fear of student loans. ex.37665(a)

[EconProf]

We economists look at incentives resulting from public policies, and there are plenty of harmful incentives built into the emerging college debt bubble. Many have already been described in this thread.
1. Easy credit lures borrowers into too much debt, saddling them forever with non-dischargable loans after gaining non-marketable majors.
2. Colleges and universities budgets are bloated with resort-style facilities (the better to lure prospective students), overpaid and underworked administrators (faculty are now outnumbered by non-teaching staff), and reduced class teaching loads. The easy student loans enabled and incentivized this bloat.
3. Easy majors allow weaker students to coast through college in order for the students (and clueless parents) to brag about their degree. Professors in those weak majors have no incentive to warn their prospective majors about the realities of the job market.
4. Since the college experience indoctrinates students to more liberal viewpoints, the current administration has little incentive to put a stop to the abuse of credit.
There are other negative incentives, and sadly, they were all predictable.

[earlyretirement]

[quote=EconProf]We economists look at incentives resulting from public policies, and there are plenty of harmful incentives built into the emerging college debt bubble. Many have already been described in this thread.
1. Easy credit lures borrowers into too much debt, saddling them forever with non-dischargable loans after gaining non-marketable majors.
2. Colleges and universities budgets are bloated with resort-style facilities (the better to lure prospective students), overpaid and underworked administrators (faculty are now outnumbered by non-teaching staff), and reduced class teaching loads. The easy student loans enabled and incentivized this bloat.
3. Easy majors allow weaker students to coast through college in order for the students (and clueless parents) to brag about their degree. Professors in those weak majors have no incentive to warn their prospective majors about the realities of the job market.
4. Since the college experience indoctrinates students to more liberal viewpoints, the current administration has little incentive to put a stop to the abuse of credit.
There are other negative incentives, and sadly, they were all predictable.[/quote]

Absolutely 100% all true. And probably no one can see these things as clearly as someone that is/was in the educational system.

It just seems like a vicious circle that will be difficult to break unless there are some serious changes in the system. As you mentioned EconProf, there doesn’t seem to be any incentive for most of the players to want to change the status quo. The banks, Universities/schools, teachers, etc. all have an incentive to keep this going on.

[livinincali]

[quote=earlyretirement]
It just seems like a vicious circle that will be difficult to break unless there are some serious changes in the system. As you mentioned EconProf, there doesn’t seem to be any incentive for most of the players to want to change the status quo. The banks, Universities/schools, teachers, etc. all have an incentive to keep this going on.[/quote]

The youth and/or the business innovators of this country are the only ones that can break the cycle. The youth can refuse to go to college or select inexpensive options. The business leaders of this community can stop taking the easy way out in selecting candidates and base it on what you know rather than the piece of paper you have. A degree requirement is just an easy way of weeding out a flood of applications. Business leaders should create online applications that test the ability to solve the problems of the business. The cheaters can be weeded out in the interview process.

MOOCs are a cheap way to learn the content. We just have to get the business community to accept them the same way they accept accredited universities.

http://en.wikipedia.org/wiki/Massive_open_online_course

[EconProf]

LivininCali you are sooo spot on.
HS grads are rapidly waking up to the misrepresentations of the entrenched interests, AKA the education industrial complex, lenders, guidance counselors, tenured professors, etc. They know that many of the titans of high tech did not have time for college. They know of too many college grads working as barristas and waiters living in their parents’ basements and contemplating their $100,000 debt. And when they throw in lost income from four years (or five, or six) when they could have been learning a trade or building a business, they are rapidly changing their minds.
The employers too are learning that the college degree is devalued and proves little in terms of their productivity. Too many high school grads go reflexivly to college that do not have the aptitude, interest, or finances for it. They go for the social life, or their parents’prestige.
On-line education promises to cheaply and effficiently teach specific courses and skills, and then award certificates after testing and proof of mastery of that particular subject. Job seekers in the future will have to prove certain competencies in line with the employer’s needs in order to be hired. No more using a mere college degree as a “signaling system” to hire a dozen college grads and hope that a few turn into long-term employees.
Many of today’s colleges and universities will be gone in ten years, and the survivors will be vastly restructured. Learning will be vastly cheaper and more accessible to the poor (esp. in the third world), and the anachronism of tenure will be on the way out. It’s all good.

[The-Shoveler]

I think it was MIT who put all their courses online for free.

you don’t get the piece of paper but…

[scaredyclassic]

Still, a college degree is worth something.

