Monday, May 07, 2007
No Student Loan Lender Left Behind
If we have learned anything over the last six years, it is that the Bush administration ALWAYS protects its business cronies over individuals and taxpayers.
In the case of the student loan industry, we have learned over the past few months that the Bush Department of Education has turned a blind eye to predatory lending practices, kickbacks and other abuses of the system by both lenders and universities.
We have learned that student loan lenders have paid financial incentives to universities to get on their "preferred lender lists" no matter whether their terms and fees were favorable to students or not.
We have learned that government employees at the Department of Education with oversight duties of the student loan industry have held stock in student loan lending companies. Some other government employees at the Department of Education worked for student loan lenders before they took over their oversight duties at the government level and have gone back to those same student loan lenders after they have left the government. In other words, student loan lenders have been regulating themselves for the last six years.
We have learned that some universities (Pace University is one) have essentially turned over their financial aid departments to student loan lenders like Sallie Mae. When a student calls Pace University's financial aid department and asks questions about student loans, he or she is transferred to a Sallie Mae employee who identifies himself or herself as a Pace University employee and answers questions about how wonderful student loans are.
We have learned that some financial aid officers at major universities (Columbia University is one) have held stock in student loan lenders like Nelnet and Sallie Mae at the very same time they are making those very same student loan lenders the "preferred lenders" for the university.
We have learned that at some schools (Pace University is one) the federally mandated exit interviews that student borrowers must undergo before they can graduate have been run by student loan lenders. Student borrowers are told about the terms of their loans and pitched student loan products like consolidation by student loan lender employees at these exit interviews.
From what we have learned so far, it seems to be college students and their families who have been screwed by the lax oversight of the student loan industry by the Bush administration. But today the NY Times reports that the Bush administration's willfully lax oversight of the student loan industry has also helped student loan lenders bilk millions of dollars out of U.S. taxpayers. This is a rather long passage from the Times article, but the story is pretty complex and I want you to get a sense of just how willfully lax the Bush people were in these cases:
Investigations into the lax oversight of the student loan industry by the Bush Education Department are continuing. House and Senate committees are looking into the problem and now the inspector general of the Department of Education has opened an inquiry into the possible conflicts of interest at the department that led to the lax oversight. In addition, the attorney general of New Jersey, following in the footsteps of the attorney general of New York, has sent subpoenas to 61 universities nationwide and 17 student loan lenders who may have tried to "game the system" with kickbacks and other financial incentive schemes.
Given how the student loan system has been essentially unregulated the last six years, who knows what the investigations will turn up. But one thing is certain: the Bush administration, disdainful of government in general and hostile to government regulation in particular, have allowed industries of all kinds (oil and gas companies, loan lenders, defense contractors, credit card companies, etc.) to regulate themselves over the last six years while the federal government has turned a blind eye to abuses and criminal activity. The states have had to pick up the slack until Democrats retook the House and Senate late last year. But if Republicans were still running all three branches of government as they have the last six years, you can be sure that none of these investigations would have ever seen the light of day.
In the case of the student loan industry, we have learned over the past few months that the Bush Department of Education has turned a blind eye to predatory lending practices, kickbacks and other abuses of the system by both lenders and universities.
We have learned that student loan lenders have paid financial incentives to universities to get on their "preferred lender lists" no matter whether their terms and fees were favorable to students or not.
We have learned that government employees at the Department of Education with oversight duties of the student loan industry have held stock in student loan lending companies. Some other government employees at the Department of Education worked for student loan lenders before they took over their oversight duties at the government level and have gone back to those same student loan lenders after they have left the government. In other words, student loan lenders have been regulating themselves for the last six years.
We have learned that some universities (Pace University is one) have essentially turned over their financial aid departments to student loan lenders like Sallie Mae. When a student calls Pace University's financial aid department and asks questions about student loans, he or she is transferred to a Sallie Mae employee who identifies himself or herself as a Pace University employee and answers questions about how wonderful student loans are.
We have learned that some financial aid officers at major universities (Columbia University is one) have held stock in student loan lenders like Nelnet and Sallie Mae at the very same time they are making those very same student loan lenders the "preferred lenders" for the university.
We have learned that at some schools (Pace University is one) the federally mandated exit interviews that student borrowers must undergo before they can graduate have been run by student loan lenders. Student borrowers are told about the terms of their loans and pitched student loan products like consolidation by student loan lender employees at these exit interviews.
From what we have learned so far, it seems to be college students and their families who have been screwed by the lax oversight of the student loan industry by the Bush administration. But today the NY Times reports that the Bush administration's willfully lax oversight of the student loan industry has also helped student loan lenders bilk millions of dollars out of U.S. taxpayers. This is a rather long passage from the Times article, but the story is pretty complex and I want you to get a sense of just how willfully lax the Bush people were in these cases:
WASHINGTON — When Jon Oberg, a Department of Education researcher, warned in 2003 that student lending companies were improperly collecting hundreds of millions in federal subsidies and suggested how to correct the problem, his supervisor told him to work on something else.
The department “does not have an intramural program of research on postsecondary education finance,” the supervisor, Grover Whitehurst, a political appointee, wrote in a November 2003 e-mail message to Mr. Oberg, a civil servant who was soon to retire. “In the 18 months you have remaining, I will expect your time and talents to be directed primarily to our business of conceptualizing, competing and monitoring research grants.”
For three more years, the vast overpayments continued. Education Secretary Rod Paige and his successor, Margaret Spellings, argued repeatedly that under existing law they were powerless to stop the payments and that it was Congress that needed to act. Then this past January, the department largely shut off the subsidies by sending a simple letter to lenders — the very measure Mr. Oberg had urged in 2003.
The story of Mr. Oberg’s effort to stop this hemorrhage of taxpayers’ money opens a window, lawmakers say, onto how the Bush administration repeatedly resisted calls to improve oversight of the $85 billion student loan industry. The department failed to halt the payments to lenders who had exploited loopholes to inflate their eligibility for subsidies on the student loans they issued.
Recent investigations by state attorneys general and Congress have highlighted how the department failed to clamp down on gifts and incentives that lenders offered to universities and their financial aid officers to get more student loans. Under this pressure, the department is now seeking to set new rules.
The subsidy payments that Mr. Oberg uncovered are another corner of the lending system on which the department long failed to act, critics say, letting millions of dollars flow from the public treasury to about a dozen lenders.
The department now says it did not fully understand the extent of the maneuvers the loan companies were making to get the subsidies until last September, when its inspector general investigated and issued a report detailing manipulations carried out by a Nebraska lender, Nelnet. The audit recommended that the department recover $278 million from the lender, but education officials instead reached a settlement allowing Nelnet to keep the money but cutting it off from further subsidies that it claimed it was eligible to receive.
Senator Edward M. Kennedy, Democrat of Massachusetts and chairman of the Senate education committee, has asked Ms. Spellings to turn over documents related to the settlement decision. She is likely to come under questioning about the Nelnet settlement on May 10, at a hearing of the House education committee.
Mr. Oberg, now retired, has a master’s degree from the University of Nebraska and a doctorate in political science from the Free University of Berlin. He is a former Navy officer, university professor, and aide to Senator J. James Exon, a Nebraska Democrat, from 1979 to 1984. He was an Education Department liaison to Congress under the Clinton administration.
The subsidy payment issue that came to preoccupy Mr. Oberg grew out of decisions Congress made in the 1980s to ensure that low-cost student loans were available at a time when the economy was souring. Lawmakers guaranteed nonprofit lenders a rate of return of 9.5 percent on student loans that were financed by tax-exempt bonds to protect the companies from spiraling costs.
Congress eliminated much of the subsidy program in 1993 because interest rates had dropped, but at that time retained the 9.5 percent return for existing loans. By 2002, lenders had devised ways to inflate the volume of loans for which they received the 9.5 percent subsidies. Congress closed one loophole in 2004, but lenders found others. Congress further restricted the subsidies in 2006.
In 1997, the Clinton administration proposed legislation to eliminate all references to the subsidies from the Higher Education Act in an effort to rein them in. Mr. Oberg took the legislation to Sally Stroup, who was then serving as senior aide to the Republican chairman of the House education committee.
“Sally told me there was no way that language was coming out,” Mr. Oberg recalled. “She didn’t give a reason — just forget it.” Ms. Stroup, who went on to become an assistant secretary of education in the Bush administration, and who is now back as an aide on Capitol Hill, did not return several phone calls and messages left for comment.
In 2000, Mr. Oberg transferred to the department’s research operation, and two years into the Bush administration, began to review the government filings of Nelnet and other lenders. He found that not only were payments to lenders rising rapidly, but also that the base amounts of the loans lenders were claiming as eligible for the 9.5 percent subsidies were exploding.
“Several big lending agencies were gaming the system,” Mr. Oberg said in a recent interview at his home in Rockville, Md.
He notified the Education Department’s inspector general’s office. He also told his superiors but felt they were brushing him off. So in November 2003, he wrote a memorandum for general distribution throughout the department warning that lender manipulations could cost the government billions unless stopped, and he recommended that the secretary could end the abuse with a letter to lenders clarifying government rules.
