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.

Comments

Crushing debt?

[Anonymous Coward]

I'll just get a loan to pay for that.

Oh great, here comes the scapegoat..

[LingNoi]

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.

Just because you live in your Mom's basement surfing Slashdot all day doesn't mean you can blame it on college debt.

Re:Oh great, here comes the scapegoat..

[Psion]

Merriam-Webster would appear to disagree with you.

Re:Oh great, here comes the scapegoat..

[PitaBred]

And given your tenuous grasp of the English language, it's quite obvious that you have no college degree.

~ Pitabred, rolling with a college degree and $0 loan debt 5 years out of school.

Re:Oh great, here comes the scapegoat..

[mrjimorg]

Ok, I'm sure this is a troll, but I'll bite. It really is scapegoat, and the source of the word is from the Hebrew story of Aaron sacrificing a goat which bore the sins of his people. This event is celebrated on the Jewish Holiday of Yom Kippur. Hmm... I guess Jews have a goat, Christians have a lamb
http://www.answers.com/topic/scapegoat

Re:Oh great, here comes the scapegoat..

[Jah-Wren Ryel]

It is like the word "gay" in video games. When I was first introduced to the word online back on me ol' dial up connection playing Counter Strike people called each other "gay" and "faggot" all the time. After a little while, it was not derogatory to homosexuals.

And getting gyped isn't derogatory
nor is it to jew down a price
and indian giving is totally neutral.

Here's a clue -- a bigoted turn of phrase is at its most derogatory when the people using it accept it as just part of the vernacular and don't question it at all because that means their society has so completely accepted the bigotry to the point where they don't even notice it as being abnormal.

In before "your just a homophobe": I like lesbians and bi-sexual girls. My favorite bands include Judas Priest and Queen. Marriage is a LEGAL institution and in the US that means separate from religion. Prop 8 is unconstitutional and will eventually be overturned. It needs to have never been voted into law.

Yeah, and I have many black friends too.

Re:Oh great, here comes the scapegoat..

[PachmanP]

I disagree completely! I would be spending my days surfing slashdot in my own apartment, if I didn't have any college debt!

Re:Oh great, here comes the scapegoat..

[PachmanP]

I don't care what those frakkin 16 year olds playing Halo/SOCOM/Counter Strike think, gay/fag is not a pejorative. "Lame" is even worse. If someone wants to describe a weapon as "bad" or a player is "unskilled" Then by the Goddess they can develop an actual vocabulary full of words that mean what they are saying.

Gay. Lame fags like you just jealous of teh skillz.

Re:Oh great, here comes the scapegoat..

[protolith]

a bigoted turn of phrase is at its most derogatory when the people using it accept it as just part of the vernacular and don't question it at all because that means their society has so completely accepted the bigotry to the point where they don't even notice it as being abnormal.

I think the exact opposite is true. A phrase is at its least derogatory when it is so ubiquitous that even those that were once being degraded are no longer aware they should be offended.
That is the point when the word or phrase has reached cultural neutrality.

A word is at its most derogatory when it is used with full malice and prejudice.

It is an unfortunate circumstance when ignorance of the original meaning of a word or phrase allows its use to become commonplace in an alternative vernacular.

"Consolidation" is a Scam

[eldavojohn]

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.

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 ... " 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 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 ... I've doled out more than my fair share and often call my friend who is now a CPA.

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.

Re:"Consolidation" is a Scam

[krlynch]

The blanket directive "Don't consolidate" is just as specious as the blanket "You should consolidate". Be a smart shopper! We, too, got lots of those "consolidate with us!" letters ... we threw most of them out. We eventually did consolidate my wife's loans, cutting the interest rate on most of her debt by more than half. The rate is fixed for the life of the loan, and we get a further rate discount for automatic payments. The effective rate is so low that they are almost paying US to hold the loan once inflation is counted in.

Re:"Consolidation" is a Scam

[Anonymous Coward]

Can't agree with you more. I came from India, with enough money to pay for first semester tuition. I got a part time job (paid $7/hr) to pay for the living costs. I managed to live off of about @ $300/month. For two and half years I lived like a monk. Even then I owed $8000 to different credit card companies and some $12000 to a bank. I paid that off in four months after getting my first job.

Take it from someone like me (call it exotic if you wish), but you don't have to live in your mom's basement for 10 years, if you use your money wisely. Don't spend on frivolous things if you don't earn anything. As simple as that.

Re:"Consolidation" is a Scam

[vux984]

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.

The advantages of a brand name school have almost -nothing- to do with the quality of the education itself.

The advantages are simply:

1) It may get you interviews over someone else, due to brand name recognition, for example he might shortlist the one from MIT over a similar candidate from from U. of Minnesota. If he finds a satisfactory canditate from that short-list, you might never get the interview.

2) The more prestigious the school, the more prestigious the -other- students tend to be. And who you met there that you might not otherwise have met is usually far more valuable than what you learned there that you might not otherwise have learned.

IT isn't quite as 'who you know not what you know' as politics or law, but IT has its celebrities and movers and shakers too, and knowing someone high in the ranks at Google or Sun or Apple or IBM or wherever still opens a lot of doors. Your choice of school impacts your odds of knowing the next generation of these people, or meeting these people's kids (although again, unlike politics etc IT isn't nearly as dynastic...)

But then not everyone on slashdot is in IT either, not by a longshot.

Re:"Consolidation" is a Scam

[nizo]

...I can't walk into an interview and drop a name like MIT...

If only you had gone to the Michigan Institute of Technology instead...granted it is geared towards people seeking careers as automotive mechanics, but just think, being able to say, "I went to MIT" would be totally worth it.

Re:"Consolidation" is a Scam

[vux984]

Things like credit card loans or car loans can actually be better when consolidated because they could be just as variable.

Consolidating credit card debt is nearly always a good idea, given those things usually just skirt the legal limits, and often run 18%+. Truly, the key is not to go into credit card debt in the first place... but once that ship has sailed and you are in debt, consolidating to a loan with a better interest rate should be a no-brainer.

Re:"Consolidation" is a Scam

[HungWeiLo]

At a previous conglomerate that I worked at, our Bangalore subsidiary had a guy get promoted to the head honcho. I found a copy of his resume in the printer, and it said he graduated from "IIT" (India's premiere educational institute on par with MIT).

A quick Googling found him struggling with homework questions on a web forum attached to an evening class at the Illinois Institute of Technology.

Re:"Consolidation" is a Scam

[Dripdry]

You say you were lucky, being able to funciton on very little sleep, for instance. You're saying your situation is the exception to the rule. I'm just trying to point out that many people simply cannot perform these sorts of things. I literally go nuts after about a month of 5-6 hours sleep and stop being able to physically function, for instance.

