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The Problem Isn't Student Loans - It's Higher Education
Submitted by Charles Hugh-Smith of ofTwoMinds blog,
Forgiving skyrocketing student debt won't solve the real problem, which is the soaring costs imposed by a cartel that is failing to prepare students for the economy of tomorrow.
Everyone understands soaring student debt is a problem: burdened with $1.3 trillion in student loans, young people are unable to start businesses, buy homes and start families. The high cost of housing and meeting regulations to launch businesses add additional burdens, but the weight of $1.3 trillion in debt right out of the starting gate is crushing.
The "solution" being pursued by the federal government is obvious: take over most of the student debt and then eventually bury it in the zombie-loan graveyard (i.e. defaults are ignored but the debt isn't officially written off), write it down via forgiveness programs, or some other mechanism to reduce the burden.
If this wasn't the plan, then why has federal ownership of student loan debt skyrocketed from zero to $900 million in a few short years?
This is a decades-old problem that's finally reaching critical mass: student debt has leaped from less than $500 billion in 2006 to $1.3 trillion today, a mere 9 years later:
The problem isn't student loans--it's the explosive rise in the costs of higher education. This chart depicts the exponential rise of higher education costs:
Apologists claim the student-loan crisis is the result of underfunding of colleges by states. While it's true that some of the cost burden has been shifted from taxpayers to students, the real problem is soaring costs of the higher education cartel, which fixes prices via the artifical scarcity of accreditation.
The extraordinary rise in administrative staffing and costs and the boom in building costly temples of higher education are well-known. This chart depicts the rise of the educrat class, at the expense of teachers/professors:
I cover the rise in costs and the the equally extraordinary failure of the higher education cartel to prepare students for work in the emerging economy in my book The Nearly Free University and the Emerging Economy: The Revolution in Higher Education.
So the problem is two-fold: it isn't just the insane cost of higher education that's the issue; the cartel is failing to prepare students for an economy that requires the 8 essential skills in addition to whatever technical skills are needed in a particular field.
Consider the study Academically Adrift: Limited Learning on College Campuses which concluded that "American higher education is characterized by limited or no learning for a large proportion of students."
New Analysis Shows Problematic Boom In Higher Ed Administrators:
In all, from 1987 until 2011-12--the most recent academic year for which comparable figures are available—universities and colleges collectively added 517,636 administrators and professional employees, according to the analysis by the New England Center for Investigative Reporting.
“There’s just a mind-boggling amount of money per student that’s being spent on administration,” said Andrew Gillen, a senior researcher at the institutes. “It raises a question of priorities.”
The ratio of nonacademic employees to faculty has also doubled. There are now two nonacademic employees at public and two and a half at private universities and colleges for every one full-time, tenure-track member of the faculty.
The number of employees in central system offices has increased six-fold since 1987, and the number of administrators in them by a factor of more than 34.
Paying a bloated institution for the privilege of sitting through four years of lectures, online courses and a few labs no longer makes sense for the vast majority of students. What makes sense is dispensing with the entire bureaucracy of the cartel and costly campuses altogether, and designing directed apprenticeships which combine the best of online coursework with on-the-job training in workplaces.
The top research universities (numbering around 125 out of thousands of colleges and universities) can continue to train the relatively small cadre of academics and researchers the economy can support. (Just issuing STEM (science, technology, engineering, math) degrees doesn't magically create jobs for the graduates.)
The vast majority of student are better served by mastering the 8 essential skills required in the emerging economy--skills that students can acquire on their own, a process of accrediting yourself that I address in detail in Get a Job, Build a Real Career and Defy a Bewildering Economy.
Forgiving skyrocketing student debt won't solve the real problem which is the soaring costs imposed by a cartel that is failing to prepare students for the economy of tomorrow.
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See resumes with 1 job per year over 7 years. Musical chairs. Many part-timers.
Millennials should be much more concerned with high asset prices rather than high education prices as shown in the this asset price index.
Don't you think it would be more appropriate to say that they should be concerned about both? Or are you just shilling this other website?
When they give the same loan to each applicant regardless of the marketability (employment potential) for the type of degree sought.
