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THE NATIONS' CAPITAL; The financial value of a college degree

VISTA, Calif. -- What is a college degree worth? Millions in additional
income over a lifetime, according to the U.S. Census Bureau.

In a study comparing the lifetime earnings of a high school graduate versus
someone with various college degrees, the average candidate with a
bachelor's degree could earn $900,000 more. The candidate with a master's
degree could earn $1.3 million more than the high school graduate. The
doctorate has a $2.5 million edge and the average candidate with a
professional degree (such as doctors and lawyers) tops the earning scale
with $4.4 million extra.

Annual college expense averages now range from $12,000 for an in-state,
public university to more than $45,000 at private colleges.

While financing such expenditure is an arduous task, it is well worth the
return. In fact, the college graduate's income returned an average of 22 to
50 percent per year. When compared with the historical earnings of 5
percent for Treasury bonds and 11 percent for stocks and real estate, an
advanced degree is a far better investment.

Highly educated tribal members can bring sophisticated knowledge and
procedures back to the reservations, for use in governance, planning and
development. At its roots, higher education is but a process of
understanding concepts and applying them to solve a tribe's specific

Money should not be a deterrent, as there are many resources available.

Parents can put money into several tax-advantaged accounts (such as an
education IRA, section 529 plan or custodial accounts) for their children.
Education IRAs (now called Coverdell Education Savings Accounts) and 529
plans have the added benefit of tax-exempt growth. When the money is taken
out for an eligible education expense, the withdrawals are also tax-free.
The highest contribution limit without incurring a gift tax (for the donor)
is $55,000 per child every five years.

College education funds can be invested in mutual funds or bank
certificates of deposit. Custodial accounts can hold stocks and bonds

On the individual level, American Indian students can apply for various
scholarships and grants. Web sites can direct an applicant's efforts
productively. Visit sites such as,, and the specific page of

Student loans are now commonly available. According to Nellie Mae, one of
the leading originators of student loans, by 2002, 64 percent of students
attending college had student loans.

Scholarships are tax-free. Student loan interest is directly deductible
from taxable income. In addition, a family or a non-dependent college
student can claim up to $2,000 of tax credit for qualified college

Other options include military, work-study, paid internships and

Information about military scholarships is available through There are G.I. Bill, ROTC and
Full Ride scholarship programs. The G.I. Bill requires a $1,200
contribution from the active soldier. As of press time, the military gives
back $536 per month in assistance for 36 months.

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ROTC provides training for eligible students for free and without
obligation of joining.

Full Ride scholarships may be available to juniors and seniors, and include
tuition, books, board and other expenses. They require a commitment to
serve as an officer for a minimum of three years after graduation.

Federal college work-study provides limited hours of work for students with
demonstrated financial needs. Positions typically include on-campus
positions as library and laboratory assistants. These jobs typically pay
around minimum wage but provide a taste of work in an academic environment.

Paid internships and fellowships are usually available to students with a
good academic performance. They work on research projects under the
tutelage of a professor. The pay can be higher than minimum wage, depending
on the availability of grant funding. Such positions are generally
perceived to be prestigious.

Some tribes provide generous funding for youngsters who are accepted in

Finances aside, only six out of 10 high school graduates will go on to
college next year. Fewer than half the college freshman will graduate.
American Indians are underrepresented on college campuses.

What can tribal leaders do to encourage college attendance and graduation?

A Reuters News report stated lack of study skills as the No. 1 reason for
student dropout rates. Tribal leaders can address this today with junior
and senior high school students.

Many universities have pre-college summer programs, ranging from arts to
science. Students actually earn credits while learning in a hands-on
college environment. Check out

Attending programs like these can give tribal youngsters a taste of
university life and independence away from home, safeguarded by a dormitory
system. In some cases, attendance could actually improve a student's odds
of getting into a prestigious college later.

What are the costs?

Most pre-college programs are expensive, ranging from $1,000 to $5,400 for
a two- to five-week program. Some offer scholarships. Check with each
program for details.

Opinions expressed are those of Cynthia Tam, CFP, as of Jan. 2, 2006.

Cynthia Tam, CFP, sets up investment and benefits programs for tribes. She
can be reached at or (619) 200-6277. CA 0D69514.
Securities offered through Investors Capital, member NASD/SIPC. Advisory
Services offered through Investors Capital Advisory, 230 Broadway,
Lynnfield, MA; (800) 949-1422.