The College Bubble

Jesse Walker | February 5, 2009

In Forbes, Kathy Kristof takes on college loans, arguing that there is

an unfolding education hoax on the middle class that's just as insidious, and nearly as sweeping, as the housing debacle. The ingredients are strikingly similar, too: Misguided easy-money policies that are encouraging the masses to go into debt; a self-serving establishment trading in half-truths that exaggerate the value of its product; plus a Wall Street money machine dabbling in outright fraud as it foists unaffordable debt on the most vulnerable marks.

At one point Kristof tackles the oft-cited factoid that college grads earn $1 million more over their lifetimes than people who only made it through high school. She argues that the figure is misleading, but I have a more fundamental question about it: If such numbers are accurate, to what extent do they mean that a college degree makes your labor more valuable, and to what extent do they mean that college itself is overvalued? In a world of degree inflation—and unnecessary licensing laws—is college lubricating class mobility, or is it an expensive barrier between the classes?

Comments

SIV|2.5.09 @ 12:30PM|#

In a world of degree inflation-and unnecessary licensing laws-is college lubricating class mobility, or is it an expensive barrier between the classes?

Mostly the latter.

|2.5.09 @ 12:36PM|#

There's another problem with the $1 million factoid: it doesn't prove that going to college caused the difference in earnings. It could well be that the people who go to college are on average smarter and/or better at taking direction and/or more ambitious than people who don't.

|2.5.09 @ 12:37PM|#

When I started college at UF, the tuition was $23/hour. Now it's something like $90/hour. Granting that it's been a while, but why has public school tuition increased at multiples of the inflation rate over the last 20 years?

robc|2.5.09 @ 12:38PM|#

Pro Lib,

subsidies.

I know you knew the answer, but in case anyone else was wondering.

|2.5.09 @ 12:38PM|#

My older sister can sell ketchup popsicles to a woman in white gloves and she was turned down for a pharmaceutical sales job she would have been great at because she only has an associates degree and a dozen years of sales results. They would have hired me out of college right away because I have a BS in Geography but couldn't sell water to a thirsty millionaire in the desert. Degrees are overrated.

|2.5.09 @ 12:43PM|#

College, for a lot of people, has become the party reward for graduating high school. You served your time in children's prison (grade and high school), and now you're been paroled. You can choose whether to go to class. You live away from mommy and daddy with a ton of people your own age and 50% of the opposite sex. You can get your hands on alcohol, drugs, and sex partners with incredible ease.

It's sort of like Club Med for 18-year-olds. Except that you don't have to pay until you leave, courtesy of student loans. Since most 18-year-olds are terrible with money, they just sign up for the debt.

Grade inflation is just the colleges serving the customer. The students paid for a degree and a party, god damn it, and they want it. They didn't pay for an education.

|2.5.09 @ 12:44PM|#

There's another problem with the $1 million factoid: it doesn't prove that going to college caused the difference in earnings. It could well be that the people who go to college are on average smarter and/or better at taking direction and/or more ambitious than people who don't.

Whoa, whoa, whoa, there. Are you implying that correlation does not equal causation?

No stimulus check for you!

|2.5.09 @ 12:46PM|#

I've got four kids. Three have prepaid tuition plans, but my daughter does not. It's like $13,500 to sign her up for one--seventeen years before she'll be old enough to attend! Time value of money has no meaning with tuition, that's for sure.

And, as robc notes, my kids are paying a premium so other kids can go to school for free. I'm sorry, but aren't I a taxpayer? How many times do I have to pay for education?

Education should not cost something comparable to a house. Yet my law school tuition could've bought me a small home. Even granting that that's graduate school, it's still obscene.

It's yet another instance of government meddling totally fucking up any home of rationality in the market. But if education ever totally blows up, it'll be blamed on deregulation.

Dello|2.5.09 @ 12:47PM|#

Nick,

While it sucks for your sister, it will also suck for the company, as they will end up with an inferior salesperson.

Jesse Walker|2.5.09 @ 12:49PM|#

There's another problem with the $1 million factoid: it doesn't prove that going to college caused the difference in earnings.

Yeah, that's the argument in the Forbes article. It's an important point to keep in mind, though I think there have been some studies of the earnings premium that at least attempted to control for other factors.

charles herrnstein|2.5.09 @ 12:50PM|#

Add in the fact that segregating the population by IQ and college readiness during prime pair bonding years means the college business is making it's own future clientel.

|2.5.09 @ 12:51PM|#

College, for a lot of people, has become the party reward for graduating high school.

