Learning To Owe
A few thoughts from a friend of mine and an introduction from a movie I (run75441) watch each year.
“I don’t need 24 hours. I don’t have to talk to anybody. I know right now, and the answer’s no. No! Doggone it! You sit around here and you spin your little webs and you think the whole world revolves around you and your money! Well, it doesn’t, Mr. Potter! In the, in the whole vast configuration of things, I’d say you were nothing but a scurvy little spider!” George Bailey
by The Bell
The Cost of Education Is Crushing the Opportunity We Mean It to Provide
The Occupy Wall Street movement has no formal goals but several consistent memes have emerged among the crowd demonstrations in various cities across the country. Most of these have to do with the concentration of wealth and the collusion/corruption between big business and government. However, a more selfish trend also has surfaced among the demonstrators – many want their college student loans forgiven.
A small, informal survey among New York protestors last week by equity research analyst David Maris found ninety-three percent of them advocated student-loan clemency. This idea actually is neither original to OWS nor unique among its members.
Sign bewailing large student loan debt
New York University Professor Andrew Ross recently proposed a radical solution to student loan debts the he calls “A Pledge of Refusal.” The idea requires those who owe to sign a pledge to stop making payments on their student loans once the pledge garners a million signatures. Meanwhile, an online petition supporting student loan forgiveness has collected over a half million signatures.
President Obama announced a plan last week to provide student loan relief. First, he is reducing the maximum repayment on student loans from fifteen percent of discretionary annual income to ten percent. Second, he will allow borrowers to combine loans from the Family Education Loan Program with direct government loans, with a lower consolidated interest rate. Obama plans to use his Executive authority to bypass Congress for this program.
Democratic Representative Hansen Clarke of Michigan wants to go even further. He has introduced legislation (H.R. 365) that includes creating incentives for banks to negotiate with distressed lenders, providing tax credits for education expenses and student loan debt, and making more private student loans eligible for discharge in bankruptcy proceedings.
Both Obama’s and Clarke’s solutions fall short of general clemency but protestors are unlikely to obtain this remedy. A Rasmussen poll found only twenty-one percent of American adults in favor of blanket forgiveness as contrasted to sixty-six percent opposed. Many feel clemency would be unfair to lenders as well as those borrowers who repaid their student loans. At worst, they write off OWS protestors and other advocates for loan forgiveness as spoiled, lazy slackers who expect a free ride.
Such epithets are unfair, counters conservative columnist Nicholas Kristoff this week in the New York Times. “While alarmists seem to think that the movement is a ‘mob’ trying to overthrow capitalism, one can make a case that, on the contrary, it highlights the need to restore basic capitalist principles like accountability.” Kristoff goes on to deplore how “some financiers have chosen to live in a government-backed featherbed. Their platform seems to be socialism for tycoons and capitalism for the rest of us . . . they can privatize profits while socializing risk.”
Representative Clarke concurs that most protestors “are not asking for [a bailout]. They are simply asking for a system that is not rigged against them.” When big bankers and investment firms can make poor decisions without suffering obvious consequences, then the motivation for individuals requesting similar absolution may not be admirable but it is understandable.
While the current crop of students and recent graduates may be whining about the problem more than past generations, they face an objectively bigger problem. This year, the average borrower graduating from a four-year college left school with roughly $24,000 of student debt, with ten percent facing debt of $40,000 or more, according to the College Board. Total student loan debt will exceed $1 trillion this year and it now exceeds outstanding credit card debt, according to the Federal Reserve Bank of New York.
Only seven percent of graduating bachelor’s degree holders come from the bottom quarter of income earners, as compared to twelve percent back in 1970. Intended as relief and opportunity for the distressed poor, student loans have become an unavoidable middle class reality. In addition, a series of laws passed by Congress last decade have increased the difficulty of discharging debt, including student loans, through bankruptcy.
The website College Scholarships reports on several programs that forgive or reduce student loan debt for graduates willing to work in high need/disadvantaged areas. The problem is such programs are limited to highly targeted professions, such as nurses, attorneys, and teachers. What is more, they often require a minimum of five years experience. Traditionally, graduates take such jobs immediately after graduation to acquire experience, when they are most inclined to social activism and less acclimated in their lifestyles to larger salaries.