That is when his supervisor, Mr. Whitehurst, director of the department’s Institute for Education Sciences, stepped in. Mr. Whitehurst said that he had forwarded Mr. Oberg’s memorandum to appropriate senior officials, whom he declined to identify, but acknowledged that he “wasn’t real happy” because he considered Mr. Oberg’s research to be outside his job description.
“Plus, I didn’t understand the issues,” Mr. Whitehurst said recently. “In retrospect, it looks like he identified an important issue and came up with a reasonable solution. But it was Greek to me at the time — preferential interest rates on bonds? I didn’t know what he was doing, except that he wasn’t supposed to be doing it.”
He told Mr. Oberg to stop because he wanted him to be monitoring grants, not lending practices. Officials also rewrote Mr. Oberg’s job description, documents show, barring him from further research into the subsidies. Although Mr. Oberg was a civil servant, the Bush administration may have seen him as a holdover from the Clinton administration.
Mr. Oberg said he decided to continue his research in his free time because, “If you tell some people they can’t do something, they want to do it all the more.”
But when he requested from his own department data on payments to lenders, known in the bureaucracy as the 9.5 percent Special Allowance Payments, Donald Conner, an analyst in the department’s postsecondary division, e-mailed Mr. Oberg saying, "I’m not permitted to give any 9.5 percent SAP information."
Mr. Whitehurst, in an interview, suggested that Mr. Oberg was viewed by some senior officials as an annoyance. “I was told he was like a dog on a bone, agitating on this issue,” Mr. Whitehurst said. Ms. Spellings did not reply to a memorandum Mr. Oberg sent her about waste in the loan program just before his 2005 retirement, Mr. Oberg said.
But Mr. Oberg’s warnings prompted a clamor in Congress and a string of reports by government investigators calling for a stop to the giveaways. Senior department officials disputed or declined to follow the recommendations of all of them.
A 2004 report by the Government Accountability Office urged the department to rewrite its regulations to save billions of dollars in future loan subsidy payments. But Ms. Stroup, who had once worked for one of the lending companies that is now under investigation for the subsidies, argued in response that it would be simpler for Congress to clamp down with new legislation. Mr. Paige repeated that argument in a letter to Mr. Kennedy, who was pressing the department to curb the subsidies.
Then, in 2005, the Education Department’s inspector general recommended that $36 million be recovered from a New Mexico lender. Ms. Spellings overruled the finding that the payments were improper and declined to recover the payments. And in January 2007, after the inspector general recommended that $278 million in overpayments be recovered from Nelnet, the department instead reached a settlement under which Nelnet could keep the money — if it dropped plans to bill the department for another $800 million in subsidies.
Nelnet was the nation’s most generous corporate donor to the National Republican Congressional Committee in 2006, and its top three executives were the largest individual donors to the committee as well, according to the nonprofit Center for Responsive Politics.
Nelnet was also well connected at the department. Don Bouc, Nelnet’s president through 2004 and president emeritus thereafter, sat on the department’s Advisory Committee on Student Financial Assistance from 2001 through Feb. 1 of this year, even while the department was auditing the company’s subsidies and negotiating the settlement. Mr. Bouc resigned from the committee 11 days after the department announced that it would not seek to recover the $278 million.
Ben Kiser, a Nelnet spokesman, said Mr. Bouc’s service for the committee was unrelated to the audit.
Robert Shireman, a researcher in Berkeley, Calif., who co-authored a private nonprofit group’s 2004 report on the subsidies called “Money for Nothing,” said, “There has been an outrageous lack of interest at the Education Department in doing anything to stop the bleeding.”
Investigations into the lax oversight of the student loan industry by the Bush Education Department are continuing. House and Senate committees are looking into the problem and now the inspector general of the Department of Education has opened an inquiry into the possible conflicts of interest at the department that led to the lax oversight. In addition, the attorney general of New Jersey, following in the footsteps of the attorney general of New York, has sent subpoenas to 61 universities nationwide and 17 student loan lenders who may have tried to "game the system" with kickbacks and other financial incentive schemes.
Given how the student loan system has been essentially unregulated the last six years, who knows what the investigations will turn up. But one thing is certain: the Bush administration, disdainful of government in general and hostile to government regulation in particular, have allowed industries of all kinds (oil and gas companies, loan lenders, defense contractors, credit card companies, etc.) to regulate themselves over the last six years while the federal government has turned a blind eye to abuses and criminal activity. The states have had to pick up the slack until Democrats retook the House and Senate late last year. But if Republicans were still running all three branches of government as they have the last six years, you can be sure that none of these investigations would have ever seen the light of day.
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reality,
The stock price of SLM led the S&P 500 Index for the first couple of years of the Bush administration. I suppose that’s bad news in your book. But it tells me more kids were able to finance college.
The stock peaked at the start of 2005. But it has hovered between $40 and $55 since the middle of 2004. However, its current price of roughly $55 reflects the buyout offer the company has accepted. Prior to the arrival of last month's buyout offer, the stock traded just above $40, its price in mid-2004. In other words, the stock was a bad deal for anyone who got in as long ago as the start of 2005.
You made a number of outrageous and silly claims in your post.
You said:
"In the case of the student loan industry, we have learned over the past few months that the Bush Department of Education has turned a blind eye to predatory lending practices, kickbacks and other abuses of the system by both lenders and universities."
Predatory lending? Ridiculous. Show me anyone paying a double-digit rate on a student loan.
Kickbacks? Find me a law that was broken.
You said:
"We have learned that student loan lenders have paid financial incentives to universities to get on their "preferred lender lists" no matter whether their terms and fees were favorable to students or not."
It is not a crime to pay for access. However, you, in your usual fashion, have overlooked the obvious. While it is a crime to attempt to bribe a cop, it is also a crime for the cop to accept your bribe. You, however, pretend the situation is one-sided. If it is not illegal for lenders to offer inducements, it is not illegal for the intended recipients to accept them.
You said:
"We have learned that government employees at the Department of Education with oversight duties of the student loan industry have held stock in student loan lending companies."
What of it? Unless they were given free stock, their returns were mostly unremarkable.
You wrote:
"Some other government employees at the Department of Education worked for student loan lenders before they took over their oversight duties at the government level and have gone back to those same student loan lenders after they have left the government. In other words, student loan lenders have been regulating themselves for the last six years."
This is America. There are few reasons to prohibit people from engaging in the pursuit of their livelihoods. Non-compete agreements do not permanently enjoin people from chasing obvious opportunities.
You said:
"We have learned that some universities (Pace University is one) have essentially turned over their financial aid departments to student loan lenders like Sallie Mae."
Yes. Just like GM and Ford, where car buyers were handed off to GMAC and Ford Motor Credit to finance their cars. Wow.
You said:
"We have learned that some financial aid officers at major universities (Columbia University is one) have held stock in student loan lenders like Nelnet and Sallie Mae at the very same time they are making those very same student loan lenders the "preferred lenders" for the university."
Heavens. As though there are enough students at a single school to power the stock price of a company aimed at the total population of the student world.
Moreover, businesses do not succeed if they rip off customers. They might enjoy a brief period of profitability, but in a competitive marketplace, there is always a low-cost competitor to take business from those who overcharge.
You said:
"We have learned that at some schools (Pace University is one) the federally mandated exit interviews that student borrowers must undergo before they can graduate have been run by student loan lenders. Student borrowers are told about the terms of their loans and pitched student loan products like consolidation by student loan lender employees at these exit interviews."
Yowser. The students sit for one last class before departing the groves of academe. A class in which they are told of what their creditors expect of them. How unfair! How abusive! Does anything prevent the ex-students from searching for a creditor offering better terms? No. If there are lenders out there willing to offer better rates, ex-students are free to do business with them.
This is a tempest in a teapot. Truly a non-story.
The stock price of SLM led the S&P 500 Index for the first couple of years of the Bush administration. I suppose that’s bad news in your book. But it tells me more kids were able to finance college.
The stock peaked at the start of 2005. But it has hovered between $40 and $55 since the middle of 2004. However, its current price of roughly $55 reflects the buyout offer the company has accepted. Prior to the arrival of last month's buyout offer, the stock traded just above $40, its price in mid-2004. In other words, the stock was a bad deal for anyone who got in as long ago as the start of 2005.
You made a number of outrageous and silly claims in your post.
You said:
"In the case of the student loan industry, we have learned over the past few months that the Bush Department of Education has turned a blind eye to predatory lending practices, kickbacks and other abuses of the system by both lenders and universities."
Predatory lending? Ridiculous. Show me anyone paying a double-digit rate on a student loan.
Kickbacks? Find me a law that was broken.
You said:
"We have learned that student loan lenders have paid financial incentives to universities to get on their "preferred lender lists" no matter whether their terms and fees were favorable to students or not."
It is not a crime to pay for access. However, you, in your usual fashion, have overlooked the obvious. While it is a crime to attempt to bribe a cop, it is also a crime for the cop to accept your bribe. You, however, pretend the situation is one-sided. If it is not illegal for lenders to offer inducements, it is not illegal for the intended recipients to accept them.
You said:
"We have learned that government employees at the Department of Education with oversight duties of the student loan industry have held stock in student loan lending companies."
What of it? Unless they were given free stock, their returns were mostly unremarkable.