For the rest it's just where they get their high school level education.

stuartl|2.5.09 @ 12:53PM|#

There's another problem with the $1 million factoid: it doesn't prove that going to college caused the difference in earnings. It could well be that the people who go to college are on average smarter and/or better at taking direction and/or more ambitious than people who don't.

Yep. Even with the shaky assumption that college doesn't teach anything, a degree holder from a real school has demonstrated they....are on average smarter and/or better at taking direction and/or more ambitious than people who don't.

Employers like these things.

|2.5.09 @ 12:53PM|#

Education should not cost something comparable to a house. Yet my law school tuition could've bought me a small home. Even granting that that's graduate school, it's still obscene.

Are you still paying off the debt? Do you make a good living? With four kids, I would guess you make a good amount. Obviously, your education paid off for you, and you were willing to pay for it. That's not obscene, that worked.

I do think that student loans interfere with competition between schools to lower prices. But the prices are still worth it to people. When they get too high, people will stop paying. But right now, telling a kid that after graduation they'll have to pay off $100,000 in debt is like telling a child that if he eats all that candy later he'll have a stomach ache.

|2.5.09 @ 12:53PM|#

You live away from mommy and daddy with a ton of people your own age and 50% of the opposite sex. You can get your hands on alcohol, drugs, and sex partners with incredible ease.

what else could explain a 6-year degree in art history?

Chuck|2.5.09 @ 12:55PM|#

Pro Lib,

In Floriduh's case, state funding has gone down correspondingly (systemwide, not just at UF). If you take the total of state $ plus tuition, the rate of growth of revenue isn't nearly so high. [ Insert standard "state shouldn't be funding college at all", etc., disclaimers here. ]

At a lot of colleges, the extra tuition goes toward wealth redistribution as universities sell the increase by promising to plow much of it back into various financial aid programs for underrepresented groups.

I think that $1 million dollar difference is going to come way down, if it ever was accurate in the first place, as more and more students major in stuff like humanities, psychology, geography, and education, that don't generally result in great jobs.

|2.5.09 @ 12:57PM|#

what else could explain a 6-year degree in art history?

An overwhelming love of Klimt?

jackee|2.5.09 @ 12:59PM|#

Try as I might, I cannot get that page to load. Must be a weird connection issue on my end. But I'm curious how the article -- which I imagine focuses on four year colleges -- relates to this piece from Brookings concerning stimulus support overstuffed but undersupported community colleges. I think it relates to your rate of return question, Jesse, since acknowledging name brand four year college degrees are overrated will also result in community (and technical) college degrees not being so undervalued. There are probably also valuable statistics somewhere out there about how many students find it worthwhile to transfer to full four year institutions versus those who find the two year degree sufficient for job hunting purposes.

|2.5.09 @ 1:00PM|#

Episiarch,

I don't agree. If I thought my tuition was even somewhat tied to the marketplace, I'd accept the cost. But the full price I paid (even with academic scholarships) was nothing compared to the subsidized price many others paid. And that's with me coming from the middle class. Actually, come to think of it, I got subsidized loans myself, which also helped to drive up the overall cost. They'll give graduate loans to dead people.

Frankly, I wonder what the real difference would be if I just spent a couple of years reading casebooks and treatises, then went off to take the bar exam. Probably very little. At most, that would cost me a couple of thousand in books.

robc|2.5.09 @ 1:01PM|#

Epi,

Loans arent going away obviously. They need to make the kids put 20% down to get the loan like old-school mortgages.

|2.5.09 @ 1:01PM|#

Shit, I forgot the quote:

"Mr. Melon, your wife was just showing us her Klimt."

"You too, huh? She's shown it to everybody."

robc|2.5.09 @ 1:02PM|#

Frankly, I wonder what the real difference would be if I just spent a couple of years reading casebooks and treatises, then went off to take the bar exam. Probably very little. At most, that would cost me a couple of thousand in books.