I attended college for six years, ultimately earning a master’s level degree in 1984. I won several scholarships, based on merit; qualified for several grants, based on need; and I worked. In spite of this, I fell short of the necessary money for tuition and books on a couple of occasions. I took out a couple of federal student loans to make up the difference that I was able to repay within a few years of graduation.
Contrast my experience with that of Robert Applebaum, who graduated from Fordham Law School in 1998 with about $65,000 in debt. After going to work as an Assistant District Attorney in Brooklyn, his salary forced him to put his student loans in “forbearance,” which prevents default but allows continued accrual of interest. Applebaum began repaying his loans upon leaving the DA’s office in 2004 but remains $88,000 in debt today.
Tommaso Boggia is an MPA candidate at Presidio Graduate School and an advocate for student loan clemency. He writes at the website Triple Pundit, “Regardless of work ethic, more and more middle class families are slipping into poverty, in part because of the heavy debt burden of house ownership and of pursuing a higher education degree . . . A whole generation is seeing their plans and ambitions shackled by the extra weight of their student loan payments. These young people are unable to buy a home, start a family, or do the socially important but underpaid jobs in the social services sector.”
In the post-World War II era, a college education was the chief means by which children from working poor families could leapfrog into the middle class or even affluence. Increasingly, however, the cost of this requirement is becoming the very thing holding them back from the opportunities promised by the American Dream.
The most cited reason for exploding debt is the ever-increasing cost of college. Average in-state tuition and fees at four-year public colleges rose an additional eight point three percent in 2001 alone, passing $8,000/year ($17,000/year with room and board). In addition, the American Council on Education notes that budget cuts and other austerity measures have reduced state appropriations to higher education by eighteen percent over the last three years.
Richard Vedder, Director of the Center for College Affordability and Productivity and author of the book Going Broke by Degree – Why College Costs Too Much, maintains that we are looking at the problem exactly backwards. Writing in the National Review, he argues that just as an abundance of easily obtainable, low interest mortgages spurred the housing bubble that caused the 2008 financial crisis, “Arguably, federal student financial assistance is creating a second bubble in higher education.”
Vedder also points out that government doles out loans without discrimination to a student’s prospects of success in college, despite the fact that over forty percent of those pursuing a bachelor’s degree fail to receive one within six years, or chances of success after college, regardless of whether a student’s field of study offers poor versus good job/career availability. During a 2011 PBS NewsHour appearance, Vedder argued American society must “open up opportunities for people to consider a variety of different options after high school, one of which is college, but there are many others.”
Most of us may not agree with those advocating total clemency for student loan debt. While this solution may be overly simplistic and impractical, it seems clear that some reforms are necessary – whether the efficiencies proposed by Obama, the incentives proposed by Clarke, or Vedder’s more draconian measures toward higher education in general. It also means we need to give OWS protestors and other loan forgiveness advocates more credit for identifying a real, substantive, and systemic problem beyond their selfish interests.
If we value an education for our children as much as we claim, our society has to find a way to re-engineer it back from the crushing burden it has become to more of the opportunity we aspire it to be. Right now, the main thing we are teaching our kids is learning to owe. This is neither opportunity nor American exceptionalism.
Good piece but only the tip of the iceberg unfortunately. As his first commenter points out the real scandal/bailout in the making is the huge and growing influence of for profit degree salons like Phoenix et al. They are little more than scams designed to tap student loan guarantees, leaving the barely educated “graduate” (for those who finish) with a large undischargeable debt.
It’s not widely understood that a loan officer at a university or for that matter community college or technical school has power that actually trumps federal bankruptcy judges. They can do something the magistrate cannot undo. Maybe that should become part of the loan disclosure.
I would guess that the availabilty of loans has led to more borrowing. Another case of supply creating demand. If loans are available, and rates are low, why save?