You wrote:
"Some other government employees at the Department of Education worked for student loan lenders before they took over their oversight duties at the government level and have gone back to those same student loan lenders after they have left the government. In other words, student loan lenders have been regulating themselves for the last six years."
This is America. There are few reasons to prohibit people from engaging in the pursuit of their livelihoods. Non-compete agreements do not permanently enjoin people from chasing obvious opportunities.
You said:
"We have learned that some universities (Pace University is one) have essentially turned over their financial aid departments to student loan lenders like Sallie Mae."
Yes. Just like GM and Ford, where car buyers were handed off to GMAC and Ford Motor Credit to finance their cars. Wow.
You said:
"We have learned that some financial aid officers at major universities (Columbia University is one) have held stock in student loan lenders like Nelnet and Sallie Mae at the very same time they are making those very same student loan lenders the "preferred lenders" for the university."
Heavens. As though there are enough students at a single school to power the stock price of a company aimed at the total population of the student world.
Moreover, businesses do not succeed if they rip off customers. They might enjoy a brief period of profitability, but in a competitive marketplace, there is always a low-cost competitor to take business from those who overcharge.
You said:
"We have learned that at some schools (Pace University is one) the federally mandated exit interviews that student borrowers must undergo before they can graduate have been run by student loan lenders. Student borrowers are told about the terms of their loans and pitched student loan products like consolidation by student loan lender employees at these exit interviews."
Yowser. The students sit for one last class before departing the groves of academe. A class in which they are told of what their creditors expect of them. How unfair! How abusive! Does anything prevent the ex-students from searching for a creditor offering better terms? No. If there are lenders out there willing to offer better rates, ex-students are free to do business with them.
This is a tempest in a teapot. Truly a non-story.
reality,
I read the article you included in your post. It was quite funny in many ways.
The journalist noted how lenders had "exploited loopholes" and "gamed the system" and how Congress was called upon to "stop the giveaways".
There were words I did not see. But they are words I think you imputed into the text and into this silly story. Words like "illegal", "criminal" and "fraudulent."
But they were missing. The only point to be made is that government always gets it wrong. Lenders were guaranteed a return of 9.5 percent many years ago, when loan rates were high and students needed a break. Hey. That's great. Too bad no one in five subsequent administrations revisited the generous government terms.
Okay. Now that's happened. Loopholes closed. Generous terms revoked. But, meanwhile, were any laws broken? No. Of course not. That's one reason a free-for-all has erupted. No one will get hurt in this round of bashing, and the changes won't upset anyone.
Of course it's laughable that the concept of "exploiting loopholes" has taken on some shady connotations. Rather than stating that some observant people have seized on opportunity created by a slow-moving government, the lenders are characterized as the bad guys.
How can that be? Have they cheated anyone? Have they pilfered funds? Stiffed students? No. This story is yet another example of a hapless federal agency with egg on its face and how a group of sleeping dogs suddenly awoke to bark at the wrong people.
I read the article you included in your post. It was quite funny in many ways.
The journalist noted how lenders had "exploited loopholes" and "gamed the system" and how Congress was called upon to "stop the giveaways".
There were words I did not see. But they are words I think you imputed into the text and into this silly story. Words like "illegal", "criminal" and "fraudulent."
But they were missing. The only point to be made is that government always gets it wrong. Lenders were guaranteed a return of 9.5 percent many years ago, when loan rates were high and students needed a break. Hey. That's great. Too bad no one in five subsequent administrations revisited the generous government terms.
Okay. Now that's happened. Loopholes closed. Generous terms revoked. But, meanwhile, were any laws broken? No. Of course not. That's one reason a free-for-all has erupted. No one will get hurt in this round of bashing, and the changes won't upset anyone.
Of course it's laughable that the concept of "exploiting loopholes" has taken on some shady connotations. Rather than stating that some observant people have seized on opportunity created by a slow-moving government, the lenders are characterized as the bad guys.
How can that be? Have they cheated anyone? Have they pilfered funds? Stiffed students? No. This story is yet another example of a hapless federal agency with egg on its face and how a group of sleeping dogs suddenly awoke to bark at the wrong people.
I'm just going to address a couple of your points:
How does the fact that the stock price of SLM led the S&P 500 Index for the first couple of years of the Bush administration tell you that more kids were able to finance college?
All it tells you is that SLM profits were up.
More kids were actually able to finance their educations when the Pell grant covered 70% of college costs (as it did in the 1980's.) Now that Pell grants only cover 30% of college costs, student loans are making up the difference (much to the healthy, subsidized profits of the loan lenders.)
As for predatory lending, check out private loans for both parents and students. Many middle class families no longer qualify for Pell grants or subsidized or unsubsidized loans. Instead, they are trying to fund college costs w/ private loans - some as high as 13%. I know because I teach seniors and I have seen it.
Holding stock in a company that you are supposed to regulate is a conflict of interest. Pure and simple.
When loan lending employees disguise themselves as university employees in the financial aid office, they are perpetrating fraud. Why can't they be up-front and tell prospective borrowers they work for SLM or Nelnet?
How does the fact that the stock price of SLM led the S&P 500 Index for the first couple of years of the Bush administration tell you that more kids were able to finance college?
All it tells you is that SLM profits were up.
More kids were actually able to finance their educations when the Pell grant covered 70% of college costs (as it did in the 1980's.) Now that Pell grants only cover 30% of college costs, student loans are making up the difference (much to the healthy, subsidized profits of the loan lenders.)
As for predatory lending, check out private loans for both parents and students. Many middle class families no longer qualify for Pell grants or subsidized or unsubsidized loans. Instead, they are trying to fund college costs w/ private loans - some as high as 13%. I know because I teach seniors and I have seen it.
Holding stock in a company that you are supposed to regulate is a conflict of interest. Pure and simple.
When loan lending employees disguise themselves as university employees in the financial aid office, they are perpetrating fraud. Why can't they be up-front and tell prospective borrowers they work for SLM or Nelnet?
reality, you wrote:
"How does the fact that the stock price of SLM led the S&P 500 Index for the first couple of years of the Bush administration tell you that more kids were able to finance college?..."
"...All it tells you is that SLM profits were up."
Wrong. Stocks don't rise simply because profits are up. Stocks rise because business is brisk AND profits are up, at least in cases like SLM. The recent buyout offer confirms the positive view of the company's future despite all the ado about nothing currently in the press.
Stock analysts look closely at what's driving profitability of companies. A healthy loan company is seeing an increase in numbers of loans as well as aggregate face value of all loans. It will experience low levels of defaults and the interest rates on loans will yield profits -- even without the federal guarantees, which are soon to disappear. There's nothing magical about the workings of a good financial services firm. Money is loaned to people who will pay it back.
You claimed:
"More kids were actually able to finance their educations when the Pell grant covered 70% of college costs (as it did in the 1980's.) Now that Pell grants only cover 30% of college costs, student loans are making up the difference (much to the healthy, subsidized profits of the loan lenders.)"
More kids? If your statement were true, college enrollment would have declined since the 1980s. It's not declining. Meanwhile, you are bandying terms when you compare grants with loans. Very few students were ever able to cover 70% of college costs with Pell Grants.
I paid my way through college. I received Pell Grants, which I believe were capped at around $2000 a year at the time I went to school. That amount was not $70% of my tuition.
Furthermore, when you state that Pell Grants now cover only 30% of college costs -- which I doubt -- your focus on the reduced effect of the Pell is actaully a call for publicly funded college education.
But, what you fail to see is that an object costs the amount of money available to pay for it. Therefore, if taxpayer funding for college increases, then colleges will raise tuition -- because they can.
Only schools in unique circumstances avoid the plague of rising tuition. Cooper Union is my favorite example. Tuition is ZERO $$ because CU owns the land under the Chrysler Building from which it receives big annual rent payments that float the school.
You wrote:
"As for predatory lending, check out private loans for both parents and students."
Your use of the term "predatory" is egregious. It does not apply. You simply object when borrowers must pay market rates on loans.
You said:
"Many middle class families no longer qualify for Pell grants or subsidized or unsubsidized loans."
Why? Did the government change the rules? It certainly wasn't the schools that ruled people ineligible. Meanwhile, the fact that there isn't enough Pell Grant money to go around is a strong indicator that student enrollment is up.
You said:
"Instead, they are trying to fund college costs w/ private loans - some as high as 13%. I know because I teach seniors and I have seen it."
Rates of 13%? If that's true, it reflects the credit standing of the borrower. Some people, including you perhaps, seem to think people with lousy credit ratings -- bad repayment history -- should pay the same borrowing rates as those who repay their loans on time.
Meanwhile, anyone who owns an appreciated house or apartment is able to obtain a home-equity loan for rates a lot less than 13%.
Moreover, there are other methods of paying for college. I worked. I went to a school offering a Co-op program, otherwise known as a work-study program. I alternated semesters of school with semesters of work. Because I was an engineering major, my jobs were in engineering. Not mindless work either.
There are many defense contractors near my school. They offered both co-op jobs and permanent employment to many of my classmates. Some of those under the most financial pressure would stick with their co-op jobs and complete college at night.
As a result of my own experience and the experience of many others I knew at my college as well as other schools offering co-op plans, I know there are many ways to pay for school that are well within the grasp of most students.
