Higher Education Bubble?

[FastEddy]

The Higher Education Bubble should be popped like a festering boil ...

[David]

Surging college costs price out middle class
By Annalyn Censky @CNNMoney June 13, 2011: 5:44 AM ET
As portrayed on the left axis, median income has hovered around $33,000 since 1988. Meanwhile, college tuition and fees -- portrayed on the right axis -- have more than doubled.

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[wancow]

Great article!!!

[David]

Is Higher Ed Going the Way of Newspapers?
By Robert Tracinski

How do you know when a sector of the economy is in a "bubble"? Well, one of the signs is when everyone starts talking about it being a bubble. With higher education, everyone knows that some kind of correction is coming, they just don't know how big or how soon.

College tuition has been increasing at an unsustainable rate, going up roughly 10% per year for the last ten years, far outstripping inflation. College debt is also unsustainable. Student loans are already bigger than credit card debt and are expected to exceed $1 trillion this year.

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[dcannady]

The price of everything is and has been rising for decades and there is nothing mysterious or surprising about it. It is the ever-increasing cost of government and printing(issuing or whatever) too much money that has caused inflation. Those constantly increasing prices trigger increases for government employees which increases the cost of government even more and, now, they've inflated the numbers and salaries of those government workers.

[David]

So why is there demand for education if it's so unnecessary? Because make no mistake: employers do want smart employees. You don't want to hire someone to whom you have to explain something three times before he or she gets it. Or worse, you don't want to hire someone who will never be able to grasp that thing, due to inferior reasoning ability. As a result, a college degree has become a proxy for determining whether a job applicant has a minimum level of intelligence necessary to perform a job. But with many private college educations exceeding $120,000 these days, that's a pretty expensive means for identifying adequate intelligence.

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[FastEddy]

We all will be rolling in the aisles when the Oh Bummer Administration tries to explain why Bobby doesn't have a job when Bobby is so dumbed down He can't even find the unemployment line.

The education bubble will be popped with a load boom when Oh Bummer can't quite get enough votes in Chicago to CYA and justify Blago's decades in jail ... ... Chicago Bored of Trade: Home of the Tea Party !

"Progressive" Teachers! Wake up, Lynn Woolsey retired (again) this week to front page fanfare, locally (again). This makes the fourth time since just after her re-election. Senility made her do it, I suppose. Its all that Mercury in the Petaluma drinking water.

That means Northern California Teachers have a huge bit of un-dumbing and re-education to do this year and next. if you want to see either of those two socialists "weiner wannabes" get more than lip service from the party and enough actual votes to win, better keep 'em after school ... BTW: What's the demo platform going to be? More of the same

[David]

That's why I say: For many people, college is a scam.

I spoke with Richard Vedder, author of "Going Broke by Degree: Why College Costs Too Much," and Naomi Schafer Riley, who just published "Faculty Lounges and Other Reasons Why You Won't Get the College Education You Paid For."

Vedder explained why that million-dollar comparison is ridiculous:

"People that go to college are different kind of people ... (more) disciplined ... smarter. They did better in high school."

They would have made more money even if they never went to college.

Riley says some college students don't get what they pay for because their professors have little incentive to teach.

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[David]

Going to any law school other than the elite few is a big time rip off.

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[David]

This is really an interesting read.

College vs. Work
July 21, 2011 2:42 P.M.
By John Derbyshire

A reader, following my earlier post on “Why College?”

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[FastEddy]

" ... One feature that stopped my eye, though, was the bit about prescription painkillers. What’s this all about? Are these really such potent narcotics? They must be doing something people really, really want: Here on Long Island we just recently had an exceptionally cruel murder committed by a painkiller addict. What do drug-legalization libertarians have to say about this? These painkillers are obviously legal. ..."

Don't get me started about the use and abuse of "prescription" drugs ... Its the "Brave New World" meets the "Valley of the Dolls" all over again. Long term Euthanasia for the willing dupes of socialism and the masses.. See also the recent Norway killings by a drugged up psycho on g'ment socialized medicine prescriptions (religious and political beliefs being that loony's rationalizations.)

[Bemused]

Originally Posted by David

So why is there demand for education if it's so unnecessary? Because make no mistake: employers do want smart employees. You don't want to hire someone to whom you have to explain something three times before he or she gets it. Or worse, you don't want to hire someone who will never be able to grasp that thing, due to inferior reasoning ability. As a result, a college degree has become a proxy for determining whether a job applicant has a minimum level of intelligence necessary to perform a job. But with many private college educations exceeding $120,000 these days, that's a pretty expensive means for identifying adequate intelligence.

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Another possibility is that many employers are lazy, and use the whole college thing as a means of thinning the herd, so to speak.

Must have Masters Degree and be able to lift 40 pounds.

I have worked for a company or two who have stated policies that candidates for their management programs must be graduates of one of the top 20 business schools.

Dare we characterize this whole college degree mania as nothing other than proof of a higher education - industrial complex?

