A story about college student loans abused, misused, wasted and ultimately paid for by taxpayers.
The article is wrong about it being difficult to walk away from student debt. Under the recent health care legislation a new provision allows former students to walk away from their student debts if they have not paid them off in 20 years. And then it is up to you and me. However even before this legislation the number of defaults on these loans was growing steadily and you and I picked up the tab anyway. But here is the most glaring void in this article: There is no mention of what this former college student learned? What did she study? It really does matter if one gets a degree in sociology, ethnomusicology, gender studies or in electrical engineering.
There are no jobs (zero, zippo, nada, can I say this another way) for psychology graduates today. And no one wants to talk about it. You might land the same job at Home Depot that you could have gotten prior to college (but there are times that it will actually be harder to land a basic job with a non-practical degree). The world is not hiring anyone today based on their Medieval History degree.
Parents are so thrilled that Johnny is heading off to college that they do not want to “discourage” the poor lad from studying an obscure subject for six years even if it almost certainly means he will end up living back at home and unemployed. It is simply not polite to ask Johnny’s parents what they are thinking. I am not very polite.
Saturday, May 29, 2010
Monday, May 17, 2010
It's College Acceptance Letter Time!
Excellent piece by Ben Stein last night on 60 minutes.
Ben states that "getting into that certain ultra-prestigious college really means very little in a lifetime." He doesn't mention it but consider those that are accepted into the most prestigious universities in the country and then choose to attend their less expensive alternative at the state university do just as well economically over their lifetimes.
So and education can matter, but far more important is what you learn and how you apply that education via hard work and ingenuity.
Ben states that "getting into that certain ultra-prestigious college really means very little in a lifetime." He doesn't mention it but consider those that are accepted into the most prestigious universities in the country and then choose to attend their less expensive alternative at the state university do just as well economically over their lifetimes.
So and education can matter, but far more important is what you learn and how you apply that education via hard work and ingenuity.
Just say "no" to college debt!
Dave Ramsey hears from a parent that just had to say "no" to borrowing for college.
And when it came down to it, the son figured out a way to join the Navy and get the Navy to pay for his college education. And when he is all done, he is likely to have a useful degree and zero student debt.
Now this makes sense. It is not the only way to do it but is an example of how to do it with going into debt.
Keep in mind that most the time “financial aid” is just another name for “debt”. And anyone that has ever listened to Dave Ramsey knows how much he detests debt.
And when it came down to it, the son figured out a way to join the Navy and get the Navy to pay for his college education. And when he is all done, he is likely to have a useful degree and zero student debt.
Now this makes sense. It is not the only way to do it but is an example of how to do it with going into debt.
Keep in mind that most the time “financial aid” is just another name for “debt”. And anyone that has ever listened to Dave Ramsey knows how much he detests debt.
Saturday, May 15, 2010
New York times article about college
Most of my friends and family believe that not everyone should go to college. Intellectually they are right there with me. But when it comes down to their kids, what is good for the goose is not good for the gander. When it comes to their kids, let’s move on to another subject. Yes, your children don’t need to go to college but by golly mine are going to attend and graduate. End of discussion.
If you can afford college or your kids line up financial aid (in other words debt) to pay for college, most folks really don’t have to worry about the short-term finances of the cost of college. Sending your kid to college is so convenient - it is the thing to do. There is hope Jimmy will get inspired. There is hope that Nancy will find herself. There is hope that Mary will emerge with a well-paying job and a satisfying career that will lead to a long, happy and independent life. And maybe in the process Kenny will find his future wife and that his wife will also be blessed with this cure-all to future earnings (a college education).
Perhaps, subconsciously part of the parental support around college might be that when Billy goes to college, you might free up his bedroom, get a little more time to travel with your husband and get some well-earned time off. If Charlie stays at home and starts a new internet business, his room will continue to be a mess.
There is also the parental pride in saying “my daughter Suzie was accepted at Cal” versus “my son Bubba has nabbed a part time job at the five and dime”.
This New York Times article discusses some of the critics of the “my kids must attend college” thinking. It points out that:
1) “Perhaps no more than half of those who began a four-year bachelor’s degree program in the fall of 2006 will get that degree within six years, according to the latest projections from the Department of Education. (The figures don’t include transfer students, who aren’t tracked.)”
2) “For college students who ranked among the bottom quarter of their high school classes, the numbers are even more stark: 80 percent will probably never get a bachelor’s degree or even a two-year associate’s degree.”
3) “It’s time, they say, to develop credible alternatives for students unlikely to be successful pursuing a higher degree, or who may not be ready to do so.”
4) “College degrees are simply not necessary for many jobs. Of the 30 jobs projected to grow at the fastest rate over the next decade in the United States, only seven typically require a bachelor’s degree, according to the Bureau of Labor Statistics.”
5) “15 percent of mail carriers have bachelor’s degrees, according to a 1999 federal study.”
On the other side this article makes a few logic missteps:
1) “It’s not just about the economic return,” he said. “Some college, whether you complete it or not, contributes to aesthetic appreciation, better health and better voting behavior.” Yes - but this assumes there are no non-economic benefits to work, apprenticeships, starting a business or serving your country in the military.