When they give car loans to all applicants regardless of the borrower's ability to pay.
When they gave home loans to all applicant regardless of the applicant's ability to pay the loan payments.
When they continued to increase the credit lines on revolving debt and saw balances rising at alarming rates regardless of the borrower's ability to pay.
A pattern?
Only 70% of students even graduate with student debt and of those with student debt the average is only 28k. Not very much compared to what the oldest of millennial should have amassed in their primary residence, pension funds, 401ks, and other assets. You would think that education costs were all millennial are worried about, and that's probably often the case, mainly because the thats all the media talks about, but if a young person actually looks at what their main expenditures are, asset prices SHOULD be much more of a concern. Say in the first 10 years of a career, you buy a 150k house, and put 180k into retirements accounts, in most cases you have already dwarfed education costs. Yes there was a bit of shilling going on but its a valid relevant point.
"Say in the first 10 years of a career, you buy a 150k house"
That's part of the fuking problem mate. They do't have funds to buy a house. They have too much debt. This will eventually impact us all. the more guaranteed loans and subsidies that are offered, the higher the tuition will go. You can't get a decent job without a degree these days. They know they have you by the short hairs.
These "institutions of higher learning" are blood sucking leechs. Glad to finally see them demonized.
Just like the housing industry, higher education institutions are just reaping the benefits from government intervention. Low interest rates and tax deductible interest for housing and low interest rates and guaranteed loans for education. It is the govt intervention not the private sector reaction that is to distortion, pain for consumers, and blame in general.
People swimming in debt are obedient, frightened and muted.
Let's stay on point here, this is understood by our rulers, savvy?
Inded, and there you have it! Debt is slavery! Anyoen saying different is a liar, or a loan officer.
But higher education is the only aspect of society that is accurately reflecting what inflation should be with all of the financial money creation...
As long as prospective employers use a college degree as a requirement for management/professional positions, people will continue to pay to get one. And as long as colleges and universities are seen in terms of "prestige" or having "a good program", people will pay even more to get a degree from the one's considered better in some way.
For the most part college in the US is not about education; it's about getting the degree.
And that essentially hits the nail. The problem isn't higher education, it's employment criteria distortion through anti-discrimination acts.
Repeal the laws/judgements that restricted employers from discriminating job seekers with entry-testing and all of this goes away.
Wouldn't you rather just be able to pass a written/verbal test to get into a company, rather than have to get a degree? Civil Rights lawyers thought differently decades ago, considered it racial discrimination, and here we are...
Right, and the "credentialization" problem is largely driven by what? Yup, big gov, big giz, and the media. They are the ones that demand a PhD for a fucking gym manager!!!! The "Wellness Center" read gym at the local Liberal Arts University has a PhD "director" and a Masters Deputy Dawg two secretaries and a raft of student helpers. Unsubsidized memberships there would be at least $1500.00/yr if the general public were allowed to see the inside of the palace!!!
;-D
Gym Arts really does have a PhD program. Look at a course catalog from any University. The classes are mind blowing. Reading like a wish list for 18 year old girls! Dance, Theater Arts, Film, Popular Music, Art History, Women's Studies, Women's History, Black History, Ceramics, Weaving, Females in Literature on and on! Universities see students as customers. Come here and we will give you four years of fun stuff. Parents, cough up the money!
Hey Jack,
Let me be clear on this: If that odious little prick every gets on my case about anything, the first words out of my mouth are going to be, "OK fine, why don't you let me take a look at your latest scholarly work."
It's time for some push back,,,
;-D
We have a winner. College education is not worth the price they are charging for it. You're paying for a Lamgoghini and getting a 1979 Fiat in return. I don't understand why academia hasn't been over thrown.
Credentialism via the univeristy system is an utter failure. That degree is not an indicator of performace or ability. All it is is an expensive hoop to jump through. The current university system is just a rent-seeker scam.
Edit: It isn't just a rent seeker scam, it is also the playground for the progtards and social justice warrior's to try out their latest PC mind and body control BULLSHIT.
US is #1 in spending on education. Piss poor ROI
easy loans mean lots of $$ chasing those degrees. price goes up.
