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"Death Spiral" - Harvard Professor Predicts Up To Half Of US Universities May Fail In 15 Years

Tyler Durden's picture




 

Soaring student debt, competition from online programs and poor job prospects for graduates are shrinking the applicant pools for many universities and, as Bloomberg reports, the National Association of Independent Colleges and Universities warns "there will clearly be some institutions that won’t make it...through these difficult steps." Rather stunningly, Moody’s found that expenses are outpacing revenue at 60 percent of the schools it tracks even as many try to slash their way to balanced budgets," and concluded "what we’re concerned about is the death spiral... this continuing downward momentum for some institutions." As Harvard professor Clayton Christensen has warned, as many as half of the more than 4,000 universities and colleges in the U.S. may fail in the next 15 years, and is "not sure a lot of these institutions have the cushion to experiment with how to stay afloat."


As Bloomberg reports,

Dowling College (on Long Island), which got a failing grade for its financial resources from accreditors last month, epitomizes the growing plight of many small private colleges that depend almost entirely on tuition for revenue. It’s been five years since the recession ended and yet their finances are worsening. Soaring student debt, competition from online programs and poor job prospects for graduates are shrinking their applicant pools.

As the debt loads and poor payoffs finally meet market forces...

What we’re concerned about is the death spiral -- this continuing downward momentum for some institutions,” said Susan Fitzgerald, an analyst at Moody’s Investors Service in New York. “We will see more closures than in the past.”

 

But Harvard Business School professor Clayton Christensen has much more dire warnings of the technological shift...

as many as half of the more than 4,000 universities and colleges in the U.S. may fail in the next 15 years. The growing acceptance of online learning means higher education is ripe for technological upheaval, he has said.

 

“I’m not sure a lot of these institutions have the cushion to experiment with how to stay afloat,”

 

...

 

“There will clearly be some institutions that won’t make it and there will be some institutions that will be stronger because of going through these difficult steps,” said David Warren, president of the Washington-based National Association of Independent Colleges and Universities.

The flood of credit to reflate yet another bubble has simply mispriced yet another critical aspect of society past...

We haven’t hit bottom yet,” said Glenn Harlan Reynolds, a law professor at the University of Tennessee in Knoxville and author of the book, “The New School: How the Information Age Will Save American Education From Itself.” Students are shopping for a less expensive education as the cost of college has increased and the job market worsened, he said.

But, rather worryingly for the future of that exponential trend...

Moody’s found that expenses are outpacing revenue at 60 percent of the schools it tracks even as many try to slash their way to balanced budgets, according to Fitzgerald.

Time for the government to find another credit transmission channel bubble to blow

 

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Mon, 04/14/2014 - 22:01 | 4659247 Ignatius
Ignatius's picture

Long colleges with winning football programs.

Mon, 04/14/2014 - 22:04 | 4659256 JohnnyBriefcase
JohnnyBriefcase's picture

Long apprenticeships.

 

BTW stay classy Intelligence_Insulter.

Mon, 04/14/2014 - 22:25 | 4659316 Ignatius
Ignatius's picture

Apprenticeship was my path and it works.

Mon, 04/14/2014 - 22:26 | 4659319 flacon
flacon's picture

Who will be left to teach the religion of Keynesianism if the universities fail? 

Mon, 04/14/2014 - 22:35 | 4659336 Tengri Temujin
Tengri Temujin's picture

This process of educational decline mirrors the Constitutional Decline we have been experiencing, there is a falling apart not just of infrastructure but of morality and values and quality of people.  This is the very sort of decay that afflicted the Roman empire and it coincided with their inability to further expand.  Similar things we are seeing now in our accelerated empire lifespan.

Mon, 04/14/2014 - 22:49 | 4659404 Handful of Dust
Handful of Dust's picture

 

My alma mother, Thomas Jefferson Virginia State University New Buffington Campus of the Commonwealth College of the Americas, will bee around for a long time. My bizniz degree is invalable. There online, at knight, part time currikulum cant be beet!

Mon, 04/14/2014 - 23:01 | 4659435 Vampyroteuthis ...
Vampyroteuthis infernalis's picture

One simple fact the author overlooked was there is going to be a LACK of qualified kids. Simply put, the products of the ghetto and the hood are not qualified to go nor can afford to go. Our baby bust will for sure do the lower ranked colleges in. RIP marxist, existential liberalism!

Mon, 04/14/2014 - 23:04 | 4659451 CrimsonAvenger
CrimsonAvenger's picture

Qualifications haven't mattered in some time. Today the only qualifications are whether they (or someone helping them) can fill out a FAFSA form.

Mon, 04/14/2014 - 23:38 | 4659532 mrpxsytin
mrpxsytin's picture

And therein lies the problem... 

Tue, 04/15/2014 - 06:15 | 4659876 zhandax
zhandax's picture

There are a lot of 'institutions' which are better off dead.  Harvard is the first one to come to mind.  Unfortunately, it is probably last on the list to go.

Tue, 04/15/2014 - 06:51 | 4659893 Thomas
Thomas's picture

We would be fine without half of the schools. The path to get there, however, will be a bitch.

Tue, 04/15/2014 - 06:53 | 4659894 Richard Chesler
Richard Chesler's picture

I thought it was common knowledge by now these "institutions" were nothing more than debt zombie factories...

Tue, 04/15/2014 - 07:25 | 4659928 RSDallas
RSDallas's picture

That would be Tenure Zombies.  

Tue, 04/15/2014 - 07:05 | 4659905 Bangin7GramRocks
Bangin7GramRocks's picture

Harvard will merge with Goldman Sachs, Stanford and Google to create "The One". Supreme World Leader and corporate deity!

