Watchhttp://www.grandforksherald.com/event/article/id/254975/
Ok, so you have hundreds of thousands of high school graduates every year some of them go on to be doctors, nurses, radiology technicians and IT specialsts. The majority of them is saddled with school loan debt along with the expectation that their education entitles them to a better lifestyle. Consequently health care costs continue to rise faster than the nominal inflation rate (just as tuition increases are growing faster than nominal inflation rate).
Could it be that cost of education at our institutes of higher education (along with fractional reserve banking where banks create 90 % of their "assets" out of thin air) creating the ultimate bubble? It is not just healthcare, you can look at he cost of education in just about any field and see that unless we continue to create money out of thin air there will not be enough money to go around and pay all this debt, or at the very least those saddled with debt will not live the lifestyle they are expecting.
Follow
Befriend
93 threads
431 comments
Kent, WA
John Bailo's website
I think that if undergraduate degrees are ever to be meaningful they have to be coupled to a job or even simply a stipend. So, today you get a Biology degree, BS, which entitles you to almost nothing.
In my world, if a Biology degree is offered, and it is accredited, then after 4 years, the owner of that degree then is entitled to some sort of salary. It might be something that is only twice minimum wage, it might be only enough for a single person to live and not in the city of his choice but enough for an apartment, food and a car and some electronics. Something like a GS-4.
However, it would establish the person as a subject matter expert, who can move around and do research, have the time to apply for grants and publish. In other words an academic without an institution paid by society.
While this may seem extraordinary, think of how insane the current system is...minting certificates without any entitlement! Why would a rational person pursue or spend money to achieve such a thing...
Of course the program would have to be rigorous, and accredited. And there would be a minimum of "life credit" and a maximum set of tests to prove the student was deserving.
My own undergraduate coursework was unique in that they made us do a miniature version of graduate school in the junior and senior years. Two major research works leading up to an original thesis to be defended with faculty. This is what academia should be. And for those who cannot do this, then maybe they should just hit the job market earlier, work in retail, party, live with friends. Why burden them...
Follow
Befriend
1 threads
87 comments
In the 2010-2012 school year, undergraduate and graduate students at UND and North Dakota State University borrowed an average of $7,855 in a year, according to the university system report released Friday. That’s up 125 percent over the past decade.
For a comparison, the Midwest inflation rate in that same period was 27 percent, according to the U.S. Bureau of Labor Statistics.
The increase indebtedness is due to a number of factors, including students’ ability, starting in 2007, to borrow more than previously allowed, and the rapid increase in tuition rates, the report said.
In the past decade, Education and healthcare costs increased by 125% while wages increased by only 25%.
They are both bubbles fueled by fractional reserve banking that'll cause a burst, just like what happened to the housing market in 2007 and the flat stock market since 2000.
Follow
Befriend (9)
410 threads
4,107 comments
Baltimore, MD
Is the education bubble the mother of all bubbles?
It can't possibly be worse than the housing bubble!
Follow
Befriend (5)
24 threads
1,300 comments
Premium
New Renter says
I tell them, get in, take the classes you need to get a degree, get out, and get a life.
There is always work and a job for those willing to do what it takes. A BS degree is the new high school diploma. Even though you will be over qualified for many jobs that require a degree you will not be considered without one.
Many, not all, of the students at my private college are "entitled". They come from wealthy families and paying tuition is not an issue. Others end up with huge student loan debt and little prospects. I had a foreign business major who was not putting much effort into a spreadsheet class. When I asked him what his career plans were he said he "was going to take over running the family business". When I told him how important understanding spreadsheets was he replied, "We have accountants to do that".
Like someone else said, "It's not what you know, it's who you know". A degree is a ticket needed to get on many trains but it by no means guarantees arrival at success.
