Next Shoe to Drop - Higher Education

It is no secret the student loan bubble is out of control. Students willing to mortgage their futures for four years of partying and some studying. We've been talking about it for years, but there just seems to be a never ending supply of youngsters willing to pay exorbitant amounts to attend Universities.

I've often wondered what might actually cause the tuition bubble to deflate. I think the answer is Covid19.

The social distancing that has been foisted on us many be the trigger. Many schools have been announcing that classes will probably be cancelled this fall or conducted online. This is leading many parents and students to finally start questioning the value of the education they are receiving relative to the cost.

Why pay $50-$75k/yr to attend a top shelf university if it has to be done online? Isn't that what University of Phoenix is for at a fraction of the cost? A big part of attending a University is the socializing - clubs, frats, sororities, personal friendships, parties, classroom experience, etc. This cannot be replicated online.

There have been several lawsuits filed by parents who are requesting refunds of tuition because they aren't actually getting the experience they paid for.

This could be the awakening. Many schools have gotten fat and top heavy with administrators over the past couple of decades spending like drunken sailors on all kinds of amenities and bullsh*t positions like Diversity Chancellors, etc. Not only that, it is not secret many of these schools (particularly the Ivy League and peer schools) love some rich Chinese students who pay full tuition. Given the tensions, they may not be attending.

I'm sure schools like Harvard with their $40 billion endowment will be ok. However, I suspect many lesser known schools with weak finances may find themselves having to close doors if this continues.

Discuss.

a reply to: Edumakated

This is both a good and bad thing.

Do we really want to be left with only the largest schools like Harvard? Having many of the smaller, lesser known schools offered diversity in the education market. There should have been healthy competition for students with a solid, competitive tuition market as well, but thanks to the government "making education affordable", there was no incentive to compete on price point, only on how fabulous your amenities and junk programs were.

originally posted by: ketsuko
a reply to: Edumakated

This is both a good and bad thing.

Do we really want to be left with only the largest schools like Harvard? Having many of the smaller, lesser known schools offered diversity in the education market. There should have been healthy competition for students with a solid, competitive tuition market as well, but thanks to the government "making education affordable", there was no incentive to compete on price point, only on how fabulous your amenities and junk programs were.

I agree. I did my undergrad at a HBCU. We didn't have huge mega endowment so I worry they may run into financial trouble.

My grad school was at a well known university with multi-billion dollar endowment. They are cutting salaries.

What may happen is that schools will be forced to compete on not only price, but maybe express degrees that don't require 4 years to compete. Realistically, college really only needs to be two years if you didn't have to take all the fluff courses.

a reply to: Edumakated

A big part of real universities that produce engineers scientists and medical doctors can't be done online. All the other ones have no business on a campus. Drop the prices as well because many of those sham degrees aren't worth nearly the costs. Lucky to get a job at all with most of them other than managing a car rental store or a liquor store.

a reply to: Edumakated

SoOo...

When the next actual shoe drops (the big ~pop~ of the USD bubble) do you honestly think anyone will be worried about a piece of paper on the wall that says that you spent a lot of money to learn things that don't matter anymore?

Some degrees will always matter. Botanists, biology, engineering, even computer science to some extent but only from a management point. Not easy managing a bunch of IT people. It's like trying to round up cats. Lot of smart IT people but really lack social norms and social skills.

a reply to: Stupidsecrets

I have a dear friend who is an IT manager in San Antonio.

What SHE says (and I have stolen the phrase and used it later) wasn't that it's like trying to round up cats.

It is like trying to herd cats.

Who are on crack.

And on fire.

As for some degrees mattering, of course they will.

Just not a lot of them.

a reply to: Edumakated

The only way it will really change is if the Government stops "loaning" money out for these useless degree programs. The second the Government subsidizes something the costs go through the roof.


Two step approach.

1) Revamp what a degree is to exclude the useless electives. If you are going for a Bachelors in a field, you should only need to take those credited classes that are directly related to that degree. Why pay for useless classes?

2) Stop funding useless degree programs. Fund only those degree programs that directly relate to a job that actually pays. It doesn't do these educated idiots any good to burn through 75K for a degree that lands you a $12 an hour job that you could have gotten without it.

a reply to: infolurker

I have no problem with people learning pure scholarship stuff (mostly useless studies). The world will always need a certain number of those types, but they need to find ways to finance that on their own, not through government subsidy.

Well known restaurants upcharge pasta dishes to lower costs on pricier meals like steak and seafood. Crap degrees remind of this tactic. Cost the university next to nothing to teach things like business or communication. Engineering and sciences however costs much more but end of the day the price point is about the same. I always smile at people who order the pasta dishes. Thanks for keeping my grilled sword fish degree the same cost as your pasta dish degree.

I went to a private university. At first, everything seemed fine and normal - most of the "general" classes like accounting or statistics or whatever that everyone had to take had good professors that taught well... But then as soon as I got into the core classes for my degree program, which were the vast majority of the classes I needed, the facade fell away. Many of my classes were entirely online with an "adjunct professor", which was basically some random person living in another state who I never interacted with. The entirety of one of the courses was literally just reading a single e-book. No quizzes, no tests, just read this e-book - but pay us like $1,400 to do it! Several of the other classes were taught by the same professor who didn't actually teach - we'd go in and he'd talk about the news for 90% of the class, and then quickly flip through a couple slides saying things like "we don't need to talk about this one - you guys know this stuff, we'll skip this", etc etc. He was basically just there so the university could pretend they had professors for those courses.
I got a bachelor's degree in cyber security without actually being taught anything about the subject. At least I have my $42,000 piece of paper though.
My college experience was without a doubt a scam. At the very least, there's absolutely no excuse to charge students $1,400 to read a single e-book and then not even so much as have a quiz about its content.

