Article on the "Student Loan Racket"

[ks-sunflower]

Something to think about.

http://kansas.watchdog.org/7834/student-loan-racket-enables-higher-educatio-bubble/

[Serenade]

Interesting stuff.

 

I don't like the current loan system, nor the emphasis on pushing every student into college, regardless of whether they are truly qualified.

[creekland]

Interesting article. I know around here not every student is pushed toward college, but the two main "problems" I see (besides a poor foundation to enter college) are:

 

1) Those two year for profit schools like Art and Culinary Institutes. They charge exorbitant amounts of money and there are VERY few high paying jobs to be had in those fields. It doesn't surprise me that 40% enter default.

 

2) The common belief that is taught in our schools that goes something to the effect of "everybody is equal" or "everybody wins." Students can put forth minimum effort and learn the minimum amount needed to pass and assume they get the same "rewards" as the "worker" who puts forth a lot of effort. In school they do. They pass. In college they may graduate (sometimes - but not always - from a lower level school at that), then they wonder why no one wants to employ them in a high paying job. After all, "my degree is just as good as the next person's." Um, maybe not in a competitive world. When there are 4 or 40 or 400 applicants for a job, "just" having the degree means nothing.

 

When it talks about a grad having 20K in debt and a $293 monthly payment, that's not at all a bad investment for many fields. ;) I know our life would have been far different had hubby not "invested" in becoming an Engineer. I'm grateful that he did. I went to school mostly debt free (had 2K in loans when I graduated). I don't regret that either.

 

My advice is to always know your student, know your major, know your likely job prospects, figure out the best college for the money (figuring in job prospects from that college), and decide what is best. There is no single right answer that works for all.

Edited October 18, 2011 by creekland

[Hedgehog]

That's really interesting. You can see it happening over here in the UK, too.

[Sebastian (a lady)]

I may have to print this out for my kid who's taking a graphic design class. Quite the flow chart there.

 

One of the issues that I'm having with college these days is that there doesn't seem to be a consensus on what the purpose of college is. Is it to get the skills you need to enter a profession? Is it to explore great thoughts and participate in the "Great Conversation"? Is it to transform onself into an adult with his own opinions and perspectives on life? Is it to credential people as trainable and able to show up to work on time?

 

It seems to me that there may be better ways of achieving some of these goals. And even that some (prominent and expensive) colleges and universities may even have a negative impact on the thinking and knowledge their students have.

 

I'm not sure that I'm particularly willing to go into hock to help my kids transform or learn to get out of bed and to class on time. And the cost of a college degree will buy a whole lot of books to self study. (Maybe we need to revive great books reading groups?) And that is assuming that the college in question would just tell them that any given "classic" is really just an extention of some -ism and as such is fodder for the dust bin.

 

Sometimes I feel like I'm turning into a curmudgeon. I just feel like many colleges are peddling the academic equivalent of Coke and Doritos with a side of Ding Dongs and calling it an academic feast, while charging five star prices. I'm not at all a college skeptic (dh and I both hold graduate degrees and really value education). I'm just not sure that many students are getting an eduation that is worth the gold plated prices.

 

Sigh.

[Jane in NC]

What an amazing flow chart! I regularly get on a soapbox about for-profit colleges and their less than ethical sales tactics. Notice that the stats on the chart regarding the 40% default rate among students attending for-profits comes from those entering repayment in 2007--before the economic downturn drove even more students into these "convenient" post secondary degree paths.

[creekland]

What an amazing flow chart! I regularly get on a soapbox about for-profit colleges and their less than ethical sales tactics. Notice that the stats on the chart regarding the 40% default rate among students attending for-profits comes from those entering repayment in 2007--before the economic downturn drove even more students into these "convenient" post secondary degree paths.

 

I always cringe when I hear students from our school heading that route. I sat in on one of the Art Institute spiels (to a low level class of graduating seniors - our low level classes have 8th grade materials). Not once did the lady talk about cost except to say that students could get loans if they needed help with the cost. The whole spiel was snazzy - showing off the best of the best from students across the country with only an occasional example pointed out as "a" student from the local branch. I felt like they were highlighting lottery winners. They had no "percentage" placement data either.

 

I wish our school didn't have to let them in, but we're a public school and anyone who has a "viable path" has access to our students.

[regentrude]

One of the issues that I'm having with college these days is that there doesn't seem to be a consensus on what the purpose of college is. Is it to get the skills you need to enter a profession? Is it to explore great thoughts and participate in the "Great Conversation"? Is it to transform onself into an adult with his own opinions and perspectives on life? Is it to credential people as trainable and able to show up to work on time?

 

There are different schools and different degree programs to satisfy ALL these goals. A student attending our university and majoring in electrical engineering will acquire the skills that enable him to enter his profession. He would not be able to acquire them by solely self-studying form books. Looking at the MEDIAN starting salary of our graduates of 59k, his tuition would be a sound investment.

Another student may attend a liberal arts college as a French literature major with the goal of exploring great thoughts and participating in great conversations; he will emerge with an enriched mind (and a knowledge of French literature). From what I see of recent humanities graduates in our circle of acquaintances, this may not in all cases translate into a marketable job skill set. He may or may not end up considering his investment worth it, depending on his values and goals.