In defense of college: For most of us, we've spent our entire lives in school, so the next step is college. It's simply expected of all the people that went to my high school.

To piss off the non-collegiates: I know a fair number of people who never went to college. Many of them are snobby about how they didn't get "taken in by it" or that they're "just not college material". Incidentally, many of them could contribute A LOT to an academic setting.
I also hear many parents and grandparents say their kids aren't college material. This trend bothers me. How else can people get a solid grounding in a wide range of the basics that underpin our ability to both learn and critically reason? High school helps a little, but falls short imo.

Although I am saddled with a fair amount of debt,about 20K, my college experience was useful. No, I didn't learn a bunch of real world skills (was in Comp Sci, and looking back it would ahve helped a lot to learn real world skills, though I took a lot of different other types of classes). I did, however, learn a lot about interacting with people(this email certainly shows!), understanding HOW to learn LOTS of different types of information, and most importantly I learned many different points of view.

What I find with non college-goers sometimes is a certain ignorance or narrow-mindedness. Their way, much of the time, seems to be the only way and all others be damned. Some of these people have had success with their jobs, though many I know are still working at Kinko's or Jimmy John's ten years later. Would the non-college achievers be better off if they had gone to college? I don't know.

I know I've written something that in itself is a bit narrow and probably sounds ignorant (I'm really fishing for other viewpoints, in a hamfisted, non-college kind of way), so I have a creeping feeling that I've shot this part of the discussion in the foot.

I may have wasted a LOT of time in college, yes. Was it a worthwhile transition between school and life instead of just being thrown to the wolves in the real world? Did it teach me MANY ideas that I've used to further my career and relations with others that I NEVER would have learned without college? Did it teach me an appreciation for all the different types of people who make the world function? Yes, yes, and yes.

Encouraging people not to go to college because it has nothing to offer seems like telling people not to get their driver's license because they're 16 and where do they need to go at this age anyway? It's very shortsighted in most instances, I feel. There's your car analogy!

Re:"Consolidation" is a Scam

[sesshomaru]

I credit the fact that I can make a decent living on the fact that I not only went to college, but when my first degree wasn't doing it for me I went back again and got another degree. My first ever "real job" that wasn't in retail grew out of an internship I had while I was getting my second degree, and all my jobs since then have come from the fact that I was able to get real world experience to put on my resume.

I have some pretty big regrets about mistakes I made during my life, it's never even occurred to me to put college in there.

On the other hand, I did have a lot of help from academic scholarships and money my family saved for it (as well as my employer later on). I never had any debt from that.

However, I'm living with horrible debt now, which came from a relationship as opposed to college. I think that the debt "industry" (some industry, it's primary product is poor people) will find a way to get at people until it is properly regulated.

Re:"Consolidation" is a Scam

[Oligonicella]

The rule there, I'll take your word. The rule in the workplace in general, numerically not possible.

Re:"Consolidation" is a Scam

[Dripdry]

Not to get too far off topic, but I am in a similar position with debt.

Although my dad and I own a business, between all the debts they and I have racked up (medical, educational mainly) we are strapped to the max. One day I'll get out form under it (one month at time), and once I do I'll be living alright, but you're right: debt is an industry, and it really is terrifying.

Re:"Consolidation" is a Scam

[couchslug]

"I managed to live off of about @ $300/month. For two and half years I lived like a monk. Even then I owed $8000 to different credit card companies and some $12000 to a bank. I paid that off in four months after getting my first job."

EEEK! A thrifty, competitive foreigner with a work ethic! Cleanse it with fire and legislation!

Re:"Consolidation" is a Scam

[kklein]

Yes.

I am a university lecturer. I have been in or working for (it's the same as in, but you're paid) universities since 1993. None of my universities have been famous, and I'll back up what you say.

When I was in college, I thought college was about learning. It isn't. Well, I should say, it is but that's only part of it. The main part, as I see it now, is about building your resume. You can, you see, learn anywhere.

As a teacher, let me tell you what most of the education research and my experience finds again and again: Great students are born, not made. Teaching is easy, because it's actually impossible. You can't teach anyone anything. All you can do is help the people who want to learn get where they are going. I work for a pretty unknown school, but I have some stellar students (and a lot of not-so-hot students) who are doing truly amazing thing, and I feel honored and privileged to give them a helping hand whenever I can, and help them fill in the gaps between what they already know. That's all I can do, but I'm happy to do it.

However, these students are not likely to fare as well as students who come from some of the more famous schools, regardless of their inherent intelligence or drive (honestly, I've come to believe the former is pretty common, but it's the latter that makes the difference). They won't have the resume that opens the doors.

In my own experience, I basically couldn't get a job after uni. I am now 34, and I am finally starting to make a livable middle-class wage. Part of that was my ridiculous degree; part of that was my unknown school. I had to go back to school (on my dime) to get a master's before I could get a real job. However, my master's isn't that famous either (I hadn't figured the name-value bit out yet). In my current situation, I have a colleague from Columbia, whose program in our field is not really as good as the one I graduated from (based on conversations and observations), who doesn't have the theoretical grounding I have, who has done almost no research in our field (and what he has done is not quantitative because he never learned research methodology, stats, or even how to write a journal article in his program), and who (according to inside sources) didn't interview well--but the job that we both applied for recently actually had a week-long debate on who to hire--the guy with the publication list (me) or the guy who went to Columbia--and they finally just found the funding to hire both of us (thank god).

But see what happened there? I work every night and every weekend on building a publication list; he catches up on satellite TV. I spend my breaks in my office studying and plowing through stats; he literally, by his own account, sits on the couch and watches DVDs with his wife for 2 months (he shows up at the end of breaks and he hasn't had a haircut or shaved since school got out). And yet we end up getting the same job (at a prestigious university).

Folks, if you're in college now, or if you have kids who are heading that way, take a close look at what you're getting for your money. My friends and colleagues who spent a little more and went to famous places are all doing better than I am, even in the same goofy field. Name-value doesn't mean a better education; it means better options for the future. You can learn anywhere. Hell, if you're highly motivated, you can teach yourself. That's not what college is about. College is about getting a job.

And take it from me: The people who say what you major in doesn't matter, as long as you get the degree are wrong. If you are in the college of liberal arts now, change majors. If your kids are talking about going that way, but don't want to be teachers, refuse to pay. There is a lot of great stuff in those majors--important stuff!--but majoring in them is sacrificing your life for them, unless you really want to teach them. Don't point at people like me, who are doing fine, and say "See? He majored in En

Re:"Consolidation" is a Scam

[ServerIrv]

Although you may be correct in your sleuth work, there are a lot of people with the same name in India. Be careful before you throw him under the bus.

Bankruptcy won't help

[Anonymous Coward]

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.

