BURTON To improve her chances of getting into a good college, Caitlin Pickavance, a 17-year-old high school senior from Danville, Calif, has been working with a private college coach
Trang 1THE MOST INTERNATIONAL
DESTINATIONS
BRIEFCASE CLOSED
The most international destinations
of any U.S airline
Why are wo the business travler's aidino of choice? The long and short of itis
Work LEG
Trang 3THEY
WANT
TO
KID
«TO HARVARD OR
STANFORD OR WHEREVER
YOU THINK HE SHOULD GO
AND IT WILL COST YOU
ONLY $45,000
BY PENELOPE WANG
PHOTOGRAPH BY C.J BURTON
To improve her chances of getting into a good
college, Caitlin Pickavance, a 17-year-old high school senior from Danville, Calif, has
been working with a private college coach
since her freshman year (cost: $800) She gets
tutored in math ($1,400), takes an ACT prep
class ($900) and participates in afterschool
enrichment activities ($1,350) Then there’s
the good-will mission to Belize she went on last spring ($1,375) and the classes she took this summer at the University of Salamanca in
Spain ($7,000) in hopes of further buffing her
résumé, Total spent to date: $12,825 “It’s not
about the money,” says her mom Cathy, who had to tap Caitlin’s 529 account to pay for her
study abroad “The stress is, oh my gosh, will
my child get into the college she wants?” >
MONEY MAGAZINE@35]1972-2007 September 99
Trang 4COLLEGE ADMISSIONS
‘Welcome to the admissions arms race
Inan era when fewer than one out of five
applicants are accepted by top schools
and media hype about the crazy competi-
tiveness of getting into college has
whipped families into a frenzy, parents
face a difficult question: What price are
you willing to pay to boost the chances
thatyour child is the one who gets in?
‘The answer lately seemsto be, what-
everit takes To give their kids an edge
over the competition, families are
shelling out thousands for costly college
prep services, from private SAT tutors
and college advisers to enrichment trips
to exotic locales (trek through Tibet,
anyone?) Add itall up and you could
easily spend the cost of ayear of college
just getting your child into college
Are all these high-priced extras really
necessary? Well, there's no denying the
fact that t's tougher than ever to get into
elite colleges After all, there are more
high school seniors competing for the
same spaces—some 32 million last year,
up 28% over the past 10 years
But what's really fueling the madness,
iswhat you might call the admissions
industrial complex This loose assort-
ment of interests, ranging from one-
person consulting outfits to test prep
giants to the colleges themselves, stands
tw benefit by convincing you that your
child’s future depends on going toa
brand-name school “College admissions
has grown into a multibillion-dollar
industry,” says Lloyd Thacker, head of
the Education Conservancy, a nonprofit
group that secks to reform the admis-
sions process “And it preyson the
anxiety of parents and kids”
Worstof all, this angstis unnecessary
‘Truths, there’s a largeelement of
randomnessin the admissions process at
elite colleges (unless you're planning
to donatea building) Moreover, research
shows that your child will do fine in life
as longas she has a fulfilling college
cexperience—and that doesn't require a
brand-name degree Here's what you
need to know about how the admissions
100 September MONEY MAGAZINE@35)1972-2007
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industrial complex works, the behind- the-scenes players who wield influence over the admissions process and the best way to target your college prep dollars, THE PARENT TRAPS
‘The marketing barrage typically begins carly in your child's high school career
Solicitations from college counselors and other handlers start flooding your mailbox, and you have to evaluate what they're selling and whether it works
Forget the old days (that is, your day) when hiring help to prepare for stan- dardized tests meant payinga couple of hundred dollars foran SAT review class
thatyou took witha bunch of other kids
‘Today the $2.3 billion test prep industry, dominated by Kaplan and Princeton Review, offers a bewildering array of services at different prices There's online review ($99 and up), big classes (eypically $1,000) and small groups
Wii i
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8
(61,500), as well as one-on-one tutoring (20 or so sessions for $2700 to $8,000, depending on the tutor’s experience)
‘There are also a growing number of
local companies that cater to upper- middle-class and wealthy families who are willing to pay even more Consider Advantage Testing, a tutoring and test prep firm with offices in New York City, Houston and 12 other areas Ratesrange from $80 to $165 for a typical 50-minute session, but top tutors charge $500
