries? Surely, the richest nation on the planet should be able to provide for its citizens' mental health.
I've written about this difference before, and the criticism I receive tends to trend political—communism versus democracy, socialism is evil, etc. On that front, let's consider South Korea's response to the coronavirus pandemic. The constitutional democracy reported its first case the same day as the United States, yet the country was able to flatten the curve within weeks. That's what happens when a functional government immediately intervenes, tests as many people as possible, and puts restrictions in place on day one.
Meanwhile, our miracle never happened. An unprepared government might be the major problem, but public health issues are multivariate. Here's where the social distinction matters. In South Korea (as in China), citizens honored the restrictions because they knew that the orders were in the best interest of society. Meanwhile, in freedom-loving America, a "liberty rebellion" was recently held in Idaho, while across the country pastors call for the faithful to gather. Some Floridians even want beaches to open.
Depression and anxiety: How inequality is driving the mental health crisis | Johann Hari
Reports from Italians and South Koreans and Chinese tell us that sheltering at home is hard. These videos also reveal something important: The citizens know their compliance serves a greater good, protecting their health care workers, elderly, and immunodeficient peers. Over here we're experiencing an uptick in anxiety and depression. This isn't surprising in a culture that's all about the individual.
Depression is Hari's wheelhouse. He went through the ringer trying to fight it with prescription meds. In the process of conducting research for his book, a number of uncomfortable truths emerged. Namely, that the normal course for fighting depression—SSRIs and SNRIs—isn't working. They never really did, at least not in the long term. Reporting on extensive research on antidepressant medication, he writes,
"The numbers showed that 25 percent of the effects of antidepressants were due to natural recovery, 50 percent were due to the story you had been told about them, and only 25 percent to the actual chemicals."
In 2010, journalist Robert Whitaker came to the same conclusion: It's the environment, dummy. The problem is that the story of a chemical imbalance is easy to grasp. Complex social dynamics—income disparity, racism, verbal and physical abuse, gender discrimination, technology addiction—are cognitively taxing, though these are the real drivers of depression. "The medicine clearly doesn't fix a chemical imbalance in the brain," he writes. "Instead, it does precisely the opposite."
Hari writes that between 65-80 percent of people on antidepressants continue to be depressed. Clearly the drugs aren't working. What then to do? You have to address the root problem. Let's start with income disparity so that the citizens of the richest nation in the history of Earth can pay their rent. Perhaps, as Hari recently suggested, we should try universal basic income.
"The single biggest thing that will affect people's anxiety is not knowing if you're going to be thrown out of your home next month or how you're going to feed your children. And I think there's an element of cruel optimism in telling a country of people living paycheck to paycheck that they should be responding to the anxiety they're experiencing this moment primarily by meditating and switching off the news. That's not going to solve the problem. The single most important thing that has to be done to deal with people's depression and anxiety is to deal with the financial insecurity they're facing."
Bottles of antidepressant pills named (L-R) Wellbutrin, Paxil, Fluoxetine and Lexapro are shown March 23, 2004 photographed in Miami, Florida. The Food and Drug Administration asked makers of popular anti-depressants to add or strengthen suicide-related warnings on their labels as well as the possibility of worsening depression especially at the beginning of treatment or when the doses are increased or decreased.
Photo Illustration by Joe Raedle/Getty Images
Rather socialist of him, but really, the "we can't afford this" argument aimed at everything our administration can't monetize has always been wrong. It's getting dangerous out here, and it's not clearing up.
Hari isn't denying that there can be biological and genetic causes of depression. As he argues in his book, we completely overlook the social causes. Decade after decade, the American social structure has been fragmenting more and more. Our close relationships are shrinking. A million online friends will never replace the one person you can call at midnight to work through troublesome thoughts with.
Depression isn't a brain malfunction. That might be a result, but it's rarely the cause. Rather, Hari writes, it's "an understandable response to adversity." Right now, we're collectively trying to manage the most widespread adversity in generations. Pretending that you can slay that dragon yourself will only get you burned.
The first level is individual: strengthen your social connections. This might prove difficult at this particular moment, but framing this challenge as a societal issue is going to serve you better in the long run than taking it personally. Of course, none of this is easy. We've been raised to believe that each one of us can be our own brand—a rather lonely occupation. Humans are social animals. We need to honor that.
The second level requires participation in our democracy, which means voting for representatives that champion concepts like health care for all and UBI. This nonsensical argument that we can't pay for it while a tiny percentage of the wealthiest citizens pay little to no taxes is ludicrous. In Lost Connections, Hari reported from Berlin's low-income neighborhood of Kotti, where rent hikes were driving lifelong residents out. Conservative Turkish immigrants, German hipsters, and the owner of a gay club, usually wary of one another, came together to fight back. Not only did they win (not every victory, but some important ones), they were bonded by their shared sense of community. Many became friends.
Hari notes that El Salvador, which happens to be among the world's poorest nations, has canceled every citizen's rent and utility bills for the next three months. "If El Salvador can do it," he says, "America can do it." It will require, as he writes, rethinking what medicine actually is.
"An antidepressant...isn't just a pill. It's anything that lifts your despair. The evidence that chemical antidepressants don't work for most people shouldn't make us give up on the idea of an antidepressant. But it should make us look for better antidepressants—and they may not look anything like we've been trained to think of them by Big Pharma."