Tue, 04/15/2014 - 07:17 | 4659911 DanDaley
DanDaley's picture

Marc Faber's take on higher ed. (hint-it's better to just have a brain and know how to use it): https://www.youtube.com/watch?v=F-hTffVyB9U

Tue, 04/15/2014 - 10:22 | 4660713 Ayr Rand
Ayr Rand's picture

Good point. I'm top 1% of college-bound seniors. But what does that mean in the Obama nation? If anything?

Tue, 04/15/2014 - 10:22 | 4660714 Ayr Rand
Ayr Rand's picture

Good point. I'm top 1% of college-bound seniors. But what does that mean in the Obama nation? If anything?

Mon, 04/14/2014 - 23:41 | 4659533 UselessEater
UselessEater's picture

I wonder if there will be a "lack" of qualified kids for the future planned economies? Foundations and endowments have been vehicles used by TPTB to pervert the course of TRUE tertiary studies and research in sciences, business and arts fields.

Colleges seem to be production lines to form debt and identify useful idiots who conform to the myth of humans being consumers and the validity of consensus science that justifies planned economies and planned societies for the "global" good of a few. I suspect there will be no 'lack' in the minds of the psycho's running this debt servitude ponzi scheme.

Perhaps kids moving away from tertiary education is a good thing in some respects. As SME's are crushed the youth look to secure employment with the mega-corp's serving the fascist trend and all that comes from that moronic 'utopia'. A possible backlash could be us supporting the micro businesses that more of us are setting up and countering the system by recruiting kids who have not been indoctrinated by advanced education; the role of elders (us) should be to pass on knowledge and skills in a way that allows the younger generation to become self sufficient, wise and resilient so they can become people who can defend, protect, nuture, grow, stimulate advance the lives of our and their next generation families.

If in your job you get a chance to pervert the rfascist ecruitment system DO so! Don't ask for their qualifications perhaps ask them to come back and talk to you after they've read a key book/ experimented with solving a problem.... anything that points to their willingness to learn and try. Perhaps your patience and perspective will bring the kids into the fascist backlash.

Tue, 04/15/2014 - 11:49 | 4661310 Monty Burns
Monty Burns's picture

I ran a post-gradute technology program at a well-known mid-western university and even in that field and at that level the Cultural Marxist/PC/Equalist/AA agendas were beginning to pollute the learning environment.  This was about 20 years ago.  The damage done from a pedagogical perspective was enormous and it's got drastically worse in the interim.

Tue, 04/15/2014 - 01:40 | 4659691 Freddie
Freddie's picture

True.  I had to go to a local state 4 year university for something about a year ago.  I walked around the school.  I remember 30 years ago it was a spartan or utilitarian place.  Today, they have buidlings that would be class A office buildings with upscale furnishing.

I would guess 40% of the kids attending can barely read.  College has become a right.  The state or private college will baby sit a lot of illiterate kids who will get a diploma.  I bet many of this subset will still have a 5th grade reading level.

Tue, 04/15/2014 - 07:51 | 4659970 therover
therover's picture

I thought it was how fast they can run the 40 yard dash.

Mon, 04/14/2014 - 23:52 | 4659557 Stuck on Zero
Stuck on Zero's picture

The Universities are lobbying Congress to hand out visas and put degree holders on the path to citizenship.  Already most of our graduate studentsa are foreign. 

Tue, 04/15/2014 - 08:34 | 4660110 pods
pods's picture

Just a coincidence that Visa holders make less and have to work harder than citizens.  They run them ragged at my place. Sad really.

pods

Tue, 04/15/2014 - 09:06 | 4660258 More_sellers_th...
More_sellers_than_buyers's picture

I'd take them over some lazy lump who gets in for politically correct reasons

Tue, 04/15/2014 - 01:03 | 4659654 Ben Dover
Ben Dover's picture

Assuming here your comment on "the ghetto" and "the hood" referred to Black and Hispanic kids, I have to ask you to expand your definition of useless to be more inclusive. I For the record, I interact daily with lots of kids and have to let you know that the White kids are no prize to be sought after either. Low expectations transcend race and neighborhood lines.

Tue, 04/15/2014 - 09:54 | 4660514 cheetahbaby
cheetahbaby's picture

For 40 years black and Hispanic kids have had significantly lower Sat scores. When the shame got too much to bear, their liberal mouthpieces starting convincing schools that scores don't matter. Doesn't make them any dumb.....

Tue, 04/15/2014 - 08:00 | 4659987 FredFlintstone
FredFlintstone's picture

Hey, they gave out $500k mortgages to gardeners why not give out $50k in student loans as well as $50k in grants to gang bangers?

Mon, 04/14/2014 - 22:48 | 4659406 NuckingFuts
NuckingFuts's picture

I was in college in the late 80's - early 90's and it does have one thing going for it. Tons of women your own age and away from home as well as copious amounts of drugs and alcohol. As far as an education goes ...... Yeah, not so much. Very expensive women and cocktails.

Completely OT: I saw no info on the shootings in KC on ZH. Did I miss it? Usually these lone wolf shooters get at least one thread.

Mon, 04/14/2014 - 23:06 | 4659457 Almost Solvent
Almost Solvent's picture

Certain topics are verboten on the new ZH.

Mon, 04/21/2014 - 13:53 | 4680140 slvrizgold
slvrizgold's picture

That was the feel good story of the week.

Mon, 04/14/2014 - 22:51 | 4659412 The man with po...
The man with pointy horns's picture

More like exponential decline. In the last one hundred years civilization has been on steroids. Empires have risen just as quickly as they have fallen.

Tue, 04/15/2014 - 09:52 | 4660505 Chuck Walla
Chuck Walla's picture

 It’s been five years since the recession ended and yet their finances are worsening.

Perhaps the recession didn't end? Or doesn't that compute to the overpaid brainiacs out there?

 

Ein Volk, Ein Obama, Ein Reich!