When the dust finally settles on this powder keg of an economy, abilities - not certificates, will be the ultimate arbiter of employment, at least outside the standard professions that require formal education are concerned.
I get resumes from college grads that would shock a lot of you. People actually write in that texting language, don't want to start before 8:30AM, no weekends and no overtime. Many people only want 30 hours, think 40 hours is too stressful. A nation of cunts
Future Americans will be Trans and Gays. Nation of Pussies
It already is a nation of pussies .... or at least our leaders are a bunch of pussies
Parents are getting dumber. Is it the inbreeding that is taking place or GMO?
I'm the voice in the wilderness in my workplace. The entire system is set up to pump, pump, PUMP (pimp?) higher education. Nothing else is ever discussed, despite leadership's exhortation to faculty that "we need to start discussing other options."
Dropout rate remains HIGH. Unemployment and underemployment for graduates remains HIGH. Student debt levels for both dropouts and grads remain SKY HIGH. Actual value of a college degree is, in real terms, LOW and heading lower.
The ONLY people I see benefiting from the COLLEGECOLLGECOLLEGE mantra are the vendors, chiefly LENDERS.
I'm not a righteous guy by any yardstick but man, NO ONE seems to have a CONSCIENCE about what we're doing to - and not doing for - young adults in this country.
It makes me feel very ill.
It'll probably turn out the most relevant education this generation gets is on a game console...
How many zombies can you blow up before game end?
They are highly educated for cannon fodder.
They are UN agenda driven and dont care how anybody feels about it. Staggering charts are getting old when there is no mitigation action. The opposite.
They got their educations in how to get where we are going. O with a harvarD education on the constitution, lolol. Must have slept thru it. It is getting harder to listen to, discuss, or analyze those pushing the agenda. Waking up is an amazing slap in the face that keeps on coming as the mask is off and many people still dont get it.
Ignatius nailed it. Get you buried in debt on a watered down degree.
Plan is to put you in a 200 sq foot home(shit you not, kasita.com) that you can transport. stack and pack without a car. Your life will be in a 1 sq mi. area. Thats the dream anyway. Its full tilt if one cares to look at it. I dont know about your city, but those stack and pack apts/condos are literally everywhere. Towns w/in the city.
Everyone should be aware of the UN agenda, it answers all of the headscratcher issues.
Not sure what happens to China, who is given a complete pass! on the agenda, when we are relegated to the dust bin of history.
Can we get a Masters degree in LGBT studies?
I get very jewish talking about forgiveness, debt or otherwise. IE
1. acknowledge the harm done for what you're asking forgiveness TO THE ONE HARMED
2. commit to desist this activity henceforth
3. offer restitution for the harm done equivalent, or better still, a bit more than the harm caused
4. If restitution proves difficult, ie the party moved away, passed on
whatever, do some other GOOD.
paraphrased from my jewish father's but u get the picture i hope
peaceful w/e ZHer's
Assisted living
Student loans are a subsidy.
All subsidized industries have artificial customers who would not be present but for the subsidy, artificial cost structures, and suffer from declining quality...because quality does not drive the subsidies, and lack of quality does.
Catels enjoy government enforced pricing, and government imposed barriers to entry. Cartels become divorced from their customer base because the cartel enforcer is more important to the bottom line than customer satisfaction...and because cartelization effectively eliminates all competition, as everyone must conform to the cartel rules.
Higher education is both a cartel, and a subsidized industry.
How could anyone have expected a different outcome?
So,
Sorry CHS.
I disagree. University cost structures are not the problem. They are the symptom.
The subsidies and the cartelization are the problem. Without them, the symptoms you noted would not be possible.
You are spot on, sir.
In simpler terms, with an endless stream of government money funnelled through the borrowers (students in this case), colleges have no incentive to lower tuition rates to attract new "buyers". In fact, there is absolutely nothing stopping them from jacking up their tuition, knowing full well a new crop of eager "buyers" will arrive each year, and will be more than willing to borrow whatever it takes to walk their gilded halls.
I usually don't expect much from a writer who can't pick between two last names, but this guy couldn't be more off base with his assessment. He's confusing the symptom for the cause. Sort of like confusing addiction for the existence of heroin.