Follow
Befriend (6)
85 threads
968 comments
44 male
Egg Harbor City, NJ
zzyzzx says
I can't really see how they are remotely the same. With the housing bubble, thousands of people with huge debts just walked away leaving the banks holding the bag. You can't just walk away from Student loan debt, your stuck with it forever until you either pay it off or you die. So unless you expecting a huge spike in suicides, the banks will get along just fine.
Follow
Befriend
485 comments
Los Angeles, CA
TechGromit says
I can. Tuition increases were largely made possible by all-you-can-eat student loans that were free flowing for the last 15 years. Now there's a country full of graduates (and dropouts) who are underwater on their education: loans are worth more than their degree.
I had friends in college that HELOC'ed their education, so to speak; they pulled out twice the cost of tuition in loans and used the extra money to rent sweet off-campus digs, go shopping, eat out. It was a lot more like the housing bubble than it wasn't.
Follow
Befriend (23)
55 threads
3,763 comments
Scottsdale, AZ
robertoaribas's website
Philistine says
actually, you have it backwards. States dropped most of their funding for education, thus causing price increases resulting in bigger loans.
Look up the state contribution to education funding over the past decade and decide for yourself. My school lost over 75% of its state funding since 2005.
Follow
Befriend (6)
17 threads
516 comments
Huntington Beach, CA
Software engineering and robotics. Those are the professions of the future which will be in hot demand. Software because everything will require a program. Tech engineering because everything will be mechanized, and machines break down. It's their nature. Then someone has to know how to fix them.
Business and medicine will continue to garner the highest wages, with "salesman" continuing as the highest paid profession.
Follow
Befriend (9)
410 threads
4,107 comments
Baltimore, MD
robertoaribas says
And we still have too many people going to college.
Follow
Befriend (9)
410 threads
4,107 comments
Baltimore, MD
http://www.usatoday.com/story/news/nation/2013/01/27/study-nearly-half-are-overqualified-for-jobs/1868817/
Study: Nearly half are overqualified for their jobs
Nearly half of working Americans with college degrees are in jobs for which they're overqualified, a new study out Monday suggests.
The study, released by the non-profit Center for College Affordability and Productivity, says the trend is likely to continue for newly minted college graduates over the next decade.
"It is almost the new normal," says lead author Richard Vedder, an Ohio University economist and founder of the center, based in Washington.
The number of Americans whose highest academic degree was a bachelor's grew 25% to 41 million from 2002 to 2012, statistics released last week from the U.S. Census Bureau show.
The number with associate's degrees increased 31%, while the number of Americans for whom the highest level of education attainment was a master's or doctorate degree grew fastest of all — 45% and 43%, respectively.
Earnings in 2011 averaged $59,415 for people with any earnings ages 25 and older whose highest degree was a bachelor's degree, and $32,493 for people with a high school diploma but no college, the Census data show.
Vedder, whose study is based on 2010 Labor Department data, says the problem is the stock of college graduates in the workforce (41.7 million) in 2010 was larger than the number of jobs requiring a college degree (28.6 million).
That, he says, helps explain why 15% of taxi drivers in 2010 had bachelor's degrees vs. 1% in 1970. Among retail sales clerks, 25% had a bachelor's degree in 2010. Less than 5% did in 1970.
"There are going to be an awful lot of disappointed people because a lot of them are going to end up as janitors," Vedder says. In 2010, 5% of janitors, 115,520 workers, had bachelor's degrees, his data show.
Follow
Befriend (3)
13 threads
2,197 comments
San Jose, CA
Premium
The Professor says
I beg to differ - there are plenty of suitable candidates who remain unemployed because there are not enough positions for all. This is the way the system is designed to be.
Have you ever sought a job in industry yourself? Sure the degree has become ONE barrier to employment but there are far more barriers to overcome. Many employers demand a myriad of certifications and experience on top of a degree even for entry level positions. Even with the degree a graduate will not be considered for many positions because of these shortcomings.
It sounds like you have given up. I understand the frustration. I ran into many such entitled students while teaching myself (and that was at a state school!)
One of the best tools I found to penetrating the armor of such entitlement was to point out how foolish the student would look if their ignorance was taken advantage of.
