Slashdot Mirror
Beating the College Bubble
An anonymous reader writes "The real estate bubble is long gone. Oil prices are sliding down. Are we in
an education bubble? The author of
Beating the College Bubble says so.
He's written a short, simple guide to avoiding the crushing college
debt that he thinks is about to bankrupt all of us. Just as easy loans encouraged people to dream big and buy a
McMansion, big college loans are tempting students with too much Comp Lit and Frat
Parties. When they graduate, the debt is so hefty that the students are stuck living
in their parents' basement for 10 years until they've paid it all off. I can
tell you from personal experience that there's some real truth to the hangover.
The beer headache is gone after a week, but the monthly payments just keep going." Read below for the rest of cdog40's review
Beating the College Bubble
author
C. Davis
pages
140
publisher
Edububble Press
rating
9
reviewer
cdog40
ISBN
1438235909
summary
Don't go to college. Save your money.
The author spells out why he wrote the book:
his kids are graduating soon and he wants to do the right thing. Should he encourage
them to spend big on an impressive, Cadillac-grade education or should he
be really cheap so they can be free of loans? Which will help the kids?
Chapter 2 works through a handful of examples of people who spent too much on education. Of course he brings up the fact that all of the big guys in the computer business skipped out on college after a few courses. Steve Jobs and Bill Gates started the trend and now it looks like Mark Zuckerberg is following in the famous footsteps.
The author writes out that some of the people in Chapter 2 really did benefit from their education. The lawyers and the doctors who sell their credentials did very well with fancy diplomas.
Chapter 3 is a largely obvious summary of what we all know: lots of college courses don't have any real use in the world. It's not as bad as jokes like: What do you call an English major? (Waiter!) The problem is that the Internet is very good at exporting bits and most college degrees specialize in manipulating bits. The Internet can and will ship this work to the lowest-wage countries in the world. So if you're interested in making money by manipulating bits, the Internet is going to cut you off at your knees. The real secret to making money he says is getting a career in something like sewer maintenance because that can't be exported despite what that famous Senator says about the Internet just being a bunch of pipes.
Chapter 4 is a great piece that explains where the money is going: into the pockets of the college presidents. Many of them make more than a million dollars a year in salary. Well, that's not all true. Some of it is going into the big, expensive buildings. Apparently long ago, students put on shows without fancy state-of-the-art, high-tech arts complexes. They just used an auditorium. No longer. Schools love to spend money on big-name architects. There's a good mention made of the high price tag, the bar, and the leaky roof at MIT's Stata Center.
Chapter 5 is a kind of a nice guy section added so the author couldn't be accused of being completely cynical and nasty. It points out that most schools aren't just spending the cash on the president's new yacht, but on things the students use like fancy dorms and swanky exercise rooms. I know this is true of my school. The dorms are much better. You can't even see the mortar between the cinder blocks any longer. He's still annoyed by this because all of the fancy features pump up the tuition bill.
Chapter 6 is where the book starts to get useful. He talks about how to negotiate for better terms on the debt or how to avoid picking up too much. You can pretty much skip Chapter 7 and move right on to Chapters 8 and 9 which describe how to save money by getting cut rate degrees or skipping college altogether.
I'm not sure whether I buy all of the techniques. He suggests that internet forums like Slashdot are more informative than a college classroom, something I'm not sure I believe. Yes, there's more discussion and the moderation system does a good job of shutting up that bossy know-it-all in the front row, but it would be nice to have a professor. I guess that's what they mean when we're supposed to read the article before commenting. Hah. No one did at my school either.
There are good ones. He tells of low-cost degree programs at most schools. You can save 80% of the price of going to Harvard, for instance. I think he's pretty honest about this because he does point out that you lose something when you take the cheap route. But freedom is just another word for nothing left to pay on your loans.
The book's website is trying to make the book interactive by posting new news stories and alternative solutions for college. It listed the new School of Everything as an alternative.