On the other hand, the cost of attending a prestigious school is astronomical. My niece will start at Tufts in the fall. My brother-in-law is in pain. But he and his wife are biting the bullet and sending her. Meanwhile, she turned down her acceptance to the honors program at SUNY Binghamton, despite the huge savings.
You said:
"Holding stock in a company that you are supposed to regulate is a conflict of interest. Pure and simple."
It's not a crime.
If every activity that is a conflict of interest were prohibited, our economy would come to a halt.
You said:
"When loan lending employees disguise themselves as university employees in the financial aid office, they are perpetrating fraud."
Fraud? Sorry. Not in a legal sense.
Meanwhile, the lenders and the schools cooperate in these activities. Thus, a lot of people have agreed to permit the activities that disturb you. They are not conspiring for criminal purposes.
"How does the fact that the stock price of SLM led the S&P 500 Index for the first couple of years of the Bush administration tell you that more kids were able to finance college?..."
"...All it tells you is that SLM profits were up."
Wrong. Stocks don't rise simply because profits are up. Stocks rise because business is brisk AND profits are up, at least in cases like SLM. The recent buyout offer confirms the positive view of the company's future despite all the ado about nothing currently in the press.
Stock analysts look closely at what's driving profitability of companies. A healthy loan company is seeing an increase in numbers of loans as well as aggregate face value of all loans. It will experience low levels of defaults and the interest rates on loans will yield profits -- even without the federal guarantees, which are soon to disappear. There's nothing magical about the workings of a good financial services firm. Money is loaned to people who will pay it back.
You claimed:
"More kids were actually able to finance their educations when the Pell grant covered 70% of college costs (as it did in the 1980's.) Now that Pell grants only cover 30% of college costs, student loans are making up the difference (much to the healthy, subsidized profits of the loan lenders.)"
More kids? If your statement were true, college enrollment would have declined since the 1980s. It's not declining. Meanwhile, you are bandying terms when you compare grants with loans. Very few students were ever able to cover 70% of college costs with Pell Grants.
I paid my way through college. I received Pell Grants, which I believe were capped at around $2000 a year at the time I went to school. That amount was not $70% of my tuition.
Furthermore, when you state that Pell Grants now cover only 30% of college costs -- which I doubt -- your focus on the reduced effect of the Pell is actaully a call for publicly funded college education.
But, what you fail to see is that an object costs the amount of money available to pay for it. Therefore, if taxpayer funding for college increases, then colleges will raise tuition -- because they can.
Only schools in unique circumstances avoid the plague of rising tuition. Cooper Union is my favorite example. Tuition is ZERO $$ because CU owns the land under the Chrysler Building from which it receives big annual rent payments that float the school.
You wrote:
"As for predatory lending, check out private loans for both parents and students."
Your use of the term "predatory" is egregious. It does not apply. You simply object when borrowers must pay market rates on loans.
You said:
"Many middle class families no longer qualify for Pell grants or subsidized or unsubsidized loans."
Why? Did the government change the rules? It certainly wasn't the schools that ruled people ineligible. Meanwhile, the fact that there isn't enough Pell Grant money to go around is a strong indicator that student enrollment is up.
You said:
"Instead, they are trying to fund college costs w/ private loans - some as high as 13%. I know because I teach seniors and I have seen it."
Rates of 13%? If that's true, it reflects the credit standing of the borrower. Some people, including you perhaps, seem to think people with lousy credit ratings -- bad repayment history -- should pay the same borrowing rates as those who repay their loans on time.
Meanwhile, anyone who owns an appreciated house or apartment is able to obtain a home-equity loan for rates a lot less than 13%.
Moreover, there are other methods of paying for college. I worked. I went to a school offering a Co-op program, otherwise known as a work-study program. I alternated semesters of school with semesters of work. Because I was an engineering major, my jobs were in engineering. Not mindless work either.
There are many defense contractors near my school. They offered both co-op jobs and permanent employment to many of my classmates. Some of those under the most financial pressure would stick with their co-op jobs and complete college at night.
As a result of my own experience and the experience of many others I knew at my college as well as other schools offering co-op plans, I know there are many ways to pay for school that are well within the grasp of most students.
On the other hand, the cost of attending a prestigious school is astronomical. My niece will start at Tufts in the fall. My brother-in-law is in pain. But he and his wife are biting the bullet and sending her. Meanwhile, she turned down her acceptance to the honors program at SUNY Binghamton, despite the huge savings.
You said:
"Holding stock in a company that you are supposed to regulate is a conflict of interest. Pure and simple."
It's not a crime.
If every activity that is a conflict of interest were prohibited, our economy would come to a halt.
You said:
"When loan lending employees disguise themselves as university employees in the financial aid office, they are perpetrating fraud."
Fraud? Sorry. Not in a legal sense.
Meanwhile, the lenders and the schools cooperate in these activities. Thus, a lot of people have agreed to permit the activities that disturb you. They are not conspiring for criminal purposes.
n_s, I can think of three trends that cast grave doubt on your position that the picture in college education is healthy and doesn't require significant government intervention:
1) The percentage of students who actually complete a 4-year degree in 4 years has been falling for a generation or more. The reason for that is that more students (and parents as well) have to take more time off to work to save the money for college expenses.
2) Degree inflation has been a major trend for 30 years or so. When I started in the company I worked for, it took ANY 4-year degree or related experience to interview for a technical job. Now, one has to have at the very least a BS in Computer Science plus experience, or an MS to interview for the same job.
3) With the decline in the manufacturing sector, a greater percentage of jobs are knowledge-based, and require at least a BA or BS or better as a ticket in.
My guess is that if the money that we as a nation need to educate this knowledge-based economy were available, college enrollment would have been increasing at 8-10% a year or so for the last 20 years. It ain't happenin'. What is happening is young people from the middle class and below are turning to alternative (and cheaper) forms of education -- community college and equivalent -- and praying that someday, SOMEDAY, they can actually put together enough money for that final two years.
We've always had a three-tier system -- the children of the well-off took their pick of prestigious universities, the middle class kids went to State U. and worked part-time, and the poorer classes went to community colleges or trade schools, or just did the best they could. That has shifted down a tier, with only the very wealthy given the Ivy Option, and society is very likely to come apart altogether as a result. What the elite are ignoring is the fact that it's no fun to be a hot shot in a third-world country. We do well when we ALL do well. End of sermon.
1) The percentage of students who actually complete a 4-year degree in 4 years has been falling for a generation or more. The reason for that is that more students (and parents as well) have to take more time off to work to save the money for college expenses.
2) Degree inflation has been a major trend for 30 years or so. When I started in the company I worked for, it took ANY 4-year degree or related experience to interview for a technical job. Now, one has to have at the very least a BS in Computer Science plus experience, or an MS to interview for the same job.
3) With the decline in the manufacturing sector, a greater percentage of jobs are knowledge-based, and require at least a BA or BS or better as a ticket in.
My guess is that if the money that we as a nation need to educate this knowledge-based economy were available, college enrollment would have been increasing at 8-10% a year or so for the last 20 years. It ain't happenin'. What is happening is young people from the middle class and below are turning to alternative (and cheaper) forms of education -- community college and equivalent -- and praying that someday, SOMEDAY, they can actually put together enough money for that final two years.
We've always had a three-tier system -- the children of the well-off took their pick of prestigious universities, the middle class kids went to State U. and worked part-time, and the poorer classes went to community colleges or trade schools, or just did the best they could. That has shifted down a tier, with only the very wealthy given the Ivy Option, and society is very likely to come apart altogether as a result. What the elite are ignoring is the fact that it's no fun to be a hot shot in a third-world country. We do well when we ALL do well. End of sermon.
# posted by 
: 6:24 PM
: 6:24 PM
Good sermon, kicksiron.
I would add one thing: While the number of people attending SOME college has increased over the last 20 years, the number of people graduating with BA's has not.
Money is being made off quite a few people who years ago would not have (or should not have) attended any college but now go for a year or two, pay tuition to colleges and loan interest to lending companies. I work very hard to make my students aware of the problems of finishing only SOME college and accumulating thousands of dollars of debt in the process. I tell them it is better to NOT attend college at all than to attend, accumulate debt and not finish. I also try and steer them toward city and state schools so that their accumulated debt isn't astronomical. College is supposed to help kids have a better life, not dig them in a deeper hole than they're already in.
I would add one thing: While the number of people attending SOME college has increased over the last 20 years, the number of people graduating with BA's has not.
Money is being made off quite a few people who years ago would not have (or should not have) attended any college but now go for a year or two, pay tuition to colleges and loan interest to lending companies. I work very hard to make my students aware of the problems of finishing only SOME college and accumulating thousands of dollars of debt in the process. I tell them it is better to NOT attend college at all than to attend, accumulate debt and not finish. I also try and steer them toward city and state schools so that their accumulated debt isn't astronomical. College is supposed to help kids have a better life, not dig them in a deeper hole than they're already in.
kicksiron, you wrote:
"1) The percentage of students who actually complete a 4-year degree in 4 years has been falling for a generation or more."
So what? The number and percentage of people in the US with a 4-year degree is rising. If students take a break from school, it does not matter.
