The next bubble: student loans and Academia
posted at 10:58 am on February 5, 2009 by Ed Morrissey
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Picture a market with overpriced product, driven by government-subsidized consumers that create an artificially high demand with overextended debt, on which major institutions rely as investments. A description of the American housing market, 1998-2008? Sure, but it also describes the American college market, and Kathy Kristof writes for Forbes that Academia may be the next bubble to pop:
Misguided easy-money policies that are encouraging the masses to go into debt; a self-serving establishment trading in half-truths that exaggerate the value of its product; plus a Wall Street money machine dabbling in outright fraud as it foists unaffordable debt on the most vulnerable marks.
College graduates will earn $1 million more than those with only a high school diploma, brags Mercy College radio ads running in the New York area. The $1 million shibboleth is a favorite of college barkers.
Like many good cons, this one contains a kernel of truth. Census figures show that college grads earn an average of $57,500 a year, which is 82% more than the $31,600 high school alumni make. Multiply the $25,900 difference by the 40 years the average person works and, sure enough, it comes to a tad over $1 million.
But anybody who has gotten a passing grade in statistics knows what’s wrong with this line of argument. A correlation between B.A.s and incomes is not proof of cause and effect. …
Offsetting that million-dollar income discrepancy is the $46,700 four-year cost of tuition, fees, books, room and board at a public school and $99,900 at a private one–even after financial aid, scholarships and grants. Add all this to the equation and college grads don’t pull even with high school grads in lifetime income until age 33 on average, the College Board says. Even that doesn’t include the $125,000 in pay students forgo over four years.
It’s impossible to recap Kristof’s thorough reporting here; one has to read the entire column. One difference between the housing subprime market and what Kristof describes as the student subprime market is the lack of government guarantees on the most profitable of the loans. Lenders can do better by avoiding government purchase of the paper, as they can avoid some of the restrictions.
Otherwise, the student lending market carries most of the same characteristics of the housing meltdown: exaggerated claims, predatory lending, and overburdened borrowers who quickly learn that they’ve gotten in over their heads. Many of these loans come at credit-card interest rates, as the regulations do not impose a cap. What happens? Students default, ruining their credit for years and leaving the lenders and their investors with empty pockets. SLM, called Sallie Mae, has lost 80% of its shareholder value thanks to what it called “nontraditional lending”, although its CEO mananged to cash out in 2007 with $72 million in stock sales before the bill came due. If that sounds familiar, see Franklin Raines and Fannie Mae.
The root cause of this impending bubble is the same for the housing market. Politicians decided that all students should go to college, just as they decided that all people should own their own home. Those are certainly admirable goals, but prescriptions for disaster as public policy. Rather than create public colleges with no requirement for tuition, which would have been the honest way to implement that policy but completely unpalatable as a spending plan, the federal government pushed for tuition loans, upping the demand at universities. With billions of dollars flooding the market and consumer demand dramatically rising, prices increased across the board, predictable from the basic economic law of supply and demand. When prices increased, the subsidies increased, which increased demand and pushed prices higher, creating a vicious cycle … exactly as it did in the housing market.
Government has to get out of the lending markets altogether. If politicians want to subsidize education, they should create more supply and lower the price in order to create the increased accessibility they want, not create bubbles in lending markets. Better yet, government should stay out of it altogether and let the market take care of itself.
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taking on debt, is what has kept me from getting an MBA. That and knowing I don’t really want a job/career and prefer to have my own business instead.
jp on February 5, 2009 at 12:02 PM
OT: here’s a WSJ article on two nonprofits being investigated by the Senate Finance Committee.
http://online.wsj.com/article/SB123371970524846863.html#
The entities are supposedly nonprofit though they seem to make an awful lot of money in the student-loan industry. That sounds pretty “for profit” to me. Daschle is tied to them, and he backed out of his bid before the SFC started looking at the rides he used to get on the “nonprofit’s” $28 million Gulfstream IV. Panetta’s foundation has a tie to these entities as does Franklin Raines and Democrats and, to a lesser extent, the GOP and even the RNC.
Someone explain to me how a tax-exempt entity engaged in a profit-making activity is allowed to keep that status and, on top of that, contribute to political campaigns? I’m going to puke.
BuckeyeSam on February 5, 2009 at 12:03 PM
Lest I be misunderstood, there’s plenty of good stuff to learn in school, especially in the hard sciences.
The technology stuff is often a little dated due to bureaucracy being unable to keep up with the pace of technological change, but that’s a different thing. Most people with computer sciences degrees would agree, I’d wager.
There’s also no need to do the whole “scare people with attrition” thing. Just teach the material and do a decent job. Make the tests fair and have a reason for how and why you test. Seems simple enough. Difficulty != value, after all.
TheUnrepentantGeek on February 5, 2009 at 12:04 PM
I’ll give you that. If I could get my masters in history or poli sci instead of secondary education and still teach high school I definitely would. Unfortunately with all of the certification tests and state standards for employment, you have to have an education degree. It’s a lengthy process. Although, I just don’t know how many people would go into teaching after they’ve decided to “get out of the grind.” All the teachers would be middle aged and sometimes young teachers are more motivated and energetic. I understand what you’re saying, though and I agree to a point.
mountaineer for liberty on February 5, 2009 at 12:07 PM
It’s an incentive… not a fetish… you can still go to college for something else, but now you’re going to have to work harder to do it… call it a learning moment…
Think of it this way when you’re 18-25 years old your brain still has the capability to learn math and science… but at age 40+ you can still learn the softer skills… its focus and teaching our young people focus… did I get cheated from learning a ton of great subjects in college by studying engineering… you bet… But i can fill those things now… the math, the physics you don’t have a real shot….
I think of how many morons believe global warming, who never did have a class in thermodynamics and heat transfer, and thus do not have the skill set to understand it’s a hoax…
phreshone on February 5, 2009 at 12:08 PM
Well seeing as you are picking and choosing…how about an attorney, do you ask how much calculus, as he is drawing up your contract?