For example I had one undergraduate with aspirations for dental school explain to me that he did not need to learn chemistry as the sales reps would explain to him all he needed to know. I laughed and asked him how that would go over with a jury after he killed a patient with an unsuitable drug.
With your student who claimed an understanding of accounting spreadsheets was not necessary I would have pointed out that accountants are experts at masking the truth and as the head of the business it would be his ass on the line if the accountant embezzles his company dry.
Of course you can - and should - use the power of the red pen. If a student doesn't put in the work they don't earn the grade. If that student complains point out s/he said the grade is irrelevant to run the family business!
Follow
Befriend (3)
13 threads
2,197 comments
San Jose, CA
Premium
zzyzzx says
Yep! Thus triggering expectation inflation!
Follow
Befriend
93 threads
431 comments
Kent, WA
John Bailo's website
Quigley says
Although isn't that like saying get a degree in TV repair because everyone has a TV? It seems like technology is more long lasting from time of manufacture and plug in replaceable, not repairable.
That is why I think the degrees that are most relevant today are the classic Liberal Arts and basic sciences. For example, look at the social media. Look at all the poorly formed arguments. The lack of reading comprehension. The inability to form valid analogies or to use reference material or classical references.
Look at how many spout off about global warming without knowing the formulas for pressure and temperature or who think they know what dark matter is without researching.
If we end up with an automated society then we will be more like the ancient Romans. Guys with a lot of time on our hands to be decadent, or aristocratic...or somewhere in between!!
Follow
Befriend (6)
17 threads
516 comments
Huntington Beach, CA
Actually I have a degree in basic science: chemistry to be exact. It hasn't made me a dime since graduation. I work repairing machines, tweaking PLC code, and massaging automated processes back to life. I think the only classes that helped were Physics and perhaps Logic. I can write like a demon, and have some stories published, but that's made me next to nothing. What pays he bills, and paid off my large student loan, is the light blue-collar job I hold fixing machinery.
I can't count the number of relations and friends I know with liberal arts degrees who are barely scraping by. One cousin has a degree in Pschology. He works as a farrier. Another has a masters in English Lit. She works as a college instructor which pays well enough for her to afford to live in a mobile home.
Friends that are engineers and computer programmers always have work that pays decently.
A liberal arts degree, these days, only guarantees that you'll fully appreciate the pathos of a poorly chosen career path.
Follow
Befriend
485 comments
Los Angeles, CA
robertoaribas says
That's why I said the tuition increases were "made possible by" loose student lending.
Follow
Befriend (6)
85 threads
968 comments
44 male
Egg Harbor City, NJ
Philistine says
Ok, so what? They CAN'T walk away from the debt. I'm not sure you understand what a economic bubble is. A economic bubble is trade of products with an inflated price. Bubbles are identified when there is a sudden drop in the price of the inflated products.
So basically there would have to be a huge drop in the number of people attending higher education institutions. Which would result in colleges having to make drastic cuts in programs and staff to survive. It's not like there's been a massive spike in the number of new colleges opening has there. Unless your suggesting colleges would cut reduce tuition rates to attract more students.
Honestly I can't see it. There may be a loosing of standards in the enrollment qualifications, so colleges can keep there student populations up, since most colleges except community colleges have way more applicants than slots available.
If there is an eduction bubble, can someone explain to me what happens when the bubble pops?
Follow
Befriend (9)
410 threads
4,107 comments
Baltimore, MD
Follow
Befriend
485 comments
Los Angeles, CA
TechGromit says
It's a comparison. Metaphors are not 1:1 parity. The last 20 years in higher education, there is a fools-rush-in mentallity, coupled with willingness to overpay for a worthless asset with inordinate debt obligations. If you can't see how those rhyme, you are being obtuse.
Follow
Befriend (5)
24 threads
1,300 comments
Premium
Quigley says
yep.