Re:Bankruptcy won't help

[Abcd1234]

Why do rich bankers get bailed out for billions but the rest of us get stuck with $50K in student debt?

Because, like it or not, the health of the economy doesn't directly hinge on your ability to comfortably pay back your student loans (unlike, say, AIG, who's failure would have untold repercussions throughout the financial industry).

Basically, the government fucked up and let these companies get too big to fail while turning a blind eye to their shenanigans. And now they're forced to bail them out. It's just that simple. It sucks, to be sure, but that's the reality. Bitching and complaining won't change it.

Re:Bankruptcy won't help

[mcgrew]

bankruptcy does not wipe out student debt.

Correction: it doesn't wipe out educational loans. A student who racks up credit card debt who makes less than a prescribed amount of money (they changed it after my bankrupcy; I'm not sure how little you have to make now) can get that debt discharged.

It doesn't wipe out taxation debts, fines, child support, or some other types of debt either.

Re:Bankruptcy won't help

[Anonymous Coward]

Why do rich bankers get bailed out for billions but the rest of us get stuck with $50K in student debt?

Because, like it or not, the health of the economy doesn't directly hinge on your ability to comfortably pay back your student loans (unlike, say, AIG, who's failure would have untold repercussions throughout the financial industry).

Specifically, letting AIG fail would allow some forbidden things called capitalism and social mobility. When the Politburo prevents unsuccessful businesses from failing, they simultaneously prevent the emergence of stronger systems, because capitalism is inherently dependent on businesses failing when they are engaging in unprofitable behaviour. This creates social mobility by providing empty market niches for competitors who could not otherwise enter the market due to high startup capital requirements. The hereditary boardroom class do not want social mobility and therefore they do not want true capitalism.

Essentially, bailouts prevent the self-correcting functions of the marketplace which would normally prevent formation of plutocracy

Do y'all get it yet?

Basically, the government fucked up and let these companies get too big to fail while turning a blind eye to their shenanigans. And now they're forced to bail them out. It's just that simple. It sucks, to be sure, but that's the reality. Bitching and complaining won't change it.

Since "the government" purposely created the "crisis" by releasing the orginial Paulson bailout request, I have to laugh.

This is just last-minute profit-taking by the Bush/Cheney crony system. It's probably been planned for five years or more.

Re:Bankruptcy won't help

[Abcd1234]

Shooting a few of the CEO's who got it into that mess would sure make me feel better, though. Or at least jabbing them with a sharp stick.

Well, I've got my stick. Meet you in NYC? :)

Re:Bankruptcy won't help

[Copid]

How about propping the economy up by giving money to the people who were trying to pay back the loans, so they won't foreclose, so the lender won't run into trouble in the first place?

The problem there is moral hazard. What you've proposed is essentially a targeted gift specifically for the worst players in the industry (both borrowers and lenders). If you're going to put money in to bail out failed business ventures, you have to do it in such a way that you're not rewarding bad behavior.

Ideally, you recapitalize the bad lender, taking it over and diluting or wiping out the sharedholders in the process. Restructure what loans you can (and it's a nasty trick--probably not very doable in this environment) and let the bad ones go bust. Keep the lender alive and paying its debts until things start to return to normal and sell it back off. The end result is that you avoid a system-wide collapse, the people who did dumb things generally didn't make out very well, and you--the bailer--end up only putting in about as much money as is required to keep things moving. This solution often freaks people out because it looks like The Evil Red Hand of Socialism, but it's less catastrophic than the free-market model and less likely to repeat itself than the corporate welfare model.

Depends...

[cabjf]

I think a lot of it depends on whether you know what you want to do, whether you need a degree to do it or not, and whether you can find a reasonable priced school that teaches it (like a state school or start at a community college).

There are way too many people going to college just for the experience. In addition, many people don't think about how they will pay for it later. Not all degrees will raise your earnings enough to make it worthwhile.

On the other side of the issue is that there are many jobs that either really require a degree or are just impossible to get without one. Which is why it really depends on the person, the career, and the school.

Re:Depends...

[CheshireCatCO]

There are way too many people going to college just for the experience.

Granted, I went to a liberal arts college so my perspective may be somewhat different from most here, but I don't think that there's anything necessarily wrong with this. Going to college to get an education, even one that you won't use in your career (assuming you even decide to have a career) isn't wrong as long as you know that that's why you're going and you're OK with it. I know quite a few folks who got degrees that they've never used to make a dime, but are glad that they go the degrees for the way that that education has enriched their lives.

Re:Depends...

[qbzzt]

I know quite a few folks who got degrees that they've never used to make a dime, but are glad that they go the degrees for the way that that education has enriched their lives.

Education as a luxury good is wonderful - I've taken a large number of courses for that. But luxury goods are something you should buy when you can afford it, not a good reason to get into debt.

Re:Depends...

[mikael]

Here in the UK, there is the "Open University", which before the advent of the VCR, CD-ROM and DVD, would broadcast all their programming on TV. Now, they have the internet which allows them to put the course syllabuses online.

how to win

[nak8880]

How to beat the "College Bubble:" 1. Go to College. 2. Become deep in debt. 3. Sell a book about being in debt. 4. ??? 5. Profit!!

Re:how to win

[ChefInnocent]

To be modded funny on Slashdot? Yes.

"Don't go to college."

[Kingrames]

What a wonderful message to send to all our recent high school grads.

This is not going to help any of us.

Re:"Don't go to college."

[HBI]

True, it won't help the banks who lend the money or the college faculties. Or beer vendors.

But it just might help a lot of people who don't necessarily need to go to college.

Re:"Don't go to college."

[HBI]

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.

Re:"Don't go to college."

[jandrese]

It really depends. A college degree is extremely useful for getting your foot in the door, but real life experience is even better. The problem of course is that your average 21 year old has no life experience, so without a degree he's SOL. For people who were already in the job market when the computer industry sprung up, it's a little different. I know a lot of the people I work with have completely unrelated degrees because IT type degrees just didn't exist back then.

The point is, if you're going to go into a high tech field and you don't already have some sort of in (like your father owns the company or you've been working closely with one of the developers on a side project for years or something), then a degree is probably going to be necessary for the HR folks to even give you a second glance. IMHO, degrees from fancy institutions are largely overrated unless you're trying to become a full partner in a high end legal firm or something like that. A generic 4 year degree from a reputable but inexpensive school (State U) is more than enough for most HR folks, and the people who do the actual hiring likely won't care that much where your degree is from, just so long as you know what you're doing.

That is a concern though, if your local school's program is terrible and you come away with no usable skills, then your degree is worthless. You'll never get past the second interview without considerable studying on your own (never a bad idea however). Once you build up a lot of marketable skills and a network of professionals then you won't need a degree, but that's almost impossible to do without first getting into the industry somehow.

