This page has been archived and commenting is disabled.
Next: Bankruptcy for a whole Generation
Wolf Richter www.testosteronepit.com
Another student protest, another mass arrest. Monday, thousands of students from all over California snarled traffic during their march on the Capitol in Sacramento. Hundreds of students then flooded the Rotunda of the Capitol, a somewhat raucous affair. Eventually, the California Highway Patrol cleared them out, and 60 were carted off and thrown in the hoosegow for trespassing and resisting arrest.
Their problem: tuition increases. Already, tuition in California's state schools has tripled over the last decade, and state budget cuts will induce universities to jack up tuition again. But the state is out of money. And so it's struggling in a weird and ineffectual way with its red ink. For California’s ongoing debacle, read.... Searching For The Missing Moolah.
The same day the students were arrested, the New York Fed released a report on the consequences of incessant tuition increases across the nation: ballooning student loan balances that are increasingly difficult to bear:
- 27% of the borrowers who had to make payments (not current students) were past due.
- $870 billion in student-loan balances at the end of the 3rd quarter 2011 (higher than credit card debt of $693 billion and auto loans of $730 billion), up 2.1% from the 2nd quarter, while other consumer debt declined or remained flat.
- Average balance: $23,300. That includes the millions of student loans that, after years of payment, have much smaller balances or are nearly paid off. Average balances owed by recent graduates are much higher.
The report lauded President Obama’s executive actions of October last year designed to ease the repayment burden of federal student loans. Laudable as they may be, they only soothe the symptoms for ex-students by shifting more of the costs to the taxpayer. But they don’t deal with the cause: the system itself. It has become dysfunctional.
Universities as businesses, in an environment that is devoid of price competition. For example, when the University of California system demands higher tuition, the whole system falls in line to support those increases, rather than resist them.
Captive customers. Students have to get their education within the higher education system. When tuition goes up, they can’t massively drop out because it would jeopardize their dream (by contrast, if air fares jump, customers react by flying less). They can choose cheaper colleges, but all colleges are jacking up tuition and fees. And the nationwide existence of “out-of-state tuition,” while plausible on a state basis, stifles cross-border competition. So students fight tuition increases the only way they can: by obtaining more funding.
Finance. The student-loan industry profits from processing student loans. Naturally, they encourage students to take on more debt. The amount is a function of the cost of the school, not of the ability to pay back the loan. While risk serves as a natural brake in making loans, in the student-loan industry, risk is transferred to the taxpayer who guarantees the loans.
The ultimate enabler. The government, in constant need of voter support, will fund and guarantee whatever it takes to allow students to get their education regardless of how reckless tuition and fee increases are. Thus, Obama’s executive actions make repayment less onerous, but they don’t do anything to contain tuition increases.
There are no price pressures on universities—except student protests (so, keep at it). Outrageous clockwork-like tuition increases are met not with resistance but with an unquestioning, endless, and ever increasing flow of government-guaranteed student loans. The beneficial forces of market discipline have been wrung out of the system, and governments have not stepped in to exercise alternate controls.
University administrator salaries, bonuses, benefits, golden parachutes, and pensions have shocked the public when they’re exposed in the media. Programs that have little to do with education swallow up more and more money. And sure, everybody loves to have well-equipped labs in fancy buildings. But the system needs to be restructured, either by opening it up to competition or by exposing it to effective checks and balances. Solutions won’t be easy, but there isn’t much room left before it will bankrupt an entire generation.
And just when the information age demands more from education than ever before. In this respect, an insidious and at once funny information-age issue with worldwide implications erupted, of all places, in a tiny village in France. Read.... Can't Even Urinate in his own Yard Anymore.
»
- advertisements -
If I had to spend my own money, instead of relying on a Gubmint program, hell yes I'd be looking for a cheaper (not necessarily the lowest cost) option.