Mon, 04/14/2014 - 22:48 | 4659403 HardAssets
HardAssets's picture

The universities have been failing to help turn out informed citizens who can think for themselves for decades.

What else is new ?

Mon, 04/14/2014 - 23:29 | 4659519 RafterManFMJ
RafterManFMJ's picture

The new Univercity pogram will follow the degree path I encapsulated. I articulated at the Univercity of Phoenix where I perused 2 duel degrees in Forestey and once in Arkeology - all from my GramGram's basement!

I come your woodlot, inspect for Amurikan Chestnut, dig haunted burial ground, same day!

As always thanks you very much Univercity of Pheonx!

Mon, 04/14/2014 - 23:34 | 4659526 mrpxsytin
mrpxsytin's picture

Surely, there is no need for anyone to teach that which becomes self evident for the true believer. 

Tue, 04/15/2014 - 01:39 | 4659690 Vart Drader
Vart Drader's picture

Gay Rights & Women's Studies

Tue, 04/15/2014 - 05:37 | 4659862 Scifact
Scifact's picture

Do you imply you need education to be irrational and self serving?

Tue, 04/15/2014 - 07:33 | 4659943 TruthHunter
TruthHunter's picture

15 years?

Thats way too long for a lot of them.

They are already obsolete.

If education wasn't a corrupt, subsidized parasite,

a shake out would have occured years ago.

Tue, 04/15/2014 - 07:53 | 4659975 Everybodys All ...
Everybodys All American's picture

Liberalism having gone full circle.

Mon, 04/14/2014 - 22:55 | 4659420 sangell
sangell's picture

Yes but now you can get a 'low cost degree' too! Just select a college that failed when you would have been in college with perhaps a focus on one that failed far away from where you are now living and thus unlikely to have few if any alumni who attended that school around and claim a degree from the school. In fact, if you contact the registrars office of a failing school and offer a soon to be unemployed clerk in that office a small 'bonus' they might be happy to print you out a transcript showing your outstanding academic achievements and a black diploma for you to fill in! Look up the school and memorize a few campus landmarks and faculty members from your 'college days' and you can have your degree in a week!

Mon, 04/14/2014 - 23:17 | 4659492 DipshitMiddleCl...
DipshitMiddleClassWhiteKid's picture

hey now..dont be giving away the secrests of success

Mon, 04/14/2014 - 23:02 | 4659440 libertus
libertus's picture

Oplerno will grow and grow because it is not dependent on student loans. Check us out! Oplerno.com

Mon, 04/14/2014 - 23:06 | 4659460 remain calm
remain calm's picture

The "at risk" universities will have to find a way to integrate on line education to cut cost, those who do it well will succeed, those who don't will perrish. That is the way it is suppose to be in America. Fuck you Obama!

Tue, 04/15/2014 - 07:19 | 4659920 Van Halen
Van Halen's picture

Short any prediction that comes out of Harvard.

Mon, 04/14/2014 - 22:06 | 4659260 nuclearsquid
nuclearsquid's picture

Burn MF'ers.  I got my first degree from a school that will exist as long as the US does (20-25 years?). Free, too, if you don't count blood, sweat and tears.

Tue, 04/15/2014 - 22:51 | 4663892 IronForge
IronForge's picture

What School is that, Nuclear Squid?

Mon, 04/14/2014 - 22:10 | 4659268 Shad_ow
Shad_ow's picture

Roll Tide!

Tue, 04/15/2014 - 07:44 | 4659959 onewayticket2
onewayticket2's picture

the tide will go out as soon as the players start taking all the revenue generated from the football (and other sports') programs as their own....a la Northwestern Univ.

 

which, in turn, will accelerate the date of death for many universities as a major source of revenue to the university's general fund dries up.

Tue, 04/15/2014 - 10:50 | 4660884 Cursive
Cursive's picture

@Shad_ow

Yes, one of my favority poems:

Roll Tide, Roll!

Around the (toilet) bowl

and down the hole!

Roll Tide, Roll!

Mon, 04/14/2014 - 22:18 | 4659293 Jack Burton
Jack Burton's picture

Indeed! And the best party schools.

Mon, 04/14/2014 - 22:54 | 4659417 Osmium
Osmium's picture

Slippery Rock?

Tue, 04/15/2014 - 07:56 | 4659981 FredFlintstone
FredFlintstone's picture

Went to HS with people who went to 1) Slippery Rock 2) Grove City College 3) Bowdoin College. The guy from Bowdoin asked the guy from Grove City how things were going at Slippery Rock. The Grove City guy was so insulted and pissed he didn't talk to Bowdoin guy for awhile.

Mon, 04/14/2014 - 22:26 | 4659324 farragut
farragut's picture

Go Hokies!

Tue, 04/15/2014 - 00:07 | 4659580 Bananamerican
Bananamerican's picture

uh, "Crush 'em Barnacles!!"

Tue, 04/15/2014 - 09:00 | 4660231 PartysOver
PartysOver's picture

SEC, SEC, SEC.  That would be the SouthEastern Conference for the non faithful.

Mon, 04/14/2014 - 22:02 | 4659249 Intelligence_In...
Intelligence_Insulter's picture

Useless.

Mon, 04/14/2014 - 22:03 | 4659253 One And Only
One And Only's picture

"Time for the government to find another credit trannsmission channel bubble to blow"

Red pencil manufacturing.

Mon, 04/14/2014 - 22:04 | 4659255 Buckaroo Banzai
Buckaroo Banzai's picture

They will do exactly what they've done for the last 35 years-- raise tuition to make up the difference. As long as the taxpayers are on the hook, and loans are plentiful, what's to stop them?

Tue, 04/15/2014 - 01:56 | 4659715 Freddie
Freddie's picture

As another poster mentioned that the universities are like a factory.  Get the kids in there. Need an Apple lap top. Books. How about a credit card?  Food plan? Obamacare too.  Need more student loans. The BS is endless.