I have found most math majors to be the ones who think they are “critical” thinkers, but are just as flakey as the rest.
Your post proves that, you only picked the argument you thought you could win, while ignoring the ones that disprove your “theory”.
And yes, I did have my stint with calculus, and the more critical thinking came from other areas…that is how do I pay off my mortagage, send my kids to college, raise a family on a then limited income…I never used calculus for that…common sense helps.
Here is an interesting stat…some of the most stable, cash positive companies and farms in the U.S. are owned by the Amish…how much calculus did they have?
right2bright on February 5, 2009 at 12:09 PM
They are also likely to come, in aggregate, from higher income families also which also gives them an advantage.
A 4-year college education is a great experience and helps graduates to think analytically across a variety of fields. However, Ed’s post points to the inefficiency of delivering this education and I think he is correct. At some colleges professors are compensated well to read lectures, barely meet with students and have TA’s grade papers. There are many PhD’s chasing few non-adjunct positions, probably the market salary for many positions is lower than what the school is paying.
I’d look for companies like University of Phoenix to continue to make inroads in providing a lower price points for education and to also provide advanced education opportunities for those older than 18-22. In addition to college costing a lot, I wonder if all that capital is spent too quickly on a young mind that is racing through 14-week semesters packed with dating, keg parties and cramming for exams.
dedalus on February 5, 2009 at 12:10 PM
I believe you forgot to add Big Environmentalism to that list.
RobertInLexington on February 5, 2009 at 12:12 PM
From my 7 years of college & my BS in science:
I went to 3 colleges in 3 different states.
1st was a community college-decent science program
2nd was a University-awesome science program(geology, at least)
3rd was a State university (that was almost like another community college)-extremely CRAPPY science program, but good teacher program.
I picked the 1st college bcs it was inexpensive compared to others & had a wide variety of courses.
I picked the 2nd college bcs their geology program was excellent.
I picked the 3rd college bcs it was the closest one around to where my future husband was living. So I became a teacher, which is useful being a rancher part-time & rancher’s wife wife full-time.
From these experiences I have found that:
1. 1/2 of college is a complete waste of time (I can ‘broaden’ my mind somewhere else on my own time)
2. Many professors are worthless as tits on a boarhog
3. Many elective classes are nothing but fluff & propaganda
4. The only undergrad degree that should really be (& seems to be) worth a damn is a science or mathematical degree bcs they actually TEACH you something.
Student loans are easily had & the stupid ’seminar’ they make you take, telling you not to borrow too much, etc. is a joke.
Kids in college are too stupid to get the consequences of borrowing all of this ‘easy’ money.
They are not counseled in HS on any other option beyond college many times.
ND is better. We have lots of trade schools.
I constantly counsel my students on ALL of their options, including working & saving up $$ after HS & THEN attending college.
College is fine & dandy for some things-
but crap like “University Studies” degrees is a HUGE waste of time & the govt should NOT be subsidizing frivolous crap like that.
Badger40 on February 5, 2009 at 12:13 PM
Which courses in your engineering education do you think were the most valuable in developing your critical thinking?
dedalus on February 5, 2009 at 12:13 PM
thanks… I understand the realities of the situation… but I like to stress the system to the point of failure… It’s not to say we don’t need education majors, but universities need to provide them on a rational cost basis…
Q: is journalism a major or a minor. is education a major or a minor… can the necessary skills be taught (for entry level) in 6 credit hours
phreshone on February 5, 2009 at 12:13 PM
Wholeheartedly. However, being forced to learn COBOL and FORTRAN after the 2000 crisis was over was nothing compared to the fact that in my first year, one of my CS teachers regularly slept in and missed class, one of them had so much difficulty speaking English that within a month I was one of two people who had not quit the class, and one teacher specifically took joy in not helping students, but leaving them in the dark with some notion that they’ll magically understand things without any guidance or ability to ask questions. The latter also refused to allow people to withdraw from the class, and the registrar had to step in.
For that quality of education, I’m 32 Gs in the hole.
MadisonConservative on February 5, 2009 at 12:17 PM
You are right that not everybody needs calculus. I use it all the time, but I teach HS science.
I do find that my scientific training as a geologist helps me figure out things more efficiently at times in everyday life, but it also makes me think TOO much.
Life is common sense & that can’t be taught.
Luckily, I lived life in the real world before I went to college. I was a ‘non-traditional’ student (old) & so I had a better grip on reality than my college mates.
My profession now-I was a good 10+ yrs older those who graduated with me.
I adapted much faster & had less stress than they did bcs I was ‘all grown up’.
Many of them were tanking, crashing & burning.
It was actually very amusing to watch.
Badger40 on February 5, 2009 at 12:17 PM
Differential equations… understanding that systems are not static… that all of creation is comprised of time cycles… which then gets you upper level “automatic control systems” which quantifies feedback control loops for multi-variable systems and designing for stability… all of which can be simplified to understand financial markets, marketing, bio-sciences, organizations, etc
phreshone on February 5, 2009 at 12:18 PM
James Kossin
Daniel Vimont
Phillip van Mantgem
I could name thousands of scientists, who took calculus, who have had the classes in therom. or heat transfer, who believe in global warming.
Decisions are made emotionally, then “science” is sought out to confirm.
It has been true in the past and in the future…85% of our decisions are based on emotion, the other 15% is evidence gathered to support our decisions.
Like your statement that you need calculus…no facts to back that up, so you create “facts”. And when those facts are disproved, you will create more.
Global warming is one perfect example, as proof is showing that it is not occurring, “qualified” credentialed scientists scramble to create new “facts” to support…until a period of time when it collapses.
Of course your belief of the “calculus god” doesn’t need to stand the test of time…common sense makes it a moot point.
right2bright on February 5, 2009 at 12:19 PM
So you are a multi-billionaire?
This sounds like the “seers” that look into the glove or read the palm to tell the future…it is all clear.
