Online “open” education site Coursera has a free personal financial planning course starting January 14th, 2013. It will run for 7 weeks, requiring 3-6 hours of work per week, and you get (likely worthless) certification of completion at the end. I haven’t seen anything similar at the other major MOOCs, Udacity or edX. Here’s the course description:

This course was created to help those who cannot afford extensive planning assistance better understand how to define and reach their financial goals. It provides basic understanding so informed decisions can be made. The course can also be seen as a reference for individual topics that are part of personal financial planning.

Financial planning, in the broadest sense, is an effort to manage all aspects of a person / family’s financial affairs. Classically, that begins with planning family spending and extends through risk management (insurance), taxes, wealth accumulation, investing, and wealth distribution (retirement and estate planning).

I signed up as I’m interested in online education in general, and my hope is that it will be more interactive and engaging than just reading a good personal finance book. It appears to be based on a UC Irvine OpenCourseware course, which has all the modules online here. Interestingly, the course originated from a grant from the owners of the Certified Financial Planner (CFP) designation. However, if there aren’t good videos and/or assignments and it’s just a bunch of Powerpoint slides, then I’m going to be a MOOC drop-out.

Now that I have a renewed interest in college costs (read: a kid), I’m paying more attention to the ongoing student loan debt discussion. One major talking point is the rising cost, but there seems to be a big difference between the published or “sticker” prices and the actual prices paid by students after grants and scholarships. As illustrated by this SmartMoney article, only 1/3rd of private university student pay the full sticker price, and the most attractive students get the best aid packages. Therefore, I wanted to find information comparing the differences between actual and sticker prices. The results were surprising:

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I just noticed that perhaps my most “Liked” post is one comparing how rising cost of college tuition crushes the housing bubble and even the rising cost of healthcare:

The current rate of tuition hikes is clearly unsustainable, and I believe that within the next 10 years there will be a big disruption. The traditional 4-year college experience won’t go away, but what if you could also earn credits with an online class taught by an Ivy League professor and graded to equivalent standards of mastery? What if it cost less than community college?

Below is a recent TED talk by Daphne Koller about her startup Coursera which offers university courses online. Now, there is already lots of free lecture material online. That’s easy.

What made this talk different is that they are tackling the hard problems of making a affordable, accessible education both effective and legitimately recognized with grades, credit-hours, and eventually degrees. This means scaling the little things that usually work best in small groups – encouraging discussions, grading homework and exams, answering questions and providing feedback. How do you manage this in a class of 100,000 students? The ideas of peer-grading and peer-teaching are very intriguing. Also, they point out that technology can make eduction more personalized to the student as compared to traditional lecture-based classes.

Embedded video after the jump.
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The NY Times Economix blog had a provocative post a few days ago about student loan debt, pointing out a government study that showed that 90% of bachelor degree holders had less than $40,000 in student loans shortly after graduating.

The chart below, using data taken from the Beginning Postsecondary Students Longitudinal Study (BPS) by the Department of Education, shows the percentage of beginning undergraduate students who, six years later, had accumulated more than the indicated levels of debt. One bar is for college entrants, and the second is for the ones who actually received a bachelor degree in that timeframe.

• In a follow-up, the author clarifies that the study includes both federal loans and private loans via student survey.
• The study does exclude PLUS loans (Parent loans). About 15% of bachelor’s degree recipients have parents who took out PLUS loans.
• The chart does not include loan debt from graduate school.
• The chart does not include credit card debt incurred during school. According to a 2009 survey by Sallie Mae, the average student leaves college with $4,100 in credit card debt.
• The chart does not include other debt (home equity loan) taken on to pay for education.
• Debt amounts may grow over time as interest accumulates.

Only 10% with more than $40k in student loans? Only 1% with more than $75k? That’s still a lot of money, but somehow seems less than I would have imagined. I could have easily left school with more than $40k in loans, and that was a decade ago.

I feel like something is missing. Perhaps part of it is the exclusions I listed above. Perhaps I’m thinking about how fast student loan debt is growing overall. In 2010, there became more student loan debt outstanding than credit card debt for the first time. Via Fastweb:

Alex Tabarrok of Marginal Revolution writes that College Has Been Oversold:

Education is the key to the future: You’ve heard it a million times, and it’s not wrong. Educated people have higher wages and lower unemployment rates, and better educated countries grow faster and innovate more than other countries. But going to college is not enough. You also have to study the right subjects. And American students are not studying the fields with the greatest economic potential.

He shares the chart below comparing the number of graduates in various fields in 1984 vs 2009. Amazingly, compared with 25 years ago, there has been no increase in the number of students graduating in science, engineering, and math. Meanwhile, the number of students graduating in visual and performing arts, psychology, and communication and journalism has doubled.

This is a touchy subject. Just because you have a humanities degree does not mean you won’t find a meaningful career or financial security. The problem is the upfront price tag: can you really justify spending $100,000+ without a clear path to earning that money back?

From a supply and demand standpoint, the chart may help explain why college graduates are having a hard time finding jobs. For example over the last 25 years, I doubt the demand for psychology majors has doubled, and I really doubt the demand for engineering majors has stayed constant.