You wrote:
"The reason for that is that more students (and parents as well) have to take more time off to work to save the money for college expenses."
Says you. I'm sure that's true in some cases. What of it? There's a long and honorable history in this country of people who "worked their way through college."
I happen to be one of them. A large percentage of law degrees and MBAs are obtained by employed people attending evening classes.
You wrote:
"2) Degree inflation has been a major trend for 30 years or so."
Depends on the school, the major and the changing nature of the job.
You wrote:
"When I started in the company I worked for, it took ANY 4-year degree or related experience to interview for a technical job."
This is quite common. I graduated from engineering school in 1982. In school I learned Fortran and BASIC as part of my mechanical engineering curriculum. Among others jobs I held during my school years was the job of computer programmer, writing Fortran code. I doubt any job like it exists today.
The technical world expanded since those days. The amount of software knowledge has exploded, and the number of people who know something about software exploded over the same period.
About ten years ago I dove into software. The software world was so desperate for people that a major US company took a shot at offering FREE software training AND jobs to people able to pass a single test. The cattle call for hopeful programmers was answered by a huge crowd that convened in an auditorium to take the single logic test. A small number of us passed and were offered intense training in C, C++, Unix, Visual Basic, Power Builder, SQL and other stuff.
That wouldn't happen today. So what? There's an ebb and flow to every line of work.
P.S. It wasn't for me. I went back to Wall Street after finishing the program. But as far as I know, all my fellow students started software careers.
You wrote:
"Now, one has to have at the very least a BS in Computer Science plus experience, or an MS to interview for the same job."
So what? Maybe the jobs themselves are more complex. Maybe the company wants employees who need less handholding when they start. Companies mature and change their hiring policies to reflect changes in their operating environments.
You wrote:
"3) With the decline in the manufacturing sector, a greater percentage of jobs are knowledge-based, and require at least a BA or BS or better as a ticket in."
No question about that!! But, surprise, surprise, manufacturing in the US -- and there is a lot of it -- is often aimed at producing complex products. It takes well educated engineers to design the machines needed to manufacture sophisticated products.
You wrote:
"My guess is that if the money that we as a nation need to educate this knowledge-based economy were available, college enrollment would have been increasing at 8-10% a year or so for the last 20 years."
As you said, it's "your guess". And it's a bad one. The population of students graduating from high school is not increasing 8-10% a year. However, if college enrollment were to have increased 8-10% a year over the last 20 years, you can quickly calculate that there would not be a sufficient supply of high school graduates to fill all those theoretical seats. Many of those empty seats would have to go to adult students.
Flash Report. Adult education has become Big Business. But not big enough to match your estimate.
You wrote:
"What is happening is young people from the middle class and below are turning to alternative (and cheaper) forms of education -- community college and equivalent -- and praying that someday, SOMEDAY, they can actually put together enough money for that final two years."
In other words, the market has risen to meet the demand.
You wrote:
"We've always had a three-tier system -- the children of the well-off took their pick of prestigious universities..."
Nonsense. Acceptance at "prestigious universities" is a matter of merit. Nothing less. The best schools -- Yale, for instance -- offer financing programs that enable penniless students to attend. What do you think those huge endowments at the best schools are used for? Some kids get financial help. Sometimes a little, sometimes a free ride.
You wrote:
"...the middle class kids went to State U. and worked part-time, and the poorer classes went to community colleges or trade schools, or just did the best they could."
You're breaking my heart. Life forces people to make choices. What's next? Bambi's rewritten so the mother lives?
You claim:
"That has shifted down a tier, with only the very wealthy given the Ivy Option, and society is very likely to come apart altogether as a result."
What planet are you on? There is no doubt the Ivies could accept only kids with top credentials AND wealthy parents. But they don't.
Meanwhile, you have overlooked the fact that admission to almost all Ivy League schools was limited to males until about 1971. Cornell was probably the only exception. For many years the Ivies also limited the enrollment of Jews. These days they are limiting the enrollment of Asians.
Why? Because those groups produced such a surge of qualified candidates. The assets of their parents played no role.
You wrote:
"What the elite are ignoring is the fact that it's no fun to be a hot shot in a third-world country."
In other words, that's why people will break their necks to live in the US rather than, say, Mexico.
You wrote:
"We do well when we ALL do well."
Either you are expressing your socialist nature or you think people become smarter by attending Harvard or Yale.
While it is true that a rising economic tide lifts all boats, it is not true that each person is equal to all challenges. Ivy League schools are too tough for most students. Pro sports are open to only a few. That's life.
But here's a point. The demand for teachers is rising, soaring. Trainers are everywhere. Instuctors for every subject pop up every day. People are obsessed with learning and doing.
"1) The percentage of students who actually complete a 4-year degree in 4 years has been falling for a generation or more."
So what? The number and percentage of people in the US with a 4-year degree is rising. If students take a break from school, it does not matter.
You wrote:
"The reason for that is that more students (and parents as well) have to take more time off to work to save the money for college expenses."
Says you. I'm sure that's true in some cases. What of it? There's a long and honorable history in this country of people who "worked their way through college."
I happen to be one of them. A large percentage of law degrees and MBAs are obtained by employed people attending evening classes.
You wrote:
"2) Degree inflation has been a major trend for 30 years or so."
Depends on the school, the major and the changing nature of the job.
You wrote:
"When I started in the company I worked for, it took ANY 4-year degree or related experience to interview for a technical job."
This is quite common. I graduated from engineering school in 1982. In school I learned Fortran and BASIC as part of my mechanical engineering curriculum. Among others jobs I held during my school years was the job of computer programmer, writing Fortran code. I doubt any job like it exists today.
The technical world expanded since those days. The amount of software knowledge has exploded, and the number of people who know something about software exploded over the same period.
About ten years ago I dove into software. The software world was so desperate for people that a major US company took a shot at offering FREE software training AND jobs to people able to pass a single test. The cattle call for hopeful programmers was answered by a huge crowd that convened in an auditorium to take the single logic test. A small number of us passed and were offered intense training in C, C++, Unix, Visual Basic, Power Builder, SQL and other stuff.
That wouldn't happen today. So what? There's an ebb and flow to every line of work.
P.S. It wasn't for me. I went back to Wall Street after finishing the program. But as far as I know, all my fellow students started software careers.
You wrote:
"Now, one has to have at the very least a BS in Computer Science plus experience, or an MS to interview for the same job."
So what? Maybe the jobs themselves are more complex. Maybe the company wants employees who need less handholding when they start. Companies mature and change their hiring policies to reflect changes in their operating environments.
You wrote:
"3) With the decline in the manufacturing sector, a greater percentage of jobs are knowledge-based, and require at least a BA or BS or better as a ticket in."
No question about that!! But, surprise, surprise, manufacturing in the US -- and there is a lot of it -- is often aimed at producing complex products. It takes well educated engineers to design the machines needed to manufacture sophisticated products.
You wrote:
"My guess is that if the money that we as a nation need to educate this knowledge-based economy were available, college enrollment would have been increasing at 8-10% a year or so for the last 20 years."
As you said, it's "your guess". And it's a bad one. The population of students graduating from high school is not increasing 8-10% a year. However, if college enrollment were to have increased 8-10% a year over the last 20 years, you can quickly calculate that there would not be a sufficient supply of high school graduates to fill all those theoretical seats. Many of those empty seats would have to go to adult students.
Flash Report. Adult education has become Big Business. But not big enough to match your estimate.
You wrote:
"What is happening is young people from the middle class and below are turning to alternative (and cheaper) forms of education -- community college and equivalent -- and praying that someday, SOMEDAY, they can actually put together enough money for that final two years."
In other words, the market has risen to meet the demand.
You wrote:
"We've always had a three-tier system -- the children of the well-off took their pick of prestigious universities..."
Nonsense. Acceptance at "prestigious universities" is a matter of merit. Nothing less. The best schools -- Yale, for instance -- offer financing programs that enable penniless students to attend. What do you think those huge endowments at the best schools are used for? Some kids get financial help. Sometimes a little, sometimes a free ride.
You wrote:
"...the middle class kids went to State U. and worked part-time, and the poorer classes went to community colleges or trade schools, or just did the best they could."
You're breaking my heart. Life forces people to make choices. What's next? Bambi's rewritten so the mother lives?
You claim:
"That has shifted down a tier, with only the very wealthy given the Ivy Option, and society is very likely to come apart altogether as a result."
What planet are you on? There is no doubt the Ivies could accept only kids with top credentials AND wealthy parents. But they don't.
Meanwhile, you have overlooked the fact that admission to almost all Ivy League schools was limited to males until about 1971. Cornell was probably the only exception. For many years the Ivies also limited the enrollment of Jews. These days they are limiting the enrollment of Asians.
Why? Because those groups produced such a surge of qualified candidates. The assets of their parents played no role.
You wrote:
"What the elite are ignoring is the fact that it's no fun to be a hot shot in a third-world country."
In other words, that's why people will break their necks to live in the US rather than, say, Mexico.
You wrote:
"We do well when we ALL do well."
Either you are expressing your socialist nature or you think people become smarter by attending Harvard or Yale.
