What The $1+ Trillion Student Debt Bubble Is Being Spent On

Tyler Durden's picture

By now everyone knows there is an unprecedented student debt bubble, amounting to well over $1 trillion and rising at a rate of nearly $200 billion per year. However, what is far less known, is what all these hundreds of billions in government loan proceeds are being spent on. The following two charts should shed some light on this all important matter just how Government money goes from Point A to Point B, using indebted to the hilt students as a pass-thru.

First, the change in the number of higher education employees since the mid-1970s, broken down by job category. One can almost see why preserving the status quo of the Keynesian religion is the lifetime goal of most professors.

And then, the change in average salaries across the higher education spectrum. It would appear the only thing Krugman would want more than being a tenured op-ed writer, pardon professor, is CEO of a private college.

Source: American Association Of University Professors, Losing Focus: The Annual Report on the Economic Status of the Profession, 2013-14

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NidStyles's picture

"Teachers and their spouses driving 'paid for', new BMW's."

 

FTFY

TeamDepends's picture

Our tenure package stipulates that, should we become disillusioned with our BMW, while at the same time a teabagger gains control of congress, we can, at no danger to us or our progeny, bail to Quito, Ecuador to become surf-bums, on your dime.

philipat's picture

Of course, this only applies to the (small) portion of the total which actually gets spent on education............Stdent loans are the only type of credit available to many, and the show must go on. Until it doesn't.

philipat's picture

Beyond which, education must be the only industry which has not effectively adopted new technology. Attending lectures is a totally unnecessary waste of time, for instance. Of course, those resisting change are the same tenured folks who are benefitting from the Gubmin largesse. Same old same old...

gh0atrider's picture

For a good arb opportunity, gh0atrider would recommend taking out several student loans and instead put all that money into Bitcoin.

cifo's picture

Not only BMW, but M5. And I am talking about my neighbours, both teachers in late 30s. Fucking amazing nonetheless.

TBT or not TBT's picture

Lotsa Obama- Biden stickers in the employee parking lots of central government subsidized universities eh?    Very statist messages and messengers dominant among their ranks.   Weirdly, loans to students to support subsidize these vote and voter generating institutions are readily available.   

CheapBastard's picture

The article forgets to mention the Backbone of Merika past time and the power drive of our future generations; college Football coaches:

 

U. Texas to pay $9.375 million for [coach] Charlie Strong in 2014

 

http://www.usatoday.com/story/sports/ncaaf/2014/01/13/charlie-strong-con...

 

"Impotent things be impotent!"

 

 

 

 

eclectic syncretist's picture

Higher education in the US?  Too many chiefs and not enough indians.  Fix that problem and the situation will improve vastly.

brown_hornet's picture

Texas football program makes profits. BIG profits. Pays for women's lacrosse scholarships.

vie's picture

Imagine if students had done that instead of going to school...

Hobo Sapien's picture

In the 80's, a roomate would get his student loan, fly to Hawaii, came back and double his money, putting the principle back into a savings account. He called them govt sponsored small business loans.

Voicefather's picture

It is foolish to think you can teach science, math and technical courses online. I've been able to mix in a lot of online assignments and videos for my classes, but some concepts just require you to be there face-to-face to teach.

 

o2sd's picture

Americans still study science and math?

economics9698's picture

Some do and when they graduate with their chemical engineering degree they look for work for a year and then get a job paying $40,000.  

Nexus789's picture

Doing a job that does not relate to their degree or does not need a degree.

tempo's picture

Co. will offer most engineering jobs to India grads w/o visas at 1/2 the going rate. Will not interview those w visas. 90% of summer jobs at mega tech co in silicone valley go to well educated foreigners w/o visas. According to Sr in Computer Engineering at major University Its a myth good jobs available for most engineering grads, only the top grads get jobs.

Postal's picture

Big Tech wants thousands of graduates so they can pick the "best": the top 5% or so.

o2sd's picture

I guess if you do maths and excel at it there is always a chance you will be tapped by a Wall Street bank as a quant or a HFT programmer.

Hobo Sapien's picture

You're right, see Professor Doom's blog - but it might be more correct to say that you can't get a job with an online degree, unless it's in a field where cheating, corruption, and bullshit are valued qualifications - like University Administrator.

August's picture

I've been on both the giving and receiving ends of university lecturing in the USA system.  Unless the lecturer is a very talented presenter (and few are), lectures waste an awful lot of time which could be better spent by the students in self-organized small groups, or just working on their own. 

