Posted on 05/29/2012 5:19:29 PM PDT by SeekAndFind
I’ve been writing for years about a bubble in higher education: too much demand, causing sky-high prices — all because of cheap government money, much like the housing bubble. Now those warnings have become conventional wisdom — so conventional that they’ve reached The New York Times and even 60 Minutes.
Pretty much everyone agrees that the increases in tuition (which have vastly outpaced consumer prices and family incomes) and the growth in student-loan debt (which now exceeds credit-card or auto-loan debt) are unsustainable. As economist Herb Stein famously said, something that can’t go on forever, won’t. So, how should we respond?
For students, piece of advice No. 1 is: Don’t go into debt. When I went to law school, back in the ’80s, I turned down free rides at a couple of excellent schools to go to Yale Law School, even though it meant taking on a lot of student-loan debt. I’m not sure I’d advise anyone to do the same thing today, even to go to Yale Law, the undisputed king of the law-school rankings — and I’m positive I wouldn’t make a similar tradeoff for many other places, even Harvard Law.
Debt is what gets people into trouble in bubbles: They borrow heavily because they think the value of what they’re buying, whether it’s a house or a tulip, will go up. When it stops going up, they’re sunk.
Today, the value of an education isn’t going up, but the price is. That’s a bad combination. So don’t borrow heavily.
That’s good advice for schools, too. Those that borrow money based on the expectation that tuition revenue will continue to increase will have problems, and, in fact, some already are. Instead, schools should be looking to cut costs and increase value
(Excerpt) Read more at nypost.com ...
Long term, I think we have to get the government completely out of the student loan business and encourage colleges to set up their own sets of private lenders.
Hillsdale College in Michigan does exactly that. They don't even allow their students to take out government loans.
There are a handful of other conservative colleges working on similar arrangements. In Hillsdale's case, their lenders actually offer better rates than government loans in some cases because their kids actually graduate with useful, marketable skills and the default rate is very low.
Still, there will be many headaches in liquidating the government loans. Some can be sold on the open market.
Others would have to be written off. As a condition for the write-offs, some of the students should be able to fill public service jobs which are otherwise hard to fill such as medical services in an rural or inner city area.
The colleges who made such loans should also be compelled to eat a portion of them. Many of them have rich endowments which could be assessed to help pay them back. Signing up students to give you an income stream and not providing an education which has a reasonable chance of allowing them pay it back should not be cost free.
They need to be cleaned off the books one way or the other. For many kids (and their parents), the debt is simply not sustainable.
Perusing the classified section this last weekend, jobs advertised included truck drivers (CDL), nurses, automotive technicians, electricians, plumbers, etc. All could be obtained thru technical schools, community colleges and apprenticeships.
But, these are the kind of jobs where you actually have to show up regularly and work .... you know, work.
First, people have to figure out their reasons for going to college in the first place. Many don’t have a clue. They have been told to go to college in order to get a good job. College has been so dumbed down that a degree doesn’t mean that much any more, and many kids go just to party and watch sports for several years.
The entire university system is going to disappear. When one can take courses from MIT online, why spend thousands of dollars to go to Podunk U. for a degree in communications? If people want a liberal arts education, the world is already at their fingertips online. This isn’t the Middle Ages any more where books and information are rare. People can educate themselves in a myriad of ways and find their calling in life without wasting years sitting in classrooms. As usual, government is getting in the way of progress. Government schools are to education what government solar companies are to energy production.
Schools like U of Florida are starting to cut STEM classes. To expensive, and lets be honest, not PC.
Hang in there. Be safe. Come home.....our nation has TONS of crummy citizens and problems (not to mention terrible political leadership) - BUT - you will still love coming home to a nation that is a far cry from where you are working and living now. Blessings.
Land of the Brave...........
“Schools like U of Florida are starting to cut STEM classes.”
Is it because of less demand?
Cost reasons. It cost a lot to have the labs and equipment to train an engineer. A liberal arts student only need the class room and teacher.
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