Posted on 01/24/2020 9:19:04 AM PST by mr_hammer
A married couple, we will call them Ted & Alice, wanted to start a manufacturing business. They thought if they bought the best machines, hired the best workers and manufactured a quality product the path to a world paved with gold would be theirs to inherit.
The couple then went on to use their savings, borrowed against their home and took loans out from family and friends to capitalize their business.
Within six months the couple secured a small building, hired a staff, installed their new equipment and began manufacturing their product. Ted also applied for and secured low interest government loans to repay some of the money borrowed from friends and family.
A year went by, the business was in full swing producing about a thousand units a day. Production units were packaged and moved to inventory awaiting shipment to the points of distribution. After another ninety days, their inventory goal was met.
After another ninety days, their inventory doubled...and almost double again six months later.
Why wasn’t the public falling all over themselves buying their beautiful, well made, nicely packaged BUGGY WHIPS?
Simply, in January 24, 2020 the demand for Buggy Whips was very small and the current manufacturing capacity of the industry was twice what the market place required.
Not to long after, being finically drained. Ted and Alice had to abandon their dream of owning a running their own manufacturing business and take jobs at the local retail and food establishment to make ends meet. A disheartening end to their dreams.
In today’s economy and business climate, participation awards are not given out. The harsh realities and negative consequence of bad business decisions are the lessons painfully learned.
Let’s use the story and draw parallel between Ted and Alice’s misfortunes (mistake) and the current unsustainable college debt that many students and families are taking on.
College costs have soared over the years. Many private colleges yearly tuition is in excess of $50,000.00 a year. A student who completes their degree at a private school can expect to have spent or financed over $200,000.00. Graduating to become a teacher, social worker or any other career that there is not a six figure salary guaranteed would be financial suicide.
No wonder the millennial’s are tripping over themselves to vote for a Socialist, they are looking to be protected once again from making a bad financial decision / choice.
Saddled with debt and jobs not paying what they need to in order to service that debt (and live), they are looking for the government (the tax-payer) to award them their participation trophy.
In the equity market those returns are exceptional. In aggregate debt, it’s an unmitigated disaster.
I do believe there is plenty of blame to go around.
Gov’t: Easy money for anyone who wants to go to college
Colleges: Jacking up tuition due to easy money
Corporations: requiring a college degree for a $40,000/year job that one Excel class would be enough training.
Students: Poor decision making with respect to Major
This is not the way it was a few decades ago. I know many English, History, Philosophy, Economics, Classics majors etc whose careers range from doctors,lawyers,business executives and so on.. My sister in law was a classics major at S Cal and is now into her 25th year at Harvard Law School and works closely with 8-10 law professors to arrange class material, schedules etc.
Generally speaking , a graduate with a degree in one of the Arts was more intelligent, more literate and more versatle that someone with a watered-down business degree.
You are so right. Thankfully, it looks like corporations are starting to relax the BS requirement rule for many jobs. Some of the best workers I’ve ever met in tech had high school degrees only - they focused on getting work experience instead.
Exactly my thoughts when I was in college.
I spent my first two years on academic probation because I didn’t understand why I was paying good money to repeat coursework I learned in high school (General Education Requirements). I rarely attended class, didn’t do my homework, basically just showing up for tests for the bare minimum to pass. But why should I? I didn’t have any interest in anything except business and economics.
Then...I get into my 300 and 400 level “hard” classes and graduate with a 3.91 GPA as a business major. My overall college GPA was 2.9!
I always thought college should be 2 years of 300 and 400 level classes in your area of interest followed by 2 years of paid supervised apprenticeship work. It would be better for employers and better for students, IMO. I also think college should be year-round to finish in 2 or 3 years instead of 4. That’s the real world...most people don’t get 3 months off during the summer and after high school, children should grow up.
lesson 1, be true to your word, If you took a loan and agreed to pay it, pay it...if one’s word is worthless, then...?
Some estimate these useless slugs are sucking up 10% to 15% of college budgets. The Bludgeon of Political Correctness they hold over the head of administrators keep them safely snug while their advancing cancer chokes off all original thought.
Your comments bring up an interesting point. The purpose of universities used to be to pass on Western civilization, ergo the philosophy classes. I don’t really think higher ed effectively serves that purpose anymore and I don’t think anyone expects it to. However, does that make the philosophy class pointless?
It’s hard for me to relate to the expectations of the current H.S. graduates. My little 16 year old daughter graduated Valadictorian of the Senior class, won a small scholarship to the local Memphis State Univ. and promptly got a job waiting tables in a bar where she was not old enough to drink. She paid her own way through to graduate with her B.A. Out of school she continued to work as a waitress and save her money. She moved up to manager of a high class restaurant. After 3 years she returned to college in N.C. and received her M.FA and promptly got a job as a professor of Theater & Drama in a well known college. So she worked alone and financed herself through to her dream, because we told all of our children that if they wanted to go to college it was up to them to find a way to do so because we couldn’t afford to. 2 of them did just that. It can be done if parents would make clear to them that they have the ability to do anything they want if they are willing to work for it.