Litigators/ambulance-chasers drive a flood of CYA tests and spike costs.
healthcare costs are corporate tax write offs
FSA and other prescriptions, copays, etc. are pre-tax up to $5000 per person
hospitals treat you then write off any uncollected fees
doctors get residency training paid by your tax dollars and hospitals/doctors benefit afterwards
END the subsidy of this private healthcare sector that is a medical cartel and you will see competitive pricing.
Poor irresponsible smoking sun tanning budlight drinking potato chip eating fat rednecks who do pot do not deserve more medical from productive members of society. Spend millions of dollars trying to save 90 year old granny so that she can live another 6months is waste of resources and depriving healthy young mind from being educated.
Just like education more money thrown in does not produce better results.
Open up medical licensing. Let biomedical engineers who work on finding cures get paid more than human mechanics who play by the book.
Doctors love sick people. If everyone got healthy, doctors can't afford mcMansions. Most are republicans anyway while their payments are 50% government subsidies.
Be responsible for your own health. If you make modest changes to nutrition, lifestyle and activity, you can avoid many diseases and cut your health care costs by more than 50% very easily. Health is true wealth. You can start by reducing your diabetes risk by 50% or more (also heart disease and stroke risk). 80 million Americans have metabolic syndrome or prediabetes.
http://diabetesrisk.net/
Cut out carbs as much as possible.
Right now I'm having my snack of an 85% cocoa, dark chocolate bar, and some green tea.
Better yet: let everyone treat themselves and pay for tests and treatments. That way they can chose and costs to the taxpayer are zero.
Now if someone wants to hire a doctor for advice on what to do and what can go wrong, they pay for it themselves. Want medical advice? Pay for it. Want Good medical advice? Pay more for it...
what's wrong with smoking pot?
Smoke more pot, drink less soda and beer.
Yo uwill feel better, and be smarter. Hell I found this site toking one night!
Weed dampens demand for oxycontin and other opiates that are Big Pharma and gubmint approved
"It's not what drug your're on, but whose."
-- Todd Snider
The problem is the human refuse in New York, LA, Chicago, Philly, and every other overpopulated urban sewer where the population subsits on processed crap driving up the cost. Probably a quarter of the urban population depends on sanity in a bottle- the Prozac nation isnt living out in the sticks. It isnt the country rednecks, its the weak urban hothouse flowers of humanity sucking up vast sums of money beyond their actual usefulness.
The saddest, sorriest, unhealthiest, weakest people in the country arent the rednecks by a long shot, its the urbanites- you watch too much TV. Most rednecks work for a living and can still tie a knot in the spines of guys like you well into their 60's.
I'm sure you've done extensive research but my life experience tells me it doesn't matter where you live, there's plenty of human refuse living everywhere.
"Spend millions of dollars trying to save 90 year old granny so that she can live another 6months is waste of resources and depriving healthy young mind from being educated."
Sooo, ummm...who get's to be "the decider" to unplug granny? The state? And just where is the connection between monies saved in this act and educating healthy young minds? The state again?
You might want to rethink your premises before the state decides some of the "young minds" aren't worth edumacating because they've become twisted in an unfeeling profit/loss vortex discounting human life itself.
Haha! See?
This is part of the attitude as to why we doctors will always be able to extract rents. You fuckers are too squeamish to cut costs. Someone gets denied care when costs are cut, either by implicit rationing by making consumers price sensitive so that some forego care, or explicit rationing by limiting services like the british health care system.
"This is part of the attitude as to why we doctors will always be able to extract rents. You fuckers are too squeamish to cut costs."
That's quite the Hippocratic Oath you swore to there doc, I will assume the rest of your oaths hold the same weight.
But you're not a doctor are you...
Edited.
Let me clarify. We cant cut the cost of healthcare by adding more doctors, only by limiting subsidy, controlling price, and accepting that some people wont get care. We arent there yet.
With a broken liability system unless big gov takes the hit on denying care to someone who doesn't have the ability to pay cash then expect the current system of treating a lot of people with very expensive treatment for ? any benefit will continue, as you said Hugo ....we arent there yet.
Exactly! You should be able to have whatever care beyond minimal basics that you can pay for yourself.
Um, who pays for the minimal care?
