7.4 What Is a Skill Set, and How Do
I Get One?
In addition to performing self-assessments to determine your personality traits; what you
do best; your characteristics, interests, and talents; and the type of workplace you prefer,
you must also understand what specific sets of skills you can offer an employer. A skill set
is a combination of personal traits, abilities, and proficiencies that you develop through edu-
cation, training, and experience. It may also include talents or abilities you can offer to an
organization to help it succeed or personal traits such as a positive attitude or a strong work
commitment.
A skill set is different from your personality, your psychological type, or your temperament.
Think of your skill set as the traits you might include on your résumé that say, “This is what
I can do, and these are the abilities I can bring to your company.” Not all the characteristics,
interests, talents, and gifts you identified in your self-assessments will be part of this skill set.
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7.4 What Is a Skill Set, and How Do I Get One?
Figure 7.4: Joe’s list of personal strengths and talents
After Joe reviewed his self-assessments, he created this list of his strengths and talents. From this list, he
can determine what he enjoys doing most and which skills can be transferable to a new career.
Blend Images/Blend Images/SuperStock
A skill set consists of talents and job preferences, transferrable skills, and job-specific skills,
all of which can be listed on a résumé.
For example, you may have a musical talent, but you may use that talent as an avocation—a
hobby you engage in outside of work for your own personal enjoyment and the enjoyment of
family and friends. The skill set you identify must meet the following three criteria:
1. It must consist of characteristics, abilities, interests, talents, gifts, and preferences
you most enjoy using on the job.
2. It must represent transferable skills—such as organizing or leading others—that
you have learned and then successfully applied in your previous jobs and personal
experiences. Once you have demonstrated that skill, you can easily transfer it from
one job or career field to another. Adding to your skill set and developing your skills
further happens through further education and work experience.
3. It must include job-specific skills you have acquired, such as the ability to use a com-
puter, fix mechanical or digital equipment, communicate well with other people, or
operate a cash register.
Joe, the Ashford student we introduced to you at the beginning of this module, reviewed the
results of his self-assessments and compiled a list, along with some notes to show how he
developed each skill (see Figure 7.4). Not all of these skills may be transferable to a new
career, but Joe is beginning to target what he enjoys doing and what he has done in the past
and to identify his personal strengths and talents. If you do not currently have the skills nec-
essary to obtain your ideal job, you will want to gain these skills through projects, volunteer
opportunities, or full- or part-time work.
136
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7.4 What Is a Skill Set, and How Do I Get One?
Figure 7.4: Joe’s list of personal strengths and talents
After Joe reviewed his self-assessments, he created this list of his strengths and talents. From this list, he
can determine what he enjoys doing most and which skills can be transferable to a new career.
For example, you may have a musical talent, but you may use that talent as an avocation—a
hobby you engage in outside of work for your own personal enjoyment and the enjoyment of
family and friends. The skill set you identify must meet the following three criteria:
1. It must consist of characteristics, abilities, interests, talents, gifts, and preferences
you most enjoy using on the job.
2. It must represent transferable skills—such as organizing or leading others—that
you have learned and then successfully applied in your previous jobs and personal
experiences. Once you have demonstrated that skill, you can easily transfer it from
one job or career field to another. Adding to your skill set and developing your skills
further happens through further education and work experience.
3. It must include job-specific skills you have acquired, such as the ability to use a com-
puter, fix mechanical or digital equipment, communicate well with other people, or
operate a cash register.
Joe, the Ashford student we introduced to you at the beginning of this module, reviewed the
results of his self-assessments and compiled a list, along with some notes to show how he
developed each skill (see Figure 7.4). Not all of these skills may be transferable to a new
career, but Joe is beginning to target what he enjoys doing and what he has done in the past
and to identify his personal strengths and talents. If you do not currently have the skills nec-
essary to obtain your ideal job, you will want to gain these skills through projects, volunteer
opportunities, or full- or part-time work.
137
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7.4 What Is a Skill Set, and How Do I Get One?
Hard Skills Versus Soft Skills
• mySkills myFuture: http://www.myskillsmyfuture.org/Target.aspx
Employers often look for two different types of skill sets in potential employees: hard skills This free service for career exploration sponsored by the U.S. Department of Labor,
and soft skills. Hard skills are abilities or skill sets that a person can learn or be trained to Employment and Training allows you to enter jobs you have had and find careers that
obtain. The skills include those acquired when you obtained a degree or certificate in a spe- use similar skills. You can also select from an extensive list of careers for a description
cific academic field, proficiency in a foreign language, or specific computer skills. These skills and detailed information about the career field, job duties, wages, and necessary skills.
are fairly easy to recognize and would be ones you might list on your résumé. • SCSEP Virtual Career Network (VCN) and Senior Community Service Employment
Program Checklist: https://www.vcn.org/backtowork50plus/checklist
Soft skills are more difficult to recognize. They are traits and behaviors based on the strengths This online resource, developed through a partnership among the AARP Foundation,
you possess and your unique personality characteristics. You may be able to develop some the U.S. Department of Labor, and the American Association of Community Colleges,
basic competence in these areas through education or training, but without a natural gift for is not just for retired persons. It is available to everyone and can help you match your
work interests and existing skills to new occupations in today’s job market. You must
them, these soft skills will most likely not be among your strongest abilities. Though they may
create a free VCN account to use the service, but your account is secure and only
or may not be fully realized now, soft skills are natural aptitudes or abilities a person pos-
accessible by you. Your data will not be accessed or shared with others without your
sesses that have the potential to be developed further. Examples of soft skills include athletic
permission.
ability, people skills (the ability to relate to and to interact comfortably with other people),
teamwork skills, the ability to persuade and motivate others, time management, patience, Complete both the Interest and Skills questionnaires to help determine which
careers you might want to explore based on your past education, training, and work
flexibility, and other similar aptitudes.
experience. The complete checklist takes approximately 60 minutes to complete. Then
use the job tools included to identify the types of jobs you may be best suited for based
A Closer Look: Conducting Your Personal Skill Set Inventory will help you get started on deter-
on your skill set, work interests, and personality. Once you have an account, you can
mining your skill set and finding a career match.
access this system 24/7 from any computer.
Reflection Questions
A Closer Look: Conducting Your Personal Skill Set Inventory 1. What were the most interesting things you learned about yourself from the listed
resources?
2. Did these tools give you any new ideas for possible career fields or educational goals? If
Use the self-assessments you conducted earlier in this module and the additional resources
so, what were they?
provided here to construct a personal skills set inventory that describes your unique traits,
3. What next steps will you take to further explore potential career fields or your
talents, and skills. Aim for a list of 8 to 10 of your strongest skills. Don’t forget to ask friends and
educational goals?
family to give their opinions of your skill set. Sometimes others see us more clearly than we see
4. Are there skills you know you will need for your future career that you do not possess?
ourselves. The following are some online resources to help you with your inventory.
If yes, how do you plan to obtain these skills?
• Skills assessment: http://www.careeronestop.org/ExploreCareers/Assessments/
skills.aspx
This self-assessment offered by CareerOneStop provides a Skills Profiler where you can
create a list of your skills and match them to job types that use those skills. It covers
both hard/technical skills and soft skills and allows you to browse various job types.
The site also includes mySkills myFuture, discussed elsewhere in this module.
• What Color Is Your Parachute? A Practical Manual for Job-Hunters and Career-
Changers: Book
Forty-five years ago, author Richard N. Bolles wrote a book titled What Color Is Your
Parachute? A Practical Manual for Job-Hunters and Career-Changers. Since 1975 the
book has been revised every year, and it has sold more than 10 million copies over its
years of publication. The book provides numerous exercises to help you determine
your personal skill set, job-hunting advice, and information on choosing or changing a
career and conducting a job interview. You can easily find new and used copies of the
book at your local library, online retailers, and both new and used book stores.
138
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7.4 What Is a Skill Set, and How Do I Get One?
Hard Skills Versus Soft Skills
• mySkills myFuture: http://www.myskillsmyfuture.org/Target.aspx
Employers often look for two different types of skill sets in potential employees: hard skills This free service for career exploration sponsored by the U.S. Department of Labor,
and soft skills. Hard skills are abilities or skill sets that a person can learn or be trained to Employment and Training allows you to enter jobs you have had and find careers that
obtain. The skills include those acquired when you obtained a degree or certificate in a spe- use similar skills. You can also select from an extensive list of careers for a description
cific academic field, proficiency in a foreign language, or specific computer skills. These skills and detailed information about the career field, job duties, wages, and necessary skills.
are fairly easy to recognize and would be ones you might list on your résumé. • SCSEP Virtual Career Network (VCN) and Senior Community Service Employment
Program Checklist: https://www.vcn.org/backtowork50plus/checklist
Soft skills are more difficult to recognize. They are traits and behaviors based on the strengths This online resource, developed through a partnership among the AARP Foundation,
you possess and your unique personality characteristics. You may be able to develop some the U.S. Department of Labor, and the American Association of Community Colleges,
basic competence in these areas through education or training, but without a natural gift for is not just for retired persons. It is available to everyone and can help you match your
work interests and existing skills to new occupations in today’s job market. You must
them, these soft skills will most likely not be among your strongest abilities. Though they may
create a free VCN account to use the service, but your account is secure and only
or may not be fully realized now, soft skills are natural aptitudes or abilities a person pos-
accessible by you. Your data will not be accessed or shared with others without your
sesses that have the potential to be developed further. Examples of soft skills include athletic
permission.
ability, people skills (the ability to relate to and to interact comfortably with other people),
teamwork skills, the ability to persuade and motivate others, time management, patience, Complete both the Interest and Skills questionnaires to help determine which
careers you might want to explore based on your past education, training, and work
flexibility, and other similar aptitudes.
experience. The complete checklist takes approximately 60 minutes to complete. Then
use the job tools included to identify the types of jobs you may be best suited for based
A Closer Look: Conducting Your Personal Skill Set Inventory will help you get started on deter-
on your skill set, work interests, and personality. Once you have an account, you can
mining your skill set and finding a career match.
access this system 24/7 from any computer.
Reflection Questions
A Closer Look: Conducting Your Personal Skill Set Inventory 1. What were the most interesting things you learned about yourself from the listed
resources?
2. Did these tools give you any new ideas for possible career fields or educational goals? If
Use the self-assessments you conducted earlier in this module and the additional resources
so, what were they?
provided here to construct a personal skills set inventory that describes your unique traits,
3. What next steps will you take to further explore potential career fields or your
talents, and skills. Aim for a list of 8 to 10 of your strongest skills. Don’t forget to ask friends and
educational goals?
family to give their opinions of your skill set. Sometimes others see us more clearly than we see
4. Are there skills you know you will need for your future career that you do not possess?
ourselves. The following are some online resources to help you with your inventory.
If yes, how do you plan to obtain these skills?
• Skills assessment: http://www.careeronestop.org/ExploreCareers/Assessments/
skills.aspx
This self-assessment offered by CareerOneStop provides a Skills Profiler where you can
create a list of your skills and match them to job types that use those skills. It covers
both hard/technical skills and soft skills and allows you to browse various job types.
The site also includes mySkills myFuture, discussed elsewhere in this module. Using Your Skill Set in Today’s Workplace
• What Color Is Your Parachute? A Practical Manual for Job-Hunters and Career- In the 1980s most organizations were defined as a hierarchy, a system in which people’s
Changers: Book
Forty-five years ago, author Richard N. Bolles wrote a book titled What Color Is Your status or importance in the organization was determined by their rank, job title, or position.