Surveys suggest that today’s upper-middle class parents don’t save for college. A 2009 Gallup poll reveals that only 20% of families earning over $150,000 a year were putting money aside for their children’s education. http://www.nsns.org/news/families-not-saving-for-college-despite-escalating-costs(Other surveys show that they say they are saving,but when it comes down to it they have put away $5,000.)
The polls indicate that famlies earning less are more likely to save– and more willing to make sacifices to squirrel money away for college.(Perhaps they are less likely to take college for granted.) But the upper-middle income families assume eithier that a)that their children will get financial aid, b)that they will have enough money available when the time comes , or c) that a grandparent would foot much of the bill.
I don’t have any hard data, but I would guess that in the 1970s both upper-middle-class and middle-class families were more likely to set up funds for their child’s college education when they were young.
But in the decades that followed the 1970s, the pressure to consume grew (“shop until you drop” etc). The sharp rise in CEO salaries raised the bar for the entire upper-middle class in terms of expectations regarding homes, cars, vacations, and what your children “should” have. In general we know that savings rates declined– presumably this includes college savings.
Meanwhile, fewer and fewer students worked after-school or during the summer. Unpaid summer internships became popular; some famliies were able and willing to bankroll, summer travel. Fewer kids were willing to waitress, work construction, or work in other blue-collar jobs. This isin’t what their friends were doing.
Over the same span, college tuitiion spiraled– in part because so many classroom buildings and dorms were beginning to deterioriate and needed to be upgraded for safety and comfort (new wiring, air-conditioning, etc.); in part because faculty salaries, which had once been more lower than other professional salaires began to climb. There was a time in the 60s and 70s when college professors drove very old cars –or VW “bugs,” spent relatively little on their homes, and lived fairly frugal lives. Most of them were men. Many didn’t marry or try to start families until their late 30s or earlly 40s.
At the same time, the cost of providing health care for staff and faculty rose. In the 1980s, companies in other sectors of the economy were “down-sizing” but it is very difficult for universities to follow that model. Education, like healthcare, is labor-intensive.” Students (and their parents) were not happy if students wound up sitting in lectures with 180 other kids. They wanted seminars–at least for upper-level classes. They expected one-on-one conferences, tutorials for senior projects, etc.
Finally, beginning in the late 1970s and 1980s, more and more working-class kids as well as kids coming from minority families were going to college. At the same time, Federal and State scholarships for these
students were disappearing. (The cut-backs began during the Reagan administration and in the 1980s, federal aid in the form of Pell grants, etc., began to dry up. Instead, the gov’t put its money into loans for wealthier famlies. (By and large, low-income […]
I was hoping to run into you here and I hope you hang around. Another economist by the name of Dr. Elizabeth Warren did a really nice study on the impact of economic growth on the middle class since the seventies. I am not so sure those of us who grew up since then had a large amount of discretionary income to be put away for the future.
One reason which I will point out and also experienced is the increasing severity of the recessions, we seem to be incurring since the seventies. I made it through the door in 1974 which hit many of my vteran colleages just graduating then. I did get caught up in the 1982, 1992, 2001, and the 2007 recessions like many people who worked in manufacturing (one of my profs whated my to become a teacher back in the sixties . . . I would have been retiring by now with a pension instead of the 200.5k substitute [I got mine out before the crash] we all seem to have now). Besides the three other degrees I hold, my graduate degee came from that pricey Jesuit University in Chicago.
One of our best econ writers here, Spencer England does a nice study also on productivity gains and to whom they were skewed since the eighties. With all of those increases in productivity we experienced since then, much of it did not come back to Labor in the form of increased wages and instead went to capital. http://www.angrybearblog.com/2009/10/labors-share.html But then too, why would anyone put money into Labor Intensive investments when one can gamble on Wall Street with a guaranteed bailout or gain from high interest loans (credit card or otherwise) to the populace?