Competition

[CheshireCatCO]

He's still annoyed by this because all of the fancy features pump up the tuition bill.

Sure, except the colleges are a business like any other (at least to some extent) and they have to attract customers (i.e., students). The prospective students have been enticed into expecting fancy rec centers and cushy dorms. Once a few schools start offering those features, pretty much everyone else has to do so to stay competitive.

It's also worth noting here that the nominal price of tuition typically doesn't pay for the actual cost of sending student to college. At my alma mater (graduated ten years ago, for reference), our tuition -- huge those it was -- paid for about 1/3 of the actual expense.

Also note that most people don't pay full tuition. The high tuitions seem to exist so that those who can (apparently) afford it can be charged for it, while being "nice" and knowing the price down for others.

Re:Competition

[Philip K Dickhead]

Education is a resource who's value is inflated through a systematized, artificial scarcity - especially at the graduate and post-grad levels.

Those with advanced degrees from 'elite' institutions have a vested interest in keeping their numbers limited and their relative status higher than their peers. This is graduated in degrees down through the system - which is designed and maintained by an economic and political elite to server their ends, maintained against the objectives of 'higher' learning by those most privileged.

What good did Harvard Business School education do for creating a better, more predictable and stable market environment? Nothing. This is one of a million examples. PhD. == Tool.

Re:Competition

[philspear]

No he's right. Medical researchers = tools. What good did they ever do? I mean, sure, a lot, but have you ever met one of them? Insufferable egotistic jerks who post sarcastically on slashdot.

Life after college

[bigredradio]

Humm.. the article quotes "stuck living in their parents' basement for 10 years" like that is a bad thing.

Re:Life after college

[jfinke]

Well, at least they won't be going and getting loans that they can't afford to purchase a house they don't need. ;)

Stupid Loans

[tripdizzle]

Boo paying back my debt!!!! I want a bailout for me damnit.

Re:Stupid Loans

[PolygamousRanchKid]

Boo paying back my debt!!!! I want a bailout for me damnit.

I don't have any debt. But, being that Uncle Sam is buying, I'll have a bailout as well.

With a lime twist.

Very dry, thanks.

MIT FTW!

[east coast]

I hear that open course ware thing is pretty nifty for the price.

As for a degree? You got a printer, a scanner and a copy of Gimp? Good boy.

College Debt?

[rjshirts]

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!

Re:College Debt?

[Arterion]

You realize that $30k loans for a $6k/semester school leaves $18k the student had to come up with some other way -- probably out of pocket. That's assuming he was actually able to complete his program in 8 semesters.

That's over $4k a year the student is paying for his own expenses. If we assumed full time work at $10 an hour -- not too bad for college work -- that's not even $20k a year before taxes. You're talking about over 25% of the student's free income from a full time job. JUST TO PAY for what the student loans wouldn't.

And you're questioning why would someone borrow $30k total for a $6k/year school?

I'm seriously wondering how could they not? And in fact, how did the manage to pay for it all ONLY borrowing $30k?

Re:College Debt?

[Whorhay]

My Wife got her Masters from a state university and worked the whole time. I believe it took her about six years, maybe seven. I think she owed a little over 12k when we got married a year ago. We still owe more than that on her car.

Re:College Debt?

[Dragoon412]

It gets far, far worse. Think about rent and cost of living.

I attend a law school that costs ~$1,000/credit hour. That works out to $36,000 year, full-time, in tuition alone. Furthermore, students enrolled full-time are not allowed to work more than 18 hours/week. And although you may think a JD candidate could make a fair amount of money, they don't. You're looking at the same $8-10/hour pay you could get as an undergraduate, except now you're clerking or doing paralegal work.

As you'd expect, law school is far more academically intensive than your average undergraduate program. The rule of thumb is that you'll spend a minimum of three hours studying for every one hour of class time. On a standard full-time track, that's 12 credits per term; 12 hours per week in every class, another 36 hours studying. So, 48 hours/week devoted to academics. Let's assume that you get a job at $10/hour, and work the full 18 hours/week. That's $180/week, or $720/month.

The short of it is that any job you get as a full-time law student isn't even going to put a dent in tuition costs.

But now, add, say, $700/month for rent. Then you have bills. And food. And transportation. Let's say the student's frugal, and he gets by on about $1200/month (obviously this varies based on where you're living, but I'm trying to pick a number that would be typical of a suburban law school). And upwards of $5000 worth of books every year.

So... add it all up.

Tuition: $36k/year
Books: $5k/year
Rent, food, bills, etc.: $14.4k/year

Working income: $8604

YEARLY TOTAL: $46,796
TOTAL TO GRADUATION: $140,388

Now, consider the time constraints.

1 week is 168 hours.
You're spending 48 hours/week in class or studying.
You sleep 8 hours/night (or 56 hours/week).
You're working 18 hours/week.
That's 122/168 hours per week spoken for. That leaves 46 hours/week on average for leisure, additional studying, eating, and transportation time. That's almost 7 hours per day. In my personal experience, it's about 2-3 hours/day for relaxing and/or working out. It's not an impossible task, but it's stressful, and not fun. But going tens of thousands of dollars into debt for the "privilege" of being too damned busy all the time isn't much fun. Clinic and volunteer work - both of which the school pushes pretty hard - all come out of this time, too.

Thankfully, I'm at the school I'm at (as opposed to a more prestigious one) because they offered me an enormous scholarship. But I have friends that are borrowing their whole way through. One of them half-heartedly jokes that the only way to get through it is to pretend that loans aren't real money, because the debt is otherwise just stifling.

Re:College Debt?

[anomaly]

I think that there's huge value in liberal arts education - and in some ways I got a better technical education than friends who went to school someplace well known with "Tech" in the name....

More than that, I simply cannot understand the logic in borrowing huge money for a degree that qualifies for a job that pays too little to service the debt!

People should look at college/university in terms of an investment. There's no reason to spend a bajillion dollars on undergraduate education, unless you plan to make your career in education and the "brand" of the degree matters - or the connections you'll make in school really matter - like the friend who went to Wharton for his MBA - because in that market, that name matters. (Incidentally, he went to Wharton after working in industry for a few years, setting aside money to pay for the tuition there.)

Other than that, students should work and save money before college, then go to community college for the core credits, then go to state school for their major credits - working during breaks to earn cash to minimize the need for debt.

Why kids think that they are entitled to go to an expensive school, borrowing a crushing amount of money in the process, while trying to party like a rock star and buying endless streams of consumer junk they can't afford (like iPhones) is beyond me. Kids need to learn to live within their means - and that includes education!

College is not important

[Bragador]

Everybody, including me, believed at some point that a college or university degree would bring fame and fortune... which is false.