A person’s career usually involved climbing a ladder up the ranks of an organization, which
Parachute? A Practical Manual for Job-Hunters and Career-Changers. Since 1975 the
was organized like a pyramid, as shown in Figure 7.5. If you performed well, once you learned
book has been revised every year, and it has sold more than 10 million copies over its
years of publication. The book provides numerous exercises to help you determine a particular job, you were promoted to supervise others who performed that job. Then you
your personal skill set, job-hunting advice, and information on choosing or changing a tried to climb to the next position on the pyramid, where you managed those supervisors, and
career and conducting a job interview. You can easily find new and used copies of the then progressed up the organizational ladder until you reached the highest level you could. Of
book at your local library, online retailers, and both new and used book stores. course, few people reached the top of the ladder, but the only way to succeed was to continue
to move up to increasing levels of responsibility. Seniority—the length of time you spent at
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7.4 What Is a Skill Set, and How Do I Get One?
the company—was extremely important in terms of pay and company benefits, and every Figure 7.6: Modern organizational structure
step you took up the ladder meant more seniority, more responsibility, and more pay.
The modern organizational structure contrasts the more hierarchical version of a business because of
the focus on sharing and collaboration to enable the company’s success.
Figure 7.5: Typical 1980s career progression
Hierarchy was the main focus of organizations in the 1980s. The idea of the corporate ladder was
important, emphasizing the start of one’s career in an entry-level position and then working one’s way
up to a senior level.
In contrast, you might visualize today’s typical organization as a solar system of people with
different talents and skill sets who work together for a single purpose or mission, as shown in
Figure 7.6 (see also A Closer Look: Are Job Titles a Thing of the Past?). It is true that most peo-
ple have a manager, and a hierarchy still exists within most organizations. However, most
organizations today engage in cross-functional meetings where people from different parts of
the organization share ideas and work as a team on company projects. It takes all members of A Closer Look: Are Job Titles a Thing of the Past?
the team, working together and applying their different skill sets, for the organization to be
successful. Can you imagine starting a new job and being told that you have no title? This is the case for the
employees of Zappos, the pioneering online shoe company. Read the following article and consider
Today people rarely stay with one organization for their entire career; they usually apply what it would be like to work at an organization with no job title, no boss, and no hierarchy.
their unique skill set in different organizations or different industries during their career. http://qz.com/161210/zappos-is-going-holacratic-no-job-titles-no-managers-no-hierarchy
Success and pay usually are not defined by how long someone has worked for the company,
Reflection Questions
his or her rank or title in the hierarchy, or the amount of responsibility or number of people
managed. Instead, the skill set and the value the person brings to the team are key factors. For 1. What is the difference between a hierarchy and a holarchy?
example, a newly hired technical specialist may earn a higher salary than someone else who 2. Would you be interested in working for a holacratic company? If so, why?
has more seniority and may even be given a signing bonus to join the company. 3. How do you think you would fit into such a company? What strengths would you bring
to the organization?
4. What might be the drawbacks or challenges of working at a holacratic organization?
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7.4 What Is a Skill Set, and How Do I Get One?
Figure 7.6: Modern organizational structure
The modern organizational structure contrasts the more hierarchical version of a business because of
the focus on sharing and collaboration to enable the company’s success.
In contrast, you might visualize today’s typical organization as a solar system of people with
different talents and skill sets who work together for a single purpose or mission, as shown in
Figure 7.6 (see also A Closer Look: Are Job Titles a Thing of the Past?). It is true that most peo-
ple have a manager, and a hierarchy still exists within most organizations. However, most
organizations today engage in cross-functional meetings where people from different parts of
the organization share ideas and work as a team on company projects. It takes all members of A Closer Look: Are Job Titles a Thing of the Past?
the team, working together and applying their different skill sets, for the organization to be
successful. Can you imagine starting a new job and being told that you have no title? This is the case for the
employees of Zappos, the pioneering online shoe company. Read the following article and consider
Today people rarely stay with one organization for their entire career; they usually apply what it would be like to work at an organization with no job title, no boss, and no hierarchy.
their unique skill set in different organizations or different industries during their career. http://qz.com/161210/zappos-is-going-holacratic-no-job-titles-no-managers-no-hierarchy
Success and pay usually are not defined by how long someone has worked for the company,
Reflection Questions
his or her rank or title in the hierarchy, or the amount of responsibility or number of people
managed. Instead, the skill set and the value the person brings to the team are key factors. For 1. What is the difference between a hierarchy and a holarchy?
example, a newly hired technical specialist may earn a higher salary than someone else who 2. Would you be interested in working for a holacratic company? If so, why?
has more seniority and may even be given a signing bonus to join the company. 3. How do you think you would fit into such a company? What strengths would you bring
to the organization?
4. What might be the drawbacks or challenges of working at a holacratic organization?
141
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7.4 What Is a Skill Set, and How Do I Get One?
Age is also less important in the workplace than it was 50 years ago. Most organizations no
longer have mandatory retirement at age 65, and many people choose to work beyond that
age. Youth does not stand in the way of someone’s success either, especially among those who
start their own businesses. The founders and chief executive officers (CEOs) of many major
companies today first held the top job at major companies when they were under age 30.
These CEOs include Mark Zuckerberg, who cofounded the company Facebook from his col-
lege dorm room when he was 20 years old; Adam Goldstein, who started the growing travel
company Hipmunk at age 22; and David Karp, who founded the popular blogging platform
Tumblr when he was 20 years old.
Not everyone is an innovator and capable of starting a new company, and these examples are
not to say that experience and past job performance do not matter. However, today’s work-
place is based more on your skill set, your ideas, and your ability to offer value to a company
than on your position in a company, your seniority, or your age.
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Summary & Resources
Summary & Resources
Module Summary
You are not alone if you are struggling to figure out which career path to choose. The profes-
sional landscape in the United States offers tremendous choice and flexibility, which can be
overwhelming for people who aren’t sure what they want to do. Fifty years ago, it was not
uncommon for people to spend their entire career with the same company, whereas today
many workers change employers 10 or even 15 times in their lifetime. And that’s okay!
Some people are fortunate enough to know exactly what they want to do with their lives. For
most people, however, discovering a career path that matches their personality, strengths,
and abilities—and provides a good balance with the other aspects of our lives—is a process of
trial and error. You can find a fulfilling career for yourself—one that matches your personal-
ity, strengths, and abilities and provides a good balance with other important aspects of your
life—by engaging in the seven-step career development process recommended by Ashford
University Career Services and outlined in this module. The first step in this process is to
look inward. Through self-exploration, you can identify dominant personality traits, personal
strengths, and interests that are important to you. Using the personality assessments and
inventories described in this module, you can discover careers that match your own personal
profile. You can continue your career self-discovery by answering questions that are designed
to help you identify your interests, talents, and work preferences.
Another important part of choosing a career involves identifying the skill sets that you have
to offer a potential employer, including hard and soft skills, as well as those you may have
learned in a previous job that can be transferred to a new role at a different company. This
module provided you with a wide range of resources to help you discern and categorize these
skills. In Module 8, we will show you how to take what you’ve learned about yourself in this
module, highlight that information in the next steps of the career development process, and
begin your new career!
Critical-Thinking Questions
1. How does a typical career path today differ from what someone might have experi-
enced 50 years ago?
2. How are career changes regarded in the United States today?
3. In your opinion, how important is personality in your choice of career? How might it
affect your job satisfaction?
4. Your friend Natasha is unhappy in her current job and wants to make a change; how-
ever, she’s not sure what she would rather be doing. What advice would you give her
to help her make a decision? Which resources would you recommend?
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Summary & Resources
Key Terms
avocation A hobby people engage in out- soft skills Traits and behaviors based on
side of work for their own personal enjoy- personal strengths and unique personality
ment and the enjoyment of friends and characteristics. Examples include athletic
family. ability or people skills.
hard skills Abilities or skill sets that can be transferable skills Abilities that have been
learned or trained. Examples include foreign developed in one workplace or situation
language or computer skills. that can be useful in another workplace or
situation.
hierarchy A system in which people’s
status or importance in the organization is
determined by rank, job title, or position.
skill set A combination of personal traits,
abilities, and proficiencies that people
develop through education, training, and
experience. It may also include talents and
abilities that can be offered to an organiza-
tion to help it succeed.
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Module 8
Digital Career Resources
Oneinchpunch/iStock/Thinkstock
By Kathy Sole, Ashford University
Learning Objectives
After reading this module, you should be able to
• Describe the purpose of a résumé and which vital information should be included in one.
• Describe the purpose and structure of an effective cover letter.
• Summarize the steps for conducting an effective job search.
• Describe the digital resources that can help you in your job search and explain their limitations.
• Define networking and describe at least three different ways to network to find a job within your chosen
career field.
Introduction: Steps to Embarking on a Great Career
In Module 7, Joe, the Ashford student, began the career development process by assess-
ing his personal strengths, personality, and skill sets. He also performed some career self-
assessments and examined his work preferences. As Joe advanced through his business
degree program, he also found that he enjoyed and excelled at his accounting courses.
Accounting seems to be a good fit for Joe due to his personality, interests, and talents, and
therefore he has decided to pursue a career in that field. Now Joe wants to display his edu-
cational accomplishments, skills, and past work experience in an effective professional
résumé and cover letter and embark on a successful job search.
Perhaps you are looking for a job now or thinking about making a career change in the future.
You completed the personal assessments in Module 7, so it is now time to take what you have
learned, build your résumé and cover letter, and research career opportunities. The guide-
lines and digital resources in Module 8 will help you get started. It often takes time to learn
about career fields, research companies you might like to work for, conduct your job search,
and undergo a sometimes lengthy hiring process. So the sooner you start preparing or updat-
ing your résumé and narrowing your job search, the better!
This module will help you complete additional steps in the career development process. We
will discuss guidelines, tips, and suggestions for constructing an effective résumé and cover
letter, launching a successful job search, and taking advantage of the vast array of online digi-
tal resources available to you. Let’s get started!
CarmenMurillo/iStock/Thinkstock
Performing career self-assessments, getting the appropriate education, and creating a résumé
are a few of the steps to take before applying for a job.
146
©Credit Goes Here
Title Goes
8.1 Building Your Résumé
Here
Before applying for a job, you will need to create a résumé. What is a résumé? In its simplest
terms, it is a summary of your professional background, talents, skills, job experience, edu-
cation, and accomplishments. In academic fields or for some jobs in countries outside the
United States, a curriculum vitae (CV) is required instead. A CV may be thought of as an
expanded résumé that provides more detail about your educational achievements, academic
qualifications, and professional accomplishments. When you apply for a job, most employers
require that you complete a job application, either online or on a printed form. Many others
also ask that you submit a résumé or a CV so they can learn more about your interests, skills,
past work experiences, and career objectives. The résumé or CV should generally be accom-
panied by a cover letter, which is a summary of your career objectives that explains what you
can bring to the organization or company and why the potential employer should invite you
for an interview. We will discuss how to write an effective cover letter later in this module.
You can prepare your own résumé using the guidelines and examples in this module. How-
ever, if you would like more advice on how to structure your résumé, be sure to visit Ashford
University Career Services, which we explore further in Section 8.3.
147
8.1 Building Your Résumé
The Primary Purpose of a Résumé Is to Obtain an Interview
One of the most important things to
remember about a résumé is that its
primary purpose is not to help you
obtain a job; it is a tool to help you get
an interview. Together with your cover
letter, an effective résumé creates
interest when it is read by hiring man-
agers and encourages them to learn
more about you. These documents “get
your foot in the door” and allow you to
be face-to-face with people who might
hire you or refer you to someone else
who can. It is usually in the interview
that an employer determines whether
he or she wants to hire you.
An effective résumé is more than just
a formal list of information about you. Creatas Images/Creatas/Thinkstock
Think of it as a sales brochure that The purpose of a résumé is to help a job seeker land
an interview. It is the first thing a reviewer or poten-
advertises you to potential employ-
ers! In today’s competitive job market, tial employer will see.
human resources personnel or hiring
managers often receive dozens, hundreds, or even thousands of applications and résumés
for job openings. The first thing the reviewer must do is reduce the number of applicants to
a manageable number of people who can be interviewed. The reviewer decides who to inter-
view by quickly screening applications and résumés to answer four main questions:
1. Does this person fit our job requirements and have the necessary skills and experi-
ence to do the job?
2. Does this person appear to be a good fit with our company?
3. Is this person interesting to me, and does he or she stand out in a positive way so
that I want to know more about the person before I make a hiring decision?