To paraphrase Warren’s comments on what has taken place since the seventies; What took a good work ethic and a high school diploma as being the ticket into the middle class has disappeared. Even today, those with college degrees are having difficulties. She goes on to point out 5 different factors impacting families today:
– Housing: Between 1970 and 2005 mortgage payments increased by 76% even with lower interest rates. The majority of Americans were not buying into the much–publicized-Mc Mansions. Commerce Department data revealed that the majority of homes owned by Americans were 25 years old and also grew from 5.8 rooms in 1970 to 6.1 rooms in 2005 or the equivalent of 1 bathroom or small bedroom. An average income family in 2005, or roughly 70% of Americans, is likely to be living in a modest home in need of repairs and energy efficiency improvements.
– Health Insurance: In 1970, employers picked up most of the cost or all of the cost of healthcare insurance with no deductibles or low deductibles. Employer sponsored health insurance from 1970 to 2005 is 74% more in inflation adjusted dollars with increased deductibles, shorter hospital stays, and defined lifetime coverage.
– Autos: While the individual automobile purchase has not increased in cost when inflation adjusted dollars are taken into consideration; today’s family, with 2 people in work force, now has 2 cars as compared to 1970. Both cars are necessary for work as families have taken up residence in the suburbs much further from their places of employment. Stores are not close in the suburbs and even if at home, a spouse needs a car to get the children to school.
– Child Care: 100% increase from 1970. It was rarely needed in 1970 and this is a newer cost in 2005. Moms with young children need child care if they are to go to work.
– Taxes: Under a progressive tax system the first dollar of the 2nd earner is taxed at the rate of the last dollar of the 1st tax earner. A 25% increase since 1970 for a family of 4.
What took one income in the seventies to be successful gave way to two incomes in order to get by and on top of this, income for males began to stagnate coupled with the risk for bankruptcy increasing if one wage earner lost their job (in the past, the wife would go to work while the husband was collecting unemployment). And what of savings? . Savings, which was at 11% of annual income in 1970 for families, dropped to a negative 8 tenths of 1% by 2005 and debt which was 1.4% of annual income in 1970 increased to 15% in 2005. In the end, every bit of mom’s additional family income was spent, plus the savings and the family unit of mom, dad and two kids dropped into debt by 15%. And the 2005 bankruptcy law revision slammed the door shut on families just in time for the 2008 Wall Street […]
Everyone used to make fun of teachers and city workers as they worked low paying jobs. The teaching job was at the bottom of the pile for incomes and you are correct, you typically would find a prof driving a “beater” rather than an Acura. Now we appear to despise these employees who put the years in because of their pensions. The same as many companies, states raided the pensions funds by over forecasting returns and pulling the excesses out. Companies went as far as to use employees pension funds for executive benefits also.
Besides Wall Street and TBTF 2008, the biggest robbery of the citizenry in the US was the “Service for Fees cost model which had little to do with outcome and the quality of it. The model was heavily skewed towards more and more procedures, less than beneficial pharma, hospital monuments, and specialists at the expense of preventative care and the lower income population. Even the SGR had no impact of the service for fees cost model.
i am not sure i understand what is going on here. i got out a long time ago.. before the rise in tuitions. but i helped my daughter repay her loans and it wasn’t huge.. through her ph.d.
i would add for what it’s worth, maggie seems to me to have it about right. people i hear in the coffee shops have no sympathy for student loan forgiveness at all, and i am not entirely sure i am sympathetic with people making middle class wages who can’t pay all their bills.
but i will also say i think that many kids in school don’t belong there and i suspect “higher education” is a bit of a scam, or at least more of a lottery than high school students are led to believe.
In a survey of parents earning $50,000 or more:
“among parents planning to contribute to their children’s education, the amount the typical parent plans to save for college is likely to cover 23 percent of their children’s undergraduate expenses, at best.”
“Only one in four parents (27 percent) thinks that it is “very likely” they will reach their college savings goal.”
“Of those who intend to fund at least some of their children’s higher education, most have spent more money on entertainment and/or discretionary purchases in the past year than they have saved for their children’s college costs.
–58 percent have spent more on eating out or ordering take-out;
–49 percent have spent more on vacations;
–38 percent have spent more on consumer electronics.
Thirty-one percent of parents who plan to contribute to their children’s education have put more money toward their children’s allowance in the past year than they have put in their college savings fund.”