Madison did that and quickly found out the law was not for him. Good thing he depend take out a loan for the 1st year of law school before discovering that.

zoltan|2.5.09 @ 1:03PM|#

Doesn't it just depend on the college? I'm currently embarking on a three-year associate's degree in nursing and when I graduate I'll be making at least 50 thou. However, I made the mistake of going to a private college for two years after graduating HS (and switching majors three times) and now I'm $32000 in the hole. So you can make $1 million dollars more a year, it just depends on if you want to go to some artsy-fartsy liberal arts university and make kibbles when you graduate while paying off student loans or if you want to not pay too much and get a practical degree.

zoltan|2.5.09 @ 1:05PM|#

"Frankly, I wonder what the real difference would be if I just spent a couple of years reading casebooks and treatises, then went off to take the bar exam. Probably very little. At most, that would cost me a couple of thousand in books."

Well, Frank Abagnale, Jr. passed the Louisiana State Bar Exam with only two weeks of self-study.

|2.5.09 @ 1:10PM|#

I see it every day. When a dumbass gets a degree, the only thing that is different is that he has proved he can sit through those classes without falling asleep. Give me a truly smart person over a stupid well-educated one any day.

|2.5.09 @ 1:11PM|#

Another question to ask is what affect licensing has on degree value? Many licenses require a degree.


Also many certifications for businesses required by state and federal government require college educated employees. NELAC is one of the ones I am familiar with, it requires lab techs to be college educated - job description: follow a recipe and get a result - and used to be done many HS grads.


I never see this mentioned in the value of calculation of degrees

|2.5.09 @ 1:13PM|#

ProL, the point is that you felt it was a price you were willing to pay--so you did.

Give me a truly smart person over a stupid well-educated one any day.

It's SO easy to tell the difference, too.

Naga Sadow|2.5.09 @ 1:14PM|#

Hmmmm. Well honestly I don't know. I do know that most degrees are worthless. Half the cocktailing and bartending staff have degrees. Problem is it's in shit like English, Literature, History, Art History, etc.

jackee|2.5.09 @ 1:15PM|#

Finally got through. The article seems to blur the line between two questions: Is college worth it ("college" broadly defined)? and How did financial shenanigans screw over all sorts of college students over the past decade or so? At the very least it seems clear that the shenanigans made college a much more dangerous proposition for a large number of students -- from lawyers to web designers. The article doesn't really address how curtailing private lending practices might affect prices -- or how the situation looked before the privatization occurred (was the outlook not so bad then?) -- which would seem to be a crucial question. In the context of the Brookings piece above, I would wonder whether pursuing greater federal funding of the community college system -- tied to the metrics like time-to-degree and not just number of enrollees -- and purging private lending practices would begin to yield prices more in line with what a (community) college degree is properly worth.

j

zoltan|2.5.09 @ 1:15PM|#

Naga, don't forget Film Studies.

|2.5.09 @ 1:16PM|#

I have to admit that, after taking the bar, I thought I could've passed it with just the prep course alone. Or reading the materials without the course. Although the Florida bar has essays, it's really all black-letter law--most of the reasoning and the gray areas of law school are chucked out altogether. I got full points on a family law essay by pretty much just listing the fifty (okay, maybe just thirty) factors to consider in an equitable distribution.

Seemed that way to me, anyway.

Episiarch,

Yes, and I also pay my taxes. And people willingly pay blackmailers and extortionists, too. Those aren't legitimate markets, either.

Naga Sadow|2.5.09 @ 1:16PM|#

zoltan,

The Skyway Man only mentions it once in his books. He has a photographic memory. He likes to leave that IMPORTANT bit of info out of his stories.

Naga Sadow|2.5.09 @ 1:17PM|#

zoltan,

Hmmmm. Haven't heard that one yet. I'll keep you posted.

|2.5.09 @ 1:18PM|#

Yes, and I also pay my taxes. And people willingly pay blackmailers and extortionists, too. Those aren't legitimate markets, either.

Nobody put a gun to your head and made you go to school to become a shark in a suit lawyer.

Naga Sadow|2.5.09 @ 1:20PM|#

OH SNAP! Cue lawyer jokes!

zoltan|2.5.09 @ 1:21PM|#

"The Skyway Man only mentions it once in his books. He has a photographic memory. He likes to leave that IMPORTANT bit of info out of his stories."

What the hell does this mean? I'm so lost right now.

Naga Sadow|2.5.09 @ 1:22PM|#

The devil visited a lawyer's office and made him an offer. "I can arrange some things for you, " the devil said. "I'll increase your income five-fold. Your partners will love you; your clients will respect you; you'll have four months of vacation each year and live to be a hundred. All I require in return is that your wife's soul, your children's souls, and their children's souls rot in hell for eternity."