4. Is this person’s résumé well presented and professional—with no spelling, grammar,
or typographic errors?
You submit your résumé because you want to move on to the next step in the job search pro-
cess: the job interview. To accomplish this goal, the reviewer must mentally answer yes to
all four of the previous questions when he or she reads your résumé. If the answer to any of
the questions is no, your résumé likely will be rejected. So your first goal in preparing your
résumé is to avoid listing information that results in your résumé being rejected. The guide-
lines that follow are designed to help you avoid this pitfall.
What Should I Include in My Résumé?
Your résumé should be one to two pages in length, depending on how many years of experi-
ence you have, the number of relevant positions you’ve held, and how many technical skills
you need for a specific job position. For example, an IT professional may need two pages to
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8.1 Building Your Résumé
outline applicable programming expertise and software knowledge. An academic CV can be
many more pages, but in general, your résumé should not exceed two pages. The headings
used for sections of a résumé vary based on the industry in which you are applying. Try to
find online examples of résumés in your industry to determine the style and format most
widely used and the information you should include. Most résumés, however, have at least
three main sections:
• Introductory information that provides your name, contact information, and a career
title followed by a list or summary of your skills, qualifications, or competencies
applicable to the position for which you are applying (Note: Some sample résumés
include the heading Objective. This heading is somewhat outdated; it is not recom-
mended that you use it.)
• Current and past employment/job history and professional accomplishments
• Post–high school educational achievements
You might also include the following optional headings if you think they might give you a hir-
ing advantage:
• Awards or special recognition you have earned
• Language abilities other than English (understood, spoken, or written)
• Professional or civic groups to which you belong and memberships or official posi-
tions you hold in community or professional organizations
• Special talents and skills you have, such as computer software programs you can use
• Professional licenses you hold
• Materials you have published or any patents you hold
Should I List Personal Information and References?
Some years ago, résumé experts suggested you add a résumé category titled Personal and list
your marital status, personal characteristics such as height and weight, and hobbies. Today
you are advised not to include such information. Most hiring managers attempt to be fair and
objective to all job applicants, and U.S. Equal Employment Opportunity Commission regula-
tions require that employers not discriminate against people because of their age, disabilities,
national origin, race or color, religion, or gender. Employers must also pay men and women
in the same workplace equal pay for equal work and cannot discriminate on the basis or
genetic tests, family medical history, or pregnancy (http://www.eeoc.gov/laws/types). Thus,
personal information regarding these issues should not be included on your résumé, and your
personal life should not influence the employer either positively or negatively. It is best to
omit personal information unless it is community oriented or you participate in activities that
have a direct relationship to your work, such as your membership in organizations like Toast-
masters that improve your public speaking skills or community activities that demonstrate
skills required by the job for which you are applying. Additionally, you should not include a
photograph with your résumé unless it is specifically required by the job posting.
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8.1 Building Your Résumé
Some people wonder if they should list
references on their résumé. We recom-
mend you not do so. Remember that
the primary purpose of your résumé is
to obtain an interview. References are
important only at the end of the inter-
view process, when just a few candi-
dates remain. At that point, telephone
interviews with personal references
may help hiring managers decide
which candidate to select.
When you prepare or update your
AndreyPopov/iStock/Thinkstock
résumé, it is a good idea to determine When preparing a résumé, you should not include
three or four former employers, for- personal references. Instead, have a personal refer-
mer instructors or school advisors, or ence list ready for the end of the interview process,
professional colleagues you know well in case you are contacted again by the potential
and who would be willing to give you a employer for more information.
favorable reference or write a letter of
recommendation for you later. Contact
these individuals and obtain their permission to share their names and contact information
as references. Keep this information yourself, but do not add it to your résumé or use the
phrase References Available Upon Request at the end of the résumé. Provide your reference
sheet only when your potential employer specifically asks for it and be sure to include the
following information:
Candidate name and contact information
References
Name, title
Address
E-mail address
Telephone
Relationship to candidate
Which Skills and Experience Should I Highlight?
Earlier we stated that when they examine résumés, the first question employers often ask
themselves is, “Does this person fit our job requirements and have the necessary skills and
experience to do the job?” Always examine job postings carefully and look for key words in it
that indicate the specific qualifications, minimal educational requirements, and desired skills
and experience required for the job. In fact, we suggest you circle key words that describe the
skills, experience, and job qualifications the organization is looking for in a candidate. Then
use these key words in your résumé to target the specific requirements of the job. This advice
is particularly important in today’s work environment because many employers reduce the
number of résumés they must read by using computer software to scan résumés for these key
words and eliminate résumés that do not contain this information.
This means that you should not make the mistake of having just one résumé and using it
repeatedly to apply for different jobs. To give yourself the best chance of being selected for an
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8.1 Building Your Résumé
interview, make sure you target your résumé to the specific job described in each advertised
job opening (you can easily make minor changes to your résumé on a computer). Include
some of the key words the organization uses in its job posting and list any relevant skills you
have that match the job requirements. If you do not have the specific experience required, be
sure you emphasize any related experience and any transferable skills you possess, which we
discussed in Module 7.
Make sure you address each of the required qualifications and minimum requirements to
avoid being screened out of the initial computer résumé review. Of course, it is also important
that your résumé be professional in appearance and error free.
It is one thing to emphasize or highlight a skill, and another to embellish or exaggerate or
claim a skill you do not have. Always be honest about your experience, qualifications, and
work history. If you do not meet the minimum requirements for a particular job but want to
apply anyway, honestly state the experience, qualifications, and work history you do have. If it
does not conform to the job posting, acknowledge in a cover letter that you are aware of this
fact, but then go on to tell the potential employer why you believe he or she should consider
you as a candidate anyway. It is always unethical to present false information on a job appli-
cation or résumé, and lies may come back to haunt you later in your career. In many cases
if, after you are hired, it is discovered that you falsified information on your application or
résumé—perhaps even years later—that falsification may be grounds for your termination.
What Type of Résumé Should I Use?
A good résumé is more than just a list
of information. The order in which
the information is presented, the font
styles you use, the organization of
each section of the résumé, and the
professionalism of your writing are
all important to create a positive first
impression.
Résumés are generally categorized
into two primary format types: reverse
chronological résumé and combination
functional and reverse chronological
Caia Images/SuperStock
résumé. Let’s examine the characteris- There are two types of résumés that Ashford recom-
tics of each of these types separately. If mends to land an interview: the reverse chrono-
you are not sure which type of résumé logical résumé and the combination functional and
to construct, you might want to experi- reverse chronological résumé.
ment with different types to see which
feels most appropriate and comfort-
able for you.
Note that there is also a creative résumé for professionals in more artistic fields, but they are
generally not used in professions associated with Ashford programs.
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8.1 Building Your Résumé
Reverse Chronological Résumé
A sample reverse chronological résumé can be found at the following link: http://nebula.
wsimg.com/6ba61e446bea55e6ec75f5fce262fe16?AccessKeyId=096AA3380C0E315FE2E
4&disposition=0&alloworigin=1. The reverse chronological résumé is the most common
and is the traditional résumé format. It emphasizes your work history and education in order
by date, with the most recent dates first. The advantage of the reverse chronological résumé
is that it shows a steady increase in experience in your career field and emphasizes your com-
mitment to your career. The disadvantage is that, because it is in date order, it also empha-
sizes any gaps in your work history or can create the impression that you are job hopping and
not sure what career or job you want to commit to. For these reasons, the following situations
are recommended and not recommended for chronological résumés:
Recommended
• In highly traditional fields such as government, banking, or insurance
• When you have stayed in the same career field or a related field for much of your
career and are applying for a new job in that same industry
• When your job history shows continued growth and increasing responsibility
Not Recommended
• When you are looking for your first job or have a brief job history
• When you have been out of the job market for awhile
• When you have periods of unemployment of more than 2 years in your work history
• When you are changing careers
• When you have frequent changes in employers
• When you wish to de-emphasize age or have been doing the same job for a very long
time
Combination Functional and Reverse Chronological Résumé
Some people use a functional résumé for situations when a reverse chronological résumé
is not the best option. A functional résumé is organized to emphasize the skills you have
acquired or the functions you have performed in your previous employment. If your work
history is brief, interrupted, or has changed frequently, instead of listing your employment by
date, the functional résumé focuses on the various skills you have acquired over the years. You
may include some dates in your description of the skills you have developed, but note that the
emphasis is on the skills themselves. The disadvantage is that the functional résumé may raise
some questions in the interview about why you chose to organize your experiences in this
way. Employers may think, “What is this person hiding?” So instead of a functional résumé, we
recommend you use a combination functional and reverse chronological résumé format.
A sample combination résumé can be found at the following link: http://nebula.wsimg.com/
12d788e2c9134fc8f5d345dc70829652?AccessKeyId=096AA3380C0E315FE2E4&dispositio
n=0&alloworigin=1. The combination résumé focuses on your relevant skills and accomplish-
ments for a particular job, with each section organized into skill areas, followed by a summary
of your work history. With this type of résumé you can highlight your most valuable skills for
a job and also provide the chronological work history that employers prefer.
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8.1 Building Your Résumé
We recommend the following situations in which combination functional and reverse chrono-
logical résumés should and should not be used:
Recommended
• When you are entering the job market for the first time or your work experience is
minimal
• When you are reentering the job market after a long absence
• When you are changing careers
• When you want to emphasize skills not used in your most recent jobs
• If your career growth in the past has not been progressive or you have had frequent
job changes
• If you have a variety of unconnected work experiences
• When much of your work has been temporary, freelance, or consulting
• When you are a specialist in several fields or skill areas
Not Recommended
• In highly traditional fields where you often are expected to begin at an entry level
and progress one step or level at a time to positions of increasing responsibility
• Where the names of specific employers you have worked for are of great interest
(e.g., in industries such as high-tech) or your most recent employers have been
highly prestigious
• When you are a specialist and have performed a limited number of job functions
Should I Make My Résumé Scanner Friendly?
In this digital age, many employers
scan résumés they receive to turn them
into digital files. Other companies use
an applicant tracking system, special-
ized computer software that scans
résumés for key words and phrases
and provides a statistical calculation
of whether your résumé should go on
to the next phase of the hiring process.
The font—a specific size and style
of type or printed characters within
a type or font family—you use can
affect your potential employer’s abil-
Photosindia.com/SuperStock
ity to scan your résumé. Pay particular There are some general formatting and styling rules
attention to how the employer wants for creating résumés. Which font and page format
your résumé to be submitted, and you use can affect a potential employer’s ability to
make your font choice based on the scan your résumé.
employer’s requirements, whether the
résumé is to be submitted online or through the employer’s electronic hiring system, or if you
are asked to submit your résumé as an e-mail attachment or by mail. Note: If you are asked
to submit your résumé as an e-mail attachment, consider saving the document as a PDF file
153
8.1 Building Your Résumé
rather than a Microsoft Word file. The PDF format looks the same on any computer and does
not allow others to make any changes. Strategies for Success:
Other Do’s and Don’ts for Résumé Preparation (Continued)
Different fonts take up different amounts of space on a page. To make sure your résumé fits
on one or two pages, experiment with different fonts. Regardless of which font you choose, Table 8.1: Action verbs for résumés
always make sure all text is at least 10 points in size, but no larger than 14 points, and that
accomplished coordinated helped managed recorded
headings are a little larger. If you are submitting your résumé online, remove any italics, bold,
and underlining in the formatting and any shading, graphics, and decorative lines you may achieved created implemented monitored researched
have added. Other do’s and don’ts for résumé preparation are listed in the following Strategies
adapted designed improved motivated reviewed
for Success.
administered developed increased negotiated scheduled
advised diagnosed influenced operated screened
Strategies for Success: analyzed drafted informed organized streamlined
Other Do’s and Don’ts for Résumé Preparation
assessed established initiated originated supervised
Read the following additional guidelines to help you present your résumé in the most
balanced evaluated innovated performed taught
professional way.