Follow
Befriend (3)
13 threads
2,197 comments
San Jose, CA
Premium
zzyzzx says
If only someone would pay that kind of dough to watch ME waddle...
Follow
Befriend
3 comments
1) government needs to get out of backing and guaranteeing student loans. It has "obviously" distorted the education markets just fha,fnm,fre distorted the housing market. government gets out and tuition prices will drop like a rock.
2) we need more for profit colleges to drive prices down via competition.
3) for profit colleges should also guarantee a one year paid position at a company within the student's specified field. no pay guarantee - it could be only minimum wage - the point is to make the guarantee, so there is a strong incentive to join such a college because the student is getting a guarantee of paid experience in the field they studied. If the college can not place the student into a position in their field within a defined time frame, then the student gets the last year of tuition refunded back to them in full. The college now has a strong incentive to pay cash kickbacks to businesses willing to take students. The goal is to payout kickbacks to businesses in values ranging from 0 to slightly less than the student's last year of tuition. The better students just get jobs right away, and the college kicks in little cash to the business because these students excelled and the businesses demand them. the shittier students will require larger subsidizing incentives to businesses to take on such mediocre students. To me this seems like a no brainer to drive tuition costs down while at the same time getting job placement for students who very badly need job placements.
Follow
Befriend (3)
13 threads
2,197 comments
San Jose, CA
Premium
husarsky says
We have plenty of those already. Most are of the fly-by-night, unaccredited, A-for-pay junk diploma factories.
http://en.wikipedia.org/wiki/For-profit_education
Follow
Befriend (16)
761 threads
7,667 comments
Boca Raton, FL
Premium
Call it what it really is, a college degree bubble, not an education bubble.
Follow
Befriend (6)
85 threads
968 comments
44 male
Egg Harbor City, NJ
New Renter says
The only problem I can see with having money thrown at you for "waddling" is once your sex appeal starts to wade (you get old and fat) your marketability drops off considerably. Shaking your body is a young girls game, if you don't have an exit strategy, you'll will wind up with nothing.
Follow
Befriend (1)
77 threads
1,113 comments
New Renter says
Really what we need is for people to STOP encouraging the youth to go into debt. In fact, let's make it hard for them to do so, and require that those issuing the loans share the risk by making school loans dis chargeable in bankruptcy. Then the market will accurately reflect the risk of student loans, and students will better understand the true value of their education too..
Follow
Befriend
2 threads
99 comments
New Renter says
I agree with this 100%. I would never advise anyone to attend a for-profit learning institution. The tuition is high and the degree or cert is useless crap. JC is an infinitely better option.
Follow
Befriend
2 threads
99 comments
Quigley says
I have a chem degree as well but was able to find a job right out of school even in recession time (2002). It wasn't the best but you have to start somewhere. I use knowledge learned from university every day.
I think people fall into the trap of having to get any job to make ends meet and they let their degree get stale. If you get a physics degree then drive a truck for 5 years, you're no longer desirable to hire as a physicist. Not saying this happened to you or that you didn't make sound choices for your situation, just a general observation.
Follow
Befriend
3 comments
what I'm proposing is making a for profit college that is both cheap, and the degree will mean something, because the college is now burdened with actually turning out well qualified students or face an economic penalty. there is now economic incentive for the college to both lower costs and make it up in student volume, and simultaneously avoid economic penalties of churning out moron students who learn nothing.
Follow
Befriend (6)
17 threads
516 comments
Huntington Beach, CA
Varmint : I got stuck alright. Stuck in a job with pay and benefits so good that I would have to make 3 x the national avg for a chemist to be in the ball park. It get a PhD and then land a sweet research gig. Meh, why waste more time and get more debt to buy a chance at a job I don't need or have any guarantee of?
The real traps are made of silk and feathers, not iron and wood.
Follow
Befriend (1)
1 threads
385 comments
Buffalo, NY
The Professor says
This is why there will be no bubble. You can't discharge student loan debts in bankruptcy. If that protection was ever revoked, I would definitely call it a bubble, but so long as this is the law of the land, there can be no bubble.