The lawyer thought for a moment. "What's the catch?" he asked.

|2.5.09 @ 1:22PM|#

True story: One of my crappy jobs before law school was as a video store manager. I was working for a low salary myself, but my six full or near full-time hourly workers all had college degrees. One was retired, so maybe he doesn't count. Granted, the economy at the time was crappy and the non-retired staff was young, but that's insane.

Incidentally, one of the staff--who I promoted to Asst. Mgr. before I left for greater things--was a film school graduate.

Episiarch,

Uh, huh. I think I'd be more bitter if I'd gotten my PhD in Physics (I came within a hair of doing that when I was applying to law school--which would've meant two solid years of post-bacc work just to get started). Lots of debt and low salary. Lovely.

Naga Sadow|2.5.09 @ 1:25PM|#

zoltan,

What it means is he remembers EVERYTHING! He probably scanned every page in every law book he could get his hands on in Louisiana.

|2.5.09 @ 1:27PM|#

I think I'd be more bitter if I'd gotten my PhD in Physics

Hey, I'm the retard who got a BS in Biology and BA in Anthropology. Thankfully I've been programming since I was 10, and no one cares about degrees in programming, just experience and knowledge.

|2.5.09 @ 1:28PM|#

"I know I'm a lawyer, but I took the bar in Alaska. They only have like four laws and most are about when you can kill seals!"

|2.5.09 @ 1:32PM|#

I was an early programmer, too. My dad pushed me to do that professionally (that was what he did early on, though he was an EE). He was probably right. Dammit.

Robert|2.5.09 @ 1:35PM|#

I've been programming since I was 10, and no one cares about degrees in programming, just experience and knowledge.

Unfortunately, I'm finding that what they want is a career oriented toward programming -- not degrees but certificates, and/or experience with a job title of programmer or the like in a particular language. I can program, and I can pick up any language quickly enough to be coding in it in hours or days, but programming has always been an adjunct to other activities for me, and it seems nobody wants to hire me as a programmer when they see a resumme that says "scientist" or "teacher" or "medical office flunkie" -- and I don't have certificates for either of the latter two either!

Robert|2.5.09 @ 1:37PM|#

My dad pushed me away from programming! :-(

Naga Sadow|2.5.09 @ 1:37PM|#

Epi,

Lucky bastard. I stumbled on economics. I was originally a polymer science major. They should have named it polymer engineering. I'm just not geeky enough to hang around my house and do all that higher math with equally geeky classmates and then go play D&D. I looked at getting a chemistry degree and was shocked at the 30k a year price tag. I mean, for Christ's sake, I make about 35k year now. The college of business got wind of all my math and chemistry and recruited me. Blissfully happy since.

robc|2.5.09 @ 1:38PM|#

Hey, I'm the retard who got a BS in Biology and BA in Anthropology. Thankfully I've been programming since I was 10, and no one cares about degrees in programming, just experience and knowledge.

I started down the path towards a PhD in Plasma Physics. Probably best I didnt finish it. Programming pays the bills.

economist|2.5.09 @ 1:39PM|#

Goot time, good times...

Urkobold™|2.5.09 @ 1:40PM|#

THE URKOBOLD'S LAST DEGREE WAS IN PORN MANAGEMENT. LIKE RESTAURANT MANAGEMENT, BUT WITH MORE NAKED WOMEN.

robc|2.5.09 @ 1:40PM|#

Its now been over 15 years since Ive been paid based on my Nuke E undergrad degree.

zoltan|2.5.09 @ 1:41PM|#

I was not aware of Abagnale's nickname so I had no idea who you were referring to. Ah, Google.

economist|2.5.09 @ 1:41PM|#

My father always told me: "There's always a need for engineers. So become an engineer. Because, to be perfectly honest, you're not going to get by on good looks and charm."
I'm paraphrasing, of course, but my father tended towards brutal honesty.

robc|2.5.09 @ 1:44PM|#

Sunday: "Do we have a Klimt?"
Boy Vampire: "Big score for Klimt! Monet still well in the lead, but look out for Team Klimt coming from behind."
Sunday: "Freshmen. Man, they're so predictable."
Boy Vampire: "And you can never eat just one."

zoltan|2.5.09 @ 1:45PM|#

Economist, that's probably better than a parent who tended toward "You can do anything you want to do!"

|2.5.09 @ 1:45PM|#

I've told all four kids that technical or science degrees will be rewarded. Law degrees will be punished. When they want to make me visibly annoyed, they mention wanting to go to law school. In fact, my wife does that, too.

economist|2.5.09 @ 1:45PM|#

Despite my profession (engineering), I can't program worth shit. I took one computer science class (plus another that was major specific and required that class) in college, barely passed, and have tried to avoid programming ever since.