Do: built examined invented persuaded trained
collected expanded investigated planned translated
• Print your résumé on a good-quality white or cream 20- or 24-pound bond or linen-
completed grew led prepared upgraded
finish paper with a smooth finish, if you are submitting it in person. For electronic
submissions, complete all online information carefully, cutting and pasting from your
conducted guided located produced verified
proofread résumé if possible. Remember to correct the formatting if it changes during
the cut-and-paste process. controlled handled maintained ran wrote
• Use an abbreviated writing style in which you eliminate the articles a, an, and the;
avoid the word I when possible; and use phrases instead of complete sentences. For Don’t:
example, instead of “I implemented a new project-planning process,” say “Implemented
new project-planning process.”
• Don’t put the word “Résumé” at the top.
• Identify results you achieved on the job by quantifying your achievements, instead
• Don’t provide too much information. Include only one short paragraph or four to five
of just listing the duties you performed. Use action verbs (see Table 8.1) to describe
bullet points in which you list your previous job responsibilities.
your accomplishments. For example, instead of stating, “I managed a large budget,” say
• Don’t give reasons for leaving past employment.
“Managed a $14 million budget.”
• Don’t include a photo or any attachments with your résumé.
• In most cases list your work history immediately after introductory information.
• Don’t staple the pages if your résumé is two pages in length.
However, if you are a recent grad without a lengthy employment history, it is acceptable
• Don’t list dates when you are available.
to display your education first. In this case, highlight your field of study and list courses
• Don’t state a salary request; unless the employer brings it up earlier, salary should not
you believe might be relevant to the advertised job.
be discussed until you receive a job offer.
• If you are nearing graduation, state that you are a student and note your expected
graduation date. Reflection Questions
• In the work history section, include organizations you have worked for, dates of
employment, and accomplishments relevant to the job you are seeking.
1. What other questions do you have about preparing a résumé? Ask them in the class
• Check and recheck spelling, grammar, and punctuation before you submit the résumé,
discussion forum.
and keep a copy for yourself.
2. What is the easiest and most difficult part of preparing a résumé? Why?
• Remember that your résumé is a dynamic document that is constantly changing.
3. Do you think the guidelines in this module will help you prepare or update your
Update it when you obtain additional experience or have additional accomplishments,
résumé? Why or why not?
education, or training. If you keep the information up-to-date, you will only need to
revise the résumé to target each specific job for which you apply.
154
8.1 Building Your Résumé
rather than a Microsoft Word file. The PDF format looks the same on any computer and does
not allow others to make any changes. Strategies for Success:
Other Do’s and Don’ts for Résumé Preparation (Continued)
Different fonts take up different amounts of space on a page. To make sure your résumé fits
on one or two pages, experiment with different fonts. Regardless of which font you choose, Table 8.1: Action verbs for résumés
always make sure all text is at least 10 points in size, but no larger than 14 points, and that
accomplished coordinated helped managed recorded
headings are a little larger. If you are submitting your résumé online, remove any italics, bold,
and underlining in the formatting and any shading, graphics, and decorative lines you may achieved created implemented monitored researched
have added. Other do’s and don’ts for résumé preparation are listed in the following Strategies
adapted designed improved motivated reviewed
for Success.
administered developed increased negotiated scheduled
advised diagnosed influenced operated screened
Strategies for Success: analyzed drafted informed organized streamlined
Other Do’s and Don’ts for Résumé Preparation
assessed established initiated originated supervised
Read the following additional guidelines to help you present your résumé in the most
balanced evaluated innovated performed taught
professional way.
Do: built examined invented persuaded trained
collected expanded investigated planned translated
• Print your résumé on a good-quality white or cream 20- or 24-pound bond or linen-
completed grew led prepared upgraded
finish paper with a smooth finish, if you are submitting it in person. For electronic
submissions, complete all online information carefully, cutting and pasting from your
conducted guided located produced verified
proofread résumé if possible. Remember to correct the formatting if it changes during
the cut-and-paste process. controlled handled maintained ran wrote
• Use an abbreviated writing style in which you eliminate the articles a, an, and the;
avoid the word I when possible; and use phrases instead of complete sentences. For Don’t:
example, instead of “I implemented a new project-planning process,” say “Implemented
new project-planning process.”
• Don’t put the word “Résumé” at the top.
• Identify results you achieved on the job by quantifying your achievements, instead
• Don’t provide too much information. Include only one short paragraph or four to five
of just listing the duties you performed. Use action verbs (see Table 8.1) to describe
bullet points in which you list your previous job responsibilities.
your accomplishments. For example, instead of stating, “I managed a large budget,” say
• Don’t give reasons for leaving past employment.
“Managed a $14 million budget.”
• Don’t include a photo or any attachments with your résumé.
• In most cases list your work history immediately after introductory information.
• Don’t staple the pages if your résumé is two pages in length.
However, if you are a recent grad without a lengthy employment history, it is acceptable
• Don’t list dates when you are available.
to display your education first. In this case, highlight your field of study and list courses
• Don’t state a salary request; unless the employer brings it up earlier, salary should not
you believe might be relevant to the advertised job.
be discussed until you receive a job offer.
• If you are nearing graduation, state that you are a student and note your expected
graduation date. Reflection Questions
• In the work history section, include organizations you have worked for, dates of
employment, and accomplishments relevant to the job you are seeking.
1. What other questions do you have about preparing a résumé? Ask them in the class
• Check and recheck spelling, grammar, and punctuation before you submit the résumé,
discussion forum.
and keep a copy for yourself.
2. What is the easiest and most difficult part of preparing a résumé? Why?
• Remember that your résumé is a dynamic document that is constantly changing.
3. Do you think the guidelines in this module will help you prepare or update your
Update it when you obtain additional experience or have additional accomplishments,
résumé? Why or why not?
education, or training. If you keep the information up-to-date, you will only need to
revise the résumé to target each specific job for which you apply.
155
8.2 Writing an Effective Cover Letter
When you apply for a job, you will most likely send a cover letter to accompany your résumé
or CV. This important document summarizes your career objectives and explains what you
can bring to the organization or company and why the employer should invite you for an
interview. To be effective, the cover letter must be customized or tailored to the specific job
for which you are applying. In this section, we will discuss why your cover letter is vital to
your success in getting an interview and offer strategies for structuring an effective cover let-
ter. Don’t forget to visit Ashford University Career Services for other helpful advice.
The Purpose of a Cover Letter Is to Summarize and Persuade
The cover letter serves a different purpose than your résumé. The cover letter should give
readers a brief summary of your skills as they relate to the job you are seeking and should
persuade them to contact you for an interview. Think of the cover letter as a marketing tool
you might use if you wanted someone to buy a product you are selling. In effect, you are sell-
ing a product—yourself! How would you convince the reader that you are the right person
for the job?
156
8.2 Writing an Effective Cover Letter
First and foremost, you need to portray
yourself as a professional. Your cover
letter is a business letter that uses for-
mal language and should be formatted
with the basic elements of such a let-
ter: a date, a mailing address, a saluta-
tion such as “Dear Mr. Moran,” three or
four paragraphs of text, a complimen-
tary close such as “Sincerely,” and your
signature and typed name at the bot-
tom. Whether you submit your résumé
by mail, e-mail, or online, you should
include a well-written cover letter
John Howard/Photodisc/Thinkstock
whenever possible.
Take ample time to write your cover letter. Make sure
it is professional, summarizes your skills that could
The following link provides step-by- benefit the company, and is formatted correctly.
step instructions for crafting a well-
written cover letter, as well as a sam-
ple letter:
http://nebula.wsimg.com/ab3ab50c935624652e6e0de6fbc444ae?AccessKeyId=096AA338
0C0E315FE2E4&disposition=0&alloworigin=1
Some additional guidelines and tips for preparing the cover letter are discussed next.
Structure an Effective Cover Letter
Earlier in this module we discussed the four questions reviewers or hiring managers ask
when they screen job applications. We have already discussed how to address two of these
questions: “Does this person fit our job requirements and have the necessary skills and experi-
ence to do the job?” and “Is this person’s résumé well presented and professional—with no spell-
ing, grammar, or typographic errors?” Reviewers should answer yes to both these questions
after they read your well-prepared résumé that incorporates the guidelines we covered previ-
ously. The other two questions—”Does this person appear to be a good fit with our company?”
and “Is this person interesting to me, and does he or she stand out in a positive way so that I
want to know more about the person before I make a hiring decision?”—should be answered
by your cover letter.
Address Your Cover Letter to a Specific Person, If Possible
If the job posting indicates an individual who will receive your information, address your
cover letter to that person. If not, you might research the company online or call and ask to
whom your application should be addressed. If you cannot learn the name of a specific per-
son, address the letter to “Human Resources,” “Hiring Manager,” or “Dear Hiring Committee”
rather than “To Whom It May Concern.”
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8.2 Writing an Effective Cover Letter
Clearly Reference the Job for Which You Are Applying
The first paragraph of your cover letter should state the specific job title and code (if listed),
as it appears in the job posting for which you are applying, and your interest in this position.
This information helps ensure that your materials are routed to the appropriate person. You
might also mention where you found the job posting or how you learned about the position;
it helps employers know which websites or bulletin boards are most effective in obtaining
applicants. If you wish, you can also include a subject line right beneath the mailing address,
with the job title and code as the subject. You might also state something about the company
and why you want to be a part of it.
Summarize Your Qualifications for the Job
After your introductory paragraph, write a brief paragraph that explains who you are and
summarizes your strongest qualifications for the job. Then include two or three paragraphs
that explain how you can meet the employer’s needs and why you would be an excellent can-
didate for the job. If you are transitioning to a new career, this is a good opportunity to discuss
your transferable skills. Remember to sell yourself!
Go back to the job posting and examine the specific requirements and preferred skills the
employer has listed. Ask yourself, “What does this employer want in an ideal candidate?”
Address those employer needs and how you can fulfill them. For example, you might discuss
where you have used the required skills in your past employment. It is best to stick with the
top three or four skills the employer is seeking and discuss how you possess those skills.
Don’t oversell yourself. Give the employer just enough information that he or she will look at
your résumé and want to invite you for an interview.
Try not to begin sentences with “I” or focus on yourself and what you can do. That information
is contained in your résumé. Write the cover letter based on what the employer has said he
or she needs, and state how you meet
or exceed those requirements. Discuss
the benefits of hiring you by stress-
ing your positive attitude, motivation,
work ethic, work quality, enthusiasm,
eagerness to learn, communication
skills, or other personal attributes that
make you an exceptional candidate.
Use the same terminology the organi-
zation has used in its job posting. For
example, one company may refer to its
personnel as employees, while another
company may call them partners or
associates. Speak the organization’s Monkeybusinessimages/iStock/Thinkstock
language by using the terminology that When writing a cover letter, customize it to the
is used throughout the job posting. needs of the company to which you are applying.
158
8.2 Writing an Effective Cover Letter
As you can see, it is important that your cover letter and résumé are customized to each com-
pany’s specific needs. For this reason, make sure you do not prepare a single, generic cover
letter and use it for multiple jobs. Hiring managers can usually spot a generic cover letter, and
it tells them that you have not taken the time to learn about the organization. Personalize the
cover letter and tailor it to the company’s specific needs.
Close by Asking for an Interview
End your cover letter with a paragraph that specifically asks reviewers for an interview. You
might say, for example, that you are eager to meet with them personally to discuss the job and
your qualifications in more detail. Then provide at least two methods by which you would
prefer the employer contact you (e.g., a phone number and an e-mail address). Close with a
standard complimentary phrase such as “Sincerely,” “Best regards,” or “With appreciation.”
Consider other do’s and don’ts for preparing your cover letter in the following Strategies for
Success.
159
8.2 Writing an Effective Cover Letter
Strategies for Success:
Other Do’s and Don’ts for Cover Letter Preparation
Read the following additional guidelines to help you prepare a professional cover letter.
Do:
• Print your letter on a good-quality white or cream 20- or 24-pound bond or linen-finish
paper with a smooth finish, if you are submitting it in person. Matching your résumé is
excellent, but not required. For electronic submissions, complete all online information
carefully, cutting and pasting from your proofread résumé if possible, and adjusting the
formatting if necessary.