or more To hire company founder Arun Alagappan, a former lawyer, you pay attorney-like fees of $685 asession But
he is booked two years in advance
‘The fees might be worthitif the tutoring, actually ddlivered results There's no way to know for sure, however Although the prep companies say that coaching increases scores by about100 or more points (forthe old two-part SAT), there islittle independent research to back up theirclaims In any case, achunk of the
PHOTOGRAPH BY ANNA NANCE/REDUX
Trang 5purported increase may be attributed
to what's known asthe practice effect—
studies show that scores increase
30 points on average between a student's
junior and senior yearsas repeat test
takersbecome more familiar with the
kinds of questions asked And whilesome
kids do rack up much higher scores after
tutoring, others like Lianna Bishop, now
21and a senior at Marquette University,
don’tgo up a point “The course cost
us $600 says her mother Jo Ann “After
‘Wouldn’tit be great if someone could
tell you exactly whatto doto getyour kid
into Yale? Enter the private college
consultant, whose ranks have doubled to
3000 in just the past three yearsor
so, reports the Independent Educational
‘Consultants Association in Fairfax, Va
For a typical fee of $1,500 to $3300 for a
year or two of guidance, these coaches
will assistyou in drawing upa list of
colleges, advise on the application
process and even help choose which high
school courses to take Just how qualified
they are for the task varies: Although
‘many are former admissions officers or
high school counselors, increasingly
parents whose only experience isshep-
herding their own kids into top schools
are hanging outshingles as wel
‘Then there are the superstar counsel-
ors, such as Katherine Cohen of Ivywise
in New York City or Michele Hernandez
of Hernandez College Consulting in
‘Weybridge, Vt They charge up to $40,000
forseveral years of guidance For thi
deluxe service, Cohen will videotape
mock college interviews to help students
polish their social skills Hemandez
draws up reading lists for students as
carly as eighth grade, Both claim that the
overwhelming majority oftheir clients
get into their first-choice colleges
Forstudents who don't get adequate
college counseling.at school—and that’s
thecase at many public high schools—a
good private consultant canbe helpful
“When a student who hasn’t done community service suddenly becomes beyond Gandhi-like, you know something’s
going on.” —Tom Parker, admissions dean, Amherst
Butgiventhe low acceptance rates at top schools, there’sno guarantee that even the
‘mostexpert coaching will help your kid
go Ivy The records of superstar consul- tants look impressive in partbecause they often take on only the students who are mostlikely be admitted toelitecolleges
And hiringa consultant may even back- fire, since admissions officials can often spot kids who are packaged Says Tom Parker, admissions dean at Amherst College: “When akid who hasn't done any community service for17 years suddenly becomes beyond Gandhi-like, you know something's going on
> SUMMERENRICHMENT CLASSES
An eye-catching, wallet-draining exotic travel program or summer session at an
Ty League college can seem like a great
way to make your kid stand out on a
college application Certainly the strat- egy has become more popular as the sell has gotten that much harder Just consider the range of choices: At
‘Harvard's summer program, your child
can attend seminars on the Holocaust or
=
THE PRICE OF ADMISSION
‘A first-class college prep program can cost as
Bob Dylan ($8000) Through Lifeworks, she can do community service and environmental work in the Galapagos Islands ($5,000) And the group Where
‘There Be Dragons will arrange for treks through Tibet or study of rural develop-
ment in Guatemala ($6,000 to $7000)
Allof these can be terrific experiences But ateen tour won'tmove your kid
to top of the admissions pile “We know about these programs,” says William Fitzsimmons, ad sdean at Harvard “A kid in eighth grade goes off
on an exotic experience that eventually becomes the subject of an essay—we see alot of that” Which undercuts the rationale for the expenditure—separating your child from the pack
‘The good news isthat a bright kid who lives a normal life can still get into good school Josh Rosenthal, now 20, spent summers during high school at a small family-run camp in Huntingdon,
Pa, where he biked and did community service work with disabled children— justbecause he enjoyed it “Lreally didn't
much as a year at Princeton (including room and board)
———————_— _
$3,000 ($200 an hour for (20 hours) 50 hours)
TOTAL COST:
college enrichment counselor: program:
MONEY MAGAZINE@35|1972-2007 Septembert01
Trang 6COLLEGE ADMISSIONS
