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College is a scam ó so letís make money off it (skyrocketing student-loan debt)
Market Watch ^ | 05/27/11 | James Altucher

Posted on 05/29/2011 6:55:00 AM PDT by TigerLikesRooster

College is a scam — so let’s make money off it

Commentary: Debt creates generation of indentured servants

By James Altucher

NEW YORK (MarketWatch) — We can’t deny it anymore: College is a scam and a bubble — and the reasons why appear below. But I’ll be the first to admit it’s going to take years for that bubble to burst. And while college tuitions are still skyrocketing and student-loan debt is creating a generation of indentured servants, we might as well benefit from it.

Many stocks will continue to go up from the multidecade college bubble, even as it eventually bursts.

The Washington Post Co. (NYSE:WPO) , which owns Stanley Kaplan, gets all of its earnings from the education side of its business, while Blackboard (NASDAQ:BBBB) is the firepower underneath online course management. Google (NASDAQ:GOOG) has all the knowledge in the world at your fingertips and also is trying to get into the online course management game. And Apple’s (NASDAQ:AAPL) increasing MacBook Air sales are due to colleges buying them for their labs. Then there’d probably be a basket of the cheaper online education schools like Apollo Group (NASDAQ:APOL) , etc.

Student-loan debt is now greater than credit-card debt for the first time ever. After the huge debt crisis we experienced in 2008 and the financial bust in housing that ruined so many lives, you would think we would be having more of a national discussion on this — but we just aren’t.

As a result, for the first time ever, we are graduating a generation of indentured servants rather than the entrepreneurs, innovators, artists and inventors that America is known for (I have no self-interest in this — I’m obviously not shorting colleges, as that’s impossible – I just hate seeing American go down the drain.)

(Excerpt) Read more at marketwatch.com ...


TOPICS: Business/Economy; Extended News; News/Current Events
KEYWORDS: bubble; college; educationfunding; highereducation; indenturedservant; studentloan
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1 posted on 05/29/2011 6:55:04 AM PDT by TigerLikesRooster
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To: TigerLikesRooster; PAR35; AndyJackson; Thane_Banquo; nicksaunt; MadLibDisease; happygrl; ...

P!


2 posted on 05/29/2011 6:55:57 AM PDT by TigerLikesRooster (The way to crush the bourgeois is to grind them between the millstones of taxation and inflation)
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To: TigerLikesRooster

For later.

The trouble is, the main way to get to the middle class is a diploma. What is the alternative?


3 posted on 05/29/2011 6:58:40 AM PDT by redgolum ("God is dead" -- Nietzsche. "Nietzsche is dead" -- God.)
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To: TigerLikesRooster; SeekAndFind

This was talked about on Coast-2-coast AM friday night

http://www.youtube.com/user/akcijak#p/c/4B49E4DC360B429F/0/ZK2rLwM_i6k


4 posted on 05/29/2011 7:03:20 AM PDT by Perdogg (0bama got 0sama?? Really, was 0sama on the golf course?)
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To: redgolum

Drop out of the government indoctrination centers, start your own business. Even if it’s mowing lawns.


5 posted on 05/29/2011 7:03:20 AM PDT by ez ("Abashed the devil stood and felt how awful goodness is." - Milton, Paradise Lost)
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To: TigerLikesRooster
If we could get this SCOTUS decision overturned, Griggs vs Duke Power Co. then the college bubble would burst.
6 posted on 05/29/2011 7:06:34 AM PDT by central_va ( I won't be reconstructed and I do not give a damn.)
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To: redgolum
The trouble is, the main way to get to the middle class is a diploma. What is the alternative?

People can make a good living engaging in skilled trades without having to go through the hassle and expense of a college degree. The idea that "everyone should go to college" is of course absurd. Some people just aren't meant for it... if we were still exposing high school students to skilled trades, then maybe more of them would realize they could have a nice life without the hassle of paying back college loans.

There are ways to get through college without racking up a ton of debt. The most important factor IMO is choosing a useful major. We see so many "horror stories" of people with degrees in glorified basket-weaving with a minor in afro-womynistic studies not being able to get jobs (at least not jobs for which they need their degree) even though they did well academically.

Then there's the living arrangements. Unless you get a scholarship to some high-end out of state school, why go out of state for an education? If my plans work out as I hope they do, my children, should they choose to go to college, will be living at home, since I am already paying once for their room and board here. Why should they pay more to live on campus?

Depending on where a student lives, it is entirely possible for them to hold down some sort of part time job while they are in college. Of course this works better if you go to school in a major metro area as opposed to one in the middle of nowhere.