Follow
Befriend
3 comments
wrong. what can't be paid back WONT! look at default rates skyrocketing. all these people will end up in permanent default, and eventually the government will revise the bankruptcy laws and there will be a mass wave of bankruptcies to follow. there is no other recourse. you can't squeeze blood from a dry turnip. the bankruptcy laws concerning student loans are perhaps the biggest criminal and immoral offenses to come from the banking lobby in the last 10 years. notice how it's the ONLY class of loan that's protected in bankruptcy. no other form of debt has such a privilege. there will be a student default revolt. it has already begun.
Follow
Befriend
228 threads
2,748 comments
husarsky says
From the link:
...."The delinquency rate today on student loans that were originated from 2005-2007 is 12.4 percent. The comparable figure for student loans that were originated from 2010-2012 is 15.1 percent, representing an increase in the delinquency rate by nearly 22 percent."
..."And since there is always a lag between getting the full cohort remittance and delinquency data, the real bad loan percentage is likely in the 20%+ category. So $1 trillion in federal student debt now, 20% delinquency, means $200 billion in loan defaults with zero collateral. And rising fast."
http://www.zerohedge.com/news/2013-01-29/student-loan-update-situation-simply-unsustainable
Follow
Befriend
10 threads
763 comments
Dublin, CA
New Renter says
I agree, the whole leadershit of "university" of phoenix belongs behind bars - taking advantage of low income minorities to the max - peddling diploma mills selling "american dream" to strugglilng people - just look at their tv commercials.
Follow
Befriend (3)
13 threads
2,197 comments
San Jose, CA
Premium
Quigley says
So Professor, with testimonials like this are you surprised your students are apathetic?
Follow
Befriend (7)
29 threads
1,203 comments
31 male
Premium
I guess it depends on what your definition of education, is,,,,
Follow
Befriend (3)
13 threads
2,197 comments
San Jose, CA
Premium
Education - Discovering the hard reality that your expensive degree doesn't mean $#!*
Follow
Befriend
7 threads
94 comments
husarsky says
Allowing a 20 something to rack up huge debt on their education and then simply declare bankcruptcy, take the sting for 10 years and wake up in their 30's with a clean slate, a bunch of cash and no debt is insane. That's why 30 years ago smart law students did exactly this causing the law to be changed. NEVER going to happen, you have a better chance of the government not backing student loans than you do this ever changing.
I'm pretty tired of hearing about the average student with 20, 30 or 40k in loans and acting as if this is an insurmountable amount of money. "Why do I have to pay this back?" Sorry, but that's the cost of a new car. And when viewed in terms of their lifetime, really not that much money.
Follow
Befriend
7 threads
94 comments
The problem is that in many cases, the students are spending someone else's money. "Fake" money if you will. Either their parents money, grant money, loan money, grandma's money, scholarship money, etc. This isn't a free market.
The only way to fix this is to have educated consumers. (Students and parents) Then to have these people DEMAND lower costs and make decisions accordingly. There is no excuse for the increase in education costs. With computers, the cost of higher education should be going down. Period. Students at "Liberal Arts U" will hold protest after protest siding with the Janitors' Union for more benefits and better pay. (Even though ironically this directly comes out of their pockets) But rarely will you see students protest increase in fees, tuition, room and board, etc.
Follow
Befriend
46 comments
male
Redondo Beach, CA
Rent4Ever says
The reason you're tired of hearing about it is because the employment situation for recent grads is pretty f'ing far from ideal right now.
So while it's not a 'ton' of money it certainly feels like it when you're cash poor, and maybe facing 5-10 years of stagnant wages and/or lack of new prospects.
It's like parking that new car in your (parents) garage and never using it for years on end. That's why they're whining.
Follow
Befriend (1)
77 threads
1,113 comments
As the cost of education rises, the value continues to decline (depending on major field of study.)