think about putting my summerson my
college applications,” he says, though he
did end up including them Josh applied
carly to Emory University and got in
BEHIND THE SCENES
Colleges help stir up the admissions
frenzy, hoping to appear more selective
‘They commonly game the ranking,
systems in two ways:
) ENROLLMENT MANAGEMENT
Using predictive modeling software,
enrollment managers try to figure out
how likely its that particular students
will enroll based on demographic
factors, academic records, projected
Mer rristown,
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$7,000
102 September ONEY MAGAZINE@35) 1972-2007
majors, financial aid required and even how often they call or e-mail the school, These techniques help colleges boost their yield—the number of accepted
students who actually enroll
But what's good forthe college isn't necessarily good for your child, A student who isn’t expected to enroll may be rejected, despite being more qualified
than others, to avoid bringing down the school’s yield numbers, “I had atop student interested in science wait-listed
bya liberal arts college, even though itwasless selective,” says Jon Reider, a college counselor at San Francisco University High School, “When Lasked
why, the enrollment manager told me,
‘Our models predicted he wouldn't come Boys who like science don’t go to cour school’ He ended up at Skidmore.”
> MARKETING AND RECRUITING Asearly as sophomore year ofhigh school, the deluge of college brochures, postcards and other mailings begins— about 200 in all, on average Taking cue from credit-card issuers, some schools even send top students prefilled fast- track applications, known as “snap apps," which imply, but don’t promise, accep- tance To further boost their appeal, schools are spending on everything from website upgrades to podcasts to recruit- ing trips by admissions officers All
told, college marketing expenditures are growing at a 5% to 10% annual rate, hitting nearly $1.5 billion last year Granted, a struggling liberal arts college may need a splashy marketing campaign to boost enrollment And even well-known schools must spend heavily
on recruiting to attract the best students possible But there’s a hidden agenda
in these recruitment drives—they lead to ahigher rate of rejections “The college’s goal is toboost application numbers
so they can lowertheir admit rate? says
Rachel Toor, a former Duke admis
sions officer and author of Admissions Confidential, The lower the acceptance rate, of course, the higher the college ranking, That, in turn, will attract even more applicants, which only increases your child’s chances of being rejected
YOUR PLAN OF ATTACK
Sowhat should you be doingto ramp down the stress and the spending yet still ensure that your child gets the best education? Try these strategies
» PICKTHESCHOOLING, NOTTHESCHOOL
‘The crazy competition for freshman slots is actually confined to about 150 schools—in particular the top 50 in the
US News & World Report college rank- ings But there are morethan 2,200 four-year institutions in the country,
PHOTOGRAPH BY IMKE LASS
Trang 7which accept 70% of applicants on aver-
age Many parents steer their kidstoward
elite schools thinking that abrand-name
BA confers a crucial advantage But if
the studentis bright, shell do just as well
as an Ivy grad later in life even with a
degree from aless selective college That
was the finding of a1999 Princeton study
that looked at the outcomes of students
who'd been accepted at an Ivy or similar
college but chose to attend a less selec-
tiveschool
‘Thatdoesn’t mean you should discour-
age your child from aiming for an elite
school But be realistic—deluged by
applicants, admissions officershave a
tough time making meaningful distinc-
tions among them At the top colleges,
says Toor, “you could take theentire
admitted class, wipe itout and admit the
next group of candidates, and you
wouldn't see much difference”
Ifyou look beyond the Ivies, moreover,
you will see that there are many schools,
PHOTOGRAPH BY JENNY LANG
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especially small liberal arts colleges, where your child can receive an educa- tion that rivals or even surpasses the Ivy League “Atthe Ivies you may be taught by a teaching assistant, whileat a small college you can become friends with the professor,” says former college counselor Loren Pope, author of Colleges That Change Lives These schools are also where you'll find some of the most innovative offerings Says Bruce Hammond, co-author of The Fiske Guide
to Gettinginto the Right College: “The less
well known colleges have led the way in
developing programs such as study abroad, great internships and opportuni- ties for doing advanced research that you wouldn't find at an Ivy.”