While it is true that a rising economic tide lifts all boats, it is not true that each person is equal to all challenges. Ivy League schools are too tough for most students. Pro sports are open to only a few. That's life.
But here's a point. The demand for teachers is rising, soaring. Trainers are everywhere. Instuctors for every subject pop up every day. People are obsessed with learning and doing.
n_s, you wrote "if students take a break from school, it doesn't matter." Ah, but it DOES matter -- to lifetime earnings and lifetime productivity. Delaying that 40K/year career entry job for a couple of years for 10K/year flipping burgers matters a whole heck of a lot, both to the individual and the economy as a whole.
You also wrote "Either you are expressing your socialist nature or you think people become smarter by attending Harvard or Yale." It must be my socialist nature then, as well as the socialist nature of most Fortune 500 HR departments. Actually, when I was at headquarters, we used to talk about preferring new hires with limited background, because it took so long for the MSs to unlearn everything they thought they knew so they could actually accomplish something.
The bottom line is that when I was in school, a year at a prestigious U. cost about as much as a new Buick sedan. Today, it's close to two new Buicks.
The point of rbe's original post was that lax regulation and oversight allowed the loan industry to profit excessively by gaming the system. That there IS such a demand for student loans is the result of reduction in government support of higher education, both in Pell grants and in direct payments to colleges and universities.
I will hold to my estimate of 8-10% annual growth in post-secondary education, but I have to qualify it by saying 'in a closed economy'. Many of the butts we're putting in college desks are in Taiwan, Jordan and India, not here. That's one of those unintended consequences of reduced government support of higher education.
Actually, there IS a solution to the problem. Some years ago, I bought stock in a local company that was developing courses and instruction delivery methods. Their primary customers were municipalities needing to train firemen, police, EMT techs and nurses. I reasoned that if the company could do that, they could also record the top university lecturers in each specialty, and deliver the content at community colleges, so everyone could have the benefit of the best education available. There are companies actually doing much of that today, but the course material tends to be irrelevant unless you're a fan of Middle Eastern literature or the like. On top of that, there's no crediting method available. Why? Everyone in higher education realizes that if you could deliver a Harvard Law degree at Podunk CC, the entire system would be turned on its ear, and no one is looking forward to diving into that can of worms.
You also wrote "Either you are expressing your socialist nature or you think people become smarter by attending Harvard or Yale." It must be my socialist nature then, as well as the socialist nature of most Fortune 500 HR departments. Actually, when I was at headquarters, we used to talk about preferring new hires with limited background, because it took so long for the MSs to unlearn everything they thought they knew so they could actually accomplish something.
The bottom line is that when I was in school, a year at a prestigious U. cost about as much as a new Buick sedan. Today, it's close to two new Buicks.
The point of rbe's original post was that lax regulation and oversight allowed the loan industry to profit excessively by gaming the system. That there IS such a demand for student loans is the result of reduction in government support of higher education, both in Pell grants and in direct payments to colleges and universities.
I will hold to my estimate of 8-10% annual growth in post-secondary education, but I have to qualify it by saying 'in a closed economy'. Many of the butts we're putting in college desks are in Taiwan, Jordan and India, not here. That's one of those unintended consequences of reduced government support of higher education.
Actually, there IS a solution to the problem. Some years ago, I bought stock in a local company that was developing courses and instruction delivery methods. Their primary customers were municipalities needing to train firemen, police, EMT techs and nurses. I reasoned that if the company could do that, they could also record the top university lecturers in each specialty, and deliver the content at community colleges, so everyone could have the benefit of the best education available. There are companies actually doing much of that today, but the course material tends to be irrelevant unless you're a fan of Middle Eastern literature or the like. On top of that, there's no crediting method available. Why? Everyone in higher education realizes that if you could deliver a Harvard Law degree at Podunk CC, the entire system would be turned on its ear, and no one is looking forward to diving into that can of worms.
# posted by : 2:27 PM
: 2:27 PM
kicksiron, you wrote:
"Ah, but it DOES matter -- to lifetime earnings and lifetime productivity. Delaying that 40K/year career entry job for a couple of years for 10K/year flipping burgers matters a whole heck of a lot, both to the individual and the economy as a whole."
Noo it doesn't. Both jobs will be held by one person or another. Meanwhile, the guy with the college degree will get a better job when that job is available. Another guy will not.
Moreover, in most jobs offices today, progression up the line does not occur on a fixed timetable. Some people move ahead faster than other -- for a lot of reasons. Based on your statement, all employees are equally promotable and equally likely to earn progressively higher salaries.
Well, that's not how it goes for most people these days. Job hopping. Job losses. Career changes. Salary jumps. Big years. Bad years. You are who you are, and your paychecks will reflect that fact more often than they will show a smooth and steady increase from the start of a career to a finish 40 years later.
You wrote re attending Harvard
"You also wrote "Either you are expressing your socialist or you think people become smarter by attending Harvard or Yale."
"It must be my socialist nature then, as well as the socialist nature of most Fortune 500 HR departments."
You missed the point. A student doesn't GAIN any IQ points while at Harvard or Yale. The validation comes from ACCEPTANCE at those schools. The kids who get in are impressive as hell. By the time they've graduated from high school, they've accomplished a lot. They haven't done everything, of course. But they are impressive and if you were placing bets on how groups of people would fare in life, you'd feel confident about the money placed on Harvard grads.
You wrote:
"Actually, when I was at headquarters, we used to talk about preferring new hires with limited background, because it took so long for the MSs to unlearn everything they thought they knew so they could actually accomplish something."
I'd be interested to know how they fared over a period longer than their first year out of school.
You wrote:
"The bottom line is that when I was in school, a year at a prestigious U. cost about as much as a new Buick sedan. Today, it's close to two new Buicks."
If your exchange rate is correct, four years of studying and a degree from a prestigious U is a bargain. Cars, as a percentage of income, have gotten cheaper. Notice too, that there are many, many more cars around today than there were 20, 30, 40 years ago.
You wrote:
"The point of rbe's original post was that lax regulation and oversight allowed the loan industry to profit excessively by gaming the system."
Correct. In other words, the loan companies and the universities did nothing wrong. That should be obvious from the fact that not one news story has described any of the actions of the loan companies or schools as criminal acts. In fact, if critics are honest, they should aim ALL dispproval at government watchdogs who were asleep at their posts.
You wrote:
"That there IS such a demand for student loans is the result of reduction in government support of higher education, both in Pell grants and in direct payments to colleges and universities."
Oh. Yeah. Sure. According to you the reason for high loan demand is the absence of free money for students. As though the recognized value of obtaining a college degree has nothing to do with loan demand. Try again.
You wrote:
"I will hold to my estimate of 8-10% annual growth in post-secondary education, but I have to qualify it by saying 'in a closed economy'."
"In a closed economy"? Or, in other words, in a theoretical system that does not exist. Why bother recasting your statement from one that is wrong only on the basis of the assumed growth rate to one that is totally wrong because it is meaningless? Why not discuss the educational system on Mars?
In any case, if enrollment were to rise 10% a year for the next 20 years, the number of kids going to college 20 years down the road would equal 7.5 times the number of kids enrolling today. Nobody credible observers think college enrollment will grow that much.
You wrote:
"Many of the butts we're putting in college desks are in Taiwan, Jordan and India, not here."
I'm not sure I follow you. But I'm sure the US is not paying tuition for citizens of those countries to study on home turf. Usually their governments pay their tuition when they come to the US. I went to college with many international students enjoying the benefits of free tuition supplied by their governments.
You wrote:
"Some years ago, I bought stock in a local company that was developing courses and instruction delivery methods. Their primary customers were municipalities needing to train firemen, police, EMT techs and nurses."
This is hardly news. Many students have benefited and earned degrees through Correspondence Courses. The US military used to run correspondance classes through the University of Maryland. Today, computers and the internet have changed it all for the better.
You wrote:
"I reasoned that if the company could do that, they could also record the top university lecturers in each specialty, and deliver the content at community colleges, so everyone could have the benefit of the best education available."
Nothing new here. Computer-based-learning is here to stay.
You wrote:
"There are companies actually doing much of that today, but the course material tends to be irrelevant unless you're a fan of Middle Eastern literature or the like."
What nonsense. The MBA program at the University of Phoenix (an online school) is a huge success. No middle-east anything in that curriculum.
You wrote:
"On top of that, there's no crediting method available."
Look again. University of Phoenix is accredited.
You wrote:
"Everyone in higher education realizes that if you could deliver a Harvard Law degree at Podunk CC, the entire system would be turned on its ear, and no one is looking forward to diving into that can of worms."
YOu seem to think that a Harvard teacher can pour knowledge into the head of a dunce. It's the other way around. A Harvard student is almost always an extremely able learner who can learn more and learn faster than most others. Harvard (the Ivies) gets the best students. That's why the school is successful. It is not the Marine Corps. It does not shape any piece of human clay into an overachieving student.
"Ah, but it DOES matter -- to lifetime earnings and lifetime productivity. Delaying that 40K/year career entry job for a couple of years for 10K/year flipping burgers matters a whole heck of a lot, both to the individual and the economy as a whole."
Noo it doesn't. Both jobs will be held by one person or another. Meanwhile, the guy with the college degree will get a better job when that job is available. Another guy will not.