[CardiffBaseball]

[quote=Blogstar]Why did I have to grow up in a time when we were supposed to be ashamed of our “diversity stories”? Woe is me.[/quote]

Was I suggesting he be ashamed? We are looking to save a buck and considering other alternatives.

[earlyretirement]

[quote=EconProf]LivininCali you are sooo spot on.
HS grads are rapidly waking up to the misrepresentations of the entrenched interests, AKA the education industrial complex, lenders, guidance counselors, tenured professors, etc. They know that many of the titans of high tech did not have time for college. They know of too many college grads working as barristas and waiters living in their parents’ basements and contemplating their $100,000 debt. And when they throw in lost income from four years (or five, or six) when they could have been learning a trade or building a business, they are rapidly changing their minds.
The employers too are learning that the college degree is devalued and proves little in terms of their productivity. Too many high school grads go reflexivly to college that do not have the aptitude, interest, or finances for it. They go for the social life, or their parents’prestige.
On-line education promises to cheaply and effficiently teach specific courses and skills, and then award certificates after testing and proof of mastery of that particular subject. Job seekers in the future will have to prove certain competencies in line with the employer’s needs in order to be hired. No more using a mere college degree as a “signaling system” to hire a dozen college grads and hope that a few turn into long-term employees.
Many of today’s colleges and universities will be gone in ten years, and the survivors will be vastly restructured. Learning will be vastly cheaper and more accessible to the poor (esp. in the third world), and the anachronism of tenure will be on the way out. It’s all good.[/quote]

I wish I could say that I see long-term systemic changes in the college/University cost structure in the next decade but I just don’t see that being the case. While some institutions might not be here in ten years, I don’t think the costs/fees are going to go down in the next decade.

Unfortunately probably the contrary. This kind of thing is hard to turn around as we’ve mentioned.

Personally, I don’t think you actually learn a whole lot in college. I think you learn much more with real life work experience and on the “street”. However, a University degree from a credible/respected University will probably always be a necessity to get a good and decent job (or at least higher paying).

College to me is a necessary “stepping stone” and part of something you have to go through to get a good entry level position of any decent pay while you’re young.

I do think more and more people are taking a good look at what they decide to major in. When I went to school, parents didn’t really have too much input on what their kid’s major was. Now, many of my friends and client’s tell their kids if they want to have their college paid they need to have a dual major with at least a degree that isn’t fairly worthless.

I wish I was as optimistic as some of you with how the online education will change the cost structure of a college degree but I don’t see this happening anytime soon.

My prediction is a University degree from a respected university will be much more expensive 10 years from now as it is today.

[bearishgurl]

[quote=earlyretirement] . . . I wish I was as optimistic as some of you with how the online education will change the cost structure of a college degree but I don’t see this happening anytime soon.

My prediction is a University degree from a respected university will be much more expensive 10 years from now as it is today.[/quote]

ER, I agree with this. For-profit online universities such as University of Phoenix charge more than $1000 for one three credit-hour class lasting approximately one month.

They seem to have no shortage of students (who are no doubt deeply indebted with student-loans) who tout how “fast” it is to get a degree from UOP in comparison to “brick and mortar” schools.

I haven’t researched the dropout rates of these for-profit online schools. I suspect a good portion of their students run out of $$ quickly when they discover the amounts of their current loan balances, become scared and quit taking out loans.

I think a degree needs to be from an “accredited and recognized” college in order to make the graduate employable in their field of major. I think most employers can see straight thru degrees from online “diploma mills.”

And the CA Legislature isn’t going to suddenly decimate the CA Education Code as it applies to retirement formulas long ago voted in by the UC Regents and CSU Board of Trustees.

It is what it is.

[UCGal]

I agree with you to a degree about the for profit universities.

But even public, brick and mortor schools are offering more and more online – My grad school – Penn State, now has 100% online programs.

The issue I have with schools like UoP is that the profit motive seems to outweigh what is good for the student sometimes. They incentivize the admissions staff to line up loans for prospective students… so the staff has no incentive to suggest that a loan might not be in the students best interest… it’s about sales.

That said – there can be decent quality education from these for-profit online schools.

I have a family member who teaches nursing for University of Phoenix. She retired from USD’s nursing program and she enjoys teaching still. They have a decent graduate nursing program. It’s not 100% online, either.

I have another family member who got his business doctorate from UoP. (already had undergrad from UC, and an MBA from back east) He was a road warrier at the time – so online worked for him when he was spending weeks at a time at international job sites. A traditional PhD program would have been impossible with his work demands… but online worked perfectly for him – he had plenty of time in hotels to excel at the course work, work on his dissertation, etc.
Now he teaches for another online, for profit, university.