Still other programs are directly focused on acquiring a narrowly defined practical skill set, resulting in a certification that guarantees the graduate has mastered this specific skill and that has direct impact on the graduate's job, often making him eligible for promotion in his field which would not be possible without the degree.

In practice, there is a mix of all these forms (for instance, engineering students take humanities and language classes as well and have to read books)

I think every single student must decide for himself what he wants to get out of college, and how much this goal is worth to him.

 

It seems to me that there may be better ways of achieving some of these goals. And even that some (prominent and expensive) colleges and universities may even have a negative impact on the thinking and knowledge their students have.

Agreed, on "some". You don't need college to become a responsible adult, to get out of bed, to stay focused on a task. You may not even need college to be exposed to different thoughts.

You do, however, need college if you wish to enter certain job fields. It is not possible to become an engineer or scientist or physician from reading books at home.

[regentrude]

What an amazing flow chart! I regularly get on a soapbox about for-profit colleges and their less than ethical sales tactics. Notice that the stats on the chart regarding the 40% default rate among students attending for-profits comes from those entering repayment in 2007--before the economic downturn drove even more students into these "convenient" post secondary degree paths.

 

What I do not get is: why are students attracted to the non-profits?

There was an article in our paper just this weekend, citing an example of a certification which costs 14k at a non-profit that is available for $500 at community colleges.

Why do students not research the cost before applying to these schools? Why don't they choose to attend a not-for-profit school?

Clearly, as much as one can despise their sales pitches, doesn't the main fault lie with the students who choose these schools over more sensible options?

[Jane in NC]

What I do not get is: why are students attracted to the non-profits?

There was an article in our paper just this weekend, citing an example of a certification which costs 14k at a non-profit that is available for $500 at community colleges.

Why do students not research the cost before applying to these schools? Why don't they choose to attend a not-for-profit school?

Clearly, as much as one can despise their sales pitches, doesn't the main fault lie with the students who choose these schools over more sensible options?

 

The online for profits sell themselves on convenience. Earn a degree at home. Apply for Pells.

 

There was a recent story on how the for profits are preying on military personnel. Perhaps the virtual degree appeals to someone who may not be fixed to a geographic area.

 

I read an article in the past year that suggested reality television was contributing to the rise of for profit culinary schools. As Creekland noted, a sous chef often does not earn enough to pay back his loans!

 

Yes, consumers are at fault for agreeing to these overpriced and often inadequate programs. (Many students find that their for profit issued degree is not equivalent to a not-for-profit school's degree. There was the case of the online nursing degree with no real lab or hands on work!?!?) I sometimes wonder if people who do not have a family background of post-secondary education are simply hoodwinked.

[creekland]

Clearly, as much as one can despise their sales pitches, doesn't the main fault lie with the students who choose these schools over more sensible options?

 

For many youngsters, sensible hasn't entered their vocabulary or thoughts yet. Snazzy sales pitches get a second look.

 

Parents are often inclined to "let the kids do what appeals to them." I even agree with that in principle, but there are limits in our family.

[Sebastian (a lady)]

No I totally agree with you that these are not self study degrees.

 

I have less confidence in English lit, various studies degrees, communications, marketing and other softer programs. I love reading and writing and am teaching a creative writing class for middle schoolers, but I don't see much point in a creative writing MFA nor do I see best selling fiction coming from grads of these programs.

 

As a future payer for college I see too many schools marketing the experience rather than real value added courses that demand hard study and the development of the mind.

 

But then I attended a military school that still has a core curriculum. When we did esoteric special studies classes it was courses like Arthurian legend, history of the Vietnam War or James Joyce.

[Sebastian (a lady)]

There was an interesting piece I read a while back interviewing chefs on their opinion of culinary programs vs apprenticing. Most of the successful and employed chefs queried favored just going to work in a kitchen.

[twoforjoy]

You do, however, need college if you wish to enter certain job fields. It is not possible to become an engineer or scientist or physician from reading books at home.

 

Maybe it was like that a generation ago. Not today. Today, if you want to be an administrative assistant you need a college degree. Things have changed, a lot. Basically, at this point, if you don't want a minimum-wage service job or aren't interested in (or aware of) a very few vocational fields, you need a college degree.

 

I think people are perhaps a bit naive about how our system works. Our culture pushes everybody to get as much education as they possibly can. Everybody is encouraged to go to school for as long as possible. That way, a giant pool of (over)-qualified workers is created, which benefits businesses and drives wages down (and so profits up).

 

This isn't stupid students going to college when they should know better. It's massive, massive profits being made off of them doing so, and so lots of money and effort going into making sure they do.

[Julie in MN]

What I do not get is: why are students attracted to the non-profits?

I think there are a lot of reasons.

 

Some students want a smaller school, with more personal staff. The U of Minnesota where I went has something like 65,000 students -- something I enjoyed a lot but many students don't.

 

Some students want a school that acknowledges faith as part of life.