Unless you study engineering or get a degree in a medical profession, you might get screwed. Oh, and you WILL get screwed with a liberal arts degree (sad for me and my psy major).

Meanwhile, some friends bring home tons of cash by being welders, linemen, plumbers and electricians...

Who is the smartest guy around? The guy that goes to university and studies something like philosophy or psychology, or the one who gets a professional welding formation and earns 75k+ per year?

Think about it...

Re:College is not important

[mcgrew]

My dad was a lineman, and I have friends who are welders and construction workers.

You can't work as an electrician (actually they're called "indoor wiremen") or a lineman without an apprenticeship, and you can't get an apprenticeship without knowing someone in the business already.

Welders get burn scars all over them, and most of them are blind by the time they retire.

Plumbers work in shit. Literally.

Factory workers and construction workesr die on the job, often horribly (as do linemen and indoor wiremen).

Plus all these jobs are hard physical labor. If you want to sit on your ass, better go to college.

Re:College is not important

[Bragador]

Well, you could become a tradesman and eventually open your own corporation in that field. There is no ceiling when you become your own boss...

Great idea!

[Seakip18]

The US can get ahead in the world economy by getting LESS education for it's populace. That way, we'll slowly start getting our manufacturing jobs back because India and China won't be able to compete. I mean, people over there can translate business logic into those magical bits faster and cheaper than here, right?

Personally, I didn't find out how much I liked Computer Science till Sophomore year of College. The theory and beauty behind how different sort algorithms was the turning point I think. Without College, I'd have settled on some part-time tech work and full-time retail employee. College has it's purposes and the masses still need higher education, whether they want it or not.

You want to not get a fuck-ton of college debt? Don't go to a school for prestige or a wife. Go to your local CC for a year then go to a local Uni to get your degree. Otherwise, study your ass in high school and get there on scholarship.

You want it to be easier for your kids? Get a 529 plan started TODAY. Contributions to it are be state and federal-tax free. You can get the money back out at regular tax rates if they don't go to school or get scholarships. I'm surprised that wasn't in the review. Just because you are getting the shaft doesn't mean your kids have to as well.

It's a huge business...

[HerculesMO]

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.

Vocational Training is the Answer

[Hangtime]

Information can be gleaned very easily from the Internet, but knowledge and the mechanics of synthesizing knowledge are best learned in a university setting. I do agree that in many ways college costs have gotten out of control. It used to be you would goto college to be a school teacher. However, why would you spend $50,000 on job that is at best going to net you $35,000 out of the gate (other than someplace you would rather not teach and danger pay come to mind).

The university setting is best for individuals who need to do high-end problem-solving or research as part of their work not for vocations. Vocations are best learned in a setting where you can skip a lot and go straight to what needs to be known and add a few extras as well. My own family is a perfect example of what can be done through vocational training. My uncle who is dsylexic and color-blind was never great in high school. Instead of moving on to college like he may have been pushed today he went to a technical college where he floushied in electrical power and control and today has been designing power systems for commericial and industrial buildings for over 25 years.

For better or worse, college has become part of the American dream and many who do not belong there are now going. People are going not because they want to but they feel they need to in order to achieve the American dream. The more we due to de-emphasize the idea that college is the only answer and supplement it with apprenticeships, vocational training, etc. , the better will do for all our children.

Right Idea, Bigger Questions

[mpapet]

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.

Re:Right Idea, Bigger Questions

[An dochasac]

The reasons 1 and 2 are no longer true are:

1. Reaganites sold the idea of higher education as a short term fiscal investment rather than a long term societal investment.
2. So more students were forced to take out loans instead of pay their way through college.
3. Loans meant universities were able to raise tuition without students noticing (student loans are even better than subprime and car loans because "the minimum payment" during the 4 years of parties and cheap bear is $0, the "balloon payments" start after graduation.
4. Universities turned themselves into country clubs in order to attract even more endowment money. Which piled even more debt onto student loans.
5. Sallie Mae helped facilitate the transfer of wealth from students to financial institutions backed (like FME, FMC) by our tax dollars.
6. More students were forced to focus on degrees with short term payback (Compsci, BA, Accounting, Law)
7. These "short payback" fields do very little to improve U.S. competitiveness and happen to be the most easily outsourced.
8. Fewer students major in "Long payback" fields such as basic science.
9. Our universities begin to decay into glorified trade schools.
10. ???
11. PROFIT!!!

Re:Right Idea, Bigger Questions

[publiclurker]

They have been outsourcing many of the jobs done in law firms for years. You just have to train them in the laws of the country they will be working for. About the only thing that they can't outsource are the lawyers who have to actually appear in court.

Missed a chapter?

[cashman73]

Is it just me, or did this book stop before it could get to Chapter 11 on purpose?

Community college

[Shotgun]

First, skip the 4 year program. The first year of college is just a sieve for partiers and a way for the college to collect a lot of tuition without doing any work. Anytime you sit in a class with 600 of your closest friends, you know you're being taken. Most community colleges offer a two year prep program, which will transfer to a 4 year college. Gets most of the bullshit courses out of the way for MUCH lower prices.

Second, there are two ways to make money in this world. Do something other people CAN'T do, or do something other people WON'T do. There's a reason that brain surgeons and attractive prostitutes get paid so much. A 4 year degree may or may not put you into one of these categories, but so can a 2 year degree.

Finally, the statistics that say a college degree will allow you to make twice as much money over your lifetime. Bullshit! Motivation will allow you to make more money, and it just so happens that motivated people are more likely to finish college. But that statistic may soon be a historical anomaly as degrees will become less directly tied to income when everyone has one.

Graduate Degrees help too

[aardwolf64]

My MBA not only got me in the door at this Fortune 100 company, but it got me an extra $25k/year over my coworkers who do the same thing as me without the MBA.

Help is on the way.

[tyrantking31]

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.

Nationalize Sallie Mae?

[Anonymous Coward]

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.

Re:Nationalize Sallie Mae?

[Anonymous Coward]

Because this isn't Venezuela or the USSR... yet.

Re:Nationalize Sallie Mae?

[dc29A]

Because this isn't Venezuela or the USSR... yet.

Yeah because Venezuela or the soviets spent way more than 700 G$ on their financial sector. Oh wait ...

Re:Nationalize Sallie Mae?

[larry bagina]

well, the assets of Sallie Mae are student loans, so if you forgive all the student loans and nationalize their assets, you'll end up with nothing.

Maybe it's time that as a country we have a serious conversation to everyone that believes they're entitled to a car, house, college education, or lifestyle they can't afford.

Re:Nationalize Sallie Mae?

[Oligonicella]

Maybe it's the dreams that are in err? I graduated with no debt at all. Ooh, hard.