• Reread submission guidelines carefully and double-check e-mail or web addresses
before you submit. If you send your cover letter and résumé to the wrong mailbox, the
wrong person, or make someone’s job more difficult, your résumé may not garner the
most positive reception.
• Research the organization online to get a feel for the culture of the company, its mission
and values, and what language it uses. Incorporate some of the vocabulary from the
company’s website in your cover letter.
• Be concise; keep your cover letter to one page.
• Keep your letter professional but friendly.
• Check and recheck spelling, grammar, and punctuation before you submit the cover
letter, and keep a copy for yourself.
• Follow up with a phone call to the company after 1 week if you do not receive
notification that your application has been received (as long as the company does not
say “Do not call” on the job posting).
Don’t:
• Don’t write about the benefits you will receive by obtaining the job. Make the letter
about the company and how you can meet its needs.
• Don’t explain all the information in your résumé, but emphasize elements of your
professional background or education that are important to the position you are
seeking. Feel free to include an example, if it is brief and makes your point clear. Also,
be sure to emphasize how the company will benefit from hiring you.
• Don’t squeeze in information or narrow the margins to make the content fit on one
page. Instead, edit to shorten paragraphs and omit unnecessary information.
• Don’t try to use humor; it can fall flat.
• Don’t try to flatter the reviewer or overly praise the company. Be businesslike in your
approach.
Reflection Questions
1. What do you find are the easiest and most difficult parts of writing cover letters?
2. What strategies can you use to overcome the difficulties of letter writing?
3. What did you learn from this module that you think will help you prepare a cover
letter?
160
8.3 Finding a Job
Job searching can be a job in itself. It takes spending time, undertaking market and company
research, organizing the information you find, preparing résumés and cover letters, going on
job interviews, writing thank-you letters for those interviews, and then repeating the pro-
cess—often many times—before you are hired. Don’t be discouraged if the ideal job does not
come along as quickly as you hope. Consider your job applications and interviews as ways of
practicing your written and oral presentations and improving your job-hunting skills. Luckily,
here at Ashford University, you have plenty of resources to help you along the path to a suc-
cessful job and the start of a satisfying career. Some of these resources are described in the
following sections.
Ashford Career Services
As an Ashford student or after you graduate and become one of our alumni, one of the most
valuable (and free) resources you have at your disposal is My Career, the Ashford University
Career and Professional Development Center. There you can access a wealth of information
and obtain one-on-one help from a Career Services specialist by e-mail or phone when you
need it. My Career contains resources that include career self-assessments, in addition to the
ones discussed in Module 7, and related career links discussed later in this module. The site
also includes resources for career exploration, résumé and cover letter writing, job search
161
8.3 Finding a Job
Table 8.2: Advantages and disadvantages of some popular job boards
tools, materials for job interview preparation, and a special section containing resources for
military students. Log on to My Career through either your Student Portal or through your Job board Description Advantages Disadvantages Evaluation
online classroom. You can also check out a video overview of what Career Services offers at
the following link: https://www.youtube.com/watch?v=69Qj86fmLaU. www.indeed.com Lists millions Website allows Posting your You might be
of jobs, in the you to search for own résumé on better advised
If you are a student in the College of United States jobs by job title, a job board such to use this site
Education or the College of Health and and globally, key words, or as this one may to point you to
compiled from company name work against company web-
Human Services, specialized resources
company web- and by city or you. You may sites, where you
are available for these colleges. Also,
sites, staffing state. You can get a reputation can apply for the
don’t forget to check the multimedia firms, other also post your as a “spammer.” jobs directly.
section of the site. There you will find job boards, and résumé here. Employers and
resources for all students that include newspapers. recruiters tire
of seeing the
audio recordings and audio and video
same résumés
webinars; career advice videos; and
on different job
information from job recruiters about boards. You also
several national companies, their pro- encounter pri-
file of ideal candidates, and how to vacy issues; your
navigate the hiring process with these résumé might
David Stuart/iStock/Thinkstock also be seen by
companies.
Using Ashford University’s My Career can offer your current
you personalized advice and career information employer!
Even if you do not make extensive use
of the resources in Career Services, and help you explore information from different http://USAjobs.gov Lists all avail- The site is The site has Good place to
glitches and is
Category:
able federal gov-
straightforward
get notices of
be sure to check the Event link on companies.
government jobs ernment jobs. and includes prone to crash- jobs and to put
the Career Services page regularly for a wide range ing. The overall in an applica-
ongoing events such as call-in teleconferences and free online workshops—both of which of job postings experience is tion. It might be
can greatly increase your knowledge of job-hunting skills—that are scheduled every month. from around the not particularly more useful for
Community career fairs and events around the country are also listed here, and you may find country. user friendly. finding oppor-
tunities that can
one you would be interested in attending in your area.
be applied to by
other channels.
Online Job Searching http://Glassdoor.com Founded in Has features The job listing A good place to
that include
2007, Glassdoor
offerings are
gather infor-
Category:
jobseeker focused offers a trans- salary reports, relatively thin, mation about
The Internet is an outstanding resource for all aspects of career services, including career parent look interview ques- and the com- potential hirers,
information and assistance, job fair information, and job boards that list open positions, with inside the hiring tions reports, pany profiles but it may be
information about how to apply for them. You should always research a company before company. and company are uneven, limited in the
reviews to give as dissatisfied scope for a
you apply to work there to learn as much as you can about the organization. The company’s
job seekers an workers tend to broader search.
website is one of your best sources of information. However, general job and career websites
insider view of be more vocal
and job boards can be useful resources, as well. Table 8.2 describes and evaluates some of the the company. than those who
most popular job boards. Just keep in mind that not all jobs will be listed on job boards. are satisfied.
It’s important to remember that although the digital world makes it easy to submit
applications for jobs online, you will have far better success getting your foot in the door
through networking (which we discuss in the next section) than by applying randomly for jobs
you find on the web. While simply responding to job postings can work, it is often like cold
calling or telemarketing. Sometimes you can have success, but you will probably encounter
much more rejection than if you have someone who knows you introduce you to a potential
employer or put in a good word for you with a company where he or she currently works.
162
8.3 Finding a Job
Table 8.2: Advantages and disadvantages of some popular job boards
tools, materials for job interview preparation, and a special section containing resources for
military students. Log on to My Career through either your Student Portal or through your Job board Description Advantages Disadvantages Evaluation
online classroom. You can also check out a video overview of what Career Services offers at
the following link: https://www.youtube.com/watch?v=69Qj86fmLaU. www.indeed.com Lists millions Website allows Posting your You might be
of jobs, in the you to search for own résumé on better advised
If you are a student in the College of United States jobs by job title, a job board such to use this site
Education or the College of Health and and globally, key words, or as this one may to point you to
compiled from company name work against company web-
Human Services, specialized resources
company web- and by city or you. You may sites, where you
are available for these colleges. Also,
sites, staffing state. You can get a reputation can apply for the
don’t forget to check the multimedia firms, other also post your as a “spammer.” jobs directly.
section of the site. There you will find job boards, and résumé here. Employers and
resources for all students that include newspapers. recruiters tire
of seeing the
audio recordings and audio and video
same résumés
webinars; career advice videos; and
on different job
information from job recruiters about boards. You also
several national companies, their pro- encounter pri-
file of ideal candidates, and how to vacy issues; your
navigate the hiring process with these résumé might
David Stuart/iStock/Thinkstock also be seen by
companies.
Using Ashford University’s My Career can offer your current
you personalized advice and career information employer!
Even if you do not make extensive use
of the resources in Career Services, and help you explore information from different http://USAjobs.gov Lists all avail- The site is The site has Good place to
glitches and is
get notices of
straightforward
able federal gov-
Category:
be sure to check the Event link on companies.
government jobs ernment jobs. and includes prone to crash- jobs and to put
the Career Services page regularly for a wide range ing. The overall in an applica-
ongoing events such as call-in teleconferences and free online workshops—both of which of job postings experience is tion. It might be
can greatly increase your knowledge of job-hunting skills—that are scheduled every month. from around the not particularly more useful for
Community career fairs and events around the country are also listed here, and you may find country. user friendly. finding oppor-
tunities that can
one you would be interested in attending in your area.
be applied to by
other channels.
Online Job Searching http://Glassdoor.com Founded in Has features The job listing A good place to
that include
2007, Glassdoor
offerings are
Category:
gather infor-
jobseeker focused offers a trans- salary reports, relatively thin, mation about
The Internet is an outstanding resource for all aspects of career services, including career parent look interview ques- and the com- potential hirers,
information and assistance, job fair information, and job boards that list open positions, with inside the hiring tions reports, pany profiles but it may be
information about how to apply for them. You should always research a company before company. and company are uneven, limited in the
reviews to give as dissatisfied scope for a
you apply to work there to learn as much as you can about the organization. The company’s
job seekers an workers tend to broader search.
website is one of your best sources of information. However, general job and career websites
insider view of be more vocal
and job boards can be useful resources, as well. Table 8.2 describes and evaluates some of the the company. than those who
most popular job boards. Just keep in mind that not all jobs will be listed on job boards. are satisfied.
(Continued)
It’s important to remember that although the digital world makes it easy to submit
applications for jobs online, you will have far better success getting your foot in the door
through networking (which we discuss in the next section) than by applying randomly for jobs
you find on the web. While simply responding to job postings can work, it is often like cold
calling or telemarketing. Sometimes you can have success, but you will probably encounter
much more rejection than if you have someone who knows you introduce you to a potential
employer or put in a good word for you with a company where he or she currently works.
163
8.3 Finding a Job
Table 8.2: Advantages and disadvantages of some popular job boards (Continued)
Job board Description Advantages Disadvantages Evaluation
http://Idealist.org Founded in Charges orga- Postings are Working in
Category: 1995, this is nizations a aimed primarily the nonprofit
specialty—nonprofit the primary job minimal fee for at lower paying sector and
board for the posting jobs but and entry-level volunteering are
volunteer and is the recognized positions. good ways to
nonprofit sector. leader in serving begin building
this sector. It a résumé and
hosts job fairs workplace skills.
for colleges But stable, mid-
and graduate level jobs are
programs. scarce and do
not have much
turnover.
http://dhigroupinc.com Company Global company Job postings Specialized
Category: matches that works range from services are
specialty—energy, employers and with recruiters, entry-level to available only in
technology and security candidates in employers, and highly special- the professions
clearance professions, six specialized job candidates ized occupations listed. Acts as a
financial services, health fields and pro- to provide con- in the industries third party, so it
care, and hospitality vides industry nections within it covers. Com- prescreens can-
industries news in those these specialized pany works with didates before
fields. professions. all parties to they talk with
provide the right hiring managers.
fit for employer
and employee.
http://Mediabistro.com Founded in A quick look at Competition If you want to
Category: specialty— 1997, Mediabis- the companies is very stiff for work in media,
media industry tro has been the posting jobs media jobs, and this is a good
leading site for demonstrates this site ensures place to learn
all things media, that this is the that each job about a range of
including jobs, primary source post will attract career oppor-
educational for jobs in the a high volume of tunities. Job
programs, and media indus- responses. posts are best
networking try, including suited for lower
events. publishing, and midlevel
broadcast, and positions.
marketing.
http://Craigslist.org Founded in Charges low The lack of If you are look-
Category: local 1995, Craig- fees for job filters greatly ing for local
classifieds slist operates posters, which increases scam temporary work
approximately allows smaller postings. Job rather than a
700 local sites in companies to seekers need to career-related
70 countries. participate. be careful about job, this site may
Like the local the informa- be ideal. Great
classified model tion they send for those new
it is built on, it in replying to the work-
is better suited to a post. Not force who need
for quick local used by major to build their
hires than for corporations for résumé.
more substantial full-time jobs.
positions.