This is where the meat of the book lies. The only way to avoid getting hurt by a bursting bubble is to get out early. This book made me think long and hard about college. You can't go back and do a scientific experiment because you can only live life once. But I do think that's how he put it. We're really in love with the idea of college that we'll spend anything. It's like when you fall head over heels over some beautiful girl that you don't even know. Then you run up your credit card on an expensive meal to impress her only to find out that she's kind of snobby or flakey or just not interested in the right things (PS3, BitTorrent, Android, Erlang etc). When the bill comes a month later, you feel kind of dumb. This book is trying to help the next generation avoid that headache.
You can purchase Beating the College Bubble from amazon.com. Slashdot welcomes readers' book reviews -- to see your own review here, read the book review guidelines, then visit the submission page.
Chapter 2 works through a handful of examples of people who spent too much on education. Of course he brings up the fact that all of the big guys in the computer business skipped out on college after a few courses. Steve Jobs and Bill Gates started the trend and now it looks like Mark Zuckerberg is following in the famous footsteps.
The author writes out that some of the people in Chapter 2 really did benefit from their education. The lawyers and the doctors who sell their credentials did very well with fancy diplomas.
Chapter 3 is a largely obvious summary of what we all know: lots of college courses don't have any real use in the world. It's not as bad as jokes like: What do you call an English major? (Waiter!) The problem is that the Internet is very good at exporting bits and most college degrees specialize in manipulating bits. The Internet can and will ship this work to the lowest-wage countries in the world. So if you're interested in making money by manipulating bits, the Internet is going to cut you off at your knees. The real secret to making money he says is getting a career in something like sewer maintenance because that can't be exported despite what that famous Senator says about the Internet just being a bunch of pipes.
Chapter 4 is a great piece that explains where the money is going: into the pockets of the college presidents. Many of them make more than a million dollars a year in salary. Well, that's not all true. Some of it is going into the big, expensive buildings. Apparently long ago, students put on shows without fancy state-of-the-art, high-tech arts complexes. They just used an auditorium. No longer. Schools love to spend money on big-name architects. There's a good mention made of the high price tag, the bar, and the leaky roof at MIT's Stata Center.
Chapter 5 is a kind of a nice guy section added so the author couldn't be accused of being completely cynical and nasty. It points out that most schools aren't just spending the cash on the president's new yacht, but on things the students use like fancy dorms and swanky exercise rooms. I know this is true of my school. The dorms are much better. You can't even see the mortar between the cinder blocks any longer. He's still annoyed by this because all of the fancy features pump up the tuition bill.
Chapter 6 is where the book starts to get useful. He talks about how to negotiate for better terms on the debt or how to avoid picking up too much. You can pretty much skip Chapter 7 and move right on to Chapters 8 and 9 which describe how to save money by getting cut rate degrees or skipping college altogether.
I'm not sure whether I buy all of the techniques. He suggests that internet forums like Slashdot are more informative than a college classroom, something I'm not sure I believe. Yes, there's more discussion and the moderation system does a good job of shutting up that bossy know-it-all in the front row, but it would be nice to have a professor. I guess that's what they mean when we're supposed to read the article before commenting. Hah. No one did at my school either.
There are good ones. He tells of low-cost degree programs at most schools. You can save 80% of the price of going to Harvard, for instance. I think he's pretty honest about this because he does point out that you lose something when you take the cheap route. But freedom is just another word for nothing left to pay on your loans.
The book's website is trying to make the book interactive by posting new news stories and alternative solutions for college. It listed the new School of Everything as an alternative.
This is where the meat of the book lies. The only way to avoid getting hurt by a bursting bubble is to get out early. This book made me think long and hard about college. You can't go back and do a scientific experiment because you can only live life once. But I do think that's how he put it. We're really in love with the idea of college that we'll spend anything. It's like when you fall head over heels over some beautiful girl that you don't even know. Then you run up your credit card on an expensive meal to impress her only to find out that she's kind of snobby or flakey or just not interested in the right things (PS3, BitTorrent, Android, Erlang etc). When the bill comes a month later, you feel kind of dumb. This book is trying to help the next generation avoid that headache.
