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The Difference in a Century

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One of my friends sent me an e-mail that I thought I’d share here. The subject line of the e-mail was “Statistics for the Year 1908.” The text of the e-mail is copied below.

The average life expectancy was 47 years.

Only 14 percent of the homes had a bathtub.

Only 8 percent of the homes had a telephone.

There were only 8,000 cars and only 144 miles of paved roads.

The maximum speed limit in most cities was 10 mph.

The tallest structure in the world was the Eiffel Tower

The average wage in 1908 was 22 cents per hour.

The average worker made between $200 and $400 per year.

A competent accountant could expect to earn $2,000 per year, a dentist $2,500 per year, a veterinarian between $1,500 and $4,000 per year, and a mechanical engineer about $5,000 per year.

More than 95 percent of all births took place at HOME.

Ninety percent of all doctors had NO COLLEGE EDUCATION! Instead, they attended so-called medical schools, many of which were condemned in the press AND the government as ‘substandard.’

Sugar cost four cents a pound.

Eggs were fourteen cents a dozen.

Coffee was fifteen cents a pound.

Most women only washed their hair once a month and used Borax or egg yolks for shampoo.

Canada passed a law that prohibited poor people from entering into their country for any reason.

Five leading causes of death were:
1. Pneumonia and influenza
2. Tuberculosis
3. Diarrhea
4. Heart disease
5. Stroke

The American flag had 45 stars.

The population of Las Vegas, Nevada, was only 30!

Crossword puzzles, canned beer, and ice tea hadn’t been invented yet.

There was no Mother’s Day or Father’s Day.

Two out of every 10 adults couldn’t read or write. Only 6 percent of all Americans had graduated from high school.

Marijuana, heroin, and morphine were all available over the counter at the local corner drugstores. Back then pharmacists said, ‘Heroin clears the complexion, gives buoyancy to the mind,regulates the stomach and bowels, and is, in fact, a perfect guardian of health.’ (Shocking? DUH!)

Eighteen percent of households had at least one full-time servant or domestic help.

There were about 230 reported murders in the ENTIRE U.S.A.!

Women used Borax or egg yolks to wash their hair? Gross. And isn’t it funny that one hundred years ago we didn’t have Hallmark holidays like Mother’s Day and Father’s Day? It’s no wonder this nation is in a financial glut – we allow our holidays to become whores for the commercial sector! And it’s not worth fighting back on this issue any more because the purpose of these holidays has changed such that you’re forced to go out and spend money to support the gift shops and the florists. And the same is true of other holidays – think of the gigantic Fourth of July displays at the grocery stores or the Halloween items that roll out at the end of August. It’s crazy.

Oh what a difference a Century makes, huh?

College Profits and Credit Card Companies

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College students are among the most marketed to (and scammed) populations on the planet. Many students are in their late teens or early twenties and are just beginning to figure out what it means to live on their own and make major financial decisions on their own. Frankly, I think this is part of the growing up process and making both good and bad decisions will help many of these students learn about the rules of the financial game for when they look at purchasing bigger ticket items like a brand new car or a home.

But one thing bothers the hell out of me and that’s when credit card companies try to hoodwink students into signing up for their product. Sure, this falls into the parameters of learning about the rules of the game, but it’s cheap. The New York Times covered this last Friday in an article entitled, “Colleges Profit as Banks Market Credit Cards to Students.”

If you clicked over to see the article, then I’m sure you noticed the Bank of America table set up at Michigan State University. Anyone who has been to college has seen a similar setup on their campuses – you have a perky representative behind the table enticing students who are walking by to sign-up for their credit card and in return you get a free t-shirt, a gigantic discount at the bookstore, or some other not-really-needed benefit. When I was in college I once signed up for a credit card because they were giving away free t-shirts…which were two sizes too small for me to wear.

Hundreds of colleges have contracts with lenders. But at a time of rising concern about student debt — and overall consumer debt — the arrangements have sounded alarm bells, and some student groups are starting to push back.

The relationships are reminiscent of those uncovered two years ago between student loan companies and universities. In those, some lenders offered universities an incentive to steer potential borrowers their way.

Here at Michigan State, the editors of the student newspaper wrote this fall that “it doesn’t take a giant leap for someone to ask why the university should encourage responsible spending when it receives a cut of every purchase.”

Good for the student newspaper at Michigan State! Keep probing the issue and asking those questions. For example, if Michigan State has this credit card arrangement with Bank of America whereby it profits when students use credit cards (responsibly or not), then with which organization does the university have a contract to teach students how to use credit responsibly? And what are the metrics for either program? In other words, how much has the university generated from its Bank of America relationship versus how much it has spent on teaching its students how to be responsible economic citizens? I’m sure that with Michigan State being a public university that the students can do some digging and find some of this information. The Times article gives this information:

Michigan State University gets $1.2 million a year but is guaranteed at least $8.4 million over seven years, according to its agreement. The contract calls for a $1 royalty to the university for every new card account that remains open for at least 90 days, $3 for every card whose holder pays an annual fee, and a payment of a half percent of the amount of all retail purchases using the cards.

My guess is that the university has no formal relationship to spend any of those millions of dollars on financial education for its students. What a shame? This stuff bothers me because no matter how level-headed you think a college student might be, there is a greater likelihood of them getting into severe credit card debt because of programs like the one above. When I was in college I rang up some $13,000 in credit card debt before I had to have my Mother bail me out (thanks, Mom 🙂 ). It was a costly learning experience for me – though I must admit that I’m much better off financially now then I’ve ever been and it is due, in part, to having racked up such a ridiculous credit card debt while in college.