Then why aren’t they billionaires…”Because I have not used my powers to be selfish”…
right2bright on February 5, 2009 at 12:22 PM
Until it is paid off, it belongs to the
bandbank or mortgage holder. But, paying it off is an investment for the future.Jvette on February 5, 2009 at 11:55 AM
Jvette on February 5, 2009 at 12:23 PM
This is true. I know many people with 6 figure incomes without college degrees.
I also know many with degrees that are barely making it.
What is the price of a good
educationindoctrination these days?Kini on February 5, 2009 at 12:24 PM
I would like to see college students who want to get into teaching pick a content area major (history, English, biology, etc.) and then combine it with education as a minor (between 9-12 hours). They can learn the basics of educational theory and classroom management, as well as get prepped for cert. tests. Some of my education classes have been helpful, but I honestly didn’t need as many as I took. This would allow for more upper level content area classes. I would have happily traded some of my ed courses for more in depth history and poli sci.
mountaineer for liberty on February 5, 2009 at 12:25 PM
I have known kids that barely made it through high school. There family was a mess, drugs, alcohol, divorce, huge amount of pain…they go to college and do great.
The skills they learned from living in chaos, and surviving, made them better students and later employees.
They learned what real conflict resolution was, they knew when something was going to spin out of control…they knew instinctively (through the many years of pain) how to alleviate a customers trauma or problems.
Chicken or the egg…were you better at calculus because you already had an ability to reason,or did calculus help you reason…
right2bright on February 5, 2009 at 12:26 PM
your right… math majors aren’t great critical thinkers… many have little context…
It’s not the math itself… its the fact that by getting to through the calculus itself, all math before it becomes more intuitive, and thus a mortage, auto loan, insurance is more second nature… its understanding as second nature, what a percentage is, that raw numbers don’t tell a story, and to be able to double check other peoples opinions/conclusions (say double checking the NYT or the speaker of the houses employment numbers)
phreshone on February 5, 2009 at 12:28 PM
Calculus helped me reason. I was a basket case before that.
College is for some & not for others. And sometimes college is for some at one time & not another.
So kids should not be made to believe that is their only option after HS. Where I live, very often that is what they are made to believe (other than tech schools).
Some folks need to mature some more before they can handle it.
After taking calc, diff eq, eng. physics, & my geo-classes which all turned out to have calc-based & diff eq-based math in them, I can say your are very correct.
After I struggled through calc 1 with a B from the hardest teacher there(a geophysicist), I FINALLY understood what algebra really all about.
After that, all the other math came about naturally.
I never took a statistics course, but now that I teach ecology in HS, I have been teaching a lot of probability statistics & it’s very easy bcs of my math background.
Now you give me an English class to teach….I’d be choking.
I can’ remember how to diagram a sentence to save my life!
Badger40 on February 5, 2009 at 12:35 PM
If you’re going to get the word out on this, we’ll need to see a graph. People generally aren’t smart enough to make sense out of this sort of logical argument.
commenter on February 5, 2009 at 12:36 PM
The ‘rents paid for college the old fashioned way… by saving money. I also took advantage of the great public university system in this country… I believe that I paid about $50K overall for tuition (less than my private high school) and room and board (rent is cheap in downstate IL).
Illinidiva on February 5, 2009 at 12:36 PM
From my experience, most people don’t understand how to read a graph & form a logical conclusion.
I’m afraid this highlight will go down for the economists to ponder in 20 years.
Badger40 on February 5, 2009 at 12:43 PM
On global warming supporters… Lets look at Heidi Cullen, the Weather Channel host who advocate that the AMS revoke their “Seal of Approval” for any television weatherman who expresses skepticism that human activity is creating a climate catastrophe.
Ms. Cullen has degrees of Columbia (BS in engineering/ operations research, doctorate in climatology and ocean-atmosphere dynamics)… But unfortunately Ms. Cullen’s core did not include thermodynamics and heat transfer classes, and Columbia graduate program is tied with the J-school, indicating that such classes were not pre-reqs for a degree, and thus students there were unable to challenge the drivel spouted by professors.
phreshone on February 5, 2009 at 12:43 PM
Great points, and thus they’ve gotten little response, aside from the untenable suggestions to force employers to omit college education from consideration in employment and give students a free ride (two of the ultimate moves in government intervention).
This isn’t a “bubble.” You don’t sell your education to the next guy, who instantly has the education you now lack (like a house or a stock). This is government trying to make education available for as many people as want it. And I’ve never heard of an interest-only college loan.
People are going to continue to pay for limited slots at desirable institutions. If you want to make it easier for new colleges to start and old colleges to expand – easing the demand and increasing competition – that’s one thing. But saying that we need to stop the loans that make top-tier colleges available to the lower and middle class is something else altogether.
calbear on February 5, 2009 at 12:43 PM
My two oldest owe about $20K each and they haven’t graduated yet. It’s a scam. Specially on campus housing and meal plans.
roux on February 5, 2009 at 12:44 PM
But that is what reading Somerset Maugham does, or did for me. Music does the same, since it is very mathematical. A welding class or wood working class would do the same…it isn’t the subject, it is the analysis, the dedication, the discipline that goes along with the subject.
Certainly math, like english, is integrated in every subject. You can’t measure wood without math, but you can’t explain your project with out english.
Reading the Chronicles of Narnia at 12 years old or leaning algebra…what is more important…neither they both have to be done to become educated.
Learning math, just math, won’t make you a good decision maker, until you integrate it with some of Mark Twain’s or others writings…like the heart and lung, which is more important to the body, well they are both needed, and both need to be maintained.
right2bright on February 5, 2009 at 12:44 PM
Another factor is that they are comparing all college grads with all non-college grads. Some college degrees, especially the engineering degrees, earn a lot more than others.
Many liberal arts degrees are not worth the parchment they are printed on.
It’s a safe bet that those who have to be cajoled into attending college by radio ads, are not going to be trying the most challenging degrees.