Why don't we forgive? Because no one held a gun to their heads. WTF is some people's idea about forgiving stupid decisions, thus penalizing others who didn't make bad ones? How about this instead? Let the stupid pay for their mistakes and the smarter ones get ahead. Those are the ones we want succeeding you know.

Re:Nationalize Sallie Mae?

[Korin43]

The problem is that we're pushing them into this as a society. It's not that these kids are stupid, we're just telling them "the only way to succeed in life is to go to college x" where college x costs far more money than they have. Then we tell them "Well everyone gets a student loan", so they assume it's a good idea. Instead of just screwing people over like this, we need to start teaching people that not everyone needs to go to college, very few people need to go to Harvard, and they will do just fine at a community college.

Re:Nationalize Sallie Mae?

[Twanfox]

Not that I condone the forgiving of college loans even though I carry a significant burden of debt in from my degree achievements, I would think that of the things listed (car, house, education, lifestyle) that education is one thing we want to make as prolific as possible within our society. A more educated public means that we can advance technology, status, solve problems better, and hope to steward this little rock of ours well enough to sustain our species over the long term. Maybe it's time we also took a look at the alarming rise of tuition and wonder just what we get out of such an inflated figure.

Re:Nationalize Sallie Mae?

[Vancorps]

How on earth did you make 30+k per year to afford college? That's the average tuition right now. I sense that you either went to college a while ago or had some serious help.

Those of us who worked through college and still ended up with lots of debt take exception that is was a stupid mistake considering we now make enough to pay our debts and live a good lifestyle.

The problem is that college is sold as a way to a better life so a lot of people are in college that shouldn't be and they are the ones that end up with a lot of debt and nothing to show for it.

Re:Nationalize Sallie Mae?

[crmarvin42]

I'm still in school, and while I knew that some schools were rated better than others, I also knew that your education is what you make of it. That's why I went

2 years at community college (HCC)
2 years at a State university (UMass Amherst)
3 years on a MS at a prestegious University within my field (Purdue).
3 years and counting on a PhD at the same university.

No student loans at Community college. 33% off of my tuition at UMass b/c I had a 3.8 at HCC. I had offers at 2 other Universities at the end of MS that were also offering tuition remission and a monthly stipend I could live on. As a result I've got 10 years worth of college education and only 2 years of student loans, neither year of which did I take the full amount, and I've been getting paid to go to school for the last 6 years.

I had friends that teased me for going the community college/state school route, but they owe 2-3 times what I do in student loans. Some of them even went to grad school but had to pay tuition and their own living expenses b/c they pursued degrees like Music Therapy and History.

Re:Nationalize Sallie Mae?

[Anonymous Coward]

How on earth did you make 30+k per year to afford college?

It's not out of the realm of possibility for a CS student to get a job telecommuting part time and earn a good chunk of that. Remember too that they have the summer to work full time. So while $30k+ might be pretty tough number to get to, you can get close enough that you can cover most, if not all, of the loan part of the tuition (since most financial aid packages include some grants too).

Then again, I have a friend who put herself through law school (private, ~$50k/yr) working a night job and had quite a bit left over for a pretty extravagant lifestyle (hint: it's legal, involved a pole, flexibility and very few inhibitions...yeah, that one.) Now she gets to work as an immigration lawyer who does a lot of pro bono work while all of her classmates sell their souls practicing corporate law in order to pay back their loans. It's pretty easy to make the argument that her way of paying for law school is less sleazy and more effective than the way her classmates are doing it.

Re:Community college

[0100010001010011]

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.

Re:Cost of my alma mater

[EricWright]

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".

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[account_deleted]

Comment removed based on user account deletion

Don't you realize GSLs have caused all of this?

[unassimilatible]

Far from being the solution, the government is the problem, yet again. While government-guaranteed student loans have expanded college access, any economist worth his salt will tell you that by flooding the college market with loans that anyone can get and that are guaranteed by the government has led to tuition well outpacing inflation. What else could have caused this?

If this sounds really familiar, it should. Fannie Mae and Freddie Mac had a similar effect on the housing bubble. So you'll have to excuse me if I get frightened when I hear "government to the rescue" for a problem it helped create.

Re:Don't you realize GSLs have caused all of this?

[johnlcallaway]

College educations have become an essential part of the american dream. Telling people "sorry, you should go to a worse school or not at all because you would be a bad investment" is exactly as stupid in the long run as it sounds there. Education should be merit based entirely, the only practical way of doing that I can think of is to have government-regulated student loans. It won't be without it's problems, but letting the market handle student loans is going to be a good way to ensure a lot of wasted talent.

Bullshit. NO ONE NEEDS A 4 YEAR COLLEGE EDUCATION TO LIVE A GOOD LIFE! This is propaganda spewed by guidance counselors, colleges, and people who wasted 4 years and many thousands of dollars who feel a need to justify their mistake.

I make a 6 figure (barely) income because I started at the bottom as an office clerk while living at home, took opportunities and made use of tuition reimbursement to take a few programming courses, and was willing to learn anything my boss wanted me to. Moved out at 22, got married at 24, and have a great life now. I'm not rich, but I don't have to check my wallet to eat out or buy the latest video game.

Petsmart will TRAIN dog groomers for free in exchange for a 2 year work commitment. After two years, if they are any good, they can make $30-50K/year. Toss in a couple of business classes, strike out on their own, and live the American dream.

There are countless opportunities out there for those willing to work for them instead of sitting on their asses and letting the government supply them with an education in exchange for a massive debt when they get out.

Only to a point.

[Tokerat]

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.

No Such Thing as "too big to fail"

[plasmacutter]

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.

Just Damn the Torepedoes FULL PARTY AHEAD!

[jameskojiro]

1. Stay in college the rest of your life building up more and more debt.

2. Buy a lotto ticket each week to pay it all off and retire.

3. ???????

4. Have a life of fun on the backs of others.

Student Loan = Indentured Servitude

[razerr]

Student loans are the modern day equivalent of indentured servitute: Just a step away from slavery.

Re:Student Loan = Indentured Servitude

[starX]

Right, because my 30k+ of student loans gives my liege lord the right to beat me, sell me, and prima nocte entitlement to enjoy my new bride.

You are as uninformed as you are un-insightful. Maybe if you spent a little more time learning some history (in a college classroom, for example), you might not go on spouting such rubbish.

I would argue that a good education can be had at any school, as long as you start with a good student. Whether you go to a top tier college, a local community college, or a trade school, you're going to get out what you put in. Kids who spend most of their time at parties and worrying about who they're hooking up with are throwing money away on a four year vacation from reality. Students who apply themselves to their studies (whether Comp. Lit. or Comp. Sci.) and seek out opportunities to apply their studies to themselves are making a great investment in their futures.