Naga Sadow|2.5.09 @ 1:46PM|#

zoltan,

I thought you turning on the sarcasm.

engineer|2.5.09 @ 1:54PM|#

I went to school to study physics. Halfway through, a visiting professor showed the salary comparison of BS vs PhD ten years after graduation. The BS salary beat the shit out of PhD salary (basically engineer vs college professor).

I took an engineering position after undergrad and never looked back.

zoltan|2.5.09 @ 2:04PM|#

By the way, where is MNG to remind us of his terminal degree? Jill Biden? Hello?

I think the big problem is that a middle-class 18-year-old has basically been coddled since birth by either parents or school (or both). Giving them x amount of time, which is usually less than two years, to have them decide what they're going to do with the rest of their lives and the repercussions of how they will pay for it is a big mistake for most people at that age, though some obviously do it successfully (with parental help, usually).

phalkor |2.5.09 @ 2:08PM|#

It's funny, I cannot imagine pursuing a humanities degree in the information age. The liberal arts degree doesn't show that you have obtained any skills beyond what you started with. I was told "you can go to any school you want and be whatever you want to be". I wanted to be a dinosaur, but instead became an engineer.

The engineering classes weren't particularly difficult and I had ample time in my schedule to pursue philosophy, creative writing, architecture, and a dash of music appreciation. It boggles my mind why people think being a paying for a history degree will somehow pay off.

Gay Dar Delux|2.5.09 @ 2:13PM|#

"Urkobold™ | February 5, 2009, 1:40pm | #

THE URKOBOLD'S LAST DEGREE WAS IN PORN MANAGEMENT. LIKE RESTAURANT MANAGEMENT, BUT WITH MORE NAKED WOMEN."

If this isn't the hyper-hetero ranting of a deeply closeted homosexual, nothing is.

Trust your feelings, Urk.

Naga Sadow|2.5.09 @ 2:18PM|#

Oh dear. Someone's begging for a taint withering.

|2.5.09 @ 2:20PM|#

I had to look up Edith Cowan University, and it turns out it's in Australia. Did the reporter just see them on a list of unusual majors and take a dig at them for surf science, or has there been an exodus of US college students that I'm unaware of?

Urkobold™|2.5.09 @ 2:21PM|#

GAY DAR DELUX,

YOU GO FIRST.

Gay Dar Delux|2.5.09 @ 2:34PM|#

YOU GO FIRST.

Huh?

zoltan|2.5.09 @ 2:36PM|#

GDD, let me help you out with Urkobold's cryptic emanations: You admit to being a closeted homosexual first.

|2.5.09 @ 2:38PM|#

My taint has crawled into my ass in sympathy...

Urkobold™|2.5.09 @ 2:40PM|#

WRONG ZOLTAN! THE URKOBOLD WAS SUGGESTING THAT GAY DAR DELUX PERFORM SODOMY ON A MEMBER OF HIS OWN SEX FIRST. IF HE IS A SHE, THEN THE URKOBOLD SUGGESTS DOING SO IN FRONT OF A WEBCAM.

YOU MUST FORGIVE THE URKOBOLD. ENGLISH IS NOT HIS FIRST LANGUAGE.

|2.5.09 @ 2:47PM|#

Creative Writing BA, minor in Philosophy. Masters in Library Science. No student loans, luckily.

Egosumabbas|2.5.09 @ 3:07PM|#

"I see it every day. When a dumbass gets a degree, the only thing that is different is that he has proved he can sit through those classes without falling asleep. Give me a truly smart person over a stupid well-educated one any day."

Even worse: when a stupid person stupidly gets a degree in a non-accredited program at a university, making his piece of paper totally worthless.

"College, for a lot of people, has become the party reward for graduating high school. You served your time in children's prison (grade and high school), and now you're been paroled. You can choose whether to go to class. You live away from mommy and daddy with a ton of people your own age and 50% of the opposite sex. You can get your hands on alcohol, drugs, and sex partners with incredible ease."