MarkTheGreat on February 5, 2009 at 12:45 PM
Let all the leftist elitist indoctrination schools crash and burn, as they should. There is such a thing as higher education, and I, for one, am for it. I am not for the killing of our children’s creativity and supplanting it with propaganda straight out of Karl Marx.
DL13 on February 5, 2009 at 12:45 PM
somebody must have pee’d in your cheerios this morning.
1) Nobody here has ridiculed education in general.
2) They have ridiculed certain people who claim to be educated.
When you figure out the difference between the two positions, you to can claim to be educated.
MarkTheGreat on February 5, 2009 at 12:48 PM
I have to say, after reading this thread, I am so glad I had my GI Bill. It didn’t cover everything, as I had to take out a loan for childcare (and other things), but it helped enormously. It also helps I went to a trade school… I’m putting off finishing my “real” degree as long as I can.
I don’t understand why a piece of paper that you pay thousands of dollars for automatically makes you smarter than the guy that didn’t pay for that paper. I’m not talking about doctors, or engineers, but people who get degrees in literature, social sciences, stuff like that. Sometimes life and work are the best teachers, and I see no reason to rush our kids off to college right out of high school.
Anna on February 5, 2009 at 12:50 PM
What I want to know is how does the government get back out once it’s in something?
Youngs98 on February 5, 2009 at 12:52 PM
Are you utterly clueless, or do you just play one for the blogs?
What has been ridiculed is the notion that unless one has gone to a fancy ivy covered college, one can’t possibly be educated.
MarkTheGreat on February 5, 2009 at 12:53 PM
Once again, you show your lack of critical thinking…the names I gave you did have that background.
So it shows that calculus doesn’t lead to good critical thinking…you did what I said happens, when confronted with an obstacle, the common thing to do is to just go out and create some new fact to support that fact that was undermined.
Pardon me for saying this…but the argument isn’t about the specific names…you should have been able to discern that with your superior critical calculus skills.
You just proved my point…thank you.
And no I don’t believe in Global Warming, but many of the people who do are extremely well educated. The professors at the Geophysical Fluid Dynamics Laboratory at Princeton prove that, I think their credentials speak for themselves, as well as goof balls like Dr. Hansen…however, they will sell their “facts” for more money from the Gov.
right2bright on February 5, 2009 at 12:54 PM
Of all the questions asked, that is the easiest…
You don’t, Government programs may change, maybe even change names, maybe “evolve”, but they don’t go away.
Once a program is funded it never goes away…never.
And that is an excellent question that should be asked time and again.
right2bright on February 5, 2009 at 12:58 PM
I agree with you. But on the same note-Drs & Engineers have their share of morons. And I don’t mean the ones with lower GPAs.
Many often times the morons are the ones with the super high GPAs. They can do it in the classroom & take a test, but when they get out & do it in real life, they are clue-less.
People with credentials can also be worthless.
Bad scientists promote bad science.
Remember Dr Venkman from Ghostbusters?
Badger40 on February 5, 2009 at 12:58 PM
Just saw this one… great statement…
and on the rest of your comment… agreed… History is an great major… tonnes of context for life, business, society… zero need for calculus as a pre-req… but in old days, even lib-arts majors took their calculus…
Calculus is a “focus” of action here… how do you get both higher education and public education on the right track… give them something to focus on… if you try to manage more than 2 or three variables, you’ll manage nothing at all…
Just get universities to get back to focusing on a strong core for the first two years… No more of this Brown University garbage where students can get a degree with no required classes… It may be ok for someone who was motivated enough to get themselves into Brown, but that’s a prescription of failure for the other 98% of college students.
phreshone on February 5, 2009 at 1:00 PM
As a EE student from Georgia Tech, I had to take 6 quarters of calculus and another year of differntial equations.
MarkTheGreat on February 5, 2009 at 1:01 PM
Not so, really. What is mocked is that some institutions of learning (whether high school, college, or university) are over-rated and over-priced. Some are mocked by the elite as less-than worthy even though they are solid credentialers (if I may coin a word) of real learning. Some majors are useless to the marketplace.
A four-year college education is wasted on the perpetual, real-world-avoiding student. Many students are not scholars and lack the rigor and discipline to earn a genuine degree or merit. In fact, courses are watered-down to accomodate them and to maintain that income-stream of tuition. The degree has the equivalence of what was once expected of a high school graduate.
More young people than not would benefit by learning a trade that is portable to new places and new opportunities. Two-year community college programs, nursing and health-related fields, and vocational schools offer well-paying jobs and in some cases the chance for individual entrepreneurship.
I cannot tell you how many former students, enamored by some career day program in junior or senior high school thought that they were going to be architects, archaeologists, psychologists, marine biologists, or stars on Broadway without recognizing that many of these careers offer limited opportunities for employment because the field has many qualified competitors for too few openings. They also do not understand the committment of years of education to prepare for these fields before they can even earn a salary commensurate with their tuition investment.
Colleges and universities that milk the federal public funding cow never decrease their tuition to reflect that infusion of money.
onlineanalyst on February 5, 2009 at 1:02 PM
One thing that hasn’t been mentioned is SCOTUS’s complicity in all this. After the Griggs decision outlawed employer aptitude tests, college diplomas became one of the few ways employers had to gauge a potential employee’s intelligence and abilities. This, more than anything else, led to the explosion of diploma-seeking, and to a great number of people who had no desire or aptitude for college to attend anyway, so as to be able to get a good job, despite that a great number of these jobs really don’t require higher education in order to perform them well.
exlibris on February 5, 2009 at 1:03 PM
One of the problems with many of the social sciences is that people who didn’t like math ran to them, rather than face math.
Many of the flawed studies that are currently being done could be fixed with a few solid math courses.
MarkTheGreat on February 5, 2009 at 1:03 PM
My husband hated getting medical/dental work done on ship, as he says “somebody had to get “C’s” in medical school.”
I love Ghostbusters!
Anna on February 5, 2009 at 1:04 PM
Dude…he had PhDs in parapsychology AND psychology.