) TARGET YOUR SPENDING Instead of throwing money at any service that promises to ease your kid’s path to Dream U, figure out the specific kind of help he needs most, then look for reason-
ably priced options If your child lacks
expert college guidance, a private consultant can make sense, but you may need only one or two sessions to help draw upa list of suitable colleges, vet essay topicsand createa calendar that sets out awork-flow plan For test prep, look for free review classes through your school or consider a group classinstead
of pricier one-on-one tutoring
This low-cost approach worked for Rose Cao, 18, from San Diego “We had advisers and free SAT classes,” says Cao, who applied to 15 schools “We couldn't afford the kind of guidance that others had, so1 had to prepare the essays on my
‘She was accepted by 12 colleges and is now a freshman at Harvard
) BE STRATEGICIN APPLYING
By doing abit ofresearch, you and your child can come up with a listofcolleges thathe or she would be happy toattend, including safety schools where your kkid’s gradesand test scores are above average, match schools thatare a natural fit, and reach schools where the odds
of acceptance are lower But if your child has afirst choice that might be consid~ ered asafety school, he should let the admissions office know—that way he won't be rejected by the school simply to preventyield numbers from falling,
> FOLLOW YOUR STUDENT'S LEAD
‘The best strategy of al, says Cigus Vanni, college counselor at Cherry Hill High School West in New Jersey
and a former Swarthmore admis-
sions officer, is to support your child's interests by investing in activities that help her explore them—whether that’s studying oceanography or making
films “Colleges look for kids who have
demonstrated a passion for learning and achieving that feels authentic,” says Vanni, “And that's what’s going to carry your kids through life after graduation.” Inthe end, where they go to college won't determine how far they'll go $
[ADDITIONAL REPORTING BY ASA FITCH AND INGRID THARASOOK
FEEDBACK: pwang@moneymailcom MONEY MAGAZINE®@35|1972-2007 September 103
Trang 8
YOUR MONEY
and YOUR BRAIN
Humankind evolved to s
eek rewards and avoid ris
but not to invest wisely To do that, you'll have to outwit your
impulses—especially the greedy and fearful ones
by JASON ZWEIG
OR MOST PURPOSES IN DAILY LIFE, your brain isa superbly functioning machine, steering you away from danger while guiding you toward basic rewards like food, shelter and love
Butthat brilliant machine can lead you astray when it comes
to investing You buy high only to sell low You You follow the crowd You make the same mistakes again And again, How come? We're beginning to get answers Scientists in the emerg- ing field of ‘neuroeconomics”—ahhybrid of neuroscience, economics and psychology—are making stunning discoveries about how the brain evaluates rewards, sizes up risks and calculates probabilities With the wonders of imaging technology we can observe the precise neural circuitry that switches on and offin your brain when you invest
Those pictures make it clear that your investingbrain often drives you to do things that make no logical sense—but make perfect emo- tional sense Your brain developed to improve our species’ odds of
survival You, like every other human, are wired to crave what lool
rewardingand shun whatseems risky To counteract these impuls your brain has only a thin veneer of modem, analytical circuits thatare often no match for the power of the ancient parts of your mind
And when you win, lose or risk money, you stir up some profound emotions, including hope, surprise, regret and the two we'l
here: greed and fear Understanding how those feelings—asa matter
of biology—affect your decision-makingwill enable you to see as never before what makes you tick, and how youcan improve,asan investor me
to time the market
examine
Excerpted from Your Money and Your Brain, Copyright © 2007, Published by
‘Simon & Schuster Reprinted with permission
Trang 10
'UR_BRAIN
THE THRILL OF THE CHASE
WHY 1s 17s0 HARD for most of usto learn thatthe old saying,
“Money doesn’t buy happiness” is true? After all, we feel as if
itshould The answer lies in a cruel irony that has enormous