7 posted on 05/29/2011 7:10:04 AM PDT by pnh102 (Regarding liberalism, always attribute to malice what you think can be explained by stupidity. - Me)
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To: TigerLikesRooster

Kaplan is flush with cash. I know. I’ve been consulting with Kaplan Prep Test and Admissions (business software development) for over two years. And, it’s funny. You would think with all the dough and university access they would attract the best and the brightest. Nope. Not even close. All it reminds me of the the dot com bubble where html script kiddies were billing at $125 per hour. Education IS a bubble.


8 posted on 05/29/2011 7:10:33 AM PDT by NamVet71MP
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To: TigerLikesRooster
The way to cut college costs is to cut the professor's salaries and do away with tenure. That way we could get teachers who really wanted to impart knowledge. Not just indoctrinators. Cut the salaries of the college admin’s, too.

I had a professor friend who hated the teaching part. She took sabbatical whenever she was eligible. Professors get huge salaries and great perks. Teaching, for many teachers, is no longer a noble profession, it is a really cushy job. Now, before all you teachers flame me, I am not talking about ALL teachers. My professor (former) friends were all Libs. That is who is mostly teaching at the college level.

9 posted on 05/29/2011 7:14:03 AM PDT by originalbuckeye
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To: redgolum

The trouble is, the main way to get to the middle class is a diploma. What is the alternative?


Find a need in the marketplace, learn a skill, work hard, start a business?

(Emphasis on the first item on that list).


10 posted on 05/29/2011 7:15:15 AM PDT by Atlas Sneezed (End the "Fiscal Fiasco" in 2012!)
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To: TigerLikesRooster

Let’s take the BILLIONS that our government gives to third-world rathole nations and use it to knock down the student loan problem, starting with those who have been saddled with it for over 20 years AND whose yearly income is BELOW how much is owed.

WE CAN DO THIS!


11 posted on 05/29/2011 7:22:46 AM PDT by getarope (I came here to chew bubble gum and kick ass, and I am all out of bubble gum!)
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To: TigerLikesRooster
The principal reason Americans support public education is to prepare children to find employment as adults. All that stuff about literacy, roundedness, or good citizenship pales compared to the overwhelming need to acquire the credentials with which to find a job. Parents deprive themselves for decades, only to send their child to a college or university, with nearly half the coursework being unnecessary or even counterproductive and a substantial fraction more soon forgotten. Why?

Credentials. This entire system is built around the power to control who gains credentials. And who controls that game but a claque of hardened socialists committed to destroying the foundations of Western Civilization! With all that cost, all that work, and all that time spent for a rotten product, do they provide a guarantee?

No.

There is a very simple solution to this problem, one that could bring the entire edifice crashing to its knees: A competitive system of private credentials.

Envision a small shop in a strip mall: "We Test." We Test tests, and how. We Test tests are no joke, indeed; they're hard. REALLY hard. We Test guarantees that any person who can pass their tests can perform as specified with an insured guarantee. If the person you hire fails to perform to those specifications within the term of the guarantee, We Test pays the cost of hiring and training a replacement.

Any human then could use any means imaginable to acquire the necessary knowledge to pass We Test tests. Any school would do, no accreditation required. The Internet is loaded with coursework and curricula, libraries and lab-simulators. Any human with the drive and intelligence to learn on their own could then qualify for a job. No saving for decades, no brainwashing, completely transferable work, at any pace one can withstand. Any employer could then simply select from a menu of We Test specifications instead of a diploma, at any level. We Test tests.

One would think that this should have happened a long time ago, but in fact there is one thing standing in the way that makes the realization of this seeming inevitability a matter of now or never.

State licensing requires degreed credentials obtainable only at said profligate, bureaucratic and unaccountable institutions charging outrageous fees and demanding excessive time as only a State monopoly could command. Why not just amend the legislation specifying education for state licensure by adding the simple words, "or equivalent"?

As an example of how little it would take, consider my wife. She just passed her board certification exam as a Clinical Nurse Specialist in the Newborn Intensive Care Unit. She walked into H&R Block, sat at a computer, took a three-hour exam harder than anything she'd endured in her Masters' Program at Cal State San Francisco, and within five minutes after completion had her passing grade. If the private system can handle a test that specialized, why can't it test arithmetic, algebra, US history, or college chemistry? Instead of bricks and mortar, it would be e-books in quarters. Why not?

12 posted on 05/29/2011 7:30:37 AM PDT by Carry_Okie (The environment is too complex and too important to manage by central planning.)
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To: redgolum
The trouble is, the main way to get to the middle class is a diploma. What is the alternative?