Don’t doubt his word.
MadisonConservative on February 5, 2009 at 1:08 PM
Very, very true. I do wish there were aptitude tests, because I’m not really cut out for college… but I do love to learn. Just not a classroom learning-type of person.
Anna on February 5, 2009 at 1:08 PM
right2bright
then again, like most engineers, i usually fall back onto the 80/20 rule…
Unfortunately, scientists and engineers are highly trusting of their colleagues, especially in academia, so many, although trained, will not go back and check on something that is not their direct field of interest…
so you are correct… calculus can only help move students down the path… and is certainly no guarantee…
phreshone on February 5, 2009 at 1:09 PM
Another reason to distrust him & others like him!
From what I’ve seen in the latter, I have grave doubts about that being a REAL science.
Badger40 on February 5, 2009 at 1:11 PM
I was BME GT… 6 quarters of upper level math, and then a required math elective… LaPlace Transforms…
I don’t wish this on all college students… but a few more would be good for the Country.
Still PO’d they got rid of the quarter system…
phreshone on February 5, 2009 at 1:13 PM
I rather like it myself.
More time to get it all.
Badger40 on February 5, 2009 at 1:22 PM
I remember looking at course catalogs deciding which school to apply to… GT had so many more electives because of the quarter system…
phreshone on February 5, 2009 at 1:26 PM
How does a bank foreclose on a college degree?
MarkTheGreat on February 5, 2009 at 1:32 PM
I believe with fed loans, eventually they start attaching your tax refunds…
phreshone on February 5, 2009 at 1:37 PM
Whew, I was afraid that it would involve surgical equipment.
MarkTheGreat on February 5, 2009 at 1:39 PM
Yup. After 25 yeas they did that to my dad. He’d taken a couple of college courses at American River College in Sac. CA.
They found him almost 25yrs later when they took his tax refund.
The govt NEVER forgets.
Badger40 on February 5, 2009 at 1:42 PM
Higher education does not equate to common sense.
We have a country now run by Harvard and other elites and they have no idea what they are doing, have never run anything, and instead of substance they threaten fearful consequences if we don’t do what pork they want.
Of course none of the ‘advice’ or ‘rules’ or ‘paying taxes’ apply to them.
Starlink on February 5, 2009 at 1:44 PM
Here’s a related question:
Why are people (especially people in academia) all on board for “Universal Healthcare” but no one is talking about price controls in academia?
The growth in cost of tuition at public and private schools has far outpaced inflation. Don’t people have a ‘right’ to education just like they have a ‘right’ to healthcare. Isn’t the right to healthcare even more important since education is a huge determiner in how well a person does in life – whether they end up living a life of poverty or prosperity?
Perhaps we should put some price controls on college educations…if costs spiral out of control, we can import excellent scholars from the Phillipines and the Middle East to do the jobs that American professors just won’t do.
I’ve been thinking for a while that we should take the same rhetoric used to attack “Big Pharma” and turn it on those smug jerks at “Big Uni”. It would be especially delicious irony given the fact that most of the professors and other staff at the universities are fully on board with price controls in the medical industry.
My only fear is that, instead of seeing how ridiculous their arguments are, they’ll actually latch on to this too and Universal Education will become one more ridiculous boondoggle that the taxpayers are on the hook for.
JadeNYU on February 5, 2009 at 1:48 PM
They can garnish your wages, too. And get at your state income tax returns.
exlibris on February 5, 2009 at 1:49 PM
Another area that’s going to revolutionize education is online courses.
There is value in sitting in a class with instructors for some things, but we’re gonna see an explosion of web-based courses for general/elective courses over the next decade. If done right, this can also enhance affordability. Of course, with the govt. so entangled with academia, who knows what will actually happen….
cs89 on February 5, 2009 at 1:49 PM
I agree, core is imperative. None of this “create your own major” stuff.
Many universities have confused educate with indoctrinate.
And High Schools are not demanding enough from the students, and their parents.
What is the statistic? In India there are more “honor graduates” then we have total graduates.
Other words, they have more at the 10 percentile in high school, then we have total kids in high school.
We are not only behind, but behind in numbers…
right2bright on February 5, 2009 at 1:50 PM
They are contracting that out to private collection agency’s that work on commission.
right2bright on February 5, 2009 at 1:51 PM
Added a little something to make it more complete.
right2bright on February 5, 2009 at 1:52 PM
I think it is true that there will be a shakeout in colleges but that is due to demographics. I don’t think that college loans represent a bubble however. Look at the size of the market and the size of the loans and you can see that it is not anywhere near the scale of other bubbles… nor are herds of people speculating on these loans.
lexhamfox on February 5, 2009 at 1:54 PM
I attended a seminar & 2 Indian students-one from a big city & one from a smaller one- said students are on their own in India.
Teachers are basically worthless & don’t even have to show up for work, help their students learn anything etc.
Education is free, but private school is where you get a good one. And few can afford that in India, of course.
Education in other countries really is eye opening.
So all the grads in India are self-motivate people with parents pushing them.
Plus, a lot of kids aren’t even attending school in the upper grades bcs of the difficulty.
But you never hear about that.
We are really lucky here. We educate everyone, stupid & kids with crappy parents included. That’s why our scores don’t match up very well with other country’s scores.
If we all had to pay for our kids to be educated, I can say with a lot of certainty we wouldn’t have these frivolous degrees & courses.
Badger40 on February 5, 2009 at 2:05 PM
Seeing I derailed the discuss more than a bit let me throw a few things against the wall while clarifying a bit.