This is only true if you are an LAS major. Engineering, Science, and Architecture students usually spend their time in the lab or studying.

Paul|2.5.09 @ 3:25PM|#

I was watching a Warren Miller film the other night. Great quote from one of the skiers:

If you can afford to go to college, you shouldn't go.

That's poetry.

armchairpunter|2.5.09 @ 3:51PM|#

Even though I have a B.A. in English Lit and a J.D., I am able to guesstimate that putting away $100,000 (which (a) won't cover one's costs at many colleges anymore and (b) does not include any savings achieved or the value of the experience gained from being in the workforce instead of college for four years) for the approximately 50 years one would survive after the would-be graduation date at a healthy but not terribly aggressive rate of 5% would yield in excess of $1,000,000.

Kolohe|2.5.09 @ 3:59PM|#

When a dumbass gets a degree, the only thing that is different is that he has proved he can sit through those classes without falling asleep.

My personal experience was that 100% wakefullness was not a requirement either.

|2.5.09 @ 4:43PM|#

I went to college and majored in history. And since 1983,all my jobs have been based on that major. I now have three degrees in the subject and now make a good salary. My parents paid for my undergraduate work (completed in four years) but I paid for all the graduate work. This required some loans, but I've now paid them off. So, it can be done. I once worked as a dishwasher, but that was before I got my B.A. I've also worked as a mail clerk, before I got my M.A. Not everyone will want to follow that path; it may be more difficult now than it was then (1970s/80s). But, you can do well (if not necessarily six figures) with a non-"practical" degree.

Alice Bowie|2.5.09 @ 4:52PM|#

If we let corporate america keep staffing their workforce to
- India
- China
- Phillipines
- Russia
- The rest of the third world
because americans MAKE TOO MUCH MONEY...well, then what's the point of college.

The minute you start making a lot of money in Corporate America...u r a TARGET. They want to get rid of you and bring in someone cheaper.

Here in NYC...it's either someone younger, someone in India, or someone in another part of US that makes less.

Yes, that's capitalism. But if you just let it go its natural path...there's no point. We all might a well sell crack on 145th street.

phalkor |2.5.09 @ 4:53PM|#

@mason

liar, my empirical study suggests that you are a work of fiction.

HammeredHead|2.5.09 @ 5:48PM|#

Programming saved my ass. I graduated with an MBA in finance from SUNY Buffalo. I moved furnature in a warehouse, managed a Taco Bell, did temp work for the SBA, and was a commercial credit analyst. None of these positions paid more than the mid 20s.

Within one year of changing to programming my salary was over 70k.

Unfortunately, this statistic would be counted in the college earnings average. It had nothing to do with college and I regret the wasted time.

Urkobold™|2.5.09 @ 5:52PM|#

PHALKOR! SINCE MASON IS TOO UNMANLY TO RESPOND ON HIS OWN BEHALF, HE HAS ENGAGED THE URKOBOLD TO RESPOND FOR HIM:

"PHALKOR, YOU ARE A WORK OF FRICTION."

Patrick|2.5.09 @ 5:54PM|#

I swear I read a different article, but one that used the exact same individuals interviewed in the LA Times a few weeks ago - yet I can't find any reference to it. Same Author peddeling the same story to multiple publications?

Invisible Finger|2.5.09 @ 5:56PM|#

But right now, telling a kid that after graduation they'll have to pay off $100,000 in debt is like telling a child that if he eats all that candy later he'll have a stomach ache.

Yep.

Student loans are an excellent way to get people hooked on debt. They're certainly justified for occupations that pay a nice wage premium, otherwise they're mostly a waste of money. Certainly most people who have little choice but a student loan would benefit from 2 years at a junior college but far too many think such a path is beneath the.

Russ 2000|2.5.09 @ 5:58PM|#

I have to admit that, after taking the bar, I thought I could've passed it with just the prep course alone.

Pardon my sounding like Jesse Walker, but I think the lead guitarist of Country Joe & The Fish did exactly that.

|2.5.09 @ 6:23PM|#

A lot of money goes into the administrative overhead needed to deal with federal and state financial aid programs, grant processes, and such.

A lot is also bureaucratic bloat caused by the proliferation of specialized departments like "Chicano Studies". I don't think any of the ethnic or gender studies departments are self-financing. They're mostly academics leeching off of the science and engineering departments, which is where the money comes from.

That is if you can count receiving publicly funded research grants as legitimate sources of income.

