The power of an entrepreneurship alumni network is an invaluable resource for students and alumni looking to start successful businesses. Not only do alumni networks and fellow classmates provide guidance, advice, and mentorship, they can also be conduits to lay the groundwork on which to build growing ventures.

As we continue to celebrate May Small Business Month, we at NerdScholar gathered our favorite alumni networks that help students find great business opportunities, get guidance from faculty, and cross interdisciplinary frontiers to turn their entrepreneurial ideas into realities.

Favorite Alumni Networks that provide networking opportunities   

Cornell’s Entrepreneurship Network (CEN)

At Cornell University, they place a high value on networking, and the main mission is to spur career success.  Their vast entrepreneur network helps students learn the ins and outs of launching a new business and connects them with fellow alumni who can provide advice.

The CEN is notorious for producing events on both the east and west coast that feature alumni speakers and opportunities to meet potential business contacts. Most recently, Cornell hosted their annual Silicon Valley event where top industry leaders in the bay area like Kara Swisher, founder and co-executive editor of All Things Digital, were present. Before such events, alum have the chance to partake in an open mic session where they give an elevator pitch of who they are, what they want from the event, and what type of professional they are trying to meet. They even provide online webinars and live streaming of events in order for Cornell alumni to access these resources remotely and globally.

In addition, Cornell’s uses the CoFoundersLab to help their alumni find co-founders based on geographic location, complementary skillsets, goals, and values. Alumni can simply take the “Entrepreneur Archetype Assessment” to find their match.

Georgetown Entrepreneurship Alliance 

Georgetown’s Entrepreneurship Alliance is alumni led and academically integrated with the university. They seek to provide current students a forum to interact with fellow students and alumni. Such interactions often lead to partnerships made in college like the one Nicolas Jammet, Jonathan Neman, and Nathaniel Ru formed and led to the launching of SweetGreen, which is not your conventional salad bar spot. The chain, concentrated in the east coast, uses local and organic ingredients from local farms in the east coast with the aim to be sustainable and cultivate meaningful relationships with those around them. To this end, they share healthy local foods and music by keeping a blog and hosting their annual SweetLife Festival where this year they invited Pheonix, Passion Pit, and other notable bands.

They even have specific sub-alliances for those interested in entertainment and media, the tech space, and venture capital. All in all, the Hoyas have a powerful resource to help them start their own businesses.

Favorite Alumni Networks that provide access to faculty

University of Washington Foster’s Buerk Center Entrepreneur Alumni Network

Foster’s Buerk Center Entrepreneur Alumni Network builds a bridge between students, alumni, and faculty in order to create a community that provides business opportunities and expands the school’s entrepreneurial activities.

Alumni have access to Foster’s highly acclaimed faculty, like lecturer and alumna Emer Dooley who has taught entrepreneurship to UW’s business, engineering, and computer science students for 11 years. In her TedX talk, she described an entrepreneurship education as learning while doing and gives students tips on what the top five skills of entrepreneurs are. Foster alumni undoubtedly have great faculty to seek guidance from.

Furthermore, alumni can connect with the center’s advisory board that contains members from the Seattle entrepreneurship community. They also hold events like networking parties, business plan competitions, and tailgates. The network is also very proud to cultivate entrepreneurship among their youngest students by having a dedicated alumni scholarship fund. 

Emory’s Goizueta Business School Alumni Entrepreneur Network

Emory’s powerful entrepreneur network gives alumni access to their faculty and university resources. Each month they host meetings where GBS professors, successful entrepreneurs, and former alumni gather to discuss the latest business trends and emerging opportunities. This has helped Goizueta Business School build partnerships and a close community with its alumni who are interested in starting their own businesses thereby helping their current students get mentorship as well.

Additionally, because they have built such a tight-knit community, they pride themselves in being able to give their alumni and current students peer review resources, opportunities for funding, and other professional services.

Evergreen State College Alumni Entrepreneur Network

At Evergreen, their alumni network has the strength to propel students’ businesses forward and build better communities by helping alumni stay connected to the universities educational resources.

Evergreen has built a community of entrepreneurs that are willing to give their expertise and stay connected with the university’s ambitious research endeavors. For example, alumna Jackie Heinricher started Booshoot Gardens in her Anacortes barn and consulted with Foster through out the process of ramping up her venture. Her now multi-million dollar bio tech company develops sustainable bamboo fiber that can be used for toilet paper, wood products, paper, reforestation, and potential to sequester carbon. Because Evergreen is very much committed to the environment and public interest it was natural that she would leverage the college’s expertise.