Unless, of course, a student isn't actually interested in learning the material, in which case he should just drop the fuck out of my course.

cchoo's picture

"Unless, of course, a student isn't actually interested in learning the material, in which case he should just drop the fuck out of my course."

Why do you assume the uninterested student is a "he"? Women can just as easily be uninterested in your course too.. 

And from my experience, the first 2-3 years of school were made up of mandatory "core" classes, and all of it was uninteresting until you get to the 400+ level courses. Don't blame your students for what your curriculum caused.

RaceToTheBottom's picture

The term "Creative Destruction"  was made for the education industry

rtalcott's picture

Nonsense...I don't think it's easy but it can be done and a nice compromise would be some "real" interaction but that can be done over the Internet also.

Postal's picture

Having racked up (heh, rack) over 300 credit hrs over the decades, I much prefer traditional, face-to-face lecture. The social aspect is part of it--and getting to see cute, little coeds in micromini skirts.

But my biggest frustratioin with online courses is that the instructors didn't seem to actually do anything: Just slap their lecture notes on PowerPoint and say, "Here. Email with questions." Granted, that's not the fault of technology, but technology has to be used correctly if it's going to be effective.

NidStyles's picture

Shitty professors are going to give shitty lectures no matter the medium.

 

The only argument for wasting my time forcing me to attend in person lectures is a lousy one that doesn't stop shitty professors from being shitty professors.

mr_gandhi's picture

Education has adopted new technology, content is routinely available online for lecture-based courses.  there are two key benefits of lectures that technology can't replace - the feeling that you are part of a community of fellow students, and listening to a real person teach you stuff.  obviously this depends on the lecturer being good at what he or she does.  watching youtube videos just isn't the same thing. our techological bandwidth for delivering 'educational content' may have increased exponentially in the last 20 years, but the capacity of our brains to assimilate it has not.  a good/great lecturer can motivate students to learn in a way that technology cannot.

the article nails it - the problem is bloated administration.   

overmedicatedundersexed's picture

having been on both sides of the lecturn-higher education out side of hard science and medicine is really an expensive hobby, and a luxury we pay for ..pay much too much for. what else would you call "woman's study" ? or all the other useless degrees in social - liberal arts?

RaceToTheBottom's picture

We are at the same place where companies that required knowledge workers to be onsite were 10 or so years ago.

 

Now teams do SKYPE calls every day and workers work from home.

 

The solution then was the same as now:  If you cannot define what needs to be done to the level that it can be done remotely and manage the deliverables, you don't know what you are doing.

 

Same thing with education.

libertus's picture

Cheap credit has blown another bubble in higher ed. In the coming years, when the interest rates go much higher lots of universities and colleges will crumble and close. That means there will be tons of unemployed faculty. Will they create new institutions or revolutions?

Education benefits all of society, but not the kind of education that creates debt and only enriches a very insular elite. Check out oplerno.com and build something very different. 

meghaljani's picture

This argument is wrong. According to Ben Bernanke, you are not going to see higher interest rates in your lifetime. 

overmedicatedundersexed's picture

where are the mock trials the outraged professors marching on washington DC?? they sit silent and take the kings silver, they make a mockery of truth.. look at the history depts, law schools, look at economic depts, silent to the things ZH points out daily, may they all burn in hell.

Bendromeda Strain's picture

       According to Ben Bernanke, you are not going to see higher interest rates in your lifetime.

Incorrect - he said he doesn't expect to see them in HIS lifetime... length to be determined.

SilverDOG's picture

Was just @ Quito.

Elevation 9350 feet.

No surf bums there.

Did not see a single skate rat.

But of course for those who believe in there tenure package value and legal parameters...

SURFS UP ..dude.

babylon15's picture

two elementary school teachers live next door to me.  $95k salary each.  one drives a bmw, the other drives an infiniti.

 

elementary school.

 

guess what state I live in?

ENTP's picture

Sounds like Illinois. 

ObamaDepression's picture

Sounds like San Francisco.

If they were Muni bus drivers they'd make $101K per year.

SF beatnik's picture

What a horrible job, MUNI bus driver.   Have you ever ridden the MUNI?

 

I prefer to pay him than to pay anyone (other than the janitors) within our fucked system of higher ed. 

philipat's picture

SF has become a State? I thought it was still justs a state of mind.....

RafterManFMJ's picture

LOL

That guy's qualified to be president.

Larry Dallas's picture

Long Island!

(Probably somewhere like Brentwood or Wyndanch where it is "more challenging to teach all brown people" as justification for higher salaries so they can fish all summer...)