Ding. Ding.
An unemployed 18 year old with no skills asking a bank for loan this size would be laughed out of the building.
I majored in English literature with a concentration in 15th and 16th centuries, and I've had a more or less successful career as a doctor.
Please defend your assertion that the major you cite is "a bad decision to be sure".
The rise of in the costs of college correspond to the influx in government spending. Just like healthcare. They have both expanded greatly.
Throw in the grads today get to compete with imported guest workers, global wage arbitrage and the ever changing dynamics of the economy. Life was easier when China was commies and Germany and Japan were being rebuilt.
Kids are dumb. College kids are the dumbest. I place blame squarely on politicians, bankers, and college administrators who changed the rules so anyone can get a loan. As soon as that happened, it was game over.
> I know many English, History, Philosophy, Economics, Classics majors etc whose careers range from doctors,lawyers,business executives and so on.<
Your comment shows that there are no hard-and-fast rules when it comes to picking a quality college major. And I do see value in an Economics degree and in a modern English degree.
But I still have my doubts when it comes to many other “arts” degrees. It would seem to me that if someone wants to be, say, a doctor, he should major in biology or chemistry. Stay out of the Classics department.
Disclaimer: I saw my college as just a place to learn a trade. In my case, it was chemistry. Perhaps I was too rigid, and so missed out on the “joy of learning” experience.
I’ve always thought that colleges and universities should be responsible for a portion of defaulted publicly funded student loans, even if that portion was only 5%.
That incentive would instantly result in college’s raising their requirements for students making progress towards their degrees, and limiting enrollment in majors where there are reasonable job prospects after graduation.
(By the way, I am a college professor)
Please see my post #34.
“You have colleges requiring useless courses to meet an arbitrary number of ‘hours’ to get a degree. If you want a business degree, you can get all the basics you need for under 60 hours. The rest of the hours are ‘fillers’ to make the mandatory needed hours. You want to end student debt, completely restructure what is necessary for a viable degree, doing away with useless courses.”
What you posted has been going on for decades. I was graduated from a good business school in 1960. Basically, I blasted through my 60 hours of BS/useless courses by the end of my second year of college.
My first semester of my junior, I had a good study group and took 20 hours of real business courses. I did great, all A’s..
I planned to do the same in the next semester, and one of my business professors, an asst. dean, told me to slow down. If I continued, I could be graduated early and only be 20 years old. That was not good for the job market.
He suggested that I attend a local college in my home town, and enjoy life. Then, take 2 business courses, 6 hours from one of his graduates, who was teaching at the local college.
I discussed it with my parents, and they thought that it would be good for them and me re them getting to know me again. My summer jobs after high school were out of state jobs. I barely saw them during my first 2 years away at college,
So we decided to do it. The prof at the big school called his former student @ the local college and arranged it. I went to 2 classes a day on Monday and Wednesday mornings.
On my days off or in the after noon,I played golf, went fishing with my dad and learned how to cook the evening meal after preparing lunch.
I not only got to know and like my parents better. I got to know a sibling who was 3 years younger.
Next, I learned how to shop for the week’s food and to prepare most meals with what I had purchased. A skill, my wife has benefited from. Our sons learned how to cook at an early age and to buy what was needed for meals before they left home to go college and a trade school.
Also, I got reacquainted with my old dog. She loved to go swimming at a local farmer’s pond while I fished. She lasted 3 years after that and went down hill as she was 10 at that time.
When, I went back to college, they had brought in Saturday classes put the seniors in those classes as we had no choice. If we wanted to be graduated, we went to Saturday classes.
So I took 4 classes/12 hours on Tuesday, Thursday and Saturday. I studied with room mates, made A’s and tutored the courses I had taken at my local college. I went home more often and played more golf and helped my mother as my Dad’s health was failing. My sibling and I became closer, and we text each other several times a week these days.
You are correct. In most colleges, the first 2 years/60 hours are bs repeat courses from high school. Test people after high school to see if those bs courses can be waived.
Getting a student loan to pay for $30,000 per year for bs courses is not a good investment for any student or parents.
Most of the blame is on the parents. Parents need to stand up and say no. That it’s stupid to spend 200K on a degree that may pay little to nothing.
Parents are afraid to say no. My kids wanted to move away and go to a big university (still a state school). I said NO. First 2 years at the local community college while living at home. Saved me 30K per kid. I have 3 kids.
SAY NO mom and dad. Your job it to bring truth, reality, cost benefit into the decision.
All
There’s a discussion here that’s missing that probably should be had independent of the loan discussion.
Is college\university there to educate or for job training?
It used to do both.
That needs a new thread.
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