You can purchase Beating the College Bubble from amazon.com. Slashdot welcomes readers' book reviews -- to see your own review here, read the book review guidelines, then visit the submission page.
big college loans are tempting students with too much Comp Lit and Frat Parties. When they graduate, the debt is so hefty that the students are stuck living in their parents' basement for 10 years until they've paid it all off. I can tell you from personal experience that there's some real truth to the hangover.
Well, here's my anecdote. I didn't rack up $100k worth of loans like my friends. I worked nearly full time through my undergrad and didn't receive a penny from my parents. I came out $20k in debt and had to prove that I actually put a lot of effort into my public college undergrad degree. I graduated in 2004, made my employer pay for my Masters from a private college (which I got in 2007) while, again, working full time. I will be making the final payment next month and be debt free for the first time since I was 17.
... " or "if trends continue" followed by "you will save a shit ton of money." I know because I received these offers ... hundreds of them. They all turned out to be variable rate bullshit. I did my homework and only needed minor math skills to figure out the scams. Maybe 5% of the people I know have had loan consolidation work for them (all one of them who graduated years before me). At a Halloween party, one of my friends lamented about trading up 3.5% & 4.5% fixed rate loans worth $80k for a consolidated loan at 3% in 2004. The company now sends her biannual updates informing her that her rates will be going up and she's looking at 7% now. Imagine that. She signed up with a company that doesn't even bother justifying it, she says some of the letters are just one sentence. The sad thing is that she can still afford the monthly payment so apathy wins for the next 10 years.
... I've doled out more than my fair share and often call my friend who is now a CPA.
I know a lot about some of my close friends and if I may impart some wisdom (I have no idea if this is covered in the book), do not consolidate your loans. Just don't do it. So many people consolidated their loans after reading a letter from a third party that used words like "at the current federal reserve rate
I know I am lucky, I was able to sleep 3-5 hours a night with little repurcussions. Most people can't live off of a cup of noodles or day old wheat bread (animal consumption only FTW) for 30 cents from Erberts & Gerberts. Make smart choices, if you aren't good with finances, ask a friend who is
If you want to pay for a brand name college, I'm not going to stop you. Their are plenty of schools like the University of Minnesota that have great engineering programs and although I can't walk into an interview and drop a name like MIT, I don't mind proving I'm worth what you want to pay.
My work here is dung.
And the great thing is that bankruptcy does not wipe out student debt.
As much as I understand the need for that not to happen, this has become a dangerous trap and something may need to be done about it.
Honestly, the easiest way to avoid debt is to avoid it in the first place. Why do students take out $30k in loans for a school that only costs $6k per semester? It might not be the easiest route, but I worked all through school, and tried to pay off all the debt I could during the deferment periods once I graduated. I can honestly say that I am almost done with a Masters degree and have a total of $3k in debt that will be paid off before I graduate.
Maybe I should sell a book... Then I could pay off that last little bit and move on to pure profit!
I'm in the same boat... and I haven't had the time to 'learn' because I already made the mistakes.
First off -- Harvard, MIT, etc.. great schools, but unless you're going on a full ride they simply are NOT worth it (at least as an undergraduate). The simple fact is that you're going to waste a lot of time in your undergrad partying, having fun, and not taking it seriously, regardless of whether it's MIT or Harvard or a state school. I wound up going to a private school and graduated $60k in debt, AFTER a half scholarship.
I'm one of the lucky ones though... while my educational loans are very high, I make a good salary and I'm working on paying it off soon. But I am also married and rent out an apartment off of my parent's house -- it helps a lot in offsetting the debt, and I'm working on offsetting even more. Hopefully in another few years, I'll have it all paid off and be debt free. That time is a long way off though, but slowly but surely I'm working there.
I'm trying to convince people like my sister, who is majoring in philosophy and by the time she graduates, will be 40k in debt -- NOT to keep on her current track lest she want to screw up her entire life. Like I said I'm fortunate, and I realize I am -- but most people are stupid in addition to naive with regards to student loans and eventual salaried positions. My sister is going to philosophize why she's broke, and she still has plans to go to grad school and become a professor eventually.