They are trying to convince me to consider teaching for one of these programs as a part time gig in semi-retirement. I’m considering it – but still have to get past the profit over student’s interest piece that bugs me.

[no_such_reality]

[quote=UCGal]
They are trying to convince me to consider teaching for one of these programs as a part time gig in semi-retirement. I’m considering it – but still have to get past the profit over student’s interest piece that bugs me.[/quote]

The students, it is better and faster and often, cheaper. Even if it is for profit.

It’ll sort itself out once people realize they need to look at attending school as their for profit activity. Are they investing in something that will get them more money, or are they really, just purchasing entertainment.

[Coronita]

Please people, tell your kids not to go to college. Less competition for my kids please….

http://money.cnn.com/gallery/news/econom…

My master’s wasn’t worth it
MBAs: A dime a dozen?

[earlyretirement]

[quote=UCGal]

They are trying to convince me to consider teaching for one of these programs as a part time gig in semi-retirement. I’m considering it – but still have to get past the profit over student’s interest piece that bugs me.[/quote]

UCGal,

That sounds like a wonderful opportunity for part-time work in semi-retirement.

Absolutely these on-line degrees I’m sure will pick up and become more popular. But quite honestly for me I learned more from college just going through the 4 years and going through the entire experience, dealing with people, living in the dorm my first year, living in a fraternity, etc.

The entire “college experience” was amazing to me. Looking back, I wouldn’t have changed anything about the experience. In fact, I want my kids to go through that experience rather than sitting at a desk learning online.

I think many people underestimate the social setting and the lessons you learn as a young adult navigating through that and dealing with so many groups of different types of people.

I think making it through college helps shape a person and makes them who they become as adults. That’s part of the reason why I think that colleges and universities will be able to charge what they do. I know many people that have the same opinion.

By the time my kids reach college if someone gives me the option to have them study and get an “online degree” for $X or go to a reputable and respected traditional University for $XXXXXX, I will still choose the traditional route even though it’s more expensive.

[livinincali]

[quote=earlyretirement]
Absolutely these on-line degrees I’m sure will pick up and become more popular. But quite honestly for me I learned more from college just going through the 4 years and going through the entire experience, dealing with people, living in the dorm my first year, living in a fraternity, etc.

The entire “college experience” was amazing to me. Looking back, I wouldn’t have changed anything about the experience. In fact, I want my kids to go through that experience rather than sitting at a desk learning online.

I think many people underestimate the social setting and the lessons you learn as a young adult navigating through that and dealing with so many groups of different types of people.

I think making it through college helps shape a person and makes them who they become as adults. That’s part of the reason why I think that colleges and universities will be able to charge what they do. I know many people that have the same opinion.

By the time my kids reach college if someone gives me the option to have them study and get an “online degree” for $X or go to a reputable and respected traditional University for $XXXXXX, I will still choose the traditional route even though it’s more expensive.[/quote]

How much is that experience worth to you and how exactly is that experience different than moving out of your parents house, moving in with some roommates and getting a job to pay for it. Moving out of your parents house and getting the experience of living on your own is what you describe. Why do you think it takes college to live that experience.

There’s plenty of non-college students in their early 20’s that live a lifestyle really similar to the college students. They get a lot of those same experiences and they didn’t have to pay for college to do it. Now college might feel like a safer place to send your child. It’s a more controlled environment and colleges today will help babysit your kid a bit, but it’s really not that different.

[earlyretirement]

[quote=livinincali]
How much is that experience worth to you and how exactly is that experience different than moving out of your parents house, moving in with some roommates and getting a job to pay for it. Moving out of your parents house and getting the experience of living on your own is what you describe. Why do you think it takes college to live that experience.

There’s plenty of non-college students in their early 20’s that live a lifestyle really similar to the college students. They get a lot of those same experiences and they didn’t have to pay for college to do it. Now college might feel like a safer place to send your child. It’s a more controlled environment and colleges today will help babysit your kid a bit, but it’s really not that different.[/quote]

Oh I’m not disputing that your route produces any less of a “learning” experience. It’s just that unfortunately I think the kid in that scenario has far fewer opportunities to enter the job market and get a job.

Hopefully I’m wrong and things REALLY change in the next decade. But I’ll continue to save each month as I don’t see college getting any cheaper the next decade and I still think in the next decade or so a traditional college experience will still have a better opportunity to get a strong job vs. the online diploma route.

This is one of those times when I’d like to be wrong.

[Author]

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