One of the biggest secrets is the tens of billions in grant money for worthless projects and studies.

I had a friend who worked on technology at a well known school.  They are supposedly a premier medical research university.  Well it is all about endless grant and grant money.  The research is a joke.  The systems being built have no hope of ever working.  Burn the money and look for a new grant.  Insanity.

 

Tue, 04/15/2014 - 06:23 | 4659882 zhandax
zhandax's picture

You mean like harry ried's solar farm on the public land next to Bundy's ranch in Nevada?

Tue, 04/15/2014 - 02:42 | 4659757 laboratorymike
laboratorymike's picture

They've already hit the cieling for that at my university (a major state university). We are leading the nation with the most debt per student graduating, though I am fine b/c I came in as a grad student with a research assistantship. What they should do is close two of the three gyms, knock off the $10,000 per event free food parties, and stop with silly degrees like pre-diet and exercise (with corresponding faculty). Cutting the funded offices like the Office of Sustainability and various BS giveaways like the $3,000 cake for the LGBT club annual banquet would also help.

But instead, they expanded the campus population by 50% since I first started grad school, and lobbied the state for a "tuition freeze" in the form of a $20 million funding increase per year, i.e. $7 extra in taxes per person per year. So it's already the case that when the faculty can't milk the students for their 6% salary increases, they will milk the taxpayers. After all, we need those three gyms in case we lose two of them!

Mon, 04/14/2014 - 22:04 | 4659258 bugs_
bugs_'s picture

a rare positive article on Zerohedge! :-)

Mon, 04/14/2014 - 22:07 | 4659264 nmewn
nmewn's picture

Beat me to it ;-)

Mon, 04/14/2014 - 22:18 | 4659299 Greenskeeper_Carl
Greenskeeper_Carl's picture

i agree. i have a 6 month old. fuck 25k a year for that piece of paper. I will help him go to school, but not like our present system

 

Mon, 04/14/2014 - 22:57 | 4659426 nmewn
nmewn's picture

A six month old, first of all, congrats dude!

Second, I ain't gonna lie, we structured our lives (financially) so that Mrs.N was able to stay home for a few years simply because I made more, we could. We went without because we could, for the greater good.

I know some aren't in that position.

The result was, knowing math, the alphabet, reading before ever entering the system, thats on Mrs.N, I only supplied her the support to do it. In Florida, we have a college pre-pay plan. Kids can go if they're capable (or have the skills or interest) but the funds are not tied to them...like, if they want a Vette, instead of going to college, we say no, it reverts to us. Many plans try to take "tax advantage" by putting the funds in the kids name, not cool IMHO.

Anyways, look into what plans you have in your state and see if one is right for you & him/her. If one isn't right, well you can move and the trades aren't a bad way to go either.

Its how I paid for mine, we need electricians, plumbers, mechanics, engineers etc more than we need lawyers & shrinks anyways ;-)

Tue, 04/15/2014 - 06:29 | 4659885 zhandax
zhandax's picture

Send the kid to Europe.  I found out Cambridge has a one year MBA program which would only cost around $63,000 for the year.  I am still undecided on whether I could tolerate the bullshit to put it to use.

Mon, 04/14/2014 - 22:08 | 4659265 nuclearsquid
nuclearsquid's picture

+1 - I can't wait to bask in the gnashing of teeth as this thing comes crashing down.  Is there a more thrilling catharsis?

 

Mon, 04/14/2014 - 22:23 | 4659311 tunnelvizn
tunnelvizn's picture

Finally, some good news . 

Mon, 04/14/2014 - 22:08 | 4659261 fonzannoon
fonzannoon's picture

I posted this a few weeks ago regarding this subject. you guys gotta get your hair cut where I do. you will  be ahead of the curve.

http://www.zerohedge.com/news/2014-04-06/ongoing-inflation-higher-educat...

Mon, 04/14/2014 - 22:33 | 4659348 techstrategy
techstrategy's picture

Collapse is not coming... Just financial assets.  Then, college will be cheap again in real terms...

Tue, 04/15/2014 - 07:58 | 4659982 Arius
Arius's picture

reasons why?

if the past is any indication of the future, plenty of collapses ... kind of starting with a clean slate.... makes sense to me, why different this time?

Mon, 04/14/2014 - 22:06 | 4659262 My Days Are Get...
My Days Are Getting Fewer's picture

Public Education died.

Now, we have Education Business.

When the volunteers for student debt don't show up, how are you going to make payrolll.

Mon, 04/14/2014 - 22:12 | 4659272 nmewn
nmewn's picture

Better question, when the the Castro model fails (again) will the indebted students flee, instead of work off "their indebtedness" to the state?

Mon, 04/14/2014 - 22:06 | 4659263 Cow
Cow's picture

I'd like to know how to short those bonds

Mon, 04/14/2014 - 23:11 | 4659472 EggSlayer
EggSlayer's picture

haha wow. How many do you think actually paid for it themselves?

Mon, 04/14/2014 - 22:10 | 4659269 i_call_you_my_base
i_call_you_my_base's picture

I wouldn't. Education financing is TBTF.

Mon, 04/14/2014 - 22:08 | 4659266 rtalcott
rtalcott's picture

Sounds like a reasonable outcome to overcapacity of low quality education not to mention low demand for any education.

Mon, 04/14/2014 - 22:38 | 4659370 cynicalskeptic
cynicalskeptic's picture

Law schools should be the first to go.   Gross overcapacity turning out unneeded attorneys whose only option for making money is working as ambulance chasers.