Favorite Alumni Networks that encourage collaboration across different disciplines and industries

NYU Entrepreneurship Network

New York University’s Entrepreneurship Network is unique in that even after graduation, it encourages alumni to collaborate with graduates across different disciplines. This multi-disciplinary collaborative spans across 21 entrepreneurship and innovation related organizations represented by 10 schools across the university. Students can connect with current students or alumni anywhere from public service, social enterprise to medicine and computer science.

The alumni network has a speaker series, which seeks to inspire NYU students to act on their ideas and start their own business enterprises. Furthermore, their diverse alumni network is always seeking to mentor current students and provide them with job opportunities with seasoned entrepreneurs.

Chicago Booth School of Business

At Chicago Booth’s School of Business, alumni are critical to the success of the Polsky Center for Entrepreneurship and Innovation because they have launched ventures across many sectors—from technology to real estate and education. They serve as mentors to budding college entrepreneurs and guide through their best practices in starting their businesses. Students have the common bond of being Booth alumni so they are able to reach out to successful entrepreneurs in their Chicago Private Equity Network, their Global Entrepreneurship Network, or their Chicago’s Women Alliance. This interdisciplinary sampling of resources and potential connections gives Booth entrepreneurs a competitive edge.

The Polsky Center, alumni, and Chicago Booth’s career services have partnered to help students.  In turn, alumni have the opportunity to attend seminars given by the Polsky Center’s faculty and get help from college students seeking to learn from entrepreneurs.  Two of many successful entrepreneurs from Booth are Ashish Rangnekar and Saurabh Sharma who created BenchPrep, which merges the technology world with the education world and allows developers to create test preparation apps. Over 200,000 users worldwide use this to prepare for the GMAT, GRE, and other tests needed to advance in higher education.

Tufts Entrepreneurial Alumni Network

This Entrepreneurial Alumni Network is aligned with the Gordon Institute and Tufts’ Entrepreneurial Leadership Program who educates students in the arts, sciences, and engineering. The alumni network serves as a catapult to build enterprises by connecting students to fellow alumni with a heavy leadership focus across different disciplines. Students are encouraged to collaborate with other students or alumni with different backgrounds. Alumni also have the network to connect with business alum, like eBay’s creator Pierre Omidyar.

Many of today’s most successful business leaders met their founding teams during college or graduate studies. College provides the environment where students can meet, learn, collaborate, and turn friendships into long-lasting business partnerships. Collaborations between business and computer science students can lead to tech partnerships, for example.

With the growing student debt and generation-Y’s trouble finding jobs in the lackluster economy, it is no surprise people have questioned the value of going to college. However, for those who want to start businesses, going to college and having access to an alumni network can be crucial to starting successful enterprises.

In fact, this is what a lot of successful entrepreneurs have done. They formed partnerships with someone they met in college or reached out to someone who was part of their alumni network.

To continue celebrating small business month, NerdScholar gathered a list of companies whose co-founders met each other in college or graduate studies, showing how the power of educational networks can be an essential resource for college students today.

How much should students be paying for their Federal student loans?  This has been under hot debate as the legislation keeping the Federal Stafford student loans interest rate at 3.4% sets to expire July 1st, doubling rates to 6.8%.  President Obama has addressed this issue in his 2014 Budget, proposing that student loan rates be tied to the ten-year Treasury Bill.  NerdScholar crunched the numbers and found students would save up to $2,300 under Obama’s proposed student loan reform.

However, Senator Elizabeth Warren (D-Mass), has stepped up the plate with her first bill proposing the revolutionary idea that students should be charged the same interest rate as big banks.  Currently the Primary Discount Rate from the Federal Reserve (the rate big banks get charged for loans from the government) is .75%.

How does the total interest for the average 4-year student debt of $26,600 vary under the different situations?

The student loan rates are set to jump back to 6.8% on July 1st should no action be taken.  Compared to the interest students are set to pay under this change, students would pay $9,000 less in interest under Senator Warren’s bill.  

According to the Kauffman Foundation, two-thirds of colleges and universities in the US now offer a course in entrepreneurship. Despite the growth in popularity, entrepreneurship as a field is still considered “mostly on the fringes of academe,” and many still debate whether it can even be taught (after all, many of today’s tech leaders dropped out of college or didn’t attend altogether).