Why, you and I and all the other chumps with jobs we got with our real SSN's, that's who.
I went to a top ten university that has now declined to a top twenty. Financial aid was generous back then and i got out wirh a B.A. and $23,000 debt.
It isnt worth it nowdays. After a lucrative post graduate degree I found most people making more than me and those fookers went to cheap no name public schools that really didnt deserve the title of university.
If you plan on medicine, MBA, or a law degree it doesnt seem to matter where your undergraduate degree is from, as long as you can blow away the competition on standardized entrance exams. The expensive school does not give you a leg up unless your family was already in the club to begin with, a few exceptions notwithstanding. It is the graduate degree that really counts.
If you are super hot in computer or math skills and dont plan to go to graduate school then definitely go the MIT or equivalent route even if it means taking out a lot of loans, but only if you are super talented.
I find that many business owners make as much as I do, but I had the upwardly mobile ethos that looked down upon that as beneath my dignity and not a good way to make money. I was wrong. If you have a skill or an interest in the trades and an aptitute for business, or think you can ride the next real estate wave in rental units then college is unnecessary. It is your talent for business and ability to manage emoloyees and take risk that is important. Skilled machine operators are also making six figures or close to it if you find the right company, usually a small one with an aggressive owner with ambitions, but dont forget boeing or bae.
Everyone thinks they have to go to college to have a good life or get rich that now we have too many graduates from fancy schools with worthless degrees. They could have gone to a vocational technical school and with the right choices be doing far better, or become a tradesman and eventually start your own business.
I am old enough now to see that the guys who get rich are not the guys who go to college in order to "get a good job.". People who get a degree and passively expect agood job to materialize are now in for a big surprise.
If my son wants to skip college and use the grubstake to start a business i would not be opposed.
degree beyond basic education is for credibility
elite brand name gives you better branding
Harvard MBA is worth more than what they are charging for. People like George Bush have to pay millions to get the same degree because the credibility around the world for that degree is worth that much.
Now those who have it will disregard just like billionares are not impressed with a fancy Ferrari alone. But for the unwashed masses, they still believe in the stupid degree. You get it to fool them not for any practical value. That's how upper class works.
I've said it: starting now, it is more and more likely that an American will be born rich than ever become self-made rich. In the past it was the reverse.
In other words, wealth has become overly concentrated. There is a tipping point beyond which any society becomes a banana republic with 99.9% of wealth controlled by 0.01% and everyone else is on the edge of poverty. In that economic structure there is no possibility for self-made wealth, only inherited wealth because the economy becomes anti-competitive, and that's reinforced by the power structure, laws and politics.
An iconic moment in this crisis that illustrates the point was when two seven year olds in Atlanta were prevented from starting a lemonade stand because they lacked licenses and permits that would ahve cost more than the profit they could make. End of era
could you type that more slowly next time.
If you dont already have connections or get the right degree harvard wont help you much.
I cant recall how to find it but there was a study done on people who were accepted to the Ivy league but turned them down. The difference in lifetine income was very small.
lol...
http://www.csulb.edu/colleges/cla/departments/wgss/majors/
Sometimes...I really can't help myself ;-)
lol You're not contemplating something are you nmewn?
Only as much as I can get away with by law ;-)
WGSS 101 Women & Their Bodies
Whoa! I'm almost qualified to teach that class, who knew?! (I'm a hands-on kinda guy :>D)
No need to hyperventilate on this… engineering, math, science, and business have far, far larger enrollments on most campuses. Gender studies, etc. are declining backwaters in which only the truly deluded need apply. They are largely an artifact of the sixties. But, after all, many universities still have departments with names like Egyptology, Art Therapy, Modernist Studies, etc. I know that this may come as a shocking surprise but higher education is sometimes about seemingly silly esoteric knowledge unrelated to commerce. The yearly budget for ALL of these peripheral departments is undoubtedly less than a single low level GS kleptocratic scam.
Get your priorities straight.
That's almost as bad as getting a degree in Economics.