Every attorney I know - including a few who went to top schools and are employed at the top of their profesion - feel that they made a huge mistake.  Those that are best off feel that they sacrificed their personal and family lives (one saw his kids only on Saturdays - leaving before they woke and getting home after they went to bed).  They are still expected to rack up billable hours and be available 24/7.   Those that haven't done as well scramble to stay employed and are still paying off student debt.  Universally they hate what they do - but then the attorneys I know still have a soul and some sense of ethics and morals.

Mon, 04/14/2014 - 22:59 | 4659429 RaceToTheBottom
RaceToTheBottom's picture

Interesting.  You certainly know some exceptional and nice lawyers.

But truthfully, it is a degree program that has been asking for a crash.

I relish in the free hand of the manipulated marketplace having its way with them....

Mon, 04/14/2014 - 23:26 | 4659511 TrustbutVerify
TrustbutVerify's picture

Can lawyers sue themselves for choosing an often grossly overpaid and too often parasitic profession?  If so, they could pay themselves a huge settlement and declare it a tax loss.  

Mon, 04/14/2014 - 23:59 | 4659564 RafterManFMJ
RafterManFMJ's picture

Oh noes! The lawyers are sad! Call a suck truck to vacuum up the tears I weep for them.

Socially when I meet a lawyer at a party or what not I get an odd mix of revulsion and schadenfreude; I have to stifle laughter when they use their lawyerhood in an effort to pick up women; I don't get how an attorney can be so beta - and 90 % seem to be - qualifying themselves incessantly to some sloppy whale that should be at sea sifting for krill rather than drinking bud light and eating deep fried cheese stix.

Lawyers - as useless as tits on a Boar.

Mon, 04/14/2014 - 22:13 | 4659274 Catullus
Catullus's picture

There's still a sizable portion of the population that has a fetish for experts and titles.

But these universities have been wasting an incredible amount of money building facilities. And their "endowments" are really just the professors retirement funds.

Tue, 04/15/2014 - 00:39 | 4659622 Gaius Frakkin' ...
Gaius Frakkin' Baltar's picture

Duh... Accomplishments require real talent whereas titles can be purchased, smoodged, or faked. A nation of no talent ass-clowns will naturally have a fetish for titles over accomplishments.

Mon, 04/14/2014 - 22:14 | 4659278 MilwaukeeMark
MilwaukeeMark's picture

“In times of change, learners inherit the earth, while the learned find themselves beautifully equipped to deal with a world that no longer exists.” 

-Eric Hoffer

I thinks Hoffer just about sums up the output of today's universities

Tue, 04/15/2014 - 00:09 | 4659582 RafterManFMJ
RafterManFMJ's picture

Hoffer and H. L. Mencken should be read by all who frequent these boards.

Mon, 04/14/2014 - 22:15 | 4659284 Cabreado
Cabreado's picture

It looks bleak...

these charades are complicated... give Larry Summers a call.

He will not disappoint.

Mon, 04/14/2014 - 22:16 | 4659288 syntaxterror
syntaxterror's picture

MOAR foreign students! MOAR jumbo student loans!

Mon, 04/14/2014 - 22:17 | 4659291 Cacete de Ouro
Cacete de Ouro's picture

I sure hope Hamburger University isn't on the list. How else are the 70 year olds going to learn to flip burgers?

http://www.aboutmcdonalds.com/mcd/corporate_careers/training_and_develop...

Tue, 04/15/2014 - 01:50 | 4659705 StychoKiller
StychoKiller's picture

Only franchisees go to Hamburger U.  Employees only get OJT.

Mon, 04/14/2014 - 22:18 | 4659301 Xibalba
Xibalba's picture

Waita sec...the Academics can't budget?  Who woulda thought?!?!

Mon, 04/14/2014 - 22:25 | 4659317 i_call_you_my_base
i_call_you_my_base's picture

Academics don't run universities, dumb ass administrators with MBAs do. And finance assholes.

Mon, 04/14/2014 - 22:22 | 4659307 natty light
natty light's picture

Why don't they have their economics department give them a solution?

Mon, 04/14/2014 - 22:23 | 4659312 BiteMeBO
BiteMeBO's picture

"Knowledge is good." - Emil Faber

Mon, 04/14/2014 - 23:06 | 4659447 Buckaroo Banzai
Buckaroo Banzai's picture

"Seven years of college down the drain. Might as well join the fucking peace corps." -- John Blutarsky

Tue, 04/15/2014 - 00:16 | 4659314 RaceToTheBottom
RaceToTheBottom's picture

Half of the Universities deserve to fail.  But this assumes that the remaining universities have to become more productive.

Most people do not understand that Universities are necessary.  Imagine TPTB having to make decisions based on some real metric of competence. 

Imagine them making hiring decisions without having some piece of paper to help them????  LOL Impossible.

Mon, 04/14/2014 - 22:27 | 4659327 My Days Are Get...
My Days Are Getting Fewer's picture

For every applicant for a student loan, hand print the following on the top of every page and sign the notation. Others may craft better language.  My text is only suggested, but not guarantied to be effective:

 

It is hereby agreed by Lender and Student, that my total student loan debt (including principal, interest, fees, penalties and costs of every kind) shall not exceed 10% of my after-tax income earned for the period of 10 years, beginning on the date I receive my undergraduate degree. Lender agrees not to enforce or collect any excess debt.  If the Lender's loan is for only part of the time I attend undergraduate school,then my obligation to that Lender shall be pro-rated.  These hand-written notations supersede and override all conflicting text.

Tue, 04/15/2014 - 00:17 | 4659386 RaceToTheBottom
RaceToTheBottom's picture

Perfect.

There   are probably about 500000 unemployed lawyers who could file and argue your case for nothing upfront. Many of those might even be good......

Mon, 04/14/2014 - 22:35 | 4659355 venturen
venturen's picture

Peak Education, with Peak Government, with Peak Stock Market....what could go wrong?

Mon, 04/14/2014 - 22:42 | 4659363 venturen
venturen's picture

maybe the UNC fake class model with sports teams working as slaves, is more profitable.