Given the current state of affairs with the Unemployed and Not In Labor Force, what planet have you been living on since 2001??? and what do you cite for many kids do not beong there? College educated people have fared far better amongst the unemployed as opposed to high school and less than high school education.
That you do not recognize what is going on in the economy today is a pretty fair assessment of your knowledge on the topic.
Nice article but these people took on the loans. I have little or no sympathey – sorry.
Look, go to your local County Community College (CC) or the closets equivelent around. Here in Texas it would be child’s play to go to our local CC, live at home and work full time (at min wage). After two years of that you would have 60 credit hours of transferable credit (assuming you get A’s and if you don’t maybe college isn’t for you), no debt, and able to transfer into a fulltime college. So you then go to the Texas flagship public college (University of Texas at Austin). Assuming you don’t work at all, get loans for every penny, and finish in 2 more years you would graduate with roughly $50K in debt. You could easily cut that in half if you work at the school and during the summer (out of parents home). Those numbers drop further if you got to some of the other public colleges. (Say UNT, Texas Tech, UT-Arlington etc). Basically its fairly easy to graduate with a BS with less than $25K in debt. Live frugally and you can bury that in a few years even on a crappy starting engineer salary.
Bottom line: if you graduate after 6 years with a degree in XXX-studies and $100K+ in debt you are an idiot. PT Barnum had something to say about that.
What these kids want is to be bailed out for multiple bad decisions over YEARS! They want to go to school, go to all those cool classes (that don’t have any math), party for 6 years and then expect a $80K starting salary at an non-profit and live in NYC. Now that reality has caught up they don’t want to face the facts. How many of these kids applied for a job with Exxon? Or moved to North Dakota for a job?
And don’t forget the services have plenty of degree money out there if you enlist and there is ROTC. (Loss rates on active duty are less than what is was during my peacetime service in the ’80s).
As for minorities. University of Oklahoma (OU) comes down to our school and offers full-academic scholorships to all National Merit Scholors every year. Makes the offer to every kid in the DFW public school systems. My oldest, if he was ANY kiind of minority could have gone to UT or OU pracctically free. As I posted before, if I could have proven he was 1/32 indian my cost for his undergraduate eduaction would have been zero. The money is there for academically qualified minorities and poor. By the bucket load.
C+ high school students from the upper middle class non-minorities better be prepared to pay full frieght. Or find another line of work. (Or go the CC route and recover for your lack of work during high school.)
The bottom line is there is plenty of oppurtunity to graduate, without parental help, and do it without massive debt. But you better be ready to work you butt off at school and drop the partying. There are plenty of great schools out there – you don’t need to spend $200K on an Ivy to become educated.
Islam will change
i think i have a fair assessment of what is going on. but i learned to read and pay attention to the reality in front of me.
you attack me without having understood what i said, and apparently because my assessment of what is going on is based on looking at what is going on and not just reciting the conventional wisdom to myself until i’ve got it memorized.
if those “not educated” are more likely to be “not employed,” that does not necessarily say that education is “needed” for a good job, except in the sense that the scam is so well entrenched you can’t even get a foot in the door without the right papers, and even very high levels of job performance will not get you a better job with ‘NON DEGREE’ stamped on your personnel file.
I used to teach at a Univerity… most of the kids in my classes had no business being there. they were not physically capable of learning the subject and had no interest in it. i gave them passing grades so i did not destroy their job prospects.
but apparently i wasn’t the only one doing that.
You do understand that every penny of savings is consider a 1 for 1 drop in any funds that will be made available to you? Correct? Any savings by your children is consider to be 100% available for tuition (all those UGMA funds). I went to a guy who specializes in getting money for kids going to college. Gives first hour free. At the end of it he basically said he couldn’t help me becuase: 1) I make too much money 2) My children are not a minority 3) My KIDS (!) had saved too much.
We even did the Federal calculator (used by all schools) and it said I was expected to pick up what would have been roughly twice what college will cost my kid.
So why save since it will be held against you?
The colleges basically assume that every penny your kid has saved and all of your liquid savings are theirs for tuition. So savings actually cost you money!