Moreover, in most jobs offices today, progression up the line does not occur on a fixed timetable. Some people move ahead faster than other -- for a lot of reasons. Based on your statement, all employees are equally promotable and equally likely to earn progressively higher salaries.
Well, that's not how it goes for most people these days. Job hopping. Job losses. Career changes. Salary jumps. Big years. Bad years. You are who you are, and your paychecks will reflect that fact more often than they will show a smooth and steady increase from the start of a career to a finish 40 years later.
You wrote re attending Harvard
"You also wrote "Either you are expressing your socialist or you think people become smarter by attending Harvard or Yale."
"It must be my socialist nature then, as well as the socialist nature of most Fortune 500 HR departments."
You missed the point. A student doesn't GAIN any IQ points while at Harvard or Yale. The validation comes from ACCEPTANCE at those schools. The kids who get in are impressive as hell. By the time they've graduated from high school, they've accomplished a lot. They haven't done everything, of course. But they are impressive and if you were placing bets on how groups of people would fare in life, you'd feel confident about the money placed on Harvard grads.
You wrote:
"Actually, when I was at headquarters, we used to talk about preferring new hires with limited background, because it took so long for the MSs to unlearn everything they thought they knew so they could actually accomplish something."
I'd be interested to know how they fared over a period longer than their first year out of school.
You wrote:
"The bottom line is that when I was in school, a year at a prestigious U. cost about as much as a new Buick sedan. Today, it's close to two new Buicks."
If your exchange rate is correct, four years of studying and a degree from a prestigious U is a bargain. Cars, as a percentage of income, have gotten cheaper. Notice too, that there are many, many more cars around today than there were 20, 30, 40 years ago.
You wrote:
"The point of rbe's original post was that lax regulation and oversight allowed the loan industry to profit excessively by gaming the system."
Correct. In other words, the loan companies and the universities did nothing wrong. That should be obvious from the fact that not one news story has described any of the actions of the loan companies or schools as criminal acts. In fact, if critics are honest, they should aim ALL dispproval at government watchdogs who were asleep at their posts.
You wrote:
"That there IS such a demand for student loans is the result of reduction in government support of higher education, both in Pell grants and in direct payments to colleges and universities."
Oh. Yeah. Sure. According to you the reason for high loan demand is the absence of free money for students. As though the recognized value of obtaining a college degree has nothing to do with loan demand. Try again.
You wrote:
"I will hold to my estimate of 8-10% annual growth in post-secondary education, but I have to qualify it by saying 'in a closed economy'."
"In a closed economy"? Or, in other words, in a theoretical system that does not exist. Why bother recasting your statement from one that is wrong only on the basis of the assumed growth rate to one that is totally wrong because it is meaningless? Why not discuss the educational system on Mars?
In any case, if enrollment were to rise 10% a year for the next 20 years, the number of kids going to college 20 years down the road would equal 7.5 times the number of kids enrolling today. Nobody credible observers think college enrollment will grow that much.
You wrote:
"Many of the butts we're putting in college desks are in Taiwan, Jordan and India, not here."
I'm not sure I follow you. But I'm sure the US is not paying tuition for citizens of those countries to study on home turf. Usually their governments pay their tuition when they come to the US. I went to college with many international students enjoying the benefits of free tuition supplied by their governments.
You wrote:
"Some years ago, I bought stock in a local company that was developing courses and instruction delivery methods. Their primary customers were municipalities needing to train firemen, police, EMT techs and nurses."
This is hardly news. Many students have benefited and earned degrees through Correspondence Courses. The US military used to run correspondance classes through the University of Maryland. Today, computers and the internet have changed it all for the better.
You wrote:
"I reasoned that if the company could do that, they could also record the top university lecturers in each specialty, and deliver the content at community colleges, so everyone could have the benefit of the best education available."
Nothing new here. Computer-based-learning is here to stay.
You wrote:
"There are companies actually doing much of that today, but the course material tends to be irrelevant unless you're a fan of Middle Eastern literature or the like."
What nonsense. The MBA program at the University of Phoenix (an online school) is a huge success. No middle-east anything in that curriculum.
You wrote:
"On top of that, there's no crediting method available."
Look again. University of Phoenix is accredited.
You wrote:
"Everyone in higher education realizes that if you could deliver a Harvard Law degree at Podunk CC, the entire system would be turned on its ear, and no one is looking forward to diving into that can of worms."
YOu seem to think that a Harvard teacher can pour knowledge into the head of a dunce. It's the other way around. A Harvard student is almost always an extremely able learner who can learn more and learn faster than most others. Harvard (the Ivies) gets the best students. That's why the school is successful. It is not the Marine Corps. It does not shape any piece of human clay into an overachieving student.
n_s, you'll just say any silly thing to try to advance an untenable argument. You wouldn't like cats -- mine don't hesitate to tell me when I'm talking nonsense.
It matters a LOT to get the earliest possible start -- give me a minute head start, and I'll beat you in a quarter mile every time, and I'm slower than Grandma. Over a mile distance (a working lifetime) other factors come into play, and the outcome could be quite different, but given the choice, I'll take the head start every time. It's in my enlightened self-interest (and yours) to get as many people as possible to their maximum earnings potential as soon as possible. It lowers my tax burden and gives me more potential customers with more disposable income. If that weren't true, we would all move to Mexico City. Thus, decreasing the time spent in the education process for the many benefits us all. Taking your logic to the extreme, however, since in the end we're all dead anyway, nothing matters.
No, the best professors don't pour learning into any student's head, but they damn sure do inspire many to do their best. I had some incredible lecturers and some who were really abysmal -- Herr Doktor Nachtrieb could make you want to make love to the chemistry book, and Daddy Day could make you want to use it for a pillow. Guess who I learned more under. Far better to take a class presented by a super-star lecturer than some bored grad student, even if the material were the same. (I used Harvard as an example solely because the best lecturers tend to congregate at the schools of best reputation. A remote-site JC could pick and choose from the best, wherever they were.)
I don't know enough about the U. of Phoenix to make any judgment of their program, but the company I had invested in used more of the video conferencing model. They would set up screens in a multitude of locations (wherever the students were), and broadcast live from a studio. There was a two-way hookup so students at each location could ask questions, with mini-cams at each remote site feeding a single master screen so the teacher could keep track of what was going on. In a college environment, I would presume that every remote site would be proctored by an instructor or grad student, who could answer most questions and act as an intermediary to the lecturer.
As to the ethical value of doing something that is not strictly illegal, even though the result harms someone, well, you have a lot of company in that assessment. A court recently ruled that the banks that helped Enron fiddle the books with phony deals that existed only on paper were not liable for damages done to ex-shareholders. The logic was that the banks' actions were not prohibited by law, so they weren't criminally liable for the actions that resulted. I don't agree, and never will.
The demand for a college education has less to do with the supply of high-school students than you might think. The Dallas police department, for example, now prefers recruits with a four-year degree, because they know that the job has changed and will continue to change, requiring officers to become familiar with more and more high-tech equiptment, read and understand more and more about the law and forensics, become more knowlegable about management techniques, and the like. Similarly, many of the jobs we do today require more education than they did 30-40 years ago.
Were you shopping for a new Buick (I LOVE Buicks, particularly the '56 convertible), you would have likely called your bank, credit union and S&L or gone on-line to shop for the best rate and terms. If the dealer sat you down with the GMAC representative (who kicks back a portion of the interest you pay to the dealer), the rep would quickly find he had to give you the best deal available or pound sand. I doubt you would have done as well at age 19 or 20. THAT'S why colleges and universities need to maintain the highest ethical standards when dealing with student loans.
One possibility -- no, 'conceivability' -- would be to load more material into secondary education, even if it meant adding a year to high school or even two. There are many things that almost everyone needs to know that simply aren't covered today. Take filling out a 1040 -- I do my own without software, but I'm weird. Or detecting bullshit from pundits, preachers and politicians. Or a government class using "The Constitution" by Justice Wm. O. Douglas as a text. Or elementary accounting and budgeting for potential small business operators. A hundred-odd years ago, someone graduating from high school exited with every skill needed to work and do tolerably well in our society -- college was something reserved for doctors, scientists and a few other professions. Not so today.
The need for a better education for us all will continue to increase. The only issue is how to deliver that at the lowest possible cost. I'm fairly certain that does not involve kickbacks, unless we've been suddenly transported to Zimbabwe.
It matters a LOT to get the earliest possible start -- give me a minute head start, and I'll beat you in a quarter mile every time, and I'm slower than Grandma. Over a mile distance (a working lifetime) other factors come into play, and the outcome could be quite different, but given the choice, I'll take the head start every time. It's in my enlightened self-interest (and yours) to get as many people as possible to their maximum earnings potential as soon as possible. It lowers my tax burden and gives me more potential customers with more disposable income. If that weren't true, we would all move to Mexico City. Thus, decreasing the time spent in the education process for the many benefits us all. Taking your logic to the extreme, however, since in the end we're all dead anyway, nothing matters.