See post 12.

13 posted on 05/29/2011 7:32:50 AM PDT by Carry_Okie (The environment is too complex and too important to manage by central planning.)
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To: redgolum

Huh? I have three nephews in their early 20’s that are making over 70k a year and they only work 6 or 7 months out of the year, if that much. One is a certified diver and underwater welder. Another is a master mechanic/welder and the other is a certified explosives specialist. No college degree for either of them. They could likely not pass a college entrance exam but they don’t lose any sleep over that. They always have an abundance of job offers to choose from and have benefits that are astounding and they don’t depend on some damned union, college degree or government agency. Not that it matters but they have women beating down their doors because they are not wimped down college grads.


14 posted on 05/29/2011 7:34:01 AM PDT by Jukeman
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To: Carry_Okie
Hurray! I've been spouting this for a decade. I became a teacher later in life because all the computer programmers I was training were from India, not America.

Too late did I learn the truth in your screed. Becoming a teacher is about accepting union socialism - not educating children.

I tell students this all the time, in more simplistic terms of course. I will ask them "What if McDonald's ran the schools?" They understand that schools would probably be more fun. A cheap trick but it makes them think.

Keep ranting!

15 posted on 05/29/2011 7:51:44 AM PDT by Aevery_Freeman (What do we do after reelection? The $1,000,000,000.00 fix is in.)
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To: originalbuckeye

“The way to cut college costs is to cut the professor’s salaries and do away with tenure”

You are approaching this problem from the wrong side. Tenure is terrible but it exists because of the fundamental structure of financing education.

As usual, government has subsidized a product and the price has gone way up. There are few market forces in place to control college spending.
You have to take away the free flow of cash to the colleges to make them responsive. They will never change if they get subsidized student loans, government grants and alumni contributions. Why should they?

Here’s a short plan:
1. Education loans should be at market rates
2. Get the Feds out of the student loan business
3. Stop the worthless research from the Feds
4. Encourage alumni to ask for change before they donate to colleges
5. And most importantly, allow students to default on student loans


16 posted on 05/29/2011 7:52:53 AM PDT by cowtowney
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To: TigerLikesRooster

There are two basic myths being peddled by academia in an effort to encourage more students to pay through the nose to attend their schools:

Myth 1: A college degree is key to financial affluence and employment stability.
Fact 1: College is an opportunity, not a guarantee. If the student takes advantage of it wisely, then he could be in a position to do well. Spenign $100,000 on a degree with no marketable skill is not an example of wisely taking advantage of college.

Myth 2: Only with a college degree will someone be able to do well.
Fact 2: College may be an opportunity, but it is not the only opportunity. There are many very wealthy and well off people who never went to college. Anyone who doubts this should inquire what a skilled welder makes.


17 posted on 05/29/2011 8:14:18 AM PDT by bobjam
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To: cowtowney

Years ago, I remember a graph showing the net worth of high school grads vs college grads over a lifetime. Obviously, the HS grads pulled ahead at the beginning, but the college grads picked up in their late 20’s and never looked back. Given the spectacular increase in college debt, I’d like to see what this graph looks like today - if any honest organization would dare to produce it.

Hard to believe, that so many college grads are starting out of the gate wearing chains that many will never escape.

I have read that kids in their early 20’s now check out their dates to see how much debt they have - sort of a “reverse dowry” effect.


18 posted on 05/29/2011 8:17:02 AM PDT by The Antiyuppie ("When small men cast long shadows, then it is very late in the day.")
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To: redgolum
>>The trouble is, the main way to get to the middle class is a diploma. What is the alternative?<<

Used to be a *trade* was a ticket to the American dream; GIs returning home after the war, went into business [tool & die/ small manufacturing] and supported the fantastic wheel of US industry. They could afford to pay their mortgage, have car, mom stayed at home and family could go on a vacation/summer camp. Sadly, we how longer have a middle class, indie manufacturing base.

In my state, vocational/technical schools were closed and consolidated. A shame and very short-sighted.


19 posted on 05/29/2011 8:22:18 AM PDT by Daffynition ("Don't just live your life, but witness it also.")
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To: TigerLikesRooster

A few disciplines require college, not because of the wallpaper, but because of the knowledge and instruction in the field. College should not be discouraged for any child who gets excited by medicine, science, engineering, etc.


20 posted on 05/29/2011 8:25:01 AM PDT by Flightdeck (If you hear me yell "Eject, Eject, Eject!" the last two will be echos...)
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