As the field of entrepreneurship is still in relative infancy, curricula across schools vary and are an ongoing work in progress. That said, the nation’s top programs share common attributes, including: an interdisciplinary core curriculum, business competitions, mentoring and networking opportunities, and experiential learning to enable students to gain real-world business experience while still in school.

As NerdScholar continues to celebrate small business month in May, we highlight seven of our favorite universities with entrepreneurship degrees. Our selection was based on:

• The programs’ demonstrated results: Namely those where 20%+ of their graduates actually start their own businesses after college.
• Affordability:  With student debt past the one trillion dollar mark, we advocate that students and parents consider universities that are public or offer generous financial aid and scholarships.
• Quality of the school: Aspiring entrepreneurs benefit from networking and collaboration with other intellectually curious students and experienced professors.  All the universities listed are among the top ranked colleges and universities by U.S. News and World Report. 

NerdScholar’s Favorite Entrepreneurship Degree Programs

Baruch College, The City University of New York

Students majoring in entrepreneurship at Baruch College can expect to focus on the interconnections between education, government, and the private sector. The major’s history goes back to when The Lawrence Field Center for Entrepreneurship launched to help New York residents start businesses. After seeing success transforming the area’s economy they decided that focusing a major in this area made perfect sense.

Twenty-two percent start businesses of their own after graduating. The program emphasizes creating self-starting entrepreneurs. They have direct access to the Small Business Development Center to seek advice on how they should start a business and determine sustainability factors. For instance, alum Michael Chiang created “MatchPuppy,” which is an OkCupid-like app to connect dog owners and allow them to have doggy play dates.  The young entrepreneur’ young business even caught the attention of Jay Leno.

Their faculty shows strong interdisciplinary backgrounds in the business, tech, non-profit center, and government business policy. This public university gives in-state students bang for their buck as their average tuition is $5,778.

Oklahoma State University

Oklahoma State University’s School of Entrepreneurship is a leading innovator in their dedicated entrepreneurship curriculum. Thirty percent of their undergraduates start businesses after college, and it is no surprise why. With 10 interdisciplinary faculty members and its 32 courses, OSU’s approach is heavily focused on helping students find their entrepreneurial potential based on the 11 unique entrepreneurial competencies they see as key: “recognizing opportunity, assessing opportunity, mastering your creativity, leveraging resources, guerrilla skills, mitigating and managing risk, planning when nothing exists, innovation—developing ideas that work, building and managing social networks, the ability to maintain focus yet adapt, and implementation of something novel or new.” All these skills helped 2008 alum Kayvon Olomi start his own business, AppTank, which connects professional app developers with app projects.

Students undoubtedly get their strengths tapped into and sharpened at OSU. They have the opportunity to participate in experiential learning bootcamp-like programs that partner with local entities like the Tulsa Chamber of Commerce, giving them real world experience. They also get to work with experienced academics like Dr. Robert A. Baron, who has bridged the disciplines of psychology and entrepreneurial business ventures. With such a robust and holistic program, OSU students are encouraged to think outside the box.  The tuition price at OSU, a public university, is $7,107.

University of Houston

About 65% of the students who major in Entrepreneurship at the University of Houston’s Wolff Center of Entrepreneurship start their own businesses during their college tenures or shortly thereafter. They are taught to become business leaders by being taught the way a CEO would train a replacement—through academic rigor and real world experience. Students must undergo a required set of 6 core courses that teach the entire business process and is based on practical business skills that allow students to scale their ideas. From those 24% of UH grads that start a businesses, 89% still have managed to keep their businesses going strong. Clearly, the rigorous training and mentorship these students receive from the Cyvia and Melvyn Wolff Center is cultivating innovation. You can take UH’s Alfonso Rivera who started RailTronix as a prime example. His successful company sells web-based software systems to help rail shippers keep track of their shipments.

University of Houston’s students also must fulfill a service requirement, as the program believes that students should give back and apply their self-starting skills in that arena.  The tuition for the University of Houston is $9,211 and scholarships are available.

University of Missouri-Kansas City

With over 20% of their graduates starting their own businesses, the Entrepreneurship Major at the University of Missouri-Kansas City’s Bloch School has built its curricula around experiential learning and has given students the foundation to start their own businesses after college. For example, one of their required courses, “Creating the New Venture: Experiential Learning,” requires students to develop a business plan, execute steps for an operation launch, and develop a plan to secure customers and other revenue streams.