Mon, 04/14/2014 - 22:41 | 4659378 TheMeatTrapper
TheMeatTrapper's picture

.."as many as half of the more than 4,000 universities and colleges in the U.S. may fail in the next 15 years."

 

That's a good start.

Mon, 04/14/2014 - 22:43 | 4659390 cynicalskeptic
cynicalskeptic's picture

But where are you going to park our otherwise unemployable 18-24 year olds?   You can't expect them to go straight to Starbucks from High School.

Mon, 04/14/2014 - 23:26 | 4659516 grunk
grunk's picture

That's why man created war.

Tue, 04/15/2014 - 02:53 | 4659762 laboratorymike
laboratorymike's picture

A couple weeks ago my MakerSpace bought a 3D printer, and I am teaching myself robotics so I can build some computer controlled lab equipment (did research in universities for 10 years, most lab equipment is a obscenely priced). In a couple years we're going to be running some light custom manufacturing based on what we're developing now. Hopefully the crash will make more regs unenforceable; if you've ever had to do regulatory reporting you know how much time is wasted on reports that no one will ever read.

We have also been talking quite a bit on how we can start doing apprenticeships and alternative means of educating some of the middle and high school kids in the area. Bringing them into the shop and working on some projects is the main thing for now. The university is too expensive and kids are not getting value for the money. The only thing keeping them afloat is the state monopoly on degree granting.

Mon, 04/14/2014 - 22:44 | 4659391 reader2010
reader2010's picture

"Man is born free, and everywhere he is in chains."

- Jean-Jacques Rousseau 

Mon, 04/14/2014 - 23:08 | 4659464 EggSlayer
EggSlayer's picture

You're in chains?

Tue, 04/15/2014 - 10:44 | 4660848 Ariadne
Ariadne's picture

stfu and pay yer taxes to the tribe. Or else

Mon, 04/14/2014 - 22:50 | 4659397 db51
db51's picture

My Son-In-Law's Fucktard Brother In Law is 51 years old, has a Degree from LSU,  Masters from UConn, and is still in school on student loans.  Driving a BMW, never a shortage of cash for travel, no one in his family has a fucking Clue how he pulls this off.    Oh, did  forget to mention he sued a former Professor College Professor and the University for an alleged knee injury playing volleyball at the Professor's cookout at the prof's home?    lmao.....Forgot to tell them about his high school football injury on the same knee.   I was so pizzed I called the Professor's home and told him he was being played by a con artist.....6 months later they settled out of court for an undisclosed sum of money.    I even sent a videotape of him jogging after the supposed cripplng accident.    Can't believe the University paid up....but W T F... free taxpaer money to burn.

Tue, 04/15/2014 - 00:19 | 4659569 RaceToTheBottom
RaceToTheBottom's picture

Thanks for your efforts to bring the scum's actions to light.  You did the correct thing.

Mon, 04/14/2014 - 22:50 | 4659409 Handful of Dust
Handful of Dust's picture

Bullish!

Mon, 04/14/2014 - 23:06 | 4659455 TrustbutVerify
TrustbutVerify's picture

"Right sizing" universities wouldn't be a bad thing.  Get rid of all the useless politically correct classes and those that, otherwise, don't lead to employment.  This would cut most time to get degrees by a year or more.  Don't admit students that care barely read (yes, its true).  Get real about pay and benefits.  Some will make the cut.  Some will not.  

I don't see this type of restructuring as a bad thing.  

Tue, 04/15/2014 - 10:21 | 4660707 clawsthatscratch
clawsthatscratch's picture

The college i work at has changed dramatically in the last few years. More and more useless directorships, more and more stupid diversity training requirements. It is becoming so corporate it is no longer a nice place to work. The political infighting is becoming very bad, but the money keeps rolling in. We teach a lot of people who have at best a 6th grade education but somehow manage to get a degree, usually in something worthless. Its all about the students ($$) of course. This will end badly like everything else here in Amerika. For now I will ride the dragon but in the end I will get be eaten as well :)

 

Mon, 04/14/2014 - 23:08 | 4659458 RaceToTheBottom
RaceToTheBottom's picture

US Education has only one chance:

Inverse Outsourcing of Education.

Relish in the Double bendover of the American Student....  to say nothing of the taxpayer.

Mon, 04/14/2014 - 23:06 | 4659461 EggSlayer
EggSlayer's picture

This is bullshit. Being from Long Island, I can tell you Dowling college is shit and I can't think of any reason why someone would go there when you can spend the same money and go to a much better institution. A college education is becoming the standard. How can there be a "death spiral" when tuition prices have spiked? Everyone knows that online programs are bullshit as well. The institutions that fail will be the weakest and the ones that deserve to fail.

Mon, 04/14/2014 - 23:15 | 4659488 Almost Solvent
Almost Solvent's picture

I'm in WNY and never heard of that school. The high tuition they charge and no one outside LI even knows who they are. SUNY Cortland at least makes the headlines once a year when they trash the town after the Cortacajug

Tue, 04/15/2014 - 01:57 | 4659716 StychoKiller
StychoKiller's picture

It's right next to Coney Island College.  You need to get out more! :>D

Mon, 04/14/2014 - 23:12 | 4659478 NoWayJose
NoWayJose's picture

You are already seeing a shift, as many colleges are chopping useless majors. The next rebellion will be to chop athletic teams, music, studio arts, etc. Colleges will not die, but you will see large departments in only a handful of popular majors, and one or two person departments in many other majors. Remember, college administrators are a bureaucracy - and what beaucrats do best is protect their jobs.

Tue, 04/15/2014 - 00:22 | 4659534 RaceToTheBottom
RaceToTheBottom's picture

Agreed. 