I forget which radio program I heard this on, but apparently there is a recent study of the California State University system showing that over the past 20 years there are no more teachers than there were 20 years ago, but three times the number of administrators. And we in California are told that we have to pay higher taxes and that kids today have to pay radically higher tuitions for fewer available classes or "they" will be forced to fire teachers.

Thanks for being a two faced lying hypocrite Meg Whitman. Now we have Jerry Brown, and the Dream Act has been signed into law.

This rant is over.

[Bemused]

Browsing Netflix, I found this documentary of relevance.

Frontline did a feature called College Inc, aired in 2010

Watch Here

In general, very good coverage. Two question I came up with as I watched.

1) If these for profit educational institutions can make a profit good enough that Wall Street is interested, why can't the traditional private and public institutions?

2) Given the nature of the operations of these for profit universities, why am I having this feeling of deja vu?

The answer to the second question is that these for profits push loans onto students so they can enroll. Some might call this predatory lending, as there is a very high default rate, meaning that many of those taking the loads are not qualified borrowers. AND most of the loans these for profits offer are federal loans and if there is default, the for profits are not on the hook for the loss. Privatization of profit, socialization of loss. Can you say "mortgage bubble"?

Any case, a good overview of and investigation of the for profit university biz.

[David]

A growing chorus of economists and educators think that the higher education industry will be America's next bubble. Easy credit, high tuition, and poor job prospects have resulted in growing delinquency and default rates on nearly $1 trillion worth of private and federally subsidized loans. Now the ratings agency Moody's has weighed in with a chilling diagnosis: "Unless students limit their debt burdens, choose fields of study that are in demand, and successfully complete their degrees on time, they will find themselves in worse financial positions and unable to earn the projected income that justified taking out their loans in the first place."

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[FastEddy]

"Obama Administration Exempting Schools From Federal Law’s Testing Mandate" - August 08, 2011 - By DONNA GORDON BLANKINSHIP, Ass. Press

" ... Education Secretary Arne Duncan says he will announce a new waiver system Monday to give schools a break. ...

... The Obama administration requested a revision more than a year ago. Duncan said another school year is about to start and state education officials have told him they can't keep waiting for relief from the mandates.

"I can't overemphasize how loudly the outcry is to do something now," Duncan said.

Duncan has warned that 82 percent of U.S. schools could be labeled failures next year if No Child Left Behind is not changed. Education "experts" have questioned that estimate, but state officials report a growing number of schools facing sanctions under the law. ...

... "This Congress faces real challenges reaching bipartisan, bicameral agreement on anything," said Sen. Tom Harkin, D-Iowa, in a written statement. "Given the ill-advised and partisan bills that the House majority has chosen to move, I understand Secretary Duncan's decision to proceed with a waiver package to provide some interim relief while Congress finishes its work."
Harkin said he remains committed to keep working toward a bipartisan solution to reform the federal education law." ...

Dumbed down students can't keep up? Forget any teacher/school merit system, forget getting better teachers, just change the rules ...

How about this? Cut the fed ed system entirely and give subsidies to schools based on merit.

[David]

If not college, then what?

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[David]

The Student Loan Bubble: Only Stupid People Will Be Surprised When It Bursts

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[David]

J

obs, jobs, jobs, we keep hearing. But for whom, whom, whom?

Certainly not for the many young Americans being graduated from colleges that have prepared them inadequately for the competitive marketplace. The failure of colleges and universities to teach basic skills, while coddling them with plush dorms and self-directed “study,” is a dot-connecting exercise for Uncle Shoulda, who someday will say — in Chinese — “How could we have let this happen?”

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[Rafael]

Originally Posted by David

J

obs, jobs, jobs, we keep hearing. But for whom, whom, whom?

Certainly not for the many young Americans being graduated from colleges that have prepared them inadequately for the competitive marketplace. The failure of colleges and universities to teach basic skills, while coddling them with plush dorms and self-directed “study,” is a dot-connecting exercise for Uncle Shoulda, who someday will say — in Chinese — “How could we have let this happen?”

Yep. Those who get degrees in hard science, technical fields, or (sadly) welfare are ready to work. History, philosophy, English, etc., not so much.

[Bemused]

Originally Posted by David

The Student Loan Bubble: Only Stupid People Will Be Surprised When It Bursts

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On the flip side, do you want to try your luck in this economy with just a high school diploma? I’m not sure I’d hire a college dropout to walk my dog.

This is an example of contemporary idiocy, of course. Does your auto mechanic have a PhD? Or need one?

The problem is that our colleges and universities are charging a $100,000 to pump out the next generation of dog walkers. Sure, part of the fault lies with the people themselves; parents who let their 18-year-old children borrow a ton of money to go to an expensive private university to major in art history are no better than strung out crack mothers.

No, the problem is that for profit universities are using predatory lending practiced to sell federally backed student loans to people desperate to train as nurses and tech workers so that they WILL be qualified for jobs.

One of many Sources Out There

I've posted on this topic before. It is the mortgage industry all over again. These for profit universities get the money, the students cant find work so cannot repay loans, and who pays? (Hint, look in a mirror)


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