Almost nobody actually pays full tuition anyway. Most students get a pell grant or some other kind of scholarship.

But education is only a waste for people who take stupid trendy majors like gender studies.
Anyone with a lick of sense ought to know that won't get you a decent job.

A CS degree on the other hand is pretty much a guarentee of future employment, assuming that you aren't a total slacker.

|2.5.09 @ 6:30PM|#

However, as far as business management, arts, and music are concerned, the article is correct. I don't know any artists or musicians who actually benefitted from getting a degree.
And people with management degrees generally end up stuck as middle-managers. They aren't the type to own their own business, so they never get really rich.

HammeredHead|2.5.09 @ 7:00PM|#

I think much of your success after college is related to the business cycles position when you graduate. If you graduate during a boom, you will probably get a position related to your career goals. If you graduate during a recession, you will probably find it difficult to get relevent experience. After a few years, your prospects for professional employment are nearly zero.

I am a bit surprised that noone advises current students to take some time off and return to graduated when the economy is better. I would have done much better in finance if I had waited until 1996 to get my MBA instead of getting it in 1992.

Dan H.|2.5.09 @ 7:46PM|#

College is even more expensive than the tuition would suggest. There's the opportunity cost.

Take two people: one goes to college for four years, the other goes through an apprenticeship to be an electrician.

The college kid will come out maybe $100,000 in debt. During that time, the electrician will have earned maybe $150,000, and will have four years of job experience and a journeyman's ticket. He may be married and have a house and a credit rating.

So right off the bat, the college kid is starting a quarter of a million dollars behind. If they did nothing else, and the tradesman took half his earnings and put it in a 40 year investment, then even if the college kid earns a million dollars more over his professional life, he will never catch up.

But around here, a journeyman in a good trade makes far more money than your average college grad. I'm a senior engineer in a large company, and my brother is a tradesman, and he makes significantly more money than I do.

It used to be that degrees in the humanities were luxuries to be pursued by the idle rich. If you were poor, you studied a trade, or you worked your ass off in school to get scholarships, or at best you went to college and made sure you studied a field that would allow you to pay back your student loans.

But then the government got involved, and subsidized the hell out of education, and created easy money programs like interest-free student loans that could be had with no credit rating. And they told everyone that college was damned near mandatory for success. So the kids flooded into the colleges - half of them having no business being there - and the colleges, like the rent-seekers they are, used the infusions of cash to jack tuition through the roof and feather their own nests.

Standards were watered down so that all the kids could go, so now we have millions of people entering the workforce with no real skills, not much of an education, and debt up to their eyeballs. And we're short on people who actually know how to build and maintain things. So we're a society of paper pushers and consumers, heavily in debt and thinking we're much smarter than we really are.

Urkobold™|2.5.09 @ 8:12PM|#

NOW THERE ARE PEOPLE WHO ARE NOT WORKS OF FRICTION. WE CALL THOSE TEST-TUBE BABIES.

HammeredHead|2.5.09 @ 8:44PM|#

Good point Dan. There is a serious market distortion caused by the government.

Colleges are producing far more graduates than the market needs. This is also creating far fewer skilled workers that the market needs. The wages for college educated people are falling while those for skilled trades are rising.

These million dollar studies are backward looking by nature. I bet the wage differential will be far less going forward. I also would wager that the lifetime earnings for skilled workers compared to college educated ones will show a negative earnings advantage for degree holders.

Auto mechanics with certifications id fuel injection or computer diagnostics make 80k a year. This is much more than your typical college graduate will ever earn.

I call it a scam.

Covert Professor|2.6.09 @ 9:58PM|#

There are significant legal obstacles for employment tests or reasonable employment requirements in general; there is case law wherein asking a job candidate to demonstrate proficiency at the task required by the job is deemed discriminatory (quite a lot of it, in fact).

This greatly increases the value of job credentials --- and of course, the primary business of colleges and universities is to provide job credentials.

One of the primary reasons for the growth in the higher education sector -- both in terms of the number of students and the costs --- is that employers view colleges as a mechanism for passing on the costs (legal and otherwise) of screening applicants. That the process is grossly inefficient is of no consequence to employers as they bare none of the costs (or only a very small portion, very indirectly).

Good administrators are well aware of this fact --- which is why the graduation rates for AA students (affirmative action) are low and their degrees are primarily in nonsense (even more so than the usual).