implications for financial
behavior: Ourbrains come
equipped with a biological
‘mechanism that is more
aroused when we anticipate a
profitthan when we getone
Lived through the rush of
greed in an experimentrun by
Brian Knutson, a neuroscien-
tist at Stanford University
Knutson put me into a fune-
tional magnetic resonance
imaging (fMRD) scanner to
trace my brain activity while
Iplayed a kind of investing
video game thathe had
designed By combining an
‘enormous magnet anda radio
signal, the fMRI scanner
pinpoints momentary changes
in the level of oxygen as blood
ebbs and flows within the
brain, enabling researchersto
‘map the neural regions
had been shown, | had to click a button with my finger when
the square appeared At the highest ofthe three levels of dif- ficulty, Fhad less than one-fifth ofa second to hit the button After each try the screen showed how much I'd just won or lost and updated my cumulative score
When a shape signaling a small reward or penalty appeared,
clicked placidly and either won or lost But ifa circle marked with the symbols of abig, easy payout came up,
I could feel a wave of expec- tation sweep through me Atthat moment, thefMRI scan showed, the neurons ina reflexive, or emotional, part of my brain called the nucleus accumbens fired I
wild When Knutson mea-
sured the activity tracked by the scan, he found that the possibility of winning $5 set off twice as stronga signal
in my brain as the chance at gaining $1 did
Onthe other hand, learn- ing the outcome of my actions wasno big deal
Whenever I captured the
reward, Knutson’s scanner
found that the neurons in
engaged by a particular task
In Knutson’s experiment, a display i
showed me asequence of shapes that each signaled a di
amount of money: zero ($0), medium ($1) or large (
symbol wasa circle, I could win the dollar amount displayed;
ifitwas a square, I could lose the amount shown After each
shape came up, between 2 and 21/3 seconds would pass—that's
the anticipation phase, when I was on tenterhooks waiting
for my chance to win or lose—and then a white square would
appear fora split second To win or avoid losing the amount 1
my nucleus accumbens fired
intensely than they had when I was hoping to get it Based on the dozens of people Knutson has studied, it's highly unlikely thatyour brain would respond much differently
Why does the reflexive partof the brain makea bigger
deal of what we might get than of what we do get? That func-
tion is part of what Brian Knutson's mentor, Jaak Panksepp
of Bowling Green State University in Ohio, calls “the seeking yystem.” Over millions of years of evolution, itwas the thrill of anticipation that put our senses ina state of high awareness,
much le
How to Keep from Beating Yourself
Mm AVOID THE “SURETHING”
Your seeking system” is especially
turned on by the prospect of a big
score, and that in turn willhinder
your ability to calculate realistic
‘odds for the success of an invest-
‘ment, Be on your guard against ary
sales rep who tries to lure you with
jackpot jargon like “can't miss,"
“double your money" or “the sky's
the limit."
REMEMBER: LIGHTNING
‘SELDOM STRIKES TWICE
If you've ever had the taste of abig _8in, youll likely be tempted to try
to get that feeling back So be espe- cially wary of investing in stocks or
‘mutual funds that remind you of the oneyou made akilling on long _agor chances are, any similarities to
‘another investment, living or dead,
‘are purely coincidental
THINK TWICE Making a financial decision while you're inflamed by the prospects of
2 big gain—or a huge paper loss—
is a terrible idea Calm yourself down (ifyou don't have kids to distract you, take awak around the block or go to the gym) and recon- sider when the heat of the moment has passed
GET AWAY FROM THE HERD Ifyou are part of an investment
‘organization, appoint an internal sniper whose job isto shoot down ideas everyone likes (Rotate this role to prevent one person from becoming universally disiked) Similarly, if you're at a barbecue and your fiends are talking up a seem- ingly great opportunity, speak to someone you respect who isn't part
of the group before you jump in
106 September MONEY MAGAZINE@35|1972-2007