- Many here are fed up with what I like to call “The highly mis-educated” or elites
- Academia could use a lot more rigor in terms of business practices and core curriculum (calculus was my strawman, because people, by in large, hate math, and thus if they escape it in their first years of college, they escape hard work, not very good for society)
- Despite this, there is still a relatively strong university system, though larger percentages of technical degrees are going to foreign students, while our HS grads move towards “gut” fields of study (which then raises the risk of indoctrination) … great if foreign students stay in the US, a brain drain if not…
- Lower standards at the University level, drags down the expectations on the Public school system – which inflicts a penalty on everyone
- experience trumps education… Bill Gates… smart enough to get into Harvard, smarter to leave…
- “critical thinking” has been hijacked by rhetoric and critisism – many, including myself, see this a result of an academia that has become political w/ too few professors who are experienced problem solvers, but problem creators…
phreshone on February 5, 2009 at 2:08 PM
All your points are right on the mark.
Many of my students groan at the thought of being made to do math in my classes.
They complain it’s a science class & not a math class, which always gives me a great laugh.
When I educate students on the educational prerequisites for occupations, they immediately respond that the easy way is better-until I educate them on the salaries they’d be making.
This is usually the eye opener for them.
What a coceppt, huh?
The harder you work, the more $$ you will probably make.
Incidentally, when I was done with my “hard” classes (math stuff, physics etc.) & I started taking Education classes to get a teaching license, I was LMAO at my feelow students (PE majors, history majors, etc) who complained at how hard the Education class work was.
I reminded them how hard math etc was, but then, they’d never experienced really hard work.
What a joke.
I sailed through the Ed classes-they were pretty stupid.
Badger40 on February 5, 2009 at 2:24 PM
Back on topic
Let’s take it from a practical standpoint…
Cost / Benefit
The average starting salary of engineering grads $50-72k depending on school. These students can afford to pay off their debt. Business majors are probably 20-30% below this, and other non-tech majors fall off faster. Unless you went Ivy, and have the drive (and luck) to get a job on Wall St. (not this year), then you can make 150k+ you first full year (at NYC cost of living)
Hence why i suggest you can only get 50% of max fed loan amounts if you don’t have a full year of calculus… Can you pay off your loans???… For every Steven King, who eventually makes it, there are tons who don’t… dis-incentivize taking on the burden, unless its a passion… a gross generalization and a bit of reverse social engineering, but how do you shift incentive within the system… let me know…
phreshone on February 5, 2009 at 2:27 PM
Same experience at B-school… Ivy leaguers with 3.0 averages weren’t used to being pushed… would take them 3 hrs to finish mid-terms (econ, finance, accounting and probablity) that the engineers, math and science majors finished in around an hour… they could talk all nice, but solve a problem, under pressure, not…
phreshone on February 5, 2009 at 2:31 PM
Academia to burst soon?
Good! That means I will not have to mortgage my entire lifetime to an outrageously high-interest student loan to earn a J.D.!
I hated paying my Stafford loan for my BA. Finished paying it off in nine years. I paid for my Associates in Computer Systems out of pocket. I’m NOT mortgaging any advanced degree I choose to earn!
newton on February 5, 2009 at 2:32 PM
Only way I see is to stop fed backing of student loans & tighten controls on who gets grants.
Like perhaps, if you want a grant, there are so many credits you have to take in areas that require people to take classes in hard to fill job areas.
This would be shifting to reflect job market trends.
But I can see the abuse of that, too.
So simple-yank fed $$ from colleges.
They’ll get their $hit straight eventually.
Badger40 on February 5, 2009 at 2:32 PM
Ha ha! It is such a delicious feeling, isn’t it?
Badger40 on February 5, 2009 at 2:33 PM
phreshone on February 5, 2009 at 2:08 PM
Thank you for clarifying. Your points are compelling.
cs89 on February 5, 2009 at 2:43 PM
I remember coming out of my economic analysis final in 1.5 hrs (and this was a 4hr final)…
Outside, one of the professors (soon to leave for the Hoover Institute) said “that wasn’t too bad”…
- I said “don’t expect more that 10 people (out of 200) to finish before the 4 hours are up”.
“But you finished in under 90 minutes”…
- “But I was paid a lot money to do math for the past 4 years, none of these people can solve a 4×4 matrix of equations by hand.”
phreshone on February 5, 2009 at 2:44 PM
Thanks cs…
The major fault in an engineering undergrad degree. you fall down major league in the final part of critical thinking… getting your point across with any sense of clarity… and I suffer in spades…
phreshone on February 5, 2009 at 2:46 PM
It’s also (to me) interesting the kinds of protections that the student loan industry has created for itself (legally).
As shameful as it may be, a person who is behind on their mortgage can often just walk away from the house, turn it over to the bank and force them to eat much of the difference.
A person who is deeply in credit card debt can do similarly through bankruptcy.
Student loans on the other hand… pretty much require an act of God *AND* extraordinary circumstances to discharge as part of a bankruptcy proceeding or otherwise go away short of full repayment.
And of course given all of the bailouts and assistance for ‘homeowners’… I kinda wish I would have purchased and then defaulted on a house instead of having gone to college and taken out a bunch of loans to pay for it.
dahat on February 5, 2009 at 2:52 PM
I’m not sure about other states. But this is already done in the California Community College System. Tuition price is more than fair at $20 a semester hour. What kills it is not the price of tuition here, but the price of textbooks. Professors try to keep the textbooks to a minimum at the school I attend. But for some courses you can pay $60 for tuition then turn around and have to pay $400 for books. A brisk market in used textbooks has sprung up.
I’ve taken some courses at private colleges, and a few of them roll up the books and tuition into one flat fee per unit. I wouldn’t mind this approach being implemented here, since you would only have to worry about one bill.
One of the nicer things is the Board of Governor’s Waver. Basically it waives your tuition. Vets almost automatically qualify for it in the first two years after they get discharged. Which means I don’t have to tap into the GI Bill right away, as long as I don’t mind paying for books out of pocket.
Suihei Deloi on February 5, 2009 at 2:54 PM
The question becomes, how much is the state subsidizing that cost because overall costs throughout the system are being kept in line…
phreshone on February 5, 2009 at 2:59 PM
That is a good arguement for what is wrong with public schools today. Amish kids in a one room school house without electricity manage to learn their three R’s by the end of eighth grade, and we have high school and a few college grads that cannot read a newspaper or add without a calculator.
