We are not against college

Here is what we have been saying for years: “We are not against college but question many of the long held assumptions about it. We think too many attend, too much is spent on it and that students are under the mistaken belief that all college degrees bestow the same benefits. And when students, parents and governments borrow recklessly to finance it, we have a huge problem.”

This article from the Economist GETS IT! YES!!

College can be valuable – at the right price and if one studies subjects that the market place demands and needs.

The market demands few college graduates with degrees in Gender Studies, Sociology, Psychology, English and History. But the market is demanding grads in Electrical Engineering, Petroleum Engineering, and Network Security.

This author is one of the few that makes three great points:

       1) Not all college education bestows the same benefits.

       2)  If one graduates with substantial student debt, the individual is frequently reducing her  opportunities rather than expanding them.

       3)  College grads on average have higher IQs than high school drop outs. So the figures that  compare the relative financial performance of the two groups should adjust for relative potential  and not attribute all the extra earnings to college. But the stats never do.

Make sure and download a copy of Lucky and Good: Risk, Decisions and Bets for
Investors, Traders and Entrepreneurs. 

Beware of Propaganda about College like this Pew Study

These social “scientists’ spread this propaganda and consistently mix up causation with correlation.

Here would be a way to actually test the Pew’s hypothesis that college education results in substantially better incomes and life styles: Take 1,000 high school students and send them to college.  Take another 1,000 students and direct them to non-college alternatives.  Each of the groups would have the same distribution of SAT scores.

Then look at the results 10-15 years later.

The reason the Pew’s results are so skewed is that on average high school grads with higher IQs go on to graduate from college in greater proportion than those with lower IQs.  This factor alone probably accounts for most of the differential in salaries 15 years later.

I am not saying that college cannot be valuable.  But based on the Pew propaganda we have allowed the cost of college to get out of hand and college students are going ever deeper into debt to finance it.

Make sure and download a copy of Lucky and Good: Risk, Decisions and Bets for
Investors, Traders and Entrepreneurs. 

The unsustainable cost of education

The quote I have always loved is: “If you hate the cost of education wait until you see the cost of ignorance.” I love the logic. It is only when you take it to the extremes that it no longer works.

Mish Shedlock has a unique perspective in his post: PhD's In Distress and the Unsustainable Cost of Education

We are in an era when basic classes like Algebra and History can be taught at a far lower cost – and yet the costs are going up not down. We need to question the models, question the assumptions and teach that which will lead to jobs rather than academic enlightenment. Let’s get real – education like everything else needs to be cost competitive.

Staff Jobs on Campus Outpace Enrollment

By Tamar Lewin The New York Times 4/20/09

http://www.nytimes.com/2009/04/21/education/21college.html?_r=1&sq=tamar%20lewin%20staff%20jobs&st=cse&adxnnl=1&scp=1&adxnnlx=1241965291-asCS28YUs/naqEben3c4gQ

This article points out some of the causes of rising college tuition. The author points out:

“Over the last two decades, colleges and universities doubled their full-time support staff while enrollment increased only 40 percent, according to a new analysis of government data by the Center for College Affordability and Productivity, a nonprofit research center.”

“A lot of it is definitely trying to keep up with the Joneses,” said Daniel Bennett, a labor economist and the author of the center’s report. “Universities and colleges are catering more to students, trying to make college a lifestyle, not just people getting an education. There’s more social programs, more athletics, more trainers, more sustainable environmental programs.”

Our response:
She points out some of the reasons that college costs keep going up but the fundamental reason is that there is so little push back. The widely-held assumption is that any dollar spent on college is a dollar well spent. And since many students and their parents are borrowing to foot the bill they have less concern about the costs and more about the hours of the gym. It is only when they start paying the bill years later that they wish they had shopped a little harder.