It aims to keep class sizes small to foster close connections between students and its internationally renowned faculty, facilitating their entrepreneurial discovery process. The program’s 13 faculty members are themselves former entrepreneurs who provide students with a template roadmap they can use to maximize their business venture ideas. They even have structured apprenticeship programs in which students can help professors’ research and publish studies. The University of Missouri-Kansas City is a public university and has an annual in-state tuition price of $9,220.

Arizona State University

At Arizona State University, students are taught that entrepreneurship is the business of change, one in which they should manage and leverage change to succeed. Twenty-eight percent of undergraduates start a business after the program, which requires them to complete a curriculum revolved around practical experiential work, direct expert teaching, and close relationships with professors. Their faculty’s background varies from sociology, fine arts, engineering to marketing and investing.

Among ASU’s innovative alumni is Kate Spade who presently designs and manages her own fashion empire. Although she did not major in entrepreneurship, ASU honors her as an example of how students can strive for innovation and business creation. A more recent example of the program success is Senior and Management major Nick Jarvis’ succeeding venture. With the help of Director of Entrepreneurial Initiatives Sidnee Peck, Jarvis and his student business partner Phil Kockerbeck launched Down2Mob 6 months ago and are already making a profit buying and reselling motor cycle parts.

Aside from the real-world experience these students receive, coursework is essential too. Among their required courses, “Entrepreneurship in Society” taught by Jane Robbins, students’ creativity is cultivated to help them understand the inter-relationships between innovation, technology, law, and public policy. Having this background helps students build business ventures that cross through all sectors of society.  ASU is a public university and its annual tuition is $ 12, 990.

Belmont University

The hands-on approach offered by Belmont’s Entrepreneurship Program sets them apart from other programs and helps their students hit the ground running.  Student entrepreneurs are given opportunities to work in one of several student-run retail spaces on campus or they can develop their own business ventures with faculty support.  This co-curricular programming equips students with the knowledge, skills, and experiences needed to become successful entrepreneurs.

More than a third of the students majoring in entrepreneurship create businesses that are their main or sole source of income after graduation. Additionally, students have the option to do an internship for course credit where they can work for entrepreneurs. Several events and programs such as the Moench Entrepreneurship Lecture Series, Lunch and Learn, Morning Coffee, and a variety of mentorship opportunities are available to students. Their private school annual tuition is $26,130 and approximately 74% of Belmont students receive some type of financial assistance.

Baylor University

At Baylor’s John F. Baugh Center for Entrepreneurship, students who major in entrepreneurship gain a suite of venture skills and techniques to launch real businesses. They have two course tracks, one in business and the other in social entrepreneurship so students with various interests can take advantage of this program.

Students have the opportunity to take the “Accelerated Ventures” two-semester course in which they create products, raise real funds, and launch products and services to generate sales. Basically, they learn how to take a company from a concept and idea to fruition and they have the track record to prove it—over 67% of students start businesses. They also have access to the universities influential alumni network that includes Bill Townsend, co-creator of Lycos and whose intellectual property helped form the basis of LinkedIn.

The annual tuition at Baylor, a private university,  is $33,716 and disburses some sort of aid to 70% of their students.

Clarkson University

Clarkson University’s entrepreneurship major concentrates on ideation, the commercialization process, and new venture creation. They seek to accelerate and commercialize discovery-driven Clarkson innovations to the marketplace. In the first-year business sequence, 100 percent of business students start and run their own companies.

Their degree program works in tandem with the Reh Center for Entrepreneurship where students can compete in business plan competitions for the Young Entrepreneur Award. As the price, they get to attend Clarkson without payment of tuition for the remainder of their four-year undergraduate careers.  Overall, 20 percent of their graduates start a business.

Clarkson’s tuition is $38,610 and the average net tuition price stands at $24, 205. Eighty-five percent of full-time undergraduates at Clarkson receive some kind of need-based financial aid and the average need-based scholarship or grant award is $24,507.

University of Southern California

USC’s Lloyd Greif Center for Entrepreneurial Studies is one of the most lauded in the country. In addition to having a dedicated set of curricula, its vast and diverse faculty seem are the one of the most powerful resources students here could take advantage of. Professor Nandini Rajagopalan helps maintain a network of professors who promote interdisciplinary research in entrepreneurship from which students are encouraged to seek guidance from.

Students also have access to the powerful alumni network USC has established. This year, the center honored Chris DeWolfe, CEO and co-founder of MySpace.com. From learning the tools and tactics to start a business to leveraging the guidance of alum and professors, 50% of USC students majoring in entrepreneurship succeed at beginning and running their own ventures.