164
8.3 Finding a Job
Networking
One of the most important resources
for job hunters and career search-
ers today is networking with other
professionals. Finding a job generally
requires more than applying for a job
online. If you want to get noticed and
learn about opportunities before they
are ever posted online, you have to
network. While it may seem daunting,
it is likely something you do every day
without even realizing it. For example,
getting to know your instructors and
fellow classmates helps you build your
Caia Images/SuperStock
professional network. You never know
Networking with other peers and professionals is one
when these relationships might open
of the best ways to hear about job openings before
up career opportunities for you.
they are posted on job boards. Using networking sites
such as LinkedIn and Beyond.com and attending job
Social and professional networking
fairs are a few ways to connect with potential employ-
websites can also be excellent ways
ees and learn about different organizations.
to connect with people who are work-
ing in fields you would like to enter or
who know people you might contact for more information or job opportunities in a specific
field. One of the most popular of these professional networking sites is LinkedIn (http://
www.LinkedIn.com). It was founded in 2003 as a social media site for professional network-
ing. The website includes professionals who want to find clients that might use their skills
and job hunters who are looking for employment. By networking with other people on the
site, you can find out who is hiring and get leads from other people in their network. Recruit-
ers who are responsible for hiring people at their companies also use LinkedIn to find poten-
tial employees, as well as entrepreneurs who have their own companies and are looking to
create an online presence; define a new brand; or find partners, investors, and customers.
To use LinkedIn, you must create an account on the website and create a public profile to
use the job search features. The networking features are easy to use and allow you to con-
nect directly with a fellow member. LinkedIn has become an active and popular space to form
specific networks for yourself, such as joining a network of other Ashford students or a net-
work based on your job interests or experiences. It is also a useful place to learn about vari-
ous professions and job opportunities. You can learn how to create a strong profile and get
the most out of your account at the following links: http://www.forbes.com/sites/laurashin
/2014/10/20/how-to-create-the-ideal-linkedin-profile and http://www.linkedinsights.com
/3-stunningly-good-linkedin-profile-summaries.
Another career network is Beyond.com (http://www.beyond.com). It boasts more than 50
million users and offers job search capabilities as well as extensive networking opportunities.
Beyond.com works with job hunters and companies of all sizes and budgets. It lists more than
200,000 companies, including well-known retail stores, health care organizations, technol-
ogy firms, and employment agencies that hire through the website. At Beyond.com, you also
can join one or more interactive talent communities, where people in your field share the lat-
est news, opinions, advice, job opportunities, and salary data.
165
8.3 Finding a Job
Don’t forget, too, to check out job fairs or career fairs for networking opportunities.
Throughout the country, such fairs are held regularly (usually at no charge) by large com-
panies, groups of employers, local communities, government agencies, school districts, and
other organizations to find qualified job candidates. These events usually last for a few hours
or half a day at a specific location. Because different employers are often present, you usually
will not be able to customize your résumé to a specific organization. However, if you wish, you
will have the chance to meet a number of different company representatives, chat with them
briefly, and hand them a copy of a general résumé you have prepared.
To participate in these job or career fairs, search using the key words “job fair” or “career
fair” and the name of your local community or state for calendars of nearby events. Prior
to an event, prepare a standard résumé and make multiple copies. On the day of the fair,
dress professionally, arrive early, and carry some type of folder that contains your résumés.
As you wander through the job fair, stop by any tables of companies that interest you to learn
more about them, network with people in the industry, and decide if you would like to leave a
résumé for their review. It’s as simple as that! Ask about when they might get back to you or
if you can follow up later—and then do so!
Additional Career Resources
Numerous federal and state government departments and agencies and public nonprofit
organizations provide information on the web related to careers and job hunting. In addition
to the websites we have already discussed in this module, other popular and extensive online
government and organizational websites are listed in the following paragraphs. Your local
libraries, as well as state and local colleges and universities, also have resources available to
the public. Don’t forget to check community resources in your town or county, as well. Most of
these resources are free or available for a nominal fee.
• Bureau of Labor Statistics: http://www.bls.gov
The Bureau of Labor Statistics of the U.S. Department of Labor is the principal federal
agency responsible for measuring labor market activity, working conditions, and
price changes in the U.S. economy. This federal agency seeks to provide information
to the public and to invest in the U.S. workforce. To do so, the bureau provides student
resources related to the job market and current economy, career exploration maps,
data on monthly and annual employment and unemployment in geographic areas,
and videos on various occupations. Some of these resources are for elementary or
high school students. However, the higher-grade-level materials are useful for college
students. The site also includes excellent publications such as the Occupational Outlook
Handbook (http://www.bls.gov/ooh), a guide to career information for hundreds of
different occupations, and Career Outlook (http://www.bls.gov/careeroutlook), a
quarterly online publication with articles targeting different career fields each quarter.
• SCORE (Service Corps of Retired Executives): https://www.score.org
SCORE is a mentorship resource with more than 10,000 volunteers in more than 300
chapters across the United States that offers free-of-charge expertise, education, and
tools to aid entrepreneurs and small business owners in more than 62 industries.
Community events, online workshops, local community workshops, and live webinars
are offered, in addition to face-to-face interaction with a mentor to assist you in
meeting your specific business goals. SCORE works with solo entrepreneurs, nonprofit
166
8.3 Finding a Job
organizations, franchisees, start-up businesses, independent contractors, military
veterans, and woman- or minority-owned businesses to provide guidance and help
with business decisions and processes.
• Society for Technical Communication: www.stc.org
The world’s largest and oldest professional association for technical communicators,
this organization seeks to increase knowledge of technical communication profession-
als and provides a job bank, as well as training opportunities and a monthly magazine
and quarterly scholarly journal to keep members current in their fields.
• The Ashford University Online Library ebrary database
This library, available through your Student Portal, has more than 100 career-related
e-books available. Search “Subject: Career” to see the list of books you can access
and read online.
• Resources to Improve Your Professional Writing
Forbes’ Jargon Madness:
http://www.forbes.com/special-report/2012/annoying-business-jargons-12.html
The Office Life: The Ridiculous Business Jargon Dictionary:
http://www.theofficelife.com/business-jargon-dictionary-A.html
While this module has focused primarily on writing résumés and cover letters and network-
ing, conducting an effective interview is another vital part of the career development process.
You will want to spend some time developing and practicing this skill. Strategies for Success: I
Got an Interview! Now What?! offers some helpful resources to get you started.
Strategies for Success: I Got an Interview! Now What?!
Part of the career development process involves learning how to sell yourself in person. Inter-
viewing is an art, and an entire book could be devoted to exploring this important skill. Be sure
to consult Ashford University Career Services for a plethora of resources related to conducting a
successful interview. In the meantime, Career Services offers the following tips for preparing for
your interview and following up afterward in order to make the best possible impression.
Interview Preparation:
http://nebula.wsimg.com/bd9046b203dc531b00eefb55e0deb6e7?AccessKeyId=096AA3380
C0E315FE2E4&disposition=0&alloworigin=1
Postinterview E-mail:
http://nebula.wsimg.com/bfcf2c25751b24ad4997352599b563b7?AccessKeyId=096AA3380C
0E315FE2E4&disposition=0&alloworigin=1
Reflection Questions
1. How many job interviews have you had? How did you feel coming away from those
interviews?
2. Did you follow up after each of them? Why or why not?
3. What would you have done differently in your least effective interviews? How could
you have been better prepared?
4. What did you do well in your most effective interviews? How can you replicate that
success in the future?
167
Summary & Resources
Summary & Resources
Module Summary
The goal of Module 8 has been to enable you to use the information you learned from your
self-assessments in Module 7 to build a professional résumé and cover letter, begin a job
search, and gather information that can help you establish a successful and satisfying career.
One of your first tasks is to build or update your résumé. A résumé is a summary of your
talents, skills, job experience, and accomplishments. You are often asked to submit a résumé
when you apply for a job. The purpose of the résumé is to land a job interview where you can
introduce yourself to prospective employers and explain to them why they should hire you.
When you submit your résumé, you should generally include a cover letter that summarizes
your career objectives and explains what you can offer the organization or company and why
the potential employer should hire you.
Together, your résumé and cover letter should present a positive, professional image of you,
help reviewers and hiring managers answer yes to the following four questions, and persuade
them to consider you as a possible job candidate.
1. Does this person fit our job requirements and have the necessary skills and
experience to do the job?
2. Does this person appear to be a good fit with our company?
3. Is this person interesting to me, and does he or she stand out in a positive way so
that I want to know more about the person before I make a hiring decision?
4. Is this person’s résumé professionally prepared and well presented—with no
spelling, grammar, or typographic errors?
By following the guidelines in this module, you can greatly enhance your chances of achieving
the goals of your résumé and cover letter and advancing to a personal interview—the next
step in a successful job search.
Finding a job requires patience and perseverance. It takes time, research, organizational skills,
several revisions of your résumé and cover letter, and a great deal of practice to improve your
interview skills until the right job comes along and you are hired. Don’t be discouraged if your
job search takes time. As you continue to practice your job searching, writing, and interviewing
skills, you are improving your chances of finding a great job. Here at Ashford University you
have a variety of resources to help you along that path. One of the most important resources
is the Ashford University Career and Professional Development Center, which is available to
you free of charge through your Student Portal or the Student Life link. Through this site, you
can find a wealth of tools and resources for every step of the job search process on your own
or obtain one-on-one assistance from a Career Services specialist by e-mail or phone.
As you embark on your career path, refer back to the guidelines in this module and explore the
various websites to learn additional strategies. The resources available to you will continue
to grow and change; you will likely find new ones on your own because you are equipped and
have the knowledge to search for these tools for success.
168
Summary & Resources
Critical-Thinking Questions
1. What is most important to you in a career? Is it having a job you enjoy? Balancing
work and personal life? Having job security? Having a flexible schedule that involves
telecommuting or staggered start times? Balancing work and personal time? Having
an easy commute? Some combination of these or other factors?
2. Have you used online résumé builder software or an online professional résumé
writing service to help you create your résumé? If so, what were the advantages and
disadvantages of this approach? If not, explain some concerns you might have about
this approach, so your classmates can respond.
3. What do you find to be the easiest and most difficult aspects of job interviews?
How would you suggest preparing for interviews to improve one’s confidence and
performance?
4. Have you or anyone you know obtained a job through networking (social networks
or professional networks such as LinkedIn)? How well did this type of job search
work for you? Explain.
Key Terms
career fair An event held by companies, font A specific size and style of type or
groups of employers, local communities, printed characters within a type or font
government agencies, school districts, and family.
other organizations to find qualified job
candidates. Also called job fair. job fair See career fair.
combination functional and reverse networking The process of meeting and
chronological résumé A document that talking with people to exchange informa-
focuses on your relevant skills and accom- tion, contacts, and experiences for common
plishments for a particular job, with each professional or social purposes.
section organized into skill areas, followed
by a summary of your work history. résumé A summary of your professional
background, talents, skills, job experience,
cover letter A document that accompanies education, and/or accomplishments.
a résumé or curriculum vitae that sum-
marizes your career objectives, explains reverse chronological résumé A docu-
what you can bring to the organization or ment that summarizes your professional
company, and should persuade the reader to background and education, with an empha-
invite you for an interview. sis on work history and postsecondary edu-
cation and each section organized in date
curriculum vitae (CV) A document used in order, with the most recent date first.
academia that summarizes your educational
achievements, academic qualifications, and
professional accomplishments.
169
Module 9
Investing in Your Education
Fancy Collection/SuperStock
By Katherine L. Jackson, Truman State University
Learning Objectives
After reading this module, you should be able to
• Differentiate between types of student loans.
• Understand the financial repercussions of borrowing more than necessary to acquire your education.
• Analyze your credit report and explain why a good credit score matters.
• Discover how to protect yourself from credit card fraud.
• Learn how to pay down debt and the implications of doing so too slowly.
© 2016 Bridgepoint Education, Inc. All rights reserved. Not for resale or redistribution.
sol82612_09_m09_171-194.indd 171 6/29/16 5:19 PM
Introduction: Your Financial Future Starts Now
The financial decisions you make now will impact your life for years to come. For example,
if you are not careful about how much credit card debt you have, this financial burden could
significantly impact your future. One of the goals of this module is to make sure you use stu-
dent loans wisely. Making smart financial decisions now can pay off in the long term, while
financial missteps and mistakes made now may cause problems down the road.