But even the Universities that survive have such large facilities that Universities will become core sets of buildings that make use of hitech internet based classes (they need to increase the teacher student ratios) surrounded by leased facilities to private businesses with focused research and interrelationships.

It has to happen.

Tue, 04/15/2014 - 00:04 | 4659573 TheMeatTrapper
TheMeatTrapper's picture

Athletics (football) brings in tens of millions of dollars a year to colleges. 

The University of Alabama pays Nick Saban $7 million a year to coach football. They pay the players (under the table). They pay the players families (under the table). The players live in first class luxury dorms. They have unlimited access to nutrition bars that serve ultra high end protein smoothies, fresh fruit and vegetables. The gyms are world class. They have personal strength coaches. 

The play books are loaded onto IPads and are wirelessly updated within minutes of each game. As an IT consultant, ask me how I know. The network has to know which plays have been changed, which players need to be notified of the canges so they can be alerted that a play has been changed. 

Our weight room has an indoor waterfall in it. 

TV revenues bring in hundreds of millions of dollars. There is even an SEC TV network being launched this season on ESPN. 

College players are now unionizing and demanding salaries. 

And they "graduate" from institutions of "higher education" unable to read. But they are very well qualified to enter the NFL and demand the right to say "nigga" whenever they please. 

The system is as corrupt as the stock market or the Congress. And people LOVE it. 

Mon, 04/14/2014 - 23:22 | 4659505 DipshitMiddleCl...
DipshitMiddleClassWhiteKid's picture

college is a scam unless you're really fucking good at math

 

otherwise, get a job or pick up a trade.

 

a kid with half a brain out of HS will take home more money living at home, making $10 an hour than the average college grad whose lucky to make 30K his first year outta school.

Tue, 04/15/2014 - 01:11 | 4659664 4 Freedoms
4 Freedoms's picture

Where to start.....  I'd really like my doctor or lawyer to have a college education.  Just for the fun of it.

Second, that HS grad will be bringing home 20K a year (for many years to come).  Isn't 30K more than 20K anymore?

Tue, 04/15/2014 - 03:05 | 4659765 Canoe Driver
Canoe Driver's picture

4 Freedoms, your doctor is really just a retard that matches symptoms with prescription medications, and gets it wrong half the time. Even surgeons were until recently recognized as the mechanics they essentially are. Your lawyer, if you have one, does almost nothing anymore that cannot be done by you, usually online, at little or no cost. And 20k can be a lot more than 30k, if you have to factor in opportunity costs, lost income, student loans, etc.

The problem is, you, and so many others, have been so indoctrinated that you actually believe the drivel you have written here.

Tue, 04/15/2014 - 04:54 | 4659839 Quantum Darwinism
Quantum Darwinism's picture

The thing is... employers also are highly likely to be fully indoctrinated, likely have gone through college/university. and possibly took on debt to pay for their degree. This makes a lot of employers much more likely to employ the College graduate. Also, I'm not sure about the US, but here in Canada most Gov jobs REQUIRE at least a Bachelor's degree.

Basically, the Bachelor's degree has become the basic license to a decent non-deadend job. A High School diploma is pretty much meaningless. It doesn't really give one an advantage vs a high school dropout and employers (even if they write it in the job requirements) are unlikely to give much weight to a high school diploma let alone mention anything about it.

 

Tue, 04/15/2014 - 04:22 | 4659818 Aussiekiwi
Aussiekiwi's picture

If he has a decent trade, an electrician, plumber etc, he should come to Australia, I can't see him making less than 80k a year here in Australia, something to investigate if your a tradee.

Mon, 04/14/2014 - 23:42 | 4659536 Sizzurp
Sizzurp's picture

Don't worry, Yellen will just print the unversities a big bailout, and DC will raise taxes even more.  It's for our own good, and our "children's future."  

Mon, 04/14/2014 - 23:48 | 4659547 RaceToTheBottom
RaceToTheBottom's picture

It is a national asset, just like Wall Street banks.  There is nothing that gives a bureaucratic bankster a Woodie more than saving the national assets for future children. 

I hate their definition of a National asset.

 

Tue, 04/15/2014 - 00:29 | 4659613 dag
dag's picture

This is why ALL Chinese students are accepted - they pay full-tuition. They must also take extra English language course in order to partcipate in class discussions.

Tue, 04/15/2014 - 00:30 | 4659615 dag
dag's picture

This is why ALL Chinese students are accepted - they pay full-tuition. They must also take extra English language course in order to partcipate in class discussions.

Tue, 04/15/2014 - 01:22 | 4659677 Modulo 9
Modulo 9's picture

Seems to me that once banks were allowed to make ridiculous home mortgage loans, it spelled the beginning of the end for the residential real-estate market.

Similarly, when banks sucked the mortgage boda-bag dry they turned to the 3x larger market of potential college graduates, and began making no-thought-required, government-guaranteed loser-loans to every "student" who could fog a mirror. This spelled the beginning of the end for colleges and universities in America. Hard to resist taking one or four of these college-tuition-loans and coming out on the other side without a job and $100K in non-dischargeable debt. Colleges jumped all over this bandwagon and the bubble was on! Tuitions inflate to absorb the money available to buy them, and it's not possible to resist that tide. So, here we are with 3x more college-tuition debt than there is in the entire home mortgage industry, and higher-education is about to get schooled, big time.

And what's with Bloomberg spewing the same old shit -- "It’s been five years since the recession ended and yet their [colleges] finances are worsening. "Ain't no recession ended 'round heah!"

 

Tue, 04/15/2014 - 01:27 | 4659682 yogibear
yogibear's picture

Bring it on.

Look at how many syccessful people didn't finish or attend.

Bill Gates

Steve Jobs,

A whole list of others

 

Tue, 04/15/2014 - 04:19 | 4659816 Aussiekiwi
Aussiekiwi's picture

yes, but they are brilliant and talented, there is a difference.