Bring back co-op programs

[timholman]

From my experience in academia, I think one of the best ways to reduce college debt would be to bring back co-op educational programs, particularly for IT and engineering majors. In recent years, American universities have transitioned almost completely from quarters to semesters, which has consequently destroyed co-op programs across the country. Thirty years ago, a student could work and go to school on alternating quarters, in many cases making enough money to cover most or all of his/her educational costs, and graduate in just 5 to 6 years. (The summer quarter was a regular teaching quarter just like fall, winter, and spring quarters.) Furthermore, the co-op student got absolutely invaluable experience while learning what industry was really like before graduation.

Now every school has transitioned to semesters, mainly to cut administrative costs. Consequently there are only two teaching semesters a year as opposed to four teaching quarters, resulting in a drastic reduction in course variety, and making co-op programs impossible to manage as many essential electives are now taught only once a year. And even if a school did offer a co-op program, a student would need 8 years to graduate!

So if you want to make college cheaper for more students and increase the number of graduating students in engineering, lobby for the return of the quarter system and the restoration of co-op programs. Too bad if the registrar's office now has to process course registration and grades four times a year instead of two. College programs should be structured for the benefit of the students, not the convenience of the administration.

Funny, this is not the "bubble" I was thinking...

[eimsand]

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.

Re:Why not?

[Grym]

Trust me. You wouldn't be terribly comfortable if AIG imploded. No one would be.

And that is the essence of the problem, is it not? How can a a political establishment so obsessed with "national security" let a market of an estimated $60 trillion dollars (almost 5 times our national GDP) go completely unregulated? It's absurd...

No terrorist in Guantanamo (or Afghanistan, for that matter) could ever do this much damage to the country, and yet none of those responsible will ever be executed, waterboarded, or undergo "extraordinary rendition." Funny how that works, huh? While we were all arguing over Dick Cheney's ticking time bomb hypothetical scenarios, the nation's economy was being set up for the largest act of sabotage and fraud in human history, and not a single person has yet to be arrested for it.

I'd be surprised if even a single CEO or government official ever gets convicted over this. And even if they do, we won't see a cent of their ill-gotten gains. Take a look at Kenneth Lay, mastermind of the Enron fraud. The man just so happened to conveniently die after his conviction but before his sentencing. The result? His conviction was wiped from the records and none of his or his wife's assets were seized.

Justice. Does the word even have a place in our society any more?

-Grym

you shouldnt have gone in the first place

[hierophanta]

seriously, if you cant figure out how to get your debt paid off, cant get a decent job, or are too dam lazy - you shouldnt have gone to college in the first place.

i think a real problem is the colleges teach to the book, instead of cultivating free thought.

Overrated institutions: college and marriage

[echtertyp]

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.

no point in whining about debt

[Slasher Dave]

Debt is an inevitability, to one degree or another, for those who don't have the cash (or their parents don't) to drop on their education and IMHO most of the time makes sense. I worked summers and did an internship, but even with all that still ended up around $40k in debt. The government forgave 10k and I was left with the rest. But I would much rather rack up some debt and be able to really focus on studying rather than having than burdening myself with the additional responsibility of a full/part time job.

Also, working your way through school to avoid debt, as some here have proposed, doesn't always make sense if it will significantly defer your graduation. The $12/hr you're making now cannot compare with the $25/hr after you graduate. Plus how stressful would it be to be working full time with a full course load? Of course if for some reason you actually find yourself with spare time/energy then by all means get a job - but this certainly wasn't my situation.

After you graduate, put in a few solid years with a good company then start jumping. If you have a CS degree then 6 figures is well within your reach and if you're focusing on paying off debt, it shouldn't take you more than a couple years.

Of course there are ways to greatly reduce debt load:
- COMMUNITY COLLEGE: stay there as long as possible. The teacher to student ratios and hence the quality of instruction is much better. 1/2 price tuition. Do your experimenting where it's cheap.
- Live with your parents. Seriously. If your sanity/social life can handle it, then do it. Rent is money down the drain. This probably implies that you're going to a local university.
- Live humbly. Do you really need that car?
- get a scholarship

Yep, The Lunch Lady...

[istartedi]

Yep. The Lunch Lady shouldn't have bought a house, and the guy with the 900 SAT score shouldn't have gone to college. Film at 11. Vo-tech at 12. The return of a decent highschool education at 1? Oh now... we're all too drunk from credit, and have fallen asleep by then.

Only for the rich...

[interactive_civilian]

The USA only has socialism for the rich, as they are the ones who need it the most. Us lower classes have to get by on hard work alone. I mean, you don't really expect the rich to lift a finger or have to take responsibility, do you? That would be the death of the American dream.

The American dream of course being to lie, cheat, steal, or do anything else it takes, possibly including work (THE HORROR!), to make it to the top where you can also completely ignore any and all responsibilities to society.

Re:Only for the rich...

[Anonymous Coward]

Maybe you should look at the US federal budget and see how much of it is for things like Social Security, Medicare, Medicaid, Welfare, etc. Those are NOT programs that are meant for the "rich".

Re:Only for the rich...

[johnlcallaway]

Having gotten to know rich people, I know why I will never be one. I'm not smart enough or motivated enough. I know rich people that help run three or four companies and work 10-12 hour days, some work almost every day of the week. When they go on vacation, they are constantly on the phone or blackberry.

It's time the whiners and sour grapers get off their high horse and acknowledge that rich people, for the most part, are rich because they are just smart and work harder than the rest. It may sound like a lot of fun jetting over the country, but take it from anyone that rack up frequent flyer miles, it sucks after a few months. Sitting in first class for 8 hours may be better than coach, but it's still sitting in an airplane for 8 hours.

And what social responsibility. Just because someone was able to get a bunch of people to work for them in exchange for a pay check society gets to suck off their teat??? Wow ... that's some reward for being successful, seeing all that money put to such good use by the government.

I have known plenty of average people that do a damn good job lying and cheating their way into insurance scams and IRS fraud, the rich don't have a monopoly on those attributes either.

So stop your bitching about something that you can never obtain because you just aren't good enough to get there and learn to enjoy what you do have.

Re:Only for the rich...

[isBandGeek()]

Just a question: Who's Paris Hilton?

Re:Why not?

[Jah-Wren Ryel]

Yes... as if he's the only one who believes an AIG collapse would be devastating. ::rollseyes:
BTW, ever heard of the phrase "ad hominem fallacy"?

It is ironic you should say that because
(a) Stating that an author has an inherent bias due to having money in the game is not ad hominem
(b) Calling someone eye-rollingly stupid for not believing you is ad hominem

Plenty of people believe AIG is too big to fail, many do so merely because they take the word of people like Michael Lewitt. If you really wanted to support your claim, clearly you should have cited the opinion of someone without a vested interest in only presenting one side of the argument.