Getting an education will have the biggest impact on your potential earning power. Take Ash-
ford student Elena Maria as an example. Elena Maria’s mother told her early on to get a good
education and save for retirement. Her mother had a hard life after her husband died. She had
to raise three girls on her own, working as a cashier at a supermarket and as a housekeeper
at a local hotel on the weekends. She wanted to instill in her girls that the only way to get
ahead was to get a good education—something she had never had.
Elena Maria’s mother is now retired
and lives on Social Security, which
is barely enough to pay rent and buy
food. Elena Maria watched her mother
work her fingers to the bone; yet in
retirement, her mother is unable to
afford even the smallest of luxuries.
Elena Maria is now 30, works full time,
and takes college classes online in the
evening. Her mother will not accept
any money from any of her daughters,
since she wants them to invest in their
education. Elena Maria hopes that one
David Sacks/Digital Vision/SuperStock
day, after she graduates from college
Elena Maria was told from a young age that a good
and has a good job, she can help her
education and financial stability are important.
mother have a better life.
In this module, we will show you how to be a responsible borrower, how to understand
interest rate expenses and student loans, and how to avoid costly repayments. We will
examine credit cards and explain how to use credit wisely, how to interpret your credit
report and credit score, how to protect your credit, how to pay down your existing debt,
and why good credit matters.
172
© 2016 Bridgepoint Education, Inc. All rights reserved. Not for resale or redistribution.
sol82612_09_m09_171-194.indd 172 6/29/16 5:19 PM
©Credit Goes Here
Title Goes
9.1 Responsible Borrowing
Here
Most people need to borrow money from time to time, especially to pay for important expen-
ditures such as a new home or an education. The most important thing to understand when
you take out a loan or open a line of credit is how interest works. Sometimes it works in your
favor, such as when you save or invest and earn interest; and sometimes it works against you,
such as when you borrow and have to pay interest.
Understanding Interest: The Beauty
and the Beast of Compounding
We’ll start with earning interest, because people
like to watch their money grow. Interest is a beauti-
ful thing if you are a saver or investor. For example,
when you deposit money in a bank savings account,
the bank lends out your money to other customers
in the form of loans to purchase a car or a boat. That Travellinglight/iStock/Thinkstock
might worry you, but the money deposited in your As an investor, interest works for you.
savings account is insured by the Federal Deposit As a lender, it is the price you pay to
Insurance Corporation, or FDIC, and is safe. In “rent” the money you borrow.
173
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sol82612_09_m09_171-194.indd 173 6/29/16 5:19 PM
9.1 Responsible Borrowing
addition to being protected, the money you deposit in your savings account earns interest.
Think of that interest as rent on the money you put into the bank. After all, if the bank is going
to use your money to make loans, shouldn’t you be compensated for letting the bank use your
money? The bank makes money by paying you a smaller percentage than it charges its loan
customers. You might earn 0.5% on your savings, but a borrower on an auto loan would pay
2.4%, and the difference is the bank’s profit. That’s the beauty part, for both you and the bank.
Now, what about the beast of borrowing? When you borrow money from a lender, you agree
to pay back both the loan principal—the amount of the loan itself—and any interest that
has accrued over the loan term—the length or duration of the loan. Again, this interest is
effectively the rent you owe for being able to use someone else’s money. This is a scenario that
always benefits the lender, but it may be very costly to you depending on the loan you choose.
Let’s imagine that you are apartment hunting. Before signing any paperwork, you would come
to an agreement with the landlord about the length of the lease and the amount of rent you
pay. It’s unlikely that you would sign a 5-year lease for $1,500 per month when you only need
the apartment for a year and cannot afford to pay more than $800 in rent. Just as you wouldn’t
make this mistake with your housing, you can also avoid it when borrowing money.
Loans come in all shapes and sizes, and some options cost the borrower significantly more
money than others. The loan term and the way interest is calculated are the key variables in
any loan equation. We will explore various borrowing scenarios in the sections that follow.
For now, it is important to understand the difference between simple and compound inter-
est. Simple interest is calculated using the original principal balance and does not include
any interest that has accumulated on the loan. If you borrowed $1,000 and agreed to a 10%
simple annual interest rate, you would pay $100 (10% of $1,000) in interest each year. Com-
pound interest, on the other hand, is applied to the principal balance plus any interest that
has accrued. If the annual interest on your borrowed $1,000 were compound interest, then
you would pay $100 in interest only in
the first year. The interest for the sec- Table 9.1: Simple versus compound interest
ond year would be $110, which is 10%
Simple interest Compound interest*
of $1,100 (the original loan amount
plus the interest that has accrued so
Year 1 $1,100 $1,100
far). Other than auto loans, most loans
are calculated using compound inter- Year 2 $1,200 $1,210
est rates. Year 3 $1,300 $1,331
Year 4 $1,400 $1,464
Whether you are paying simple inter-
est or compound interest affects how Year 5 $1,500 $1,611
much you pay in the long run. With
Year 6 $1,600 $1,772
a simple annual interest rate over
10 years, you would pay $1,000 in Year 7 $1,700 $1,959
interest on a loan of $1,000. With a
Year 8 $1,800 $2,145
10% compound annual interest rate,
however, you would pay $1,594 in Year 9 $1,900 $2,358
interest on a loan of $1,000 over the
Year 10 $2,000 $2,594
same time period. Table 9.1 provides
a comparison. *Rounded up to the nearest dollar.
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9.1 Responsible Borrowing
Let’s face it: Neither scenario is a good one, because either way you are paying back at least
twice the original amount of the loan. Getting a lower interest rate or paying back the loan
more quickly would certainly eliminate a lot of your interest payments. Lengthening the term
of the loan, on the other hand, produces staggering results. Figure 9.1 shows how simple and
compound interest play out over several decades.
Figure 9.1: The effect of simple versus compound interest over time
Understanding how interest rates affect both your savings and your loans is critical to making sound
financial decisions.
Used by permission from Lance Barnard.
In Module 10, we will explore how compound interest works in your favor when you are
investing money. However, when borrowing money, especially in the long term, it can cost
you a lot more money than you realize. Armed with this information, let’s look at how you can
keep the most money in your pocket when taking out student loans.
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9.1 Responsible Borrowing
Student Loans: Know Your Options
College is an important investment for your educational, professional, and financial future. An
undergraduate degree makes you a more educated citizen, prepares you for a career, or helps
you move ahead in your current vocation. According to the National Center for Education Sta-
tistics, the median income for college graduates is $48,500, whereas the median income for
high school graduates is $30,000 (see Figure 9.2). That is a 57% difference in earning power
over your entire adult life (U.S. Department of Education, National Center for Education Sta-
tistics, 2015).
Figure 9.2: Income: High school versus college degree
Though the thought of taking on a student loan may be scary to some people, the benefits of earning an Creatas/Creatas/Thinkstock
undergraduate degree can be helpful for one’s career and overall financial situation.
There are several options for student loans, each
with different interest rates and repayment options.
Research all your options to determine which will
be best for you.
Data from “Annual Earnings of Young Adults,” by National Center for Education Statistics, 2015 (http://nces.ed.gov/programs/coe
/indicator_cba.asp); and “Work-Life Earnings by Field of Degree and Occupation for People With a Bachelor’s degree: 2011,” by T. Julian,
2012 (http://www.census.gov/prod/2012pubs/acsbr11-04.pdf).
As you are aware, this valuable investment in yourself comes with a price tag. Few people are
able to pay for their education outright and therefore must take out student loans. It is impor-
tant to understand the types of loans that are available because each one will have a different
impact on your financial future. As you now know, interest plays a major role in how much
you repay in the long term.
Types of Student Loans
If possible, you want to obtain a federal loan (as opposed to a private loan) primarily because
it costs less and has better repayment options. Federal student loans are available from the
Federal Perkins Loan Program and the Federal Direct Loan Program:
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9.1 Responsible Borrowing
• The Federal Perkins Loan
Program provides low-
interest loans available for
students with extraordinary
need through some 1,700
participating postsecondary
institutions.
• If you do not qualify for a
Perkins loan, you can apply
for a Direct Subsidized Loan
through the Federal Direct
Loan Program, for which you
must meet less-stringent
Creatas/Creatas/Thinkstock
income guidelines.
There are several options for student loans, each
with different interest rates and repayment options.
With both the Perkins and the Direct
Research all your options to determine which will
Subsidized Loan, you do not accrue
be best for you.
any interest on your loan as long as
you are a full-time student. There is a
grace period (usually between 6 and 9 months) upon graduation before loan repayment is
contractually required to begin. These are deferred-interest loans, which means the loans
do not begin to accumulate interest until after you graduate and after the grace period has
expired.
With Direct Unsubsidized Loans (also through the Federal Direct Loan Program), you do not
have to meet any income guidelines, but interest on these loans accrues the entire period in
which you are enrolled, as well as during the grace period. The 2010 Student Aid and Fis-
cal Responsibility Act eliminated direct loans through guaranty agencies, so all such loans
are now made directly through Federal Student Aid (https://studentaid.ed.gov), which is an
office of the U.S. Department of Education. Direct unsubsidized student loans, as well as many
private loans, accumulate interest while you are in school. Therefore, when you graduate you
not only owe the amount that you borrowed, but any interest that accumulated while you
were a student.
Let’s say you took out an unsubsidized student loan in the amount of $10,000 at a 5% inter-
est rate at the beginning of your first year, and for simplicity, that is all you borrowed. Look at
Table 9.2 to see what you owe upon completion of your degree.
As you are aware, this valuable investment in yourself comes with a price tag. Few people are
able to pay for their education outright and therefore must take out student loans. It is impor- Table 9.2: Loan with accrued interest
tant to understand the types of loans that are available because each one will have a different
Year Amount (interest rate) Total
impact on your financial future. As you now know, interest plays a major role in how much
you repay in the long term.
End of your first year $10,000 (1.05) $10,500
End of your second year $10,500 (1.05) $11,025
Types of Student Loans End of your third year $11,025 (1.05) $11,576
If possible, you want to obtain a federal loan (as opposed to a private loan) primarily because End of your fourth year $11,576 (1.05) $12,155
it costs less and has better repayment options. Federal student loans are available from the
Federal Perkins Loan Program and the Federal Direct Loan Program:
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9.1 Responsible Borrowing
Thus, upon graduation you have $12,155 in outstanding student loans that you must repay.
This interest accumulation is one of the big reasons subsidized loans are more appealing than
unsubsidized ones.
There are certain perks to some of the government subsidized loan programs, however. Under
certain circumstances you might be eligible for one of the federal government’s loan forgive-
ness programs (http://www.finaid.org/loans/forgiveness.phtml). For instance, if you work
as an AmeriCorps volunteer, you not only receive a stipend, but get money to put toward your
student loan balance (http://www.nationalservice.gov/programs/americorps).
For many students, signing loan papers and having money magically appear in an account is
a powerful seduction. With a simple signature, you can have access to a lot of money through
your student loan. You could use that money to have a nicer apartment, eat out more, and
maybe afford a car. None of these, however, pertain to your education.
How to Use and Pay for Your Student Loan
How, then, should you spend your student loan money? The answer is: on tuition, books, and
supplies (e.g., a computer and lab equipment) that you need for your classes. These are edu-
cation expenses. The burden of student loans can have a negative impact on your relation-
ships, how you feel about yourself, and your future standard of living. To minimize this strain,
only ask for as much money as you really need and make sure you spend your student loan
money only on your education expenses!