Are you getting this Mr. Charles Hugh-Smith?
<EDIT: Deleted>
Higher education only generated alpha when it was scarce. When everyone received it alpha started being generated by something else.
To make matters worse, higher education has also become fragile at the same time, further decreasing any alpha it can generate.
How can college prepare students for a career when they aren't supposed to teach them to lie, cheat and steal?
Today they teach them how to be obedient, system following, redistribution supporting pussies
So, you spent a lot of money learning useless things at school and buying textbooks? How about you buy my book where I tell you how wrong you were. Oh, and stop spending money on books and get a real job! Want to know how? Buy my other book!
Getting a third party with a printing press to finance the whole thing is a bitch.
Theft at multiple levels
How many kinds of theft, economic theft are there?
- Theft of Brains, propaganda, omitted facts, false history
- Theft of Economic Opportunity through false statistics, uncollected data, blanket terms like inflation, COLA, GDP, Unemployment
- Theft through overpriced Tuition
- Theft through overpriced housing
- Theft of Usury, Student, Auto, Home, loans
- Theft of Insurance
- Theft of Liability
- Theft of Health Care which is both poor quality & expensive, but also causes bankruptcy and debt
- Theft of Labor, wealth extraction, taxes
- Theft of Government, US Constitution, Justice, US Congress
- Theft of Bread Winner Jobs, Export of Jobs, Anglo, Economic Trade Model, Anti-Trust, Corporate Model
Education can steal in many ways
Universities should just file for IPO then, will solve all the problems.
$1.3 trillion? A pittance. Just have the Fed absorb the loans into its balance sheet.
In time and as needed. That is the new kind of fairness. Defray it to the super rich.
911 truthers needed on this comment section STAT. http://www.dailymail.co.uk/news/article-3276186/Trump-blames-George-W-Bu...
Donald Trump says it on Bloomberg - Buck stops with GWB. Counterpoints are coming off out from under rocks and I believe the 911 souls are stirring at the attempt to defend their real murderers. Help if you feel inclined. It's our chance.
Have taught engineering 30+ years at one of the best public research universities in the US. A professor's time goes into teaching, research, administration, and professional and community service, presumably with teaching and research activities dominant. By the way, research has a component of teaching, since students learn the discipline doing research work. Service work includes professional advice to industry, government, and individuals (one gets many e-mail and phone call questions) and work in professional societies. Some faculty administration activities are necessary, such as registering and advising students.
I have watched administration and bureaucracy grow precipitously during the past 20 years. Some of it is due to the many (UNNECESSARY) government forms that BY LAW and regulations must be filled out and submitted to government agencies. Filling out these forms have created a lot of jobs in university bureaucracies, but the forms are non essential to education, wastes time, and increases costs. Another component of increased administration is when new upcoming academic officials want to move up in the system. They "innovate" new programs to have saucy items on their resumes to justify promotion, but usually delegate the extra administrative work to the teaching faculty. This eats my time. A few years ago a claim publicly arised that research diverts professors from teaching, which short shrifts students. This didn't seem to jive with my personal experiences. I never seemed to have enough time for either teaching or research. One semester I carefully recorded where my time actually went, and found: teaching 25-30%, research 25-30%, adminstration 40-50%. Hidden, and often unnecessary administration was the biggest consumer of my time, and I am/was not an administrator.
Study The paper: There is no energy crisis, by Tom Bearden, and you will learn electrical engineers are not taught clean energy solutions that could save humanity. Also, Study Keshe Plasma generator.
Liberal Arts and Gender Studies are destroying the fabric of society.
A friend of mine went to Washington University(~$20k/year). One of the required classes is a gender studies class. To pass the class he had to go to the mall and purchase a purse, then carry it for a period of time(can't remember how long.)
Load of crap.
First, at least half the problem with student loans is with the for-profits which operate as large-scale cons, conning the feds out of student loan money, often for subjects and at quality levels that should barely count anyway even if the student is real and actually attends classes.
Second, the problem is with the ECONOMY people, if the economy were anything like normal then most of this college education would be appreciated and utilized. If the economy collapses, then 99.9% of PhDs will just starve to death, but it's not really the university's fault.