Islam will change
and while there is no evidence of cause and effect reasoning in your comment to me, or even that you have ever heard of the concept
it looks as though you are “reasoning” :”oh lookie non college educated have a higher percent unemployed than college educated, therefore we must educate the non educated.”
this ignores the possibility that those non college educated may not be well adapted for the benefits of education, or may not have the same “drive” as those who do survive the cattle drive, or that the economy does not “need” full employment and the unemployment problem has nothing to do with education at all, or that it is only one of many factors.
now, me, i have had to be patient with the college educated for over fifty years, and… well… it gets hard.T
i agree with much of that
but i would add there are many kids who no matter how hard they work will not become engineers, and i don’t know how many jobs for economists are out there.
our economy needs to find some way to usefully employ those kids at something that will not brutalize them.
meanwhile, the colleges i knew did nothing to help the kids make better choices. seems to me that’s what grownups are for, especially grownups in the “education system” who are in a better position to know what good choices are in an economy that is greatly different from the one the kids’ parents grew up in.
and, hate to say it, i have known chemical engineers who couldn’t find a job. there are other factors in the job market besides having the right degree.
hate to say it even more, i worked for and next to people who had professional degrees in engineering who could not figure out a basic problem if it hadn’t been discussed in detail in their textbook. maybe that’s all we expect out of an education. but i have known many uneducated people who were smarter than that.
Actually, it’s every penny your kid has saved, all your liquid assets and your illiquid assets if you have any. One college told us we needed to get another mortgage on our house to pay my son’s tuition this year.
I got the same treatment. Filling out the Fed forms was a complete waste of time from that perspective. It was worth it since some of eth colleges needed the info even if you were up for merit scholorships (which actually made the difference in where he went).
At least he will graduate with a degree that means something. The OWS types are basically HS grads with $100K worth of debt….
Islam will change
Put yourself in the role of the lender (or university) and structure a loan for an asset that is not assumable in case of default nor is measurable from an income generating perspective ex ante. There’s a reason why 18 year olds have a hard time getting mortgages and car loans – and for student loans the collateral is something that can’t even be reclaimed by the lender.
Thus, just about any student loan is below the market rate for what it should be given the dynamics of what the lender is lending against.
If education is viewed as an investment, I see no reason that all of a student’s savings shouldn’t be viewed as the principal downpayment on that investment.
“So why save since it will be held against you? . . . So savings actually cost you money!”
This sounds like a person who buys a designer pair of shoes at 50% off and points out all the money saved in making such a thrifty purchase. The tuition is X. X = savings + loan (no pun intended) and the loan includes interest. Since savings reduces the loan amount dollar for dollar, I’m hardpressed to see how savings actually costs you money.
“Average in-state tuition and fees at four-year public colleges rose an additional eight point three percent in 2001 alone, passing $8,000/year ($17,000/year with room and board).”
Basically, publicly funded higher education is increasingly funded through tuition. It’s all part of our disinvesting in society.
Cut the frills: simple food, and simple accommodation; outside exercise instead of million dollar recreation facilities. This plus, cap the salaries of administrators, coaches and the tenured professors to something reasonably middle class (50,000) — then make public universities FREE for everyone; if rich parents want to send George to Harvard, fine.
The US is being crushed in intrl. competition not only by the Chinese, but also by the Germans; in most German states, university is FREE.
We need to recognize that contrary to mindless libertarianism, we are a society, and we in fact benefit if people are taken care of. The alternative is to be a third world hell hole.
In case I wasn’t clear
I am all in favor of lowering the cost of education, and that includes liberal education.
What I am not in favor of is mindless educationism.
First you equation is wrong. Its X = savings + loans + Grants
Grants are money that does NOT have to be paid back. Free money, weather its tuition reduction, a straight scholorship etc. For example if my child had been 1/32 native american his tuition would have = 0.