 

Some want more of a "girls school" or one that's more for boys. Most are co-ed now, but because of their roots they may still lean towards one gender, or provide more single gender dorms, etc.

 

Maybe it was like that a generation ago. Not today. Today, if you want to be an administrative assistant you need a college degree. Things have changed, a lot. Basically, at this point, if you don't want a minimum-wage service job or aren't interested in (or aware of) a very few vocational fields, you need a college degree.

 

I think people are perhaps a bit naive about how our system works. Our culture pushes everybody to get as much education as they possibly can. Everybody is encouraged to go to school for as long as possible. That way, a giant pool of (over)-qualified workers is created, which benefits businesses and drives wages down (and so profits up).

 

I agree that employers really are using college as a weeding out method, sometimes at very low levels of employment. Or, even for those jobs where low levels are not looking for degrees, the employee may not be able to move up the ladder at all because at some point a degree becomes the deciding factor.

 

However, I don't think of this in particular as a conspiracy where employers are looking to drive wages down or loan officers are looking to drive profits up. I think of it more as a convenient way for employers to choose candidates -- sort of like the ACT is a convenient tool. The ACT doesn't really predict success in college, and the degree doesn't really predict success in the workplace, but it's the best folks come up with sometimes. Interviews can be very deceiving, lawsuits can result from choosing based on personal preference, and our society is too big for folks to really know who they are hiring.

 

I personally think it's just a matter of a college degree being the new high school diploma. It's a random decision to end basic education at age 16, or 18, or 22. Maybe somewhere in there it's changed because kids just aren't learning enough by age 18?

 

Julie

[creekland]

Maybe it was like that a generation ago. Not today. Today, if you want to be an administrative assistant you need a college degree. Things have changed, a lot. Basically, at this point, if you don't want a minimum-wage service job or aren't interested in (or aware of) a very few vocational fields, you need a college degree.

 

I think people are perhaps a bit naive about how our system works. Our culture pushes everybody to get as much education as they possibly can. Everybody is encouraged to go to school for as long as possible.

 

I agree with what I've quoted. I think the reason a college degree has become the "minimum" is because public schools are no longer turning out high school grads who can be counted on to know "enough" or have a decent work ethic. Before, more dropped out of high school and took up a trade (my farming grandparents didn't go beyond 8th grade - my factory working grandparents stopped at 4th). Both knew quite a bit of academics compared to their grade level counterparts now.

 

Our culture pushes academics because, for many, that IS the road to success for most (not all). People want their kids to "succeed." Schools want their students to succeed. Our country wants our citizens to succeed. Everyone pushes toward the route of best chances. Many fail to realize their niche might be outside of academics and their probability lies elsewhere. Many fail to realize the academic road to success takes work and they want to slide by. (I've been in upper level ps math classes these past two days and I see several of these types.)

 

The academic road is not the right road for all, but as long as it's the one showing the best probability for success, it will continue to be chosen by many.

 

Personally, I'm also of the mindset that simply loves learning and I've conveyed that to my boys. They will love college for the learning as well as the other benefits that come along. Then they'll have their degree for whatever their path may be.

 

Here at school I really miss that "loves learning" aspect as the vast majority of the students here simply don't have it. "Learning" is a job for them that "has" to be done rather than something they want to be doing. I can make them be quiet. I can't always open the brain (but I try).

[Kristin in Hawaii]

.... is somewhere in the middle. I was the first in my family to earn a degree -- and it was an independent study/online A.S. Nursing degree added on to my years of experience as an EMT. It doubled my income. I think my total cost was under $20K.

 

I also agree that the high school graduate today is missing critical knowledge that students gained in earlier decades. Logic, Latin, studies of Great Books -- gone from high school today -- and, I believe, critical in creating well-rounded and educated high school graduates. Anyhow, I know I'm preaching to the choir here ;)

 

It is a bit surreal to see how many buy into the big prices for fields that are really unlikely to ever allow them to pay back their costs... or work in the field at all!

 

Aloha,

 

Kristin

[mom31257]

What I don't understand is why college tuitions costs have increased so much in the last two decades. This article is old, but it still shows that statistics from 1982-2007. The article says that rising tuition is because of less appropriations from states and the bad economy, but during many of those years, the economy was not bad. 439% is outrageous, IMHO.

[Jane in NC]

What I don't understand is why college tuitions costs have increased so much in the last two decades. This article is old, but it still shows that statistics from 1982-2007. The article says that rising tuition is because of less appropriations from states and the bad economy, but during many of those years, the economy was not bad. 439% is outrageous, IMHO.

 

Actually the increase in college tuition is similar to what has happened to the cost of medical and professional services--things that are not outsourced to low wage markets. There was an analysis of this in the NY Times (I think). Not that this is going to make any of us feel better...

 

Granted, colleges do spend more money making students comfortable (nicer dorms, better phys ed facilities, etc.) than in days of old. But that does not account for the steep upturn in costs. The good news is that there are so many schools that can appeal to a variety of budgets and interests. And I thank our lucky stars for my son's merit aid. Hats off to the alumni who contribute to endowments!