Consider Isabel, a friend of Elena
Maria’s who entered college right out
of high school. She financed her educa-
tion and living expenses with student
loans. When she graduated she had
$50,000 in student loan debt. Isabel
was not careful with her money. She
chose not to work while she was in
school, so she borrowed not only to
finance her education, but her lifestyle
as well. She had a nice apartment with
no roommates to help cover costs. Isa-
bel continued to buy her shoes and
Wavebreakmedia Ltd/Wavebreak Media/Thinkstock
clothing at expensive stores. After
One way to lessen the burden of student loans is to
attending classes and doing home-
ask for only the amount of money you really need
work, Isabel was tired, so she dined out
for books, tuition, and supplies.
with her friends at her favorite (and
expensive) restaurants. In her mind,
Isabel thought she had earned these perks. She worked hard, went to class, and received good
grades, and she justified these extras as validation for a job well done. But this lifestyle, which
was paid for with student loans, has now come back to haunt her.
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9.1 Responsible Borrowing
Isabel now pays $250 per month toward her student loan debt. She has a Direct Subsidized
Loan, so no interest accumulated during her time in college. She even had a 6-month interest-
free grace period after she graduated before she had to start repayment. Yet she will be paying
on this loan for many years to come, and she will pay much more than if she had only bor-
rowed what she needed for school expenses.
Let’s compare the difference between if Isabel had borrowed $25,000 versus $50,000. To do
that, we calculated the length of repayment, the total interest paid over the life of the loan, and
total repayments (amount borrowed plus total interest) for both loans, assuming an interest
rate of 5% (see Table 9.3).
Table 9.3: Comparison #1: Loan repayment plans over time
Monthly Length of Total
Loan amount payment repayment Total interest repayments
$50,000 $250 431 Months $57,500 $107,500
$25,000 $250 130 Months $7,500 $32,500
For Isabel, this means that by borrowing $50,000 to pay for her education and living expenses,
and if she only pays $250 a month, it will take her more than 35 years to repay her debt from
college! Having so much debt could also disqualify her for a car or mortgage loan. Notice
that if she borrows $50,000 with the interest expense included, she repays this loan twice
over ($107,500). If she had worked part time to cover her living expenses and borrowed only
$25,000 for her education expenses, she would have her loan paid off in a little more than
10 years, or 3 times faster (considering she still pays $250 per month). Furthermore, Isabel
cannot escape this debt. You cannot get out of student loan debt by declaring bankruptcy,
except in extreme circumstances. What you borrow must be paid back with interest.
Suppose that Isabel decides to work part time and only takes out the $25,000 loan. The length
of time she takes to pay it off impacts the overall interest expense of her loan. Let’s look at
what her payment would be if she chose to pay it off over 10 years (120 months) versus
20 years (240 months). We’ll assume the same 5% interest rate on the loan (see Table 9.4).
Table 9.4: Comparison #2: Loan repayment plans over time
Monthly Length of Total
Loan amount payment repayment Total interest repayments
$25,000 $265 120 Months $6,800 $31,800
$25,000 $165 240 Months $14,600 $39,600
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9.1 Responsible Borrowing
Here we see the attraction of the lower loan payment. She saves $100 a month by financing the
loan over 20 years instead of 10. However, this is where self-deception can worm its way into
your thinking. Although she pays $100 less per month, in the long run she pays more than twice
as much interest ($6,800 versus $14,600) because she takes twice as long to repay the debt. The
general rule of thumb is that you never shop by payment amount. Anyone can make your pay-
ment affordable by simply extending your payments over more months. Financing over a longer
period of time, as we saw in Table 9.4, only increases your costs. Try out the following student
loan calculator by plugging in different numbers to see how your loan would be affected: http://
www.bankrate.com/calculators/college-planning/loan-calculator.aspx?MSA=&MSA=.
Consider more tips in Strategies for Success: Five Rules to Follow When You Take Out Student
Loans.
Strategies for Success:
Five Rules to Follow When You Take Out Student Loans
1. Don’t take on more debt than you absolutely need.
2. Avoid using student loans to pay for a lifestyle you cannot afford.
3. Use lower interest federal loans instead of higher interest private ones.
4. Remember to check into federal loan forgiveness programs.
5. Repay your student loans as quickly as you can.
Reflection Questions
1. For what types of expenses should student loans be used?
2. Why shouldn’t you use your student loan to buy a new car?
3. Suppose Manny just graduated with a bachelor’s degree in education but also with
$20,000 in student debt. What loan forgiveness programs might help Manny lower
his debt?
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9.2 Credit Cards: A Tool, Not a Crutch
As a student, chances are you will need to rely on credit from time to time. Credit allows
you to receive goods and services now in exchange for payment at a later date. You should
approach consumer credit with caution, particularly when it comes to credit cards. Almost
anyone over age 18 can sign up for a credit card, regardless of ability to make payments. It is
up to the borrower (that’s you) to exercise good judgment to avoid borrowing more than you
can afford to pay back. This, of course, is easier said than done.
Life is full of temptations and unexpected events, both of which can be costly. It is easy to
swipe your card to pay for things. However, unless you have factored these costs into your
budget, you may be paying on these items for years and at a far higher cost than the original
price, thanks to very high interest rates. It is vitally important to pay off your credit card
balance, in its entirety, each month. If you do not have the discipline or ability to do so, you
should reconsider how you use your credit cards; a good rule of thumb is not to use your
credit card to dine out or purchase clothing.
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9.2 Credit Cards: A Tool, Not a Crutch
Before Elena Maria decided to get control over her
money, she made a number of expensive mistakes
that taught her some valuable lessons. Five years
ago, Elena Maria found a beautiful dress at a depart-
ment store. The dress was perfect for her cousin’s
upcoming wedding. It was not on sale, but the store
had only one in her size. When she tried it on, her
sister said she looked like a model and urged her to
buy the dress. Elena Maria hesitated but ultimately
couldn’t resist. The dress cost $350, matching shoes
were $120, and an evening bag was $85, for a total
outfit price of $555.
Elena Maria decided to use her department store
credit card to pay for the dress. Unfortunately, when
the bill arrived, Elena Maria could only make the
minimum payment. Her department store credit
card had an interest rate of 24%, and she continued Digital Vision/Photodisc/Thinkstock
to make the minimum payment each month. It took Be sure to use your credit card wisely.
Elena Maria 5½ years to pay off her purchase. By Too much debt can seriously affect the
that point she paid about $1,000 for her $555 outfit quality of your relationships as well as
(with $442 in interest—more than the cost of the your self-esteem.
dress)!
As you may have noticed, large retailers push for you to sign up for their store credit card
with discount incentives, such as 10% to 20% off your current purchase. They usually state,
“It’s free and easy!” It’s not simply good employee training that motivates sales associates to
ask you to fill out a credit card application, but self-interest. Employees often receive a com-
mission for each person who fills out an application. What governs the efforts of retailers to
recruit more store card holders? Research shows that, on average, a customer who has a store
credit card spends more than a customer without one. In addition, the interest on a store
credit card is typically more than twice that of a national credit card (e.g., Visa, MasterCard, or
Discover). So the retailers’ efforts are grounded in a good old-fashioned business practice—
make money!
By being cautious, you can use credit cards as a tool rather than a crutch. Getting a credit card
with a low credit limit, such as $1,000, can help keep your spending in check and provide you
with both convenient and essential benefits. You can travel without large amounts of cash.
You can make purchases when funds are low or pay for bigger ticket items for which you
might not have cash on hand. Many companies also offer valuable rewards programs or other
perks, such as extended warranties on the products you buy; some may cover the insurance
on a rental car. A credit card is an absolute necessity in an emergency. Without one, you may
not be able to rent a car or make hotel reservations. Yet perhaps most important, if you use
your credit card responsibly and pay off the balance each month, you help build a solid credit
score.
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9.2 Credit Cards: A Tool, Not a Crutch
What Is Your Credit Score, and How Do You Get It?
Your credit score tells potential creditors your level
of creditworthiness. When you have an excellent
credit score, lenders consider you to be financially
reliable and will offer you better (lower) interest
rates on loans. As you now know, interest rates can
have a major impact on your financial future. So it
is vitally important to track your credit score and
work toward achieving an excellent rating.
There are four main competing credit bureaus
(Equifax, Experian, TransUnion, and Innovis), each
of which gathers information from credit issuers
and public records. (An alternate credit bureau is
described in A Closer Look: Build Credit by Paying
Your Bills.) Equifax, Experian, and TransUnion cre- gpointstudio/iStock/Thinkstock
ated VantageScore 3.0, which is the most used A good credit score is important
mathematical model to measure a consumer’s cred- because it can help you take out a loan
itworthiness. VantageScore 3.0 calculates consumer and receive offers with lower interest
credit scores from 300 to 850. Here’s a range of rates. Keep track of your credit score
scores to help you get an indication of where you and always strive for the best rating.
stand:
• Excellent credit: 750–850
• Good credit: 661–749
• Fair credit: 601–660
• Poor credit: 501–600
• Bad credit: below 500
Most lenders view a score of 750 or above as an excellent credit score, but what is considered
excellent depends on who is extending the credit. One lender might view a credit score of 750
or above as a top score, whereas another might view 780 or above as excellent. There are no
hard-and-fast rules, only indicators based on creditor behavior over time.
Some credit card companies now include your credit score on your monthly bill. If not, you can
get your free credit score from Credit Karma, Credit.com, and Quizzle. The components that
make up your VantageScore 3.0 credit score (in order of importance) include the following:
• Payment history
• Age and type of credit
• Percentage of credit line used
• Total balance or debt
• Recent credit behavior and inquiries
• Available credit
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9.2 Credit Cards: A Tool, Not a Crutch
Credit bureaus compile your credit information. Each may have different data, depending on
who reports the information. For instance, the car dealership where you got your car loan
may only report your payment history to Experian, so this credit history will not show up on
your Equifax or TransUnion reports. Your credit report contains your financial credit history,
which includes your debts and your repayment history.
A Closer Look: Build Credit by Paying Your Bills
There is a new credit bureau in town. PRBC, formerly known as Pay Rent, Build Credit, began
operating in 2002. The idea behind PRBC was that consumers could self-report their payments
on items that typically do not get reported to credit bureaus, giving them the opportunity to
demonstrate a good credit history on items such as rent, utilities, cable, insurance, and cell
phone bills. PRBC gives you a place to build a payment history and establish a PRBC Alternative
Credit Score. The PRBC score uses the same numbers as a traditional credit score, but unlike a
traditional credit bureau, a PRBC score below 600 is unlikely to get a loan, whereas borrowers
who have a PRBC score of more than 750 are considered exceptionally reliable.
To participate, you need to register at least three of your monthly bills and then regularly pay
your bills on time. PRBC tracks your payment history over time and calculates your score. This
is a way for individuals with lower income, as well as students who do not possess the typical
credit accounts required by the major credit bureaus, to build a credit history. By accurately
tracking your creditworthiness, the PRBC Alternative Credit Score provides potential lenders
with a more accurate representation of how well you manage your money. Visit the company
website for more information: https://www.prbc.com.
Reflection Questions
1. How can PRBC help you build a strong credit score?
2. Who would most benefit from PRBC’s program?
3. It is an oft-stated dilemma that one must have good credit to get credit. Given this, how
can college students establish a good credit score if they’ve never taken out a loan?
What’s in Your Credit Report, and Who Can See It?
Your credit report contains your name, current and previous addresses, the name of your
employer, a list of credit accounts with credit limits and payment history, public informa-
tion gathered from state and county courts, overdue debt from collection agencies, and hard
credit inquiries. Hard credit inquiries occur when you apply to open a credit account such
as a credit card, mortgage, or auto loan. These types of queries stay on your credit report for
2 years and are used to calculate your credit score—the more hard inquiries on your credit
report, the more negative the impact on your score. Soft credit inquiries do not show up on
your credit report and do not impact your score. These inquires may come from insurance
companies (who check your credit report before they quote you a price on life and other
types of insurance products), current creditors who may inspect your credit report, or a
potential unsolicited lender who may look through your credit report to decide whether to
extend you an offer for credit—this is where preapproved credit card offers originate. If you
do not want to receive such offers, visit the official consumer credit reporting industry web-
site (https://www.optoutprescreen.com/?rf=t). You can also opt in if you have previously
removed yourself from this list and want to be reinstated. Viewing your own credit report
also generates a soft inquiry.
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