Could independent colleges be the next bubble?

MSNBC ^ | Oct. 24, 2008 | Maurna R. Desmond

[motoman]

I’m starting to wonder just what our government will be able to guarantee going forward. I’m not so sure anymore, especially if we elect a massive tax and spend white house, senate, and house.

[pray4liberty]

It was a downward spiral where fewer students led to fewer professors.

Thanks for posting this. Maybe the liberal vision of killing the future generation through abortion has something to do with this. They wanted population control.

Liberals will reap what they sow. It's slow, but sure.

[pray4liberty]

I asked a friends nephew what he was majoring in and he replied “Environmental Archeology”. Oh yeah, that will land him a good job for sure.

Well, it might make him an expert floor sweeper at McDonalds.

[ggekko60506]

“Amen! I was grousing to a friend of mine the other day (Attorney, law firm manager) about the numbskulls I supervise where I work (Commercial bank-C&I lending)...”

Everyone I know in supervisory position has seen this phenomena and it is particularly pronounced in my business (Management Consulting) where critical thinking skills are prized.

The 4 year degree institutions are churning out graduates who arrive a s semi-functional illiterates but with very high salary expectations. If any other business other than “education” was churning out such a product they would answering complaints before the FTC.

I was in a meeting recently where I made what I thought was and arch reference to V. I. Lennin. One of our recently minted graduates thought I was referring to John Lennon.

Sad.

[rb22982]

Federal loans are only about $8k a year—private colleges cost 30k a year. Plus Loans are getting harder to get and not every parent wants to take on $20+k in debt a year when they see their retirement investments have decreased 40% in 1 year and heading lower. People going to public universities should still be able to get the federal loans and be ok but not so with out of state or private universities.

[Jimmy Valentine]

Anno Domini, I guess. One fortunate side effect is that it keeps aging geezers like me in demand.

It is amusing to me at my age (61) to get calls from head hunters looking for competent lenders who can analyze and structure a deal.

[ggekko60506]

Good for you. I have no doubt benefited from the diminished competition (I am 46) because of the “educated idiot” effect we have been talking about but I worry the effect this having on the country in the long run.

I have noticed a corollary phenomena among the Asian and European colleagues of these young Americans: they are smart, well-educated and don’t have overweening delusions of grandeur.

Not good.

[REPANDPROUDOFIT]

What I can't reconcile is how tuition and expenses have been rising at both state and private colleges much faster than the rate of inflation.

Tuition has to keep going up to pay for the lavish retirement/pension benefits that are being given to retiring personnel.

[Toki]

I go to a small school in GA (independent and writing intensive. I was insane when I choose to go here). And trust me, my college has improved my grammar skills, well comparatively to high school. The problem is my whole family writes like this (except my mom), so my mom after fifteen years of trying to teach me grammar, spelling and everything else (and she is a actually teacher too) gave up on me finally. She aged ten years trying to teach me grammar (and trying to get me to concentrate on my work). Then again, she never even tried to help my dad. She just edit and type all his papers for him through college :D.

[rednesss]

"Do you work in this field?"

I do. I work in student financial services at a college, prior to that I worked at a state agency that was a FFELP guarantor. The FFEL program has been on the downhill slide for awhile. A lot of that has to do with the FFELP guarantors and the ease of use of the software used to disburse funds. We are a Direct Loan school btw.

[rednesss]

"School loans should become a rarity."

I don't know, should only rich kids get a postsecondary education???

"I know someone who pays over $1000 a month for the next 40 years."

You'd have to be getting a medical degree to rack up enough student loans to pay $1,000 a month for 40 years. In which case, with a medical degree, your increased lifetime earnings could more than pay for that. Of course if you got a PhD in basketweaving then you deserve all the misery you put yourself into.

The current dependent, undergrad, lifetime borrowing limit for borrowing through the Stafford Loan program is $31,000. If you're an independent student then it bumps up to $57,500. That hardly works out to the $480,000 scenario you described above as the limit for medical borrowing is $224,000

[rednesss]

"Federal loans are only about $8k a year—private colleges cost 30k a year."

The one thing that differentiates a public from a private university is that most private universities have very large endowment funds from which they award lots of campus based scholarships. Look at Harvard, they recently said that they have so much money, that if you make less than $60K a year then the tuition will be free. I was aware of a student that was attending Stanford, the tuition there is around $36K, this student was receiving about $22,000 from Stanford in gift aid.

[GoSarah]

I don't know, should only rich kids get a postsecondary education???

School loans drive up the supply pool. The only thing colleges can do is raise prices in response.

A little discernment on the part of the government can go a long way--e.g., don't give loans to someone who's going to Harvard to major in theater or women's lib. They should do it like VR does for disabled students: the disabled student declares a career(s) they want to pursue. The major, school, and tuition is built around these choices, and the student gets to pick from these.

You'd have to be getting a medical degree to rack up enough student loans to pay $1,000 a month for 40 years

Nope, not in this person's case. 30K+ is the average now and 40K+ per year isn't uncommon anymore, so any graduate program can easily land you at 1000/mo. To add insult to injury, interest rates on loans have crept towards 6-8% instead of the 2-4% they used to be. It really is lifelong slavery.

Also, medicine doesn't pay that much anymore except in some specialities, and certainly won't when (not if) we have socialized care. Even doctors will tell you to not to go into medical school for money. A quick Googling shows that the average (not starting) salary for a general physician is only 118K. That's very comparable to many white collar fields.

[rednesss]

"30K+ is the average now and 40K+ per year isn't uncommon anymore"

Your numbers are a little inflated, the median debt for a graduating senior getting a BA is $15,500 for public-school graduates and $19,400 for private-school graduates. Of course if you decide to get that advanced degree in underwater BB stacking/women's studies, and you didn't bother to check the employment market to see that those people make a bit over minimum wage, well then I'm not going to shed a tear for that dunce.

[rednesss]

After all these responses, not a single Monty Python reference. My, my.

http://www.youtube.com/watch?v=xOrgLj9lOwk