While the average net tuition price at USC is $27,541, 60 percent of their students receive some type of financial assistance.

Sources:

• Kauffman Foundation 
• University of Southern California 
• Oklahoma State University School of Entrepreneurship
• Princeton Review’s annual rankings of the best 50 Entrepreneurship Programs in the U.S.
• Department of Education’s College Scorecard
• U.S. News College Rankings

Background: Universities’ roles in fostering entrepreneurship

Universities have long been the propellers for innovation but have not always offered the concrete and robust entrepreneurial programs that now exist today. For students looking to start a business after college, finding a college with a solid entrepreneurship program can help accelerate them towards their goals.

Participating in these programs gives students access to the hands-on learning, mentorship, networking, and even seed funding that translates innovative ideas into realities.  Whether students aim to be traditional small-business owners, or seek to transform entire industries and spur social change, universities provide them with the first opportunity and resources to explore futures in entrepreneurship.

NerdScholar’s series of featured entrepreneurial programs

In celebration of National Small Business Month this May, NerdScholar launched a series highlighting our favorite college entrepreneurial programs. We’ll be featuring university programs each week during May that have entrepreneurial focused degree programs, university-sponsored hackathons, strong alumni support, university venture funds, and other entrepreneurship focuses. This week we highlight college entrepreneurship programs that have great incubator programs. 

Our favorite university incubator programs with an engineering focus:

DUHatch Incubator at Duke University

Duke’s student business incubator seeks to educate young entrepreneurs how to turn their ideas into actionable business ventures. They are not your traditional commercial business incubator and tech accelerator as they place a high importance on multidisciplinary efforts to solve needs in medicine, law, tech, and business. They have space for 1-4 years. Professor Larry Boyd, a leader in orthopedic medical device innovation, is focused on helping students on the path to commercialization. They offer entrepreneurship resources for students looking to get into engineering fields from energy, tech, to biomedicine.

Boston University’s Office of Technology Development

In collaboration with the College of Business, the College of Engineering, and the Lavin Center for Entrepreneurship, BU’s incubator seeks to turn student ideas into companies. They currently host 15 tech start-ups spanning the fields of bio-tech, medicine, clean energy, engineering, and even publishing. Not only do they provide mentorship and professor support along students’ ideation and execution process, but they have the opportunity to get financing from angel investors, corporate, and government sources. For example, students have the fortune of getting guidance from Professor Peter R. Russo whom runs BU’s entrepreneurship curriculum and has previously served as the CEO of Honeywell Instruments. He is involved with student initiatives that undergo a diligent peer review process, thereby helping the students make connections to the wider financial and business communities in Boston.

Zahn Center for Engineering Innovation San Diego State University

The Zahn Center provides College of Engineering students with resources to transform their ideas into business ventures. Besides providing office space, they give access to machine shops and electronic labs to build prototypes, mentorship, and even pro-bono legal services. The Zahn Center even has the SDSU’s business MBA program’s consulting services to validate a team’s technology with thorough market research. One of their current incubator companies, Brace ME, was founded by three of SDSU’s mechanical engineering students, Nicole Allen, Phillip Berry, and Caitlin Enomoto, and the company which looks to alleviate lower back pain by pushing their patented spine support brace to market.

Bucknell University’s Entrepreneur’s Incubator

In collaboration with the Small Business Development Center and the Engineering Development Services, Bucknell gives their student entrepreneurs office space to work out their business plans. Some are even eligible to get loans, grants, and tax credits from the Greater Susquehanna Keystone Innovation Zone in Pennsylvania. Furthermore, entrepreneurs have access college technical staff and student interns at one of the best engineering schools in the nation.

Texas Venture Labs at the University of Texas at Austin

The TVL Incubator at Texas hosts between 10-12 companies each semester, giving them access to student time and innovation. Four to six students have the chance to work closely with start up companies and make an immediate impact on their business development. With access to professors like Venture Labs Director, Rob Adams, students have close access to training and mentoring they can leverage. One example of a successful TVL alumni company is InfoChimps, with the mission to democratize access to structured data. Infochimps’ COO, Joseph Kelly, lauds the TVL team for being, “bright-eyed entrepreneur types who are willing to contribute to their portfolio companies with whatever is needed.”