I just hope people don't make the same mistakes, and predatory lending is banished ESPECIALLY for those in educational debt. I've already screwed myself and I'm working it off -- but there are going to be a LOT more who simply can't pay, and they are going to eat up our country in bankruptcies just like the housing crisis is now. The fact that they are deferred on payments only helps that it hasn't hit us at the same time.
The price is always right if someone else is paying.
For many generations a college education generally fulfilled the promise of class mobility. E.G. Dad's a gardener, daughter a lawyer. The key to this dream was two-fold.
1. Cost of tuition/loans were capable of repaying in +/- 10 years.
2. Job you leveraged yourself into PAID the loan + decent standard of living over the 10 year payback.
Neither 1 or 2 hold true any more.
Discussions about class in the U.S. are generally forbidden, but I'll throw it out anyway. I find it almost impossible to see how decades of "winner take all" economics ISN'T creating a massive, permanent, underclass. Economic conditions suggest this is so already.
http://www.maxineudall.com/2010/02/should-economists-be-sued-for-malpractice.html
I disagree. I do not have a degree. The main ingredient for success is not a piece of paper or 'getting your foot in the door', but excelling - and working hard as part of that - and not being dumb about the value of your skills. Sell yourself. I don't consider any break I got 'lucky'. I was in the right place at the right time, and you can be too.
HBI's Law: Frequency of calling others Nazis is directly correlated with the likelihood of the accuser being Communist.
My experience with federal consolidation was fantastic. I was able to consolidate 80K+ at less than 3% fixed. But as it turns out there is help on the way beyond consolidation. It's called Income-Based Repayment and it begins this year. http://www.ibrinfo.org/ This program has the potential to solve both the consolidation problem and the bankruptcy problem.
We willna be fooled again!
I think it's time that as a country we have a serious conversation about the people making blood money off of our children's college dreams. This is a serious question: why don't we just forgive all outstanding US student loans, and nationalize the assets of the Sallie Mae corporation and use the money to jump-start a program to send students to college for free? Also, how much money is the CEO worth? The rest of their directors? Perhaps a dialog about seizing the asse's they've gained during their tenures at SLM, preying on our nation's youth, is necessary too. Discuss.
The best is to do a community college in a town with a 'real' college. Move into the same apartment complexes as the other students. Go to the same bars. You'll still get the same college "experience" but won't have the debt to show for it.
The in-state tuition and fees (ie, bare minimum) at NCSU (public university) was in the neighborhood of $650/semester when I started in fall of 1990. Today, that same base tuition and fees will run you $2643.
Using the CPI, $650 in 1990 dollars is approximately $1031 in 2008 dollars. In "neutral dollars", my university now costs 256% what it did 18 years ago (406% in real dollars).
When I was in graduate school (and not paying my own tuition), I routinely saw in-state tuition increases of 15-20%/year and thought "those poor bastards".
Comment removed based on user account deletion
If there is an education bubble, it just burst and no one noticed. Not to be cliché, but as someone who was recently laid off from an education lender who exited the market for private loans, I'm getting a kick out of these replies.
I have to tell you that the problem coming up for new students isn't going to be paying off their huge debt after college, but instead finding a way to get the money to attend.
Lenders are going under quickly. We were backed up by a large bank with a promise of funding for private loans, even in these financial tough times; then a week later they backed out on us (myself and all my friends are all still without employment). At this point (IIRC) there are around 30 private loan lenders in the education marketplace, this is down from approx 100+ only two years ago.
The Feds are going to pull the plug on guaranteed FFEL buy-backs pretty soon (the whole country is out of money, not much choice); this is bad because schools are going to go with Direct Lending (which does have better interest rates, so that's good for students and families) and lenders will have no in-road to sell private loans (once they have a Stafford and they need more, you can recommend a private loan).
Lenders will drop FFEL as there is no incentive to participate any longer (high default rate with no 100% buy-back guarantee, BARELY profitable..I'm talking pennies on the dollar above operating costs), and since that will dissipate volume so heavily, probably drop out of the market altogether.