I hope the student loan bubble collapses. Our education system needs a massive overhaul.

The state university system in CA just announced there would not be in class teaching this fall. That system has almost 1/2 million students. I think that they are trying to go online for teaching. The state universities were pretty affordable.

The UC campus near me is also talking about what to do in the fall. I don't know if any decisions have yet been made.

I've also read some articles that seem to be recommending that students plan on doing their first 2 years of college at online colleges to save money and still get their ge requirements completed.

This is going to be an epic change

a reply to: trollz

Agreed, I don't think it would necessarily be a bad thing for some of these colleges to go away or be forced to drastically rethink their organizational structure. I mentioned in another thread that before any more money is given to higher education a drastic revamp of the elementary and secondary education system needs to take place.

It is my opinion that schools need to get back to the basics with a focus on teaching kids some type of skill at the very least before they graduate high school as well as basic education of living life such as how debt works, how financing works, how to maintain a car and home. There are a lot of complex pieces to this puzzle but what is currently being done now is not working and it has been shown that just by throwing money at these schools doesn't mean better test scores or better students.

My daughter will be a senior in high school next year and I have a son that will be in 8th grade. It amazes me how much time they take preparing for the standardized tests which is all focused on getting budget dollars and the funny thing is the teachers are telling them this. The education system has really lost its way and in my opinion is completely broken

originally posted by: infolurker
a reply to: Edumakated

The only way it will really change is if the Government stops "loaning" money out for these useless degree programs. The second the Government subsidizes something the costs go through the roof.


Two step approach.

1) Revamp what a degree is to exclude the useless electives. If you are going for a Bachelors in a field, you should only need to take those credited classes that are directly related to that degree. Why pay for useless classes?

2) Stop funding useless degree programs. Fund only those degree programs that directly relate to a job that actually pays. It doesn't do these educated idiots any good to burn through 75K for a degree that lands you a $12 an hour job that you could have gotten without it.

I agree 100%. I've long said the only way to reign in University costs is to get rid of student loans. The easy financing allows schools to keep raising the cost of tuition unchecked.

IF left to the private market, student loans would be available but there would be reasonable underwriting. A top student could get a loan to get an engineering degree but would probably be hard pressed to find a bank to loan them $100k to study lesbian art theory.

I also believe schools should be required to guarantee a portion of their graduates student loans say, like 10%. This way if a student defaults, the school is on the hook which incentizes the school to ensure their graduates are getting a good ROI in terms of employment.

a reply to: Edumakated

I agree with everything except "University of Phoenix at a fraction of the cost." So many lols with that scam.

originally posted by: 0zzymand0s
a reply to: Edumakated

I agree with everything except "University of Phoenix at a fraction of the cost." So many lols with that scam.

There was a bit of snark in that comment...

a reply to: Edumakated

I think there is also room for businesses to recruit high school talent for work study programs too. They pay for your education, you summer intern, and after you graduate, you work for them for so many years. A sort of return to an apprenticeship program track in some areas. It would have to be regulated, but I could see it being a viable option for some, especially careers that benefit from hands on experience.

It wouldn't be too dissimilar to heading to the military for the GI Bill in some ways.

originally posted by: infolurker

1) Revamp what a degree is to exclude the useless electives. If you are going for a Bachelors in a field, you should only need to take those credited classes that are directly related to that degree. Why pay for useless classes?

Could not agree more. It was irritating to be forced to take Physical ed, literature, english, history etc., for a degree in Laboratory Technology. None of those classes had a thing to do with my degree and cost me money to boot.

I was already taking aerobics classes five days a week via the college to stay in shape, but no, that didn't count. I had to take a straight up Phys Ed class. Boring as hell and we did nothing more than I was already doing in aerobics. Don't get me wrong, I liked my history classes and I love to read, so Literature was ok. I just didn't like the fact that it was required for a degree testing blood samples. English on the other hand, I despise. I resented the hell out of that class.

I didn't take loans for my classes though. I worked my way through college by acting as the chemistry lab assistant, and I worked after classes as a phlebotomist at the hospital lab where I was training.

There was a big story in one of those leftist outlets, The Guardian maybe? The headline was "What if students can't go to college this fall?"

Yeah, what if? What if thousands of kids discover that the brainwashing they've received that you MUST go to college in order to have any kind of normal life is false. What if they discover they can make it without a degree from one of these overpriced indoctrination centers?

We can only hope.

originally posted by: ketsuko
a reply to: Edumakated

I think there is also room for businesses to recruit high school talent for work study programs too. They pay for your education, you summer intern, and after you graduate, you work for them for so many years. A sort of return to an apprenticeship program track in some areas. It would have to be regulated, but I could see it being a viable option for some, especially careers that benefit from hands on experience.

It wouldn't be too dissimilar to heading to the military for the GI Bill in some ways.

Yeah, the reality is that most jobs don't actually require college degrees. The company can teach you most everything needed to be successful. Companies just want them because the degree acts as kind of a filter for candidates. It is far harder to recruit candidates without some sort of measuring stick to gauge intelligence.

When I came out of college, I worked in a highly competitive field (management consulting). The company I worked for mostly recruited from the Ivy League and peer Universities. They had a formal training program and we spent about three weeks submerged in finance, accounting, excel, access, powerpoint and other tools to be successful. The cut straight through the fluff and got down to business in terms what was needed to do the job. They could literally take a bright English major and have them doing discounted cash flows and building out complex financial and other analytic models pretty quickly.

I know some of the tech barons have been pushing to hire kids straight out of high school. I think Peter Theil funds a scholarship that has kids drop out of college to work at start up.