A large part of this guys business was getting with the prospective kids parents and then organizing their portfolio’s to maximize the amount of money they would get for free (grants or scholorships). Everything from moving money out of savings into a business, buying real property, differing pay (if you get bonus type pay) until the next calendar year, if you plan far enough ahead pushing everything into 401Ks or IRAs (which don’t count in the formula as ‘savings’) etc. Everything he could do to game the formula and get grants. Basically anything you had saved translated 1-for-1 in reducing the availability of grant money. For most of the middle class and above on the income scale any savings will translate into less grants and more required loans.
That was my point and it was very frustrating (mostly becuase of the time waste that could have been avoided with some basic guidlines telling people who were never going to qualify)
I agree that student loans are way below market rate. I think if Universities had to hold them, they were not garenteed by the Fed, and could be discharged in BK after 5 years from graduation you would see much more prudent lending and lower costs. Right now the only stop light to taking out $100K in non-dischargable loans getting a degree in 16th century French literature is the smarts of a 18 year old. Considering the stupidity shown by college students on you-tube and facebook I’m not really sure they are qualified to take out loans…
Considering you can graduate from Harvard numerically & scientifically illiterate (see Matt Yglesious for example #1) I’m pretty sure that most kids are not getting a good return on their investment.
Islam will change
Germany tracks kids from an early age. University may be free but you have to be on the right ‘track’ to get in. Its not universal. When I lived in Germany my next door neighbors kid new by 5th grade he was going into the trades and not university. I don’t think Germany is a good example. (he has since grown up and works as a heating/AC guy in the same company as his father and has just finished his apprenticship).
Public universities should not be free and open to everyone. A lot of people cannot compete. Texas is a perfect test case in that the University of Texas automatically admitted the top 10% (now 8%) of every High School graduating class. Reguardless of actual SAT/AP scores or anything else. The flunk out rate skyrocketed to the point they set up a feeder system to have kids that used to make it in basically sit in one of the satellite campuses (UT-Houston, UT_Arlington, UT-El Paso, UT- San Antonio etc) and if you got a 3.2 or higher you automatically transferred into UT as a sophmore. Basically if you didn’t mind waiting a year or two its very easy to graduate from UT – just hard to get in as a freshman.
We have too many kids going to college and parking themselves getting a useless degree and going into big-time debt or cashing out their parents savings. I read somewhere once that the entire output of History PhDs from the Ivy league each year would cover the entire US College systems needs for History PhDs in the same year. So why are we pumping so many out???
And don’t get me started on the well documented glut in lawyers.
Islam will change
seems to me you are a little shortsighted. those loans are guaranteed by the gov. presumably because an educated population is good for the rest of us.
if there is a problem with the market, it’s that there are no jobs waiting for college graduates, and loans are given to students with poor job prospects, good kids who have been told their whole lives that they need to stay in school and work hard… which turns out to be a fraud for many of them, and a meaningless cattle drive for most.. which is to say they need the ticket, but they neither need nor profit from the “education.”
i don’t have any easy answers to this, but i guess i’ll have to sit here and take accusations that i don’t know what i’m talking about or harbor ill will to the victims.
And yes mindless imprisonment at an Average cost or $28,000/year. We have that money to imprison people for 4 or more years; but god forbid, we can not spare it for education. The US is the leader in imprisoning people . . . a definite growth industry.
Yes, yes . . .
‘Are there no prisons?”
‘Plenty of prisons,’ said the gentleman, laying down the pen again.’And the Union workhouses.’ demanded Scrooge. ‘Are they still in operation?’
‘Both very busy, sir.’
‘Oh. I was afraid, from what you said at first, that something had occurred to stop them in their useful course,’ said Scrooge. ‘I’m very glad to hear it.’
‘Under the impression that they scarcely furnish Christian cheer of mind or body to the multitude,’ returned the gentleman, ‘a few of us are endeavouring to raise a fund to buy the Poor some meat and drink, and means of warmth. We choose this time, because it is a time, of all others, when Want is keenly felt, and Abundance rejoices. What shall I put you down for?’
‘Nothing!’ Scrooge replied.
‘You wish to be anonymous?’
‘I wish to be left alone,’ said Scrooge. ‘Since you ask me what I wish, gentlemen, that is my answer. I don’t make merry myself at Christmas and I can’t afford to make idle people merry. I help to support the establishments I have mentioned-they cost enough; and those who are badly off must go there.’