Excellent! So I suppose you have data and a good theory to back your bold claims? Or are you, perhaps, just talking out of your ass?

There are numerous reasons to believe the AIG bailout is an error. However, the most obvious one is the same reason used to justify the bailout - that AIG is too big to fail. If that premise is true, then obviously AIG has a defining and central role in the US and world economies. Yet the bailout has now placed control over such a massively key piece of market infrastructure into the hands of the government, in complete violation of the principles of the free market. It moves us ever closer to a command and control economy for which there are numerous examples of failure and of the relatively few examples of success, they are all on a micro-scale, like singapore, when compared to the US economy.

That would explain...

[copponex]

That would explain why college education is less expensive per capita, and of comparable quality, and free across much of Europe. Oh, wait...

Any economist worth his salt will also tell you that giving out government loans to private institutions that exist purely to make a profit will always lead to price increases, while service industries like education, health care, local utilities, etc, are almost always better served by a single entity, regionally operated, that has no profit motive.

The only problem is when the false idea - that free markets solve all problems efficiently - is run up the flag pole, again and again, despite evidence to the contrary.

It's much easier to have an open government institution providing common necessities than it is to try and regulate private institutions that have no public interest, yet receive massive public funds. If you're serious about finding a solution, all you have to do is look around, and see what other countries have been doing successfully for years.

Everyone here laughed and laughed that the European governments charged a 100% tax on fuel, until about a year ago. Since those countries foresaw the inevitable, that tax reduced consumption, funded mass transit construction, and made them less dependent on countries like Saudi Arabia for their daily transportation needs. Here it would be called socialism; elsewhere, it's just common sense.

Re:They WERE regulated. That was the issue.

[Grym]

The largest banks that failed (Freddie Mac and Fannie Mae) were almost arms of the government, they were tied so tightly in. And to call the financial industry of the U.S. "unregulated" is, frankly, breathtakingly idiotic or at the very least utterly ignorant of the market and the regulations imposed thereon. The WHOLE PROBLEM was that the government was TOO involved with the financial industry, not that they were too hands off. You don't get quite they level of giant sums of money and poor decisions without the government involved somehow.

There's a lot of disinformation out there regarding the nature of the financial crisis, and I can see how one might have such an opinion. However, I have made a genuine effort to research this issue and I can assure you that, as difficult as it may be to believe, our government did allow a 60 trillion dollar market, in the form of, modern OTC derivatives to exist completely and utterly unregulated.

In fact, this market was so "free" that that figure--60 trillion--is actually just an estimate (some go as high as 600 trillion). Nobody knows just how much money has been tied up in what was essentially bets between the mega-rich about the rise and fall of company values. Even crazier, not even the companies themselves know the others' positions because the information is secret. As a result, they've stopped lending to each other, the so-called "credit freeze" or more pleasant euphemism "lack of confidence."

Before you label others ignorant or a revisionist, please educate yourself on this issue. If you think Fannie Mae (an institution which has been around since the Great Depression) was the cause of all this, you have been misled. You need to ask yourself why you have been deceived and whose purpose does this lie serve.

-Grym

Re:You mean leftist economist

[joe545]

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.

You honestly think that a state with 1.8million people has more college graduates than the UK (pop. 60 million)? In 2003 the UK had 3 million full-time students aged 16 and over. http://www.statistics.gov.uk/articles/labour_market_trends/economic_inactivity_students_LMTDec03.pdf/ and had 16% of the working population with a degree http://www.statistics.gov.uk/STATBASE/Expodata/Spreadsheets/D7743.xls/.

Re:You mean leftist economist

[Koiu Lpoi]

I find it funny that you have a hidden premise that "Leftist Economists are wrong", as if being a liberal somehow makes you no longer worth listening to as an economist. I also like how you don't back it up with anything.

Also,

In America, we have this thing called freedom

Another hidden premise of "high taxes remove freedom". Where do you get these ideas, man? Nobody removes the "freedom of driving" by taxing it, and you straight-up ignored all the positive points he said.

I could go on, but you've given so little backing to any of your points past stating them, I think it's best to just leave it at that.

Of course, on the other side...

[MickLinux]

I'm not against rich people, but let me give a bit of the other side.

First, if you are going to compare pay, don't compare wages -- even a slaveowner must feed his slaves; even a farmer must feed his cattle. Compare discretionary income. Now, considering discretionary income, I would argue that most US laborers without a college education work far harder for their dollar, than any of the manager's class and up. I say that, while working with them. Let's then toss into the mix, 2nd and 3rd world laborers, and the difference becomes extreme.

Don't believe me? Let's try a sanity check. Typical career wage earner makes about $12/hr or less where I work in Hampton Roads. So we're talking $12 x 2000 hr/yr = $24000. With overtime, that used to be about $30k, though right now it's typically undertime, at $20k or less. Now, in this area apartment rent takes a minimum of about $700/mo = $8400. Most wage earners never had a chance to buy into that housing bubble. Food for 2 (taking a typical family size of 4) is about $50/wk = $2500/yr. Childcare is another $8000. Electricity is $1000. Phone is $500, minimum. So we'll estimate that the wage earner makes 24k, and spends $20500. So his discretionary income (pre-recession/depression) is $3500. He works 2000 hrs, or makes $4.50 of discretionary income a day. He'll need to be careful with that $4.50, because it also has to cover his vehicle costs, though I'm assuming he lives locally. If he drives farther, he can reduce his rent, but those costs typically balance out. I think if you run a similar sanity check on the manager's discretionary income, it's a tad more.

But now, let's also get down to another issue: the rich say they've earned the right to it, because they've gone after it. Okay, I can get down with that argument, but only insofar as everyone chooses to go after something, and they'll eventually get what they're after (typically speaking). But that does not mean that they've earned the right to profits that were made by others. What I typically see is that the profits are made at the manufacturing level. Cuts are also made, there, but they shouldn't be.

What I mean, is that if they are not paying a living wage to their employees, or if they are not meeting OSHA standards, then they don't deserve those extra profits. But that is often where the profits come from. Even layoffs, to increase profits, is not acceptable, because much of the economic mass of the company is derived from those workers you are laying off, and you are separating those workers from the economic mass that they earned. In other words, you are stealing from them.

So I'm not saying that the rich are horrible, the rich don't deserve to be rich ... but I do not agree with Limbaugh or other pseudo-conservative talkshow hosts who basically want the world to pander to their greed. Let the rich be rich, and let them enjoy a better standard of living -- but don't agree with them that they have the right to force others into a standard of death - which is much what has happened in this last century.

To paraphrase John Paul II, this last century has developed into a war by the powerful against the weak.

That includes the rich against the poor. Think about it.

Re:You mean leftist economist

[copponex]

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