We shouldn’t have to bankrupt ourselves to put kids through college. Too many kids have to get degrees to prove they are semi-literate and motivated, even though their jobs shouldn’t require a degree. Ban the NEA!
Laura in Maryland on February 5, 2009 at 3:04 PM
That explains a lot, thanks
Vashta.Nerada on February 5, 2009 at 3:28 PM
Think of the insanity. Paying tens of thousands of dollars to send some kid to university so that he can get a business degree and go work in the banking industry lending out money or an accounting degree to count all the money we don’t have.
It really is the end of the world.
We should be sending kids to build things, lay bricks, assemble goods, drill for oil etc.., not send them to universities to study bullsh1t so that they can go and get paid to do nothing productive for society other than be consumers using more borrowed money.
There are very few productive jobs in society that don’t require you to get your hands dirty. But every parent wants their kid to push paper behind a desk.
keep the change on February 5, 2009 at 3:52 PM
Hmmm – I will only say that the quality of education has an extremely strong correlation to the rank of the school. I did both grad and undergrad in universities considered top 10 by the engineering ranking system, and I have to say I really got my money’s worth of exposure to the latest and greatest in technology. In fact, I found later (to my shock), that a lot of processes in the industry are dated wrt the academia (old processes are stable since they have proven the test of time, etc). So, I would not make a blanket statement that all technical degrees teach outdated stuff.
peter_griffin on February 5, 2009 at 3:54 PM
What’s the point of directing people towards engineering, any supply increase will shift the price (salary)down. I tell people to avoid it at all costs.
hanzblinx on February 5, 2009 at 3:55 PM
These Universities charge exorbitant amount of money for young adults to attend their colleges. We get bogged down with tuition payments and our sons and daughters are forced to take these dumb-ass electives to perpetuate a prof. career and salary. They use the ruse of developing the “well rounded student”. Hogwash to that! Vocational schools should be the example that we use. Classes should be ala carte and for the major only. You become well rounded when you enter the workforce and interact with the rest of society.
DJ from MA on February 5, 2009 at 4:13 PM
55Gs for me. But thank God I got in on low rates & locked it in there. Whew!
As for books-I tell all my students when you get to college, don’t buy the book!
We all know that’s true except for math & classes where you have assigned problems.
Go buy the earlier edition-it’s usually pretty identical.
Buy online!
Buy from a friend/acquaintance.
When I worked a bit in the nearby private Univ. bookstore in Laramie, I was shocked at the mark-up for used books & even more shocked by the selling of ‘donated’ books.
You know, the ones they say you can’t sell back?
They pack ‘em up & sell ‘em to another store across country!
Sell your book on Amazon!
God how I wish Amazon had been around when I was in college!
Badger40 on February 5, 2009 at 4:19 PM
Higher ed is also an avenue for liberal indoctrination, so Congress responds to their lobbyists with cash and more cash, and easy VISA rules. I work in higher ed, and there is nothing scarier to the admin than the demographics or more and more poor kids with poor grades who don’t want to go to college. The loans are there to entice them.
PattyJ on February 5, 2009 at 4:31 PM
Well, when you talk about visa rules, they are driven largely because of the pressure from the US Chamber of commerce – and as far as that group goes, both right and the left are as malleable as putty. Any party that tries to be business friendly is forced to play nice to the Chamber of Commerce, otherwise Bill Gates will come to the House and testify how the absence of visas is causing his little fiefdom to crumble.
peter_griffin on February 5, 2009 at 4:47 PM
Should that ever happen… the value of a college degree will plummet. Somebody has to work at Denny’s. The market will not support everyone having an office job.
But as with all leftist lies, they depend on an ignorant public looking at everything in static terms.
mankai on February 5, 2009 at 4:59 PM
Geeze. Is that all?
College was a complete waste of time and other people’s money. Of course, now it’s my money I’m wasting, paying it back. I don’t use anything that I learned in my finance classes, and I work as a financial professional.
samuelrylander on February 5, 2009 at 5:05 PM
Great College Courses For FREE:
MIT Open Course Ware (OCW)
Grad and Undergrad; many courses on video.
Harvard tried for generations to take over MIT.
Good thing it failed.
65droptop on February 5, 2009 at 5:41 PM
Marxist Indoctrination Centers.
Johan Klaus on February 5, 2009 at 7:02 PM
FWIW, I personally hope that all colleges of education go bottom up. I obtained my BBA by using the GI Bill after I left the army. Wound up working for a financial institution and after four years realized that I absolutely hated it. Decided to go back to college in order to teach HS science. I soon realized that the education degree was a total waste of time. I was being told by the college of education that I had to get a degree in ed in order to teach. I then corresponded directly with the Ga Dept of Ed and discovered that while I had certain education classes that I had to complete I did not have to have a degree in education. At that point I became my own advisor and took as many biology classes as I could while taking the minimum number of ed classes to satisfy the state requirements. I took on a large amount of debt to do this which I have paid off. But what infuriates me is that the education classes that I had to take have been of no help in my job as a teacher. Lots of theory on how to teach being taught by people who had never taught in a HS classroom. The best job training that I received to be a teacher was taught to me by the nice drill sergeants:) during basic training at Fort Jackson in SC. I learned more about how to manage a group of unruly students there than in any education class in college. I advise all of my students that the best route to take after HS is to serve their country in the military. The military will make them mature enough to decide later if college is what they want. It will also provide money for college and eliminate the need for student loans.
dawgyear on February 5, 2009 at 7:11 PM
I sent my son first to community college its all we could afford. then to the us military..
he only has a 2 year degree but right now
he has NO Debt..
These people are going to get soaked..
Pay off your bills fast..
jcila on February 5, 2009 at 8:23 PM
This whole thread reminds me of a few articles, that might shed some light on how we got here. This one by George Will, this one by Lowell Gallaway and this one by Richard Vedder talks about how civil rights litigation caused many employers to substitute a college degree for more relevant aptitude testing. So now jobs someone with a high school degree from a reasonably good high school should be able to do are now reserved for holders of BAs.