If you want to fight depression and anxiety, you need to change the story you tell yourself. As a society, we need to empower everyone so that they can climb the bottom rungs of Maslow's hierarchy of needs—ensure everyone's health and provide enough financial support for basic needs—and encourage group participation instead of espousing the bootstraps rhetoric. It's not rocket science and it's certainly not modern psychiatry. It's common sense.
More frequent sex has been linked with higher income rates, according to a 2013 study.
- A 2013 study associated more frequent sex with higher income rates. The initial hypothesis suggested that medical, psychological and physical positive effects of sexual activity could influence wage factors in working adults.
- Maslow's Hierarchy of Needs all tie in with a healthy sex life, according to several studies listed below.
- Scoring high on Maslow's Hierarchy of Needs is directly linked to securing and maintaining high-wage income and making smarter financial decisions.
A 2013 paper written by Nick Drydakis, professor at the School of Economics, Finance, and Law at Anglia Ruskin University (UK), suggested a link between more frequent sex and higher income rates. The initial hypothesis of this study was that the medical, psychological, and physical positive effects of sexual activity (good health, endurance, mental well-being, etc.) could influence wage factors in working adults.
The hypothesis was proven to be correct - according to the results of this study, employees who are having sex more than four times per week reported receiving statistically significantly higher wages than those who reported having less sex.
Maslow's Heirarchy of Needs
When our basic needs are being met, we are more motivated to excel in our careers, earning (and saving) more money in the process.
Image by Shutter_M on Shutterstock
The study referenced Maslow's Hierarchy of Needs, which outlines the basic human needs that need to be met before other motivations for better-living occur. This has been deemed as a "theory for human motivation," as American psychologist Abraham Maslow stated that when these needs are met, the individual can lead a happier, more fulfilled life.
The five basic needs are:
The link between Maslow's Needs and your sex life
While there are many ways to fulfill Maslow's Needs, a healthy sex life (or happy relationship) checks a lot of the boxes.
Physiological needs such as the need for sleep, food, and oxygen don't require a mate, however the physiological need for reproduction does.
Safety and belongingness are qualities often associated with relationships, either romantic or platonic. Whether it's a lifelong friendship or a close intimate one, that human connection satisfies the second level of Maslow's hierarchy.
Esteem for Maslow refers to the need for respect, self-esteem, and confidence. Confidence and high self-esteem have been directly linked to active sex lives and vice versa, according to Harvard Medical School.
Self-actualization represents the highest motivations that we have as human beings. These are things that drive us to realize our full potential and help us become our most ideal self. According to this 1995 study published in Psychological Reports, self-actualization and empathy are key predictors of high marital satisfaction.
The link between a healthy sex life and a satisfying high-income career
The reasoning behind Maslow's Needs is that if these basic human needs aren't being met, the human will not be able to function or thrive in society. People who have these needs met are happier, more fulfilled individuals, and are more successful in work and relationships. The more successful you are in your career, the better chance you have for higher-income jobs or salary bumps.
A healthy, active and happy intimate/sexual relationship is key to accomplishing Maslow's 5 Needs, which in turn is critical to helping you land a high-income job that you care about.
Couples in successful relationships have mastered the skill of “financial harmony”
"Of all the intimacies you share, the sharing of money sparks the most arguments and creates the most resentment and confusion."
Photo by fizkes on Shuttestock
A recent FFCI (Forum for Family and Consumer Issues) study which took place over a period of two years and included a total of 161 participants showed a direct link between what is described as "financial harmony," or agreeance over financial roles and ideas, and happiness of the overall relationship. The study was completely voluntary and confidential.
Money can be a major cause of conflict and stress in relationships and because of this, there is a significant link between good finances and happy relationships. More than 60% of participants in this survey stated that financial problems increased the amount of stress in their romantic lives.
Citing an article by Felton-Collins and S.B. Brown, the authors of the FFCI study wrote that "Of all the intimacies you share, the sharing of money sparks the most arguments and creates the most resentment and confusion."
Marriage therapist Barton Goldsmith is quoted saying that "couples may find it harder to talk about money than about sex." This idea that sex is a delicate and controversial topic even in the most intimate relationships furthers the notion that being in "financial harmony" with your significant other is a key to a successful long-term relationship.
The impact of sex on your finances, and vice versa, according to a marriage therapist
If given a choice between answering two questions (your favorite sex position or how much money was in your savings account right now), most people would choose to describe intimate details of their sex lives rather than list a number in a bank account. Why? Because sex is easier to talk about than money.
Sex is fun, interesting, and feels good - money is known to cause stress. Add to that each person's individual history and view on finances, and you can understand how talking about finances in any kind of romantic relationship can feel extremely difficult.
However, according to marriage and family therapist Lisa Bahar, not only does financial stress impact intimacy, but the lack of financial stress can improve intimacy (and vice versa).
"Couples who are experiencing financial strain have a higher likelihood of experiencing disruptions or difficulties in the bedroom", she explains in a 2015 interview. "I see more and more with the strain that the economy/financial impact has on couples that there is a decrease in interest and a feeling of disconnection, which plays out sometimes by withholding or shutting down among partners."