"Graduates of the Departments of Women’s, Gender and Sexuality Studies nationally hold positions in business, government, and the non-profit sector, where they are actively working to create positive changes in our society. Our majors are well prepared to enter their particular chosen field with open minds about the challenges of the workplace as well as to train the next generations with a better understanding and appreciation of our diverse and multicultural world."
I wonder how many guys major in this?
That's very funny. I hope you were joking because this morning I had to attend a sexual harassment training seminar as an elected official and what I learned from that is the fact that anyone can be accused of harassment without corroboration and your only recourse is to hire a...wait for it.... lawyer. One case that was cited as an example was Anita Hill and Clarence Thomas and that's when I took off the gloves and challenged every idiotic point thereafter. She didn't have an answer for most of my questions and I was the only one in the room of about 60 people that challenged her. It's no wonder why our society is becoming uncompetitive and litigious. What a load of crap. Her degree is in social work, enough said.
I've been harrassed because you mentioned harrassment and sexual in the same sentence.
I may never recover; I accept money orders, Visa, MasterCard, and PayPal.
I hate to tell you this, but you can be criminally charged without corroboration on the word of one person. And you will be in jail hoping for a lawyer.
None that I know of.
They just go to work, pay taxes, raise their own families providing the federal government (once upon a time) with the revenue for them to issue grants to states & schools so people with an inordinate amount of time on their hands can sit around, navel gaze and train other people to do the same thing who don't want to get their hands dirty.
You asked...lol.
So, what's your opinion of this thirty year old Sandra Fluke character who took the course we're talkin about? By my math she's been in school "studying" since she was six years old.
Any idea when she's gonna break out on her own and...ya know...become a professional at something ;-)
You'd have to be a masochist to hire a woman with that degree. You know it's only a matter of time before somebody tells a blonde joke by the water cooler and you're getting calls from Gloria Allred.
Higher education funding is nothing but an ill conceived and poorly executed plan for removing people from the unemployment lines temporarily.
Never has a rich nation shot itself so many times in the foot.
well, as reported on ZH, b/c of government grants and loans it causes higher college tuitions and costs, go figure
The best advice I ever got was from a tenured professor when I was talking to him about postgraduate study. He said, "Why pay all the money and do all that work? Just pay the same amount and get the same silly piece of paper from an online univeristy and do all the reasarch and learning you want to do on your own." Best advice ever.
When you need a degree to get a minimum wage paying mall job, you know college has lost its purpose.
The function of higher education has moved to giving the children of the wealthy a place to party for 4 or so years before they are placed in high paying jobs requiring no work.
The end of college being worth a single cent was the 2000 crash. Since then you had a better chance of success sitting in your parents basement registering every .com you could think of hoping some angel investor will give you $25 million to finance your startup.
Or you could have become a real estate speculator without a cent to your name and make a million dollars in a month.
Or gamble some cash in the stock market.
Every option features some sort of scam to get rich without actually working. Those poor saps in college thinking study and hard work will lead to a good paying job are the losers.
It depends what you major in. In the engineering fields your starting salaries and job offers are strongly dependent on your grades. A straight A student with "decent people skills" will get the choice jobs and pay.
The other factor is what you do with yourself over the summer, many engineering colleges have work study programs, it is a great way to start making connections for your career moves.
I think the real underlying issue is that this generation has not been taught a work ethic.
Most kids that get straight A's in engineering have a work ethic.....
Or, assuming you're a hot chick, just major in sugar daddies..............
Of all the people I know (almost all went to college) the only two who have any kind of money to their name did the first two things on your list....sick...sad...world.
I have all sorts of issues with saying that students are helpless in the face of tuition increases. Stupid, hell yes, but helpless?
How about those sleazy ads for older men and younger girls paying for college on their backs here on the sidebars at ZH? Revolting and disgusting.
downchecks from fat old men and guys who don't have daughters, apparently.
Seems like they'd sell more memberships if they they actually used fat old men in the ads with the young women instead of the male models that dress like pimps
You know the ads you see are based on your search history, right?