Thus, state schools, community colleges, and cheap private schools are going to see a huge spike in demand, and larger, more expensive private institutions are going to see a drop in enrollment. As no one can afford the big school and no one can get into the cheap ones (they're full, even after expansions), we're poised to start becoming a lot dumber than we are now unless something tips the scale back. Keep an eye on education costs, this is the "sleeper" of the worries that face the USA.
CAn'T CompreHend SARcaSm?
There is no such thing as "too big to fail".
Capitalism fails when companies don't face destruction at the hands of their managers' incompetence.
If congress can't take the popular impact of such massive companies collapsing, then they need to pass legislation limiting the assets of specific companies, compelling divisions into financially separate departments as they approach that cap.
VLC FOR MAC IS DYING! IF YOU DEVELOP, PLEASE SAVE IT!!
>Anyone who says that doesn't understand the role of AIG in the economy.
I don't think you quite understand. I would embrace the complete breakdown of the system you call "the economy", including the destruction of every industry, the fall of cities, and the end of the current "system of government." All these things are failures and should be allowed to fall.
As a person who works in the higher ed industry (faculty & scientific research), let me tell you, there are way too many institutions out there.
The fact of the matter is that there are many, many institutions out there that are passing unqualified graduates in the name of keeping the doors open. As much as some participants might disagree, higher education is a business, and students are the customers. If you fail too many students, enrollment (i.e. revenue) drops.
As much as it pains me to say, I believe that we as a society would be better served if 15-25% of this country's marginal universities were to close. The existence of these institutions is not resulting in an enlightened, educated populace, but is instead simply driving down the value of a college degree.
I'm guilty of both. But honestly, two institutions that are failing millions and are now thankfully crumbling are "college" and "marriage". The two most overrated aspects of American life, and both cause lots of remorse and compromised lives. What will happen next is good, and healthy: the dull institutions will crumble, while their mission will live on in some new way. *Learning* is good, I suspect we'll see lifelong learning replace 4 years and a sheepskin.
That I don't have a degree & still make decent money for someone my age. Oh, and actually am 40 w/ a + net worth.
I was a C student (ace tests, fail homework), so naturally not the most "motivated" scholastically speaking. My spelling still sucks. But when I made the determination to go to UW Comp sci, I was told by peers who had done a semester that 1. I couldn't do it. 2. I wouldn't do it. My dad said NO WAY in Explitave Hell to the bill. We had a huge fight over me becoming nothing, and how can I ever change if I am not allowed to go deep into debt. (granted I didn't see it that way then)
I said Whatever, I'll just drink and do drugs for a few years, race around town, and do a little jail time... (O.K. I didnt' say that but that's what happened)
Somehow, I survived. I am no longer that person (he disugsts me actually, Please don't drink and drive!) I found that I had expensive tastes for things, and I needed to fund them or steal them, and well, it's hard to steal a perfectly cooked prime rib unless you get the whole cow... That only happened once.
I also found out what I didn't want to do. I took some Classes at a Community center for slightly higher education. I learned all about programming from a guy who never programed a day in his life. On the 5th day of class he told us "I'm learning this as I teach it so bear w/ me." I learned about Database structures and relationships from a teacher who the school wouldn't pay to do her job so she left (She was awesome). I started to learn C from a guy who was so Jaded that his educational message was overshadowed by his agression. Lets not even go near my 1st Calculus teacher who had a honest to goodness personality disorder. My 1st time w/ Bash was taught by a good kid, 4-5 years my jr. He was a great teacher, but they didn't pay him crap either. My 2nd calculus teacher rocked. He took me to The Limit, and we had a beer there. I had to take a human relations class, and realized that here is someone (a psychologist who taught the class) who really needed therapy.