Oh, and how many times can I quote stories from the New York Times? Geez! For their part, the Times has a series called “The Debt Trap” where they look at the relationship between increased consumer spending and the lenders providing the dollars for that relationship. It’s interesting – go take a look!

Could This Spring Bring Out The Bicycles?

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Retailers certainly hope so – and they have a good reason, too. After a very successful year in 2008 (aside from the lackluster holiday season), businesses specializing in bicycling need a solid year in 2009 in order to stay viable in a rocky economy. This issue was covered recently in a New York Times article which stated:

Mr. Townley is even more skeptical now, predicting a flat to slightly down year for small bicycle stores. Declining gas prices are one reason. He also cited major price increases in bicycles and accessories resulting from the rising cost of materials and shipping — 98 percent of bicycles are manufactured overseas — which cut into profits. He said data showed that wholesale sales of new bicycles to shops for the first nine months of the year were down by more than 4 percent.

As our national economy begins a real shift to become more “green” and sustainable, there is a good chance that other businesses which help to create the “sustainable” economy will become the focus of business writers. The thing to remember, though, is that even though going green is the rage among television shows and big businesses right now – it will still take some time to catch on among the general public.

Great strides are being made, however, and I don’t believe that articles like this one will serve to hurt the change in our economy.

I.O.U.S.A. – The 30 Minute Documentary

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The other day I shared my favorite commercial from the holiday season with you all and today I’ll be sharing a documentary that I watched over the Christmas season which is eye-opening and scary at the same time. It’s 30 minutes long, so sit back and relax while you watch this one.

Pretty scary, huh? For more information on this growing debt crisis you can head over to the official movie website or to the Peter G. Peterson Foundation website.

I have two concerns with the documentary and the supporting websites. First, it becomes obvious that the filmmaker has a thing against President Bush and his administration as well as President Ronald Reagan and his trickle-down economics approach to governing the market. Honestly, that’s fine and I don’t really care about those concerns. People will always go after President Reagan since he was the beginning of modern conservatism and I think it’s obvious that President Bush will continue to be castrated in the popular (and independent) media for the rest of our lifetimes.

My second issue, though, is that when you look through the supporting websites there are no concrete examples of how to fix this massive debt problem. Sure, the Peterson Foundation website has a 10 point “what you can do” list, but it boils down to being engaged in local, state, and national government and keeping better financial controls in your personal life. Well, those are things that we should all be doing anyway!

I encourage you to watch the documentary when you have the opportunity. But I wish that there were better examples of how concerned citizens could help to alleviate this problem.

Hope For My Student Loan Debt…Maybe

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Yesterday, I found out that the rules and regulations for the College Cost Reduction and Access Act of 2007 (CCRAA) were finalized. These regulations included something called the Public Service Loan Forgiveness Program. In short, this program allows those working for nonprofit organizations to have the balance of their federal student loans forgiven after ten years of payments (with the clocking beginning in October 2007). The payments do not need to be consecutive, they just need to be comprised of 120 monthly payments (paying twice in one month does not count as two payments). I had to find out more about this program, so I contacted the program administrator in Washington, DC to get the facts. Here is our conversation starting with my e-mail to the program administrator:

My name is Joe and I am contacting you about the Public Service Loan Forgiveness Program created by the College Cost Reduction and Access Act of 2007. I have been working, full-time, for nonprofit organizations since May 2005. I have approximately $56,000 in federal student loans (a Direct Loans consolidation loan) and $48,000 in private student loans.

I understand that the private student loans do not qualify for the new provisions, however, I want to confirm that my Direct Loans consolidation loan does qualify. Also, I’ve read that the new regulations apply to payments made from October 2007 forward. Since I make my payments each month, does this mean that I can count my last 14 payments towards the 120 required for the balance of the loan to be forgiven? Is there anyway to count the previous monthly payments that I’ve made since I began repayment in July 2006?

Please let me know if you need any additional information. This is exciting news!

And here is the response from the program administrator in Washington, DC.

Good Morning Joe,

Your Direct loan consolidation loan will qualify for the forgiveness, and will count payments beginning on October 2007 forward. So, all payments made from the Oct. date on will count towards the 120 payments. Sorry, none of the payments made before that date can or will count towards the 120 payments. I’m glad that the public service forgiveness program will be a great benefit for you. If there is anything else I can do to help, please let me know.

A very friendly response from the feds – I like it! I thought that I should return the favor with a comment or two of my own and another question or so.

Thank you so much for the information! A final question or two.

First, do the 120 payments need to correspond to 120 months? Or if I make two payments in one month does that count as 2 payments towards the 120?

And finally, is there anything that I need to sign up for in order to be a part of this program? Or do I just track the payments on my own and when I hit 120 payments I contact Direct Loans?

And, within a matter of minutes, the program administrator replied as such…

One payment per month is what counts towards the 120 payments and direct loans will track the payments for you, we are also in the process of developing a form to have your employer sign as a public service position to tie the job with the payments.

This was perhaps the most pleasant experience that I’ve ever had dealing with my student loans. The representative, Ms. Nikki Harris, was professional and courteous and showed the utmost in professionalism in her prompt responses to my questions. And on top of that, I might be looking at getting some of my student loans forgiven after another 106 payments!

I have to figure out what I’d like to do with this, actually. I’ve been making excess payments on both my private NJHESAA loan and my Direct Loans consolidation loan. However, since I am being charged more on my NJHESAA loan and there is a possibility to have the Direct Loan forgiven at some point, it might make sense to begin adding more to my monthly payments to NJHESAA and then see where I’m at in a few years with the Direct Loans. The problem that I have with NJHESAA, though, is that you can’t make online payments – it’s so archaic.

Anyway, I take this information about the Public Service Loan Forgiveness Program as a good sign. This is a good way to begin the new year!