Tue, 04/15/2014 - 06:14 | 4659879 Grouchy Marx
Grouchy Marx's picture

So, sending a dull, untalented individual to University will produce what? 

A dull, untalented person who thinks he is intelligent because he has been receiving highly inflated grades for four years.

Plus, a slave to debt.

And one indoctrinated with progressive, entitlement ideology.

Sounds like a winning program to me. Let's raise taxes so we can further support the faculty welfare system. 

Tue, 04/15/2014 - 08:17 | 4660031 IridiumRebel
IridiumRebel's picture

...and then they can go work for the government!

Tue, 04/15/2014 - 02:15 | 4659733 Quantum Nucleonics
Quantum Nucleonics's picture

Wouldn't that be about right?  Half the people graduating from college have worthless degrees.

Tue, 04/15/2014 - 02:19 | 4659735 James-Morrison
James-Morrison's picture

If you made it this far, to the end of comment section, then you know we are in deep doo-doo.

Not a single passing grade for any contribution to the comment section.

Lack of original thought.

Lack of insight.

Lack of understanding.

Sad, yet still poignant - really proves the thesis of the article.

Kind of like the Vietnam War memorial in DC-- a dark, bleak future.

Tue, 04/15/2014 - 03:02 | 4659764 livefreediefree
livefreediefree's picture

Yea, you nailed it, but great joy (some decades ago, being on top and the top of the world) amidst great joy (ie, pre-Progressive USA) is a wash, but very mild joy (manufactured pleasantness lasting 1/10 of a second) amidst omni-faceted dystopia (ie, right now) is brontosaurian orgasmic.

Tue, 04/15/2014 - 07:40 | 4659954 matrix2012
matrix2012's picture

@ James-Morrison

 

why don't you just write a "good" comment here based on your said criteria ? c'mon give us an example

Tue, 04/15/2014 - 02:22 | 4659738 Never One Roach
Never One Roach's picture

Moar Loans!

Tue, 04/15/2014 - 05:48 | 4659866 Calculus99
Calculus99's picture

It's a very simple equation if you're a parent of under 16s  and want some o the best free education for them -

https://www.khanacademy.org/

 

Tue, 04/15/2014 - 06:32 | 4659887 Comte d'herblay
Comte d'herblay's picture

Those who attend college and graduate, no matter their grades should move as close to the Swamp on the Potomac, as possible.

Better yet, take a summer or 4 and go there to find a job that will get you close to government office buildings and personnel,chat up the waitresses, and learn the ropes of getting a government job.

Do that and I guarantee you a future that will be the envy of all your peers, except those who work for a government contractor.

Because FEDERAL government is the most lucrative, highest growth industry in the world.  

And if you can, develop a larcenous frame of mind to exploit your new found success as a member, eventually,  of the 1%.

Follow the example of hrc, the Bamster, Gingrich, Pelosi, and other do-othings. Get an appointed post, rather than an elected one, and you can outlast even the 12 term members of the House. Security up the whazoo.

Where else can you simply exchange oxygen for carbon dioxide and become a millionaire, or greater?

Tue, 04/15/2014 - 06:48 | 4659891 Calculus99
Calculus99's picture

Yep, joining the Deep State is a great career move for many. And if your character is mendacious, you'll go far, deeper and deeper into the Deep State so to speak...

Tue, 04/15/2014 - 07:31 | 4659935 ZeroPoint
ZeroPoint's picture

The University of Phoenix is going to have to come up with a dollar menu.

Tue, 04/15/2014 - 08:06 | 4660006 esum
esum's picture

supply and demand works again

 

Tue, 04/15/2014 - 08:17 | 4660032 Atomizer
Atomizer's picture

Secure a basket weaving MBA degree. Become employed within the Federal Reserve, IMF, World Bank or United Nations Security council. BIS requires transgender tendencies. 

Tue, 04/15/2014 - 08:20 | 4660046 FreeNewEnergy
FreeNewEnergy's picture

Here in NY, there is so much empty office and building space on the SUNY campuses that our enlightened governor and his cronies developed the Start-Up New York program. From the website:

There’s a new advantage to doing business in New York. A big one. START-UP NY, Governor Cuomo’s groundbreaking initiative, is transforming communities across the state into tax-free sites for new and expanding businesses. Now, businesses can operate 100% tax-free for 10 years. No income tax, business, corporate, state or local taxes, sales and property taxes, or franchise fees.

 

Start-Up New York will be funded by taxpayers, to support leeches and cheats who will pay no taxes for ten years. It's a desperate plan for a desperate state. Only in NY. Best part is that it's a massive failure, already.

Tue, 04/15/2014 - 08:21 | 4660053 Rising Sun
Rising Sun's picture

Healthcare, education and social services - the three make-work industries of the new millenium

 

what a way to get rolling for the next 100 years

 

Such a fucking shit show going on out there - corporate education is no better - you need a fucking certification to wipe yourself after you take a shit in the office sandbox.

Tue, 04/15/2014 - 08:23 | 4660059 Che Guevara is Dead
Che Guevara is Dead's picture

Out of curiousity I calculated the cost of a 50 minute class at my alma mater, a large state school in the People's Republic of California. It came to ~$100. That's a lot of money to be lectured at by inexperienced TAs and incompetent assistant profs with 0 life experience in the real world.

Tue, 04/15/2014 - 08:46 | 4660161 Pumpkin
Pumpkin's picture

Well, I knew the Harvard endowment was HUGE!  But, the professor is correct, they are burning money like no tomorrow.

 

Harvard University, the college with the largest endowment in the country, saw its numbers drop from $32 billion at the end of fiscal year 2011 to $30 billion at the end of fiscal year 2012, according to data reported to U.S. News in an annual survey.

 

I guess they have to get it whiles the gettins good.

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