Third, yeah, the price of a university education has soared absurdly over the past fifty years, from about 1/4 of an average US household income to about 5/4 of an average household income. Meanwhile public universities like California are no longer funded as well by the state, that has to use the money to feed and jail illegal aliens, and pay $200,000/year pensions to retired civil service workers.
Agreed. Trying to generalize about "student loans" without looking at the con-job the for-profit schools have done against the government is bullcrap.
All schools are for-profit.
"...public universities like California are no longer funded as well by the state, that has to use the money to feed and jail illegal aliens, and pay $200,000/year pensions to retired civil service workers."
Hence the ENORMOUS spike in foreign student enrollment, due to the present funding model. Very lucrative.
No one ever asks, however, how many of "the brightest" have ID cards from the Chinese PLAN.
This newfangled invention called "television" could go a long way towards solving this college edumacation problem. Students could watch lectures from any university in the world, say Harvard, and then take the tests proctored locally by cost effective faculty. If they had questions, the local faculty could facilitate.
This would all be almost free compared to what we have now. People could use the public library for classes, ancillary lectures, and test taking. Or the local community center, or virtually any building that is underutilized in towns these days.
Of course, that would eliminate the gravy train for all "administrators" everywhere. So forget it. Some things are just too important to improve.
Have run into many young folks who saw student loans as employment. And it looks like they will end up getting all that dough for free.
When the Fed prints trillions to keep criminals in power, who cares about this welfare program? Cut it off at your own risk.
The higher cost for Marxism indoctrination. Another two decade investment.
Dead Can Dance - Indoctrination (A Design For Living) - YouTube
It is absolutely true. The core of the problem is education system itself. One of the major fact that is being ignored in the debate is that the state of K-12 education system is appalling, producing illiterate graduates, 99% of them do not have capabilities to enter any type of collage if educational standards from 1950-ties were maintained. But they are atill admitted because of the money alone.
In the fact, student loans allowed the mediocrity to enter US universities and graduate "cum laude". All of it was not for poor but talented as propaganda maintained. As a matter of fact the poor students admitted nowadays to top universities are most talented and brightest from all students, most of them are on full scholarships. The majority of dumbest are children of former middle classmen those who are loaded with debt and parents ambitions.
But there is even bigger picture and a question begging to be ask; What the educational system is really for:
https://contrarianopinion.wordpress.com/2015/03/19/education-blessings-o...
Can I suggest a couple of reforms help?
Shrink the pool that gets federal money
End permanent debt slavery
The top 3 items are desperately needed, right now.
Assign the funds to the student, not the school. Allow student to shop for best deal.
Right now schools get pools of money based on headcounts, and they dole out what they wish. Take that away from them.
Art degrees with a 98% failure in placement from the halls of education.. Yes, just placement, not even a real job.. fantasy degrees. Degrees provided by the want, not the need, or is Star Bucks an 'art(ful) job?
What are the consequences of .guv subsidy, again? Proggie responses only, please, because these oil tongued idiots have apparently not witnessed what happens at an ice cream stand in the heat of mid-summer when they offer free ice cream. And if they have, have obviously not made the psychotic connection.
'
'
' In 5 years, automation, 3D printing, autonomous vehicles, VR & AVR will decimate most of the employment fields.
Accounting and finance, logistics and transportation, teaching, manufacturing… All are going to be wiped out.
And no, we're not going to be all repairing robots or writing code. And definitely not make hanging macrame lion art, to supplement our incomes. I won't buy yours either.
Deflation will stalk the land, as by 2020 it will become apparent that our governments are broke, as are the social programs.
Nobody is talking about this.
For good reason, too.
•?•
V-V
In principle yes, maybe not timing, and the endgame will be very close to Huxley's dystopia. Quite honestly, what else could the PTB do with this scenario when scitech appears to make even Free Shit Inc. a going concern?
"Accounting and finance, logistics and transportation, teaching, manufacturing… All are going to be wiped out."
Nonsense. In theory yes, in practice not a chance. Because governance structures, business processes, legacy IT applications and 'politics' in the widest meaning of the term will delay that outcome which won't be fully realised for decades.