‘Many can’t go there; and many would rather die.’
‘If they would rather die,’ said Scrooge, ‘they had better do it, and decrease the surplus population.”
Buff, do you understand what you are saying? We can finance a prison system for an average of $28,000 per year; but, we can not finance an education? $28,000 for non-violent prisoners, $ millions to put them to death . . . and we can not afford to forgive loans? $44,000 to imprison a person in California, almost as much as a Harvard education, and we quibble educational costs?
http://thesocietypages.org/graphicsociology/2011/11/01/prison-vs-princeton-annual-cost-comparison/ Prison versus Education.
I agree . . .
I don’t see your point with the Scrooge analogy. Or the last paragraph comparing college costs and prison. People in prison usually don’t qualify to attend Princeton last I checked….
So what’s you point and how does it apply to this post? There are plenty, plenty of ways to get a college education without going into debt or only minimaly. Right now – even in the inflated education costs of today. I pointed out more than one.
What the OWS children want is not to have to pay for ther incredibly bad decisions. They want anyone, the government, charity, their parents, grandparents, ANYONE to give them what they believe they are entitled to. They spent 6 years and $100K in college ‘finding themselves’ and getting a degree in XYZ studies that has no market demand at all. And now they are surprised, in the Obama economy, that they are only qualified for a job as a barrista at Starbucks?
Look at some of the tales of woe from the OWS on huffington’s site. The guy who left a full-time teaching position to go $35K in debt getting a Masters in puppeteering (?), finding out there was no demand for his ‘art’, and now unable to get his old job back and works part time. Yet he wants someone else to pay his debts?!?
Or the even more hilarious 30 something, some kind of art degree, who ‘works very hard at what she loves’ , but doesn’t make enough money for the lifestyle she beleives she deserves. Lives in one of the highest COL areas of NYC. She produces a product no one is willing to pay much for (at least by NYC standards). And she works, very, very , very hard. So did the last buggy whip maker. (She actually got good advice in the column to move to a lower COL city that has a vibrant arts market that she might make it in – my bet she will continue to whine and live just above the poverty line in NYC.) Bottom line, if you do something that no one wants to pay you for, you have a hobby not a job. No matter how hard you work.
Look run, anyone who can do the academics can get a BA/BS degree from a college without going into debt. It just takes a lot of work. If you sucked as a student in HS you will be behind the pack to start, but you can make it up easily enough. What the OWS people don’t want to do is work hard. Its the entitlement mentality.
To repeat – my point which you made no effort at all to refute or even dispute:
The bottom line is there is plenty of oppurtunity to graduate, without parental help, and do it without massive debt. But you better be ready to work you butt off at school and drop the partying. There are plenty of great schools out there – you don’t need to spend $200K on an Ivy to become educated.
Islam will change
i am afraid i have to agree with Buff here. your choice between education and prison does not strike me as satisfying the demands of a useful logic.
i don’t like prisons. hell, i don’t even like schools… mine was too much like a prison. i am willing to pay taxes to help fund education, but i think we better get our pencils out and calculate the cost and decide who is going to pay for how much of it.
and… the point that Buff misses: there is a significant percent of people who would get no benefit out of schools the way they are currently structured. if we intend to have a decent society… and not more prisons… we need to address that.
even some kids who would benefit from school need a lot of hand holding… that ought to be part of the school’s job.
but it takes actually knowing what it is you are trying to do and not just throwing around statistics and false choices.
i always liked A Christmas Carol, but it wasn’t lost on me that if Scrooge hadn’t saved all those years, there would have been no one to buy that goose.
the crisis is related to moral failure, but not on the part of bankers or borrowers. The moral failure belongs to the Federal Reserve. The Feds reduce interest rates for a reason: they want people to borrow more. If people refuse to borrow at the current rates, the Fed lowers interest rates until people start borrowing more. They frequently lower rates to 0%. With such low interest rates, why is anyone shocked that people borrow money? That was the Fed’s intent.
Alice from http://britainloans.co.uk/
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