2) “People with college and graduate degrees generally earn more than those without them, and face lower risks of unemployment, according to figures from the Bureau of Labor Statistics.” Yes but this is the standard illogical argument on college. Just because there is a correlation between college degrees and financial success does not mean that one leads to the other. The number one predictor of financial success is higher IQs. Since those with higher IQs tend to get to college easier and have a better chance of graduation, their higher IQs may have more to do with their financial success than the college education.
It is great to see more discussion in the main-stream media on this subject.
If you can afford college or your kids line up financial aid (in other words debt) to pay for college, most folks really don’t have to worry about the short-term finances of the cost of college. Sending your kid to college is so convenient - it is the thing to do. There is hope Jimmy will get inspired. There is hope that Nancy will find herself. There is hope that Mary will emerge with a well-paying job and a satisfying career that will lead to a long, happy and independent life. And maybe in the process Kenny will find his future wife and that his wife will also be blessed with this cure-all to future earnings (a college education).
Perhaps, subconsciously part of the parental support around college might be that when Billy goes to college, you might free up his bedroom, get a little more time to travel with your husband and get some well-earned time off. If Charlie stays at home and starts a new internet business, his room will continue to be a mess.
There is also the parental pride in saying “my daughter Suzie was accepted at Cal” versus “my son Bubba has nabbed a part time job at the five and dime”.
This New York Times article discusses some of the critics of the “my kids must attend college” thinking. It points out that:
1) “Perhaps no more than half of those who began a four-year bachelor’s degree program in the fall of 2006 will get that degree within six years, according to the latest projections from the Department of Education. (The figures don’t include transfer students, who aren’t tracked.)”
2) “For college students who ranked among the bottom quarter of their high school classes, the numbers are even more stark: 80 percent will probably never get a bachelor’s degree or even a two-year associate’s degree.”
3) “It’s time, they say, to develop credible alternatives for students unlikely to be successful pursuing a higher degree, or who may not be ready to do so.”
4) “College degrees are simply not necessary for many jobs. Of the 30 jobs projected to grow at the fastest rate over the next decade in the United States, only seven typically require a bachelor’s degree, according to the Bureau of Labor Statistics.”
5) “15 percent of mail carriers have bachelor’s degrees, according to a 1999 federal study.”
On the other side this article makes a few logic missteps:
1) “It’s not just about the economic return,” he said. “Some college, whether you complete it or not, contributes to aesthetic appreciation, better health and better voting behavior.” Yes - but this assumes there are no non-economic benefits to work, apprenticeships, starting a business or serving your country in the military.
2) “People with college and graduate degrees generally earn more than those without them, and face lower risks of unemployment, according to figures from the Bureau of Labor Statistics.” Yes but this is the standard illogical argument on college. Just because there is a correlation between college degrees and financial success does not mean that one leads to the other. The number one predictor of financial success is higher IQs. Since those with higher IQs tend to get to college easier and have a better chance of graduation, their higher IQs may have more to do with their financial success than the college education.
It is great to see more discussion in the main-stream media on this subject.
Monday, May 10, 2010
Most profitable college majors
Here is an article about the most profitable college majors. It is good to see this kind of material discussed in the media because it is so rare. The general media and our politicians think and communicate that any college education is a worthwhile education.
But two things are not discussed. First, it matters whether one majors in engineering or in ethnomusicology. The first one lands the college graduate plenty of job offers at a good wage. The ethnomusicology graduate ends up waiting endlessly for a job offer that never arrives.
But this is only part of the cost versus benefit discussion that needs to be heard. If one is accepted at Harvard but instead decides to attend San Jose State to study electrical engineering, their career prospects are just as strong according to the data. In other words, historically the actual learning and characteristics of the college student are what matter - not the brand-name of the college. A graduate with an IQ of 120 and a degree in Mechanical Engineering from University of Arizona is going to do pretty well - far better in fact than a student with an IQ of 120 and a degree in Sociology from Harvard. The Arizona all-in cost is perhaps $80,000 versus over $200,000 at Harvard.
But the biggest waste is when one spends $200,000 on an obscure degree from Harvard that is not in demand. Then you have the worst value - a high cost for a degree with little value.
Just because someone else is paying for the college education (your parents, a scholarship or the government) does not mean that this opportunity should be wasted. The atmosphere and friends developed at college are great but they are secondary to the job of creating graduates that are in demand.
But two things are not discussed. First, it matters whether one majors in engineering or in ethnomusicology. The first one lands the college graduate plenty of job offers at a good wage. The ethnomusicology graduate ends up waiting endlessly for a job offer that never arrives.
But this is only part of the cost versus benefit discussion that needs to be heard. If one is accepted at Harvard but instead decides to attend San Jose State to study electrical engineering, their career prospects are just as strong according to the data. In other words, historically the actual learning and characteristics of the college student are what matter - not the brand-name of the college. A graduate with an IQ of 120 and a degree in Mechanical Engineering from University of Arizona is going to do pretty well - far better in fact than a student with an IQ of 120 and a degree in Sociology from Harvard. The Arizona all-in cost is perhaps $80,000 versus over $200,000 at Harvard.
But the biggest waste is when one spends $200,000 on an obscure degree from Harvard that is not in demand. Then you have the worst value - a high cost for a degree with little value.
Just because someone else is paying for the college education (your parents, a scholarship or the government) does not mean that this opportunity should be wasted. The atmosphere and friends developed at college are great but they are secondary to the job of creating graduates that are in demand.
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