Our favorite incubator college programs with a regional focus:

Office of Entrepreneurship at the George Washington University

The George Washington University’s Office of Entrepreneurship offers five annual memberships to students. Once chosen, they have access to office space, free Internet, actual mailing addresses and a collaborative community where they can exchange ideas and roll out business plans. This incubator aims to facilitate innovation in Washington, DC.  This office was made possible after successful GW alumni Anthony Shop and his partner launched their own digital ad firm start-up called Social Driver after winning a business plan competition. Now other undergraduate GW students can enjoy the resources to launch their own businesses.

The Center for Innovation and Entrepreneurship at Cleary University

As the first micro business incubator in Michigan’s Livingston County, this incubator provides guidance and low-cost assistance to launch the small business ideas students have. The primary purpose is to stimulate the economy of the region and create more employment opportunities. Students get to enjoy the broad span of workshops and leverage the CUMBI networking events.

W. L. Lyons Brown III Innovation Lab at the University of Virginia

This ten year old incubator at the University of Virginia recently celebrated its reopening and expanded to deliver a community of collaboration and innovation. Proud of their strong emphasis on community , the “iLab” welcomes all 11 school degree programs and members of the Virginia community. The incubator offers office space, meeting rooms, a “pitch” room where entrepreneurs can present their ideas and get feedback, and a coffee bar. Among the many companies the incubator has helped launch is Darden alumnus Nathan Tan’s Forgetful Gentleman, a company dedicated to help the modern man become a gentleman via their high quality stationary, clothing, etiquette, and gift-giving.

Cal U’s Entrepreneurial Leadership Center & Student Incubator

The ELC/SI encourages Cal U students to develop their ideas, create business plans, obtain funding sources, and register their businesses. They provide dozens of workshops and training classes including their “Ice House” 8-week training program which was designed to connect students with successful entrepreneurs.

Summary:

On July 1^st, legislation set to keep subsidized Stafford student loan rates at 3.4% is set to expire, doubling the rate to 6.8%.  President Obama has taken a proactive step towards addressing the issue in his 2014 Budget Proposal.  His proposal ties student loan rates to the market—specifically to the 10-year Treasury bill.  NerdScholar applied Obama’s proposal to recent years that student loans have had fixed rates—how would this proposal have changed student loan payments in the past 7 years, if it had been in effect?

Key findings: 

• If President Obama’s proposed rates had been in effect during the years of fixed Stafford student loan rates (2006-2013), the weighted average rates would have been consistently lower each year.
• For each year of loans students, interest rates would have been an average of .83% lower, costing students $330 less.
• In this time period, the average 4-year student would have saved an average of $1,300, or a range from $1,030 to $1,430.

Background: 

Currently subsidized loans have a fixed interest rate of 3.4% and unsubsidized loans have a fixed interest rate of 6.8%. However, after July 1st the subsidized Stafford student loan rates are set to double from 3.4% to 6.8%.  Obama’s proposed budget will have Stafford loans tied to the ten-year Treasury bill.  Subsidized loans will have an interest rate of .93% on top of the ten-year Treasury bill rate.  Unsubsidized loans will have an interest rate of 2.93% on top of the ten-year Treasury bill rate. 

The Top Ten Cities That Would Benefit from Obama’s Budget Proposal on Student Loans 

According to Credit Karma the list below shows which cities have the highest average student debt.  These cities could benefit the most from the changes to student loans in Obama’s 2014 Budget.

NerdScholar analyzed the impact of President Obama’s proposed student loan reform and found that a 4-year student would save an average of and up to $2,300.

Top Ten Cities With The Most Student Debt

Obama’s Proposed Interest Rates

On July 1^st, subsidized Stafford loan interest rates of 3.4% are set to double to 6.8%.  President Obama has taken a proactive step to change this in his 2014 Budget Proposal.  Instead of a fixed 6.8% rate, loans would be tied to the 10-year Treasury rate plus a margin for lenders.

Future Best And Worst Case Scenarios For Students Under Obama’s Proposed Plans

Tying student loan rates to the market can be considered risky, should the market rates jump during inflationary periods.  However, NerdScholar used projections of the 10-Year Treasury bill to compare the cost of 4 year’s worth of student loans as versus the 6.8% rate over the next ten years.   Students would save almost $1,000 on average.

Should the Obama student loan rates be enacted, future students entering the top ten cities mentioned above could save $2,315 on their loan payments, and possibly pump that money into the local city economy instead.

Graduation is fast approaching for many college seniors. For those who are still looking to land the ideal position, career fairs offer the perfect opportunity to get face-to-face time with employers.  But what if you missed all the fairs during the past year and you’re graduating in a few weeks?