Sekhmet on February 5, 2009 at 8:34 PM
Word.
I went to a Private U, 2 major degrees, 4 years, $80K in debt. FAFSA is a joke — based on my parents’ income (around $98K/year), I didn’t qualify for any aid — which is pretty laughable, since my parents didn’t give me one red cent (”We can’t afford it”).
I worked my butt off through school, and came out with a full time job I was already working in my senior year. I make about $60K/year (with bonuses) in a sector that is very, very stable right now. Not bad for 23, eh?
But the Uni was a joke. My degrees really have nothing to do with my job or my hiring, and are very loosely related to what I do. My Uni prided themselves on being so “diverse!” and “urban!” but that meant high admission rates based on social classification, but very low graduation rates. Kids come out of there WRECKED.
For example: the graduation rates for black/latino males was abysmally low, but the admission rates were very high. They want to improve graduation rates (great for that PR!) so the academic standards are abysmally low. I worked harder in my public inner city high school AP classes. But it’s an easy way to pocket a hot $40K, then kick these non-graduates into the crushing vortex of the real world with some major debt.
I was first gen for college, and everyone just pushed me along with “Oh, STUDENT LOANS! You’ll pay those off!” “But I have $60K already and am thinking about law school!” “No, it’s okay!” Oy.
My Parents were ignorant to it as well: they figured a student loan must be easier than a mortgage, so I skipped along merrily taking out loans until I was smacked with about $800/month in repayment after graduation. I was thinking about changing my job for a while, and the career adviser was pushing NON PROFIT ORGS on me. Hell no. So I stayed with my current job.
But $800/mo out of the gate. $800/mo is more than my monthly rent. In CHICAGO. With some re-fi, I knocked it down to about $400/mo which is manageable.
But a lot of undergrad kids come out thinking they’re gonna be handed a $66K/year job on some fluffy English BA degree, with NO resume experience outside of light retail and maybe some server work.
The debts are manageable if you work hard toward a real degree, GET WORK EXPERIENCE WHILE IN COLLEGE, and work like hell for a job before graduation. But kids don’t do it. They take 5, 6 years for a fluff degree, keep lending from Sallie Mae (the Devil!), and just think a degree will give them the world.
Academia is the worst racket ever. I loathed my college experience.
lansing quaker on February 5, 2009 at 10:08 PM
This is a topic that incenses me like no other. It is unconscienable, IMO, to lure an 18-year-old into a lifetime of indentured servitude to Sallie Mae on the premise that such debt is “good” because it is financing education. There should be Pell grants for the truly destitute, and whatever grants the individual colleges want to fund from their obscenely HUGE endowments, and scholarships. PERIOD. If you can’t find a way to make those sources of funding work for you, then maybe you need to look at a state school. Or do it the old fashioned way and wait tables to earn your way through school. I wish someone had forced me to go to work to pay for school, or directed me to a cheaper alternative.
The University of Arkansas, which is right up the road from where I live, patted itself on the back a couple of years back for raising $1 billion for its endowment fund. Yes, that’s billion with a “b.” And yet tuition still goes up every year an average of 6 percent. The school just announced a couple of weeks ago it will go up again this year, when students and their families can probably least afford it. And the U of A is already the priciest public school in the SEC (that means only Vanderbilt costs more). Now I can practically guarantee the cost of running this school doesn’t increase by an average of 6 percent every year. If it does, then maybe the chancellor and his people need to look for ways to rein in costs. Why don’t they? They don’t have to. Because they know that students will just keep borrowing more and more money, mortgaging their futures with student loans all because someone sold them on the notion that this is “good” debt. The immorality of it all is simply breathtaking.
NoLeftTurn on February 5, 2009 at 10:40 PM
BTW – no one seems to be touching on the reason why everyone is expected to go to college these days: because the courts and Congress have basically litigated away employers’ ability to perform independent testing of applicants’ skills and education. Used to be that most companies gave employment exams and IQ tests as a matter of course in the hiring decision, but a few discrimination lawsuits (Griggs v Duke Power for one) ended that process so now companies use college degrees as a surrogate.
Not everyone is ready for college and too many colleges (and their degrees) are worthless, but companies require them and false demand is thus created by everyone who wants a job in America. Britain and Europe don’t have these problems because vocational schools and employment exams are still pretty widespread over there.
Not only that, you can’t walk away from a college degree like you can a mortgage. The lenders have you by the b*lls, and as such, the colleges know it and squeeze every last dime out of their “customers.”
jr.ewing.78 on February 5, 2009 at 11:31 PM
I work for a university, and we’re one of the lucky few universities who knew how to handle an endowment (in Chicago no less!), so we’re in good financial shape. I was smart and consolidated my loans before Cheney, in all his infinite wisdom, cast the deciding vote in the Senate to raise Stafford loan interest rates to their maximum. Since I work for my alma mater, I’m lucky enough to get my MBA for free. Our tuition only went up 4% this year, considerably less than other universities. Just crossing my fingers that enrollment doesn’t fall too much in the fall, since thats where my salary comes from!
lolwut on February 5, 2009 at 11:44 PM
Well speaking as someone with a CS degree actually I completely disagree with that. CS isn’t about learning the latest technology, the newest computers, the newest software or anything like that. It’s learning how to attack problems, break them down and process them. It’s generating new algorithms and being able to analyze them to determine if they’re really better or not. It’s learning general language patterns not specific language, it’s organizing data. Honestly after you get your CS degree you’re expected to be able to be decent in a new language in a couple of weeks. (Because so much of the basics translates.) I mean seriously, good portions of my studies I didn’t even touch a computer to do them. Anybody that wants to know more can just read this
And for what it’s worth yes I currently work as a software engineer
Dave_d on February 6, 2009 at 12:26 AM
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