Then it all hit me... I love computers, and HATE programming. I loved Logic, Hated coding. What happens if I OJT, and just work hard, really hard? What if I learn how this business runs...and then... apply my knowledge to that. what if I just work my way into IT? I stopped school and focused on work. I felt unfullfilled for a while. My wife left, I ran over my cat, and life generally sucked... for about 5 months. Then it happend. I started to get promoted.
Since I started where I work, I've doubled my salary a twice and working towards my third. Plus clients. I have been "seen" by my organization. The higher ups have fast tracked my career, and even waived education requirements for the job I have. Yeah, it's taken me as long or longer than it would have had I gone to college, but I got some things out of it. Sallary negotion takes a little more research. I learned what I want, what I can get from working for someone and what I have to do to work for myself. (I feel for small business owners... Collecting on a project is a PITA)
There are some things I never got to do, like Study, or have some greater social interactions, but that's what WoW's for anyway. I now make more in gold (just kidding about the in gold part) than my dad and mom combined. My dad has 2 degrees.
If I had any advice to give to the youth, it'd be Learn. From school if you can, from your surroundings eitherway, and especially from your parents mistakes. Don't put off your homework, but don't put off partying either, you only live once, and hot people are at their prime between 20-30.
A small part of me may still wish I would have gone to college, and I may do some time in the future. I regret some decisions I have made, sure who doesn't? Now, I realize that I make the decissions that affect my life so do you.
Just a question: Who's Paris Hilton?
We actually have a pretense of a free market in the US, or at least we did until recently. Lead weights are good for diving but not hot air balloons.
S&L scandal? Lockheed? The nationalization of nearly every industry in WWII (because it was more efficient... but that wouldn't be suitable to your original argument, eh?) No bid contracts throughout the Iraq War? Not even counting the countries we've run over in order to better benefit US business, or the tariffs we've been giving agribusiness for years because they don't want to compete and suffer the same fate as the rest of our manufacturing industries. We believe in the free market when it suits the particular interest of the top tier of businessmen who, through their influence, help formulate policy. (Please deny that major players from the energy market helped formulate Bush policies. I beg you.)
K-12 public school education costs twice as much as private schools per pupil in the US, and private schools do a lot better.
From what I gather from this DoE study, private schools do out perform government schools, but not evangelical schools - mostly Catholic and Lutheran. I haven't studied in detail their performance metrics, but I imagine the fact that parents are invested in their child's education if they're paying for it. Not to mention I don't think there are too many private schools in urban ghettos, so the numbers are probably similar if it's restricted to similar population demographics. And please provide your source on private school costs.
We have the best mortality rates for cancer and heart disease. UK has among the worst
Source? From this source, the Journal of American Medical Association: "The US population in late middle age is less healthy than the equivalent British population for diabetes, hypertension, heart disease, myocardial infarction, stroke, lung disease, and cancer."
I never said free markets did solve all problems, but they solve most better than government does.
Such as? If that were the case, why in cases of national emergency are the resources of the country taken over by government? (WWI, WWII, Korea...)
Last time I checked, the US has the most college graduates of any country. Our worst college-educated state, West Virginia, has more college graduates than any country in Western Europe.
That's obviously false.
I laugh at a 100% gas tax. In America, we have this thing called freedom, and we like freedom in our daily lives, which includes driving. Freedom, economic, political, and personal, has allowed us in roughly 200 years to build an economy that dwarfs any other.
Nope. A strong state that has protected resources for US business interests has led to our wealth.
In fact, if California were a country, it would be the fifth biggest economy by some measures. Americans simply want a free lifestyle, not one dictated by central bureaucrats. Our oil dependence has not been utopian, but I don't believe in utopia. You certainly have your own problems in Europe, and most Americans wouldn't trade yours for ours.
I live in the southeast. And yes, a majority of Americans have been asking for socialized medicine, more education spending, more UN involvement in world affairs... pick any poll you like. Freedom and liberty have nothing to do with doing exactly what you want all the time.
Frankly, anyone who would quote a nut like Chomsky is hard to appeal to.
Provide one factual counter example to anything he's ever said, if in fact you've read more than quotes.
But I would submit to you that America did not quickly become the largest economy in the world by employing