Lucky for you, there are some schools that are still hosting career fairs during May. So pack plenty of copies of your resumes, business cards, and have your elevator pitch ready to deliver. Career experts recommend doing your homework before coming. Research what companies will be at the fair and nail down a game plan to visit those that you are most interested in with resumes tailored to the positions they have open.

According to CareerXRoads, you should “Be able to talk about your strengths and how you can bring value to your prospective employer.” Remember that at the end of the day, it is all about the company.

Essentially, you should be prepared with your resume, elevator pitch, and reasons why you would add value to an employer’s company. NerdScholar rounded up some of the last minute Career Fairs around the country happening in May.

Featured Career Fairs in May:

University of California at Irvine, May 2nd

UC Irvine will hold a career fair at their UCI Student Center. Make sure you stop by their office as they offer a packet to help you prepare.

Stephen F. Austin University, May 3rd

Stephen F. Austin will host a teacher career fair for those looking to get into the education space. They offer plenty of prep materials including a workshop about “How to Work a Career Expo.”

Hispanic Alliance for Career Enhancement, May 6th

HACE, an organization dedicated to promote career growth, will host a professional and technology career fair where companies from Accenture Technology to Teach for America will be available to talk with students and other job seekers.

Portland State University 2nd Annual Career Fair, May 9th

Students from all majors at Portland State University will enjoy the opportunity to talk with employers in the private, non-profit, and government sectors. Additionally, they welcome students who are not seniors to use the time to find summer internships.

Penn State Central Pennsylvania Career Fair, May 17th

The Central Pennsylvania Career Fair, hosted by Penn State, will leverage health care, manufacturing, and the service sector industry networks to help soon-to-graduate students get connected to jobs. Penn State’s career center staff will be all hands on deck to help students discuss what skills and education should be attained and highlighted to make more connections.

Illinois State University’s Chicago Land Career Fair, May 22nd

Students and job seekers in the Chicago area can attend Illinois State University’s first ever “Chicago Land” Career Fair. Make sure you pre-register and check out their resources such as their videos, dress tips, and list of attending employers.

Summary:

On July 1^st 2013, legislation set to keep subsidized Stafford student loan rates at 3.4% is set to expire, reverting rates back to the original rate of 6.8%.  President Obama’s proposed 2014 budget would tie student loan rates to the ten-year Treasury bill.  NerdScholar analyzed Obama’s proposal to calculate the net impact on student’s borrowing costs if the proposal passed.

Our key findings include:

• Students would save on average $240 a year for each year of borrowing, or approximately $1,000 for four years of college and up to $2,300.
• Based on current government assumptions of market rates, the student loan interest rate would average 6.2% over the next 10 years, ranging from 4.6% (2014) to 7.0% (2023). 
• By tying interest rates to the market, interest payments could vary significantly.  For example, if students borrow during the projected low interest rate period of 2014-2017, they could save up to $2,300, under Obama’s proposal.  However, if interest rates increase, as projected for 2020-2023, students would end up paying an additional $210 above what they would have under the original 6.8%.

Background and Detailed Analysis

What are student interest rates now and how will they change under Obama’s proposal?

Currently subsidized loans have a fixed interest rate of 3.4% and unsubsidized loans have a fixed interest rate of 6.8%, however after July 1^st the subsidized Stafford student loan rates are set to double from 3.4% to 6.8%.  Obama’s proposed budget will have Stafford loans tied to the ten-year treasury bill.  Subsidized loans will have an interest rate of .93% on top of the ten-year treasury bill rate.  Unsubsidized loans will have an interest rate of 2.93% on top of the ten-year treasury bill rate.

This isn’t the first time that federal student loans have been tied to the market.  The period from 1992-2006 subsidized Stafford Loans were tied to the 91-Day Treasury Bill with an additional margin ranging from 1.7% to 3.1% depending on the time period.  Further, the cap was, for the most part at 8.25%. 

What is the dollar impact in each of the different scenarios?

To better understand what these changes mean for students dollar-for-dollar, NerdScholar has analyzed the total change in student payments under each scenario.  Below is a comparison of how interest payments would differ under the various interest rate structures.

For each scenario, we calculated interest payments off of the national average annual subsidized and unsubsidized Stafford loan amounts of $3,206 and $3,444, respectively.  We also assumed the standard 10-year loan repayment period.

• Using current interest rates, students end up paying an effective rate of 5.16% for one year of borrowing.  Students would pay a total of $8,542 over 10 years.
• Should Obama’s budget not pass concerning the student loans and Congress not take action on the expiration of the 3.4% rate, the subsidized loans will return to their fixed rate of 6.8%.  Students would end up paying an extra $641 compared to current rates.
• 10-year Treasury bill rates as of April 15, 2013 were 1.72%.  As of this year, based on market rates, students would pay $576 less for 1 year of loans compared to current rates.

What would ten years under Obama’s budget proposal look like?

Within Obama’s 2014 budget request is a 10-year projection of future ten-year treasury bill rates.  Below is what each year would look like using the projected interest rates provided within the budget proposal.

 Tying student loans to the market can be risky due to fluctuations in the market.  On average for one year of borrowing students would save $237.  The best case scenario would occur for a 4-year student borrowing from 2014-2017 who would save $2,314.36 over the life of her loans as opposed to if she had paid the 6.8% fixed rates.  In the worst case scenario over the next ten years, a 4-year student borrowing from 2020-2023 would pay an extra $211 over the life of her loans.  

“Thrift Shop”, a music video sensation sweeping the nation by rapper Macklemore since the beginning of 2013 is catchy, funny and may just be the present day looking glass into the economic mindset of a generation.  Ok, so it’s quite the leap, but it may not be that far off.  

In case you’ve been away from the social media and the hip hop scene, this song is about the musician finding his swag, his style and his clothes from “the thrift shop down the road”.   Some of the older generation have jokingly mocked this video as an accurate portrayal of our generation: a generation without money forced to scrounge for scraps at the thrift store.  I’ll be honest here.  I actually loved thrift store shopping when I was in high school and I still occasionally stop by my local thrift store on Haight St. when I need something.  So, I’m here to defend the portrayal of the millennial generation in “Thrift Shop”.

Let’s look at some of the lyrics and how they resonate with the Millennials of today:

The song opens up with

I’m gonna pop some tags, only got twenty dollars in my pocket 

And isn’t this a truth heard road the Millennial world?  Millennials graduated during the Great Recession.  According to the Pew Center Research Report, Millennials are less likely to be employed (63%) than Gen-Xers (70%) or Boomers (66%) of the same age.  Yea, we might just have only $20 in our pocket, and as a generation we’re learning to make it work.

They be like “Oh that Gucci, that’s hella tight”
I’m like “Yo, that’s fifty dollars for a t-shirt”
Limited edition, let’s do some simple addition
Fifty dollars for a t-shirt, that’s just some ignorant b*** s***
I call that getting swindled and pimped
I call that getting tricked by a business

Some may say it’s a combination of being the most tech savvy generation and with the least access to money as working adults, but this generation is less materialistic than previous generations.  This generation is saving less than previous generations.  And yes, this generation on average may believe that buying into status is simply, as Macklemore says it “getting swindled and pimped…by a business”.   This mindset is exemplified in a photo series by Fast Company showing adult Millennials with everything they owned.  It showcased the statistics that yes, Millennials are reaching what was considered major life milestones like ownership of large items such as cars, houses, accessories, etc. much slower than their predecessors.  But, it doesn’t mean that we’re not happy.  We may not be taking the same directions as our predecessors, but the constraints of our situations are forcing us to redefine what success looks like and what we value.  As many articles point out, this generation isn’t happy with the consumer argument of owning something just for looks or status, the better selling point is what can this new product actually do for me or help me accomplish?

As Macklemore puts it…

Trying to get girls from a brand?
Man you hella won’t, man you hella won’t 

The Millennials are digging themselves out of a hole they didn’t create and they’re making the rules while doing it.  This isn’t the Silent Generation Part 2.  The Millennials aren’t just putting their heads down to just bleed out hard work.  The financial constraint partnered with the endless access to free information on the web has started a social revolution.  You will find Millennials with little to no money started social causes and banding together using social media, or showcasing their talent on the web.  They know they are united and are shouting a message that they won’t be beaten down by the times, that they’ll rise to the top, even in their onesies from the thrift shop.  All the statistics are stating the Millennials are behind, but the truth is quite the opposite—they’re not even playing that game anymore.  People trying to size them up are simply using the wrong measuring stick.  Just like Macklemore, the entire Millennial generation is taking what they can and running with it…afterall…

I’m digging, I’m digging, I’m searching right through that luggage
One man’s trash, that’s another man’s come up

Well put, Macklemore, well put.