No, the best professors don't pour learning into any student's head, but they damn sure do inspire many to do their best. I had some incredible lecturers and some who were really abysmal -- Herr Doktor Nachtrieb could make you want to make love to the chemistry book, and Daddy Day could make you want to use it for a pillow. Guess who I learned more under. Far better to take a class presented by a super-star lecturer than some bored grad student, even if the material were the same. (I used Harvard as an example solely because the best lecturers tend to congregate at the schools of best reputation. A remote-site JC could pick and choose from the best, wherever they were.)
I don't know enough about the U. of Phoenix to make any judgment of their program, but the company I had invested in used more of the video conferencing model. They would set up screens in a multitude of locations (wherever the students were), and broadcast live from a studio. There was a two-way hookup so students at each location could ask questions, with mini-cams at each remote site feeding a single master screen so the teacher could keep track of what was going on. In a college environment, I would presume that every remote site would be proctored by an instructor or grad student, who could answer most questions and act as an intermediary to the lecturer.
As to the ethical value of doing something that is not strictly illegal, even though the result harms someone, well, you have a lot of company in that assessment. A court recently ruled that the banks that helped Enron fiddle the books with phony deals that existed only on paper were not liable for damages done to ex-shareholders. The logic was that the banks' actions were not prohibited by law, so they weren't criminally liable for the actions that resulted. I don't agree, and never will.
The demand for a college education has less to do with the supply of high-school students than you might think. The Dallas police department, for example, now prefers recruits with a four-year degree, because they know that the job has changed and will continue to change, requiring officers to become familiar with more and more high-tech equiptment, read and understand more and more about the law and forensics, become more knowlegable about management techniques, and the like. Similarly, many of the jobs we do today require more education than they did 30-40 years ago.
Were you shopping for a new Buick (I LOVE Buicks, particularly the '56 convertible), you would have likely called your bank, credit union and S&L or gone on-line to shop for the best rate and terms. If the dealer sat you down with the GMAC representative (who kicks back a portion of the interest you pay to the dealer), the rep would quickly find he had to give you the best deal available or pound sand. I doubt you would have done as well at age 19 or 20. THAT'S why colleges and universities need to maintain the highest ethical standards when dealing with student loans.
One possibility -- no, 'conceivability' -- would be to load more material into secondary education, even if it meant adding a year to high school or even two. There are many things that almost everyone needs to know that simply aren't covered today. Take filling out a 1040 -- I do my own without software, but I'm weird. Or detecting bullshit from pundits, preachers and politicians. Or a government class using "The Constitution" by Justice Wm. O. Douglas as a text. Or elementary accounting and budgeting for potential small business operators. A hundred-odd years ago, someone graduating from high school exited with every skill needed to work and do tolerably well in our society -- college was something reserved for doctors, scientists and a few other professions. Not so today.
The need for a better education for us all will continue to increase. The only issue is how to deliver that at the lowest possible cost. I'm fairly certain that does not involve kickbacks, unless we've been suddenly transported to Zimbabwe.
# posted by : 6:53 PM
: 6:53 PM
kicksiron, you wrote:
“It matters a LOT to get the earliest possible start -- Over a mile distance (a working lifetime) other factors come into play, and the outcome could be quite different, but given the choice, I'll take the head start every time.”
You seem to think the only people against whom you compete are the people who enter the workforce the same day you do. Your position would hold a little water if that were true. But it’s not. Your argument also assumes everyone works for a paycheck handed out by others, such as a corporate employer. But that’s not the case either.
Meanwhile, probably the biggest asset booster since WWII is homeownership. My father-in-law is a good example. He worked and saved over his career as a doctor. He graduated from medical school at the end of WWII, was immediately inducted into the army, spent a couple of years in uniform, returned to civilian life and began a residency in his specialty. He was 35 before he started practicing. He bought a house in the Park Slope section of Brooklyn. It cost $20,000 in 1960, which was a fair market price at the time, and not viewed as a bargain. It’s worth over $3 million today. That house is the bulk of his net worth. His long-term neighbors have enjoyed the same experience.
A good friend of mine recently became the CFO of a bio-tech company. It went public a few days ago. His compensation includes a big chunk of stock. Based on its current price, his holdings are worth over $3 million. Meanwhile, he’s enjoyed a huge run-up in the price of his house. His career kicked off when he graduated from business school at the age of 30.
You wrote:
“ It's in my enlightened self-interest (and yours) to get as many people as possible to their maximum earnings potential as soon as possible.”
I didn’t know there was a “maximum” potential. But I agree there are trends in earnings.
You wrote:
“ It lowers my tax burden…”
You’ve got to be kidding! While this statement should be true, it isn’t.
You said:
“…and gives me more potential customers with more disposable income. If that weren't true, we would all move to Mexico City.”
Even Mexicans don’t want to live in Mexico City. Where do you get these ideas? If you’re suggesting people would move to a low-cost environment, only remittance people would pick ridiculous places like Mexico City.
You wrote:
”No, the best professors don't pour learning into any student's head, but they damn sure do inspire many to do their best.”
You’ve made my point. There are good students and good professors at almost every school. The hope is to match the right students with the right professors. But putting an average kid at Harvard isn’t the way to do it. As experience has shown, the black kids with sub-standard qualifications who are granted entry and given a free ride at Harvard have a terrible record. Their drop-out rate is so high it should embarrass the school.
You said:
“I had some incredible lecturers and some who were really abysmal.”
There isn’t a college student in America who’s had it any different.
You wrote:
“A remote-site JC could pick and choose from the best, wherever they were.”
Nonsense. Big-name profs earn pretty big bucks AND they revel in the prestige of their venue. They have no incentive to commoditize their product and sell it to the masses.
You wrote:
”I don't know enough about the U. of Phoenix to make any judgment of their program, but the company I had invested in used more of the video conferencing model.”
It’s remarkable to me that a guy who has invested in remote learning seems unaware of the magnitude of this industry. There are more than 30 public companies in the education business. The top competitors have market capitalizations well over $1 billion.
You claim:
”As to the ethical value of doing something that is not strictly illegal, even though the result harms someone, well, you have a lot of company in that assessment. A court recently ruled that the banks that helped Enron fiddle the books with phony deals that existed only on paper were not liable for damages done to ex-shareholders. The logic was that the banks' actions were not prohibited by law, so they weren't criminally liable for the actions that resulted. I don't agree, and never will.”
You need to get your stories straight. No banks cooked the books at Enron. The accounting shenanigans were handled by the consulting firm that went down with the Enron ship. The banks loaned money improperly. However, perhaps you know that Enron was acquired and much of its operations are humming along as they always did.
You said:
”The demand for a college education has less to do with the supply of high-school students than you might think.”
I realize that many people start college at ages well above 18. There’s nothing new here.
You wrote:
“The Dallas police department, for example, now prefers recruits with a four-year degree, because they know that the job has changed and will continue to change, requiring officers to become familiar with more and more high-tech equiptment, read and understand more and more about the law and forensics, become more knowlegable about management techniques, and the like. Similarly, many of the jobs we do today require more education than they did 30-40 years ago.”
Your statement about the police department is at best half true. To assure a racial balance on the police force, the standards for black and Hispanic applicants will be set at levels lower than those for whites. This will result in few black and Hispanic officers rising in the ranks. If police forces had to recruit only college graduates, we’d see nothing but white cops in this country.
You wrote:
”Were you shopping for a new Buick, you would have likely called your bank, credit union and S&L or gone on-line to shop for the best rate and terms. If the dealer sat you down with the GMAC representative (who kicks back a portion of the interest you pay to the dealer), the rep would quickly find he had to give you the best deal available or pound sand. I doubt you would have done as well at age 19 or 20. THAT'S why colleges and universities need to maintain the highest ethical standards when dealing with student loans.”
There two situations are barely comparable. Meanwhile, students taking student loans are not facing potential rip-offs. If they obtain other less traditional school funding, they might have trouble. But that lenders cited in the recent hoopla are not the schemers looking to defraud hapless borrowers. Really. Sallie Mae isn’t competing with loan sharks.
You wrote:
”One possibility -- no, 'conceivability' -- would be to load more material into secondary education, even if it meant adding a year to high school or even two.”
What about all your “head-start” concerns?
You wrote:
“There are many things that almost everyone needs to know that simply aren't covered today. Or detecting bullshit from pundits, preachers and politicians. Or a government class using "The Constitution" by Justice Wm. O. Douglas as a text. Or elementary accounting and budgeting for potential small business operators.”
There’s already a high drop-out rate. You’ve developed a plan that will raise the rate to eye-popping levels.
You wrote:
“A hundred-odd years ago, someone graduating from high school exited with every skill needed to work and do tolerably well in our society -- college was something reserved for doctors, scientists and a few other professions. Not so today.”
Even if this were true – which it wasn’t – it means nothing. Moreover, would you want to seek care from a doctor who studied only what was known about medicine 100 years ago? My mother’s parents – my grandfather and grandmother – graduated from Northwestern University around 1910. He was a prominent lawyer in the town of Creston, Iowa. I guarantee you he was almost destroyed by the Depression. His law practice never recovered. On the other hand, my father’s family was unscathed by the Depression. My father’s father did not graduate from high school. Nevertheless, he became a financial guy whose business was solid enough to skate through the 1930s.
You wrote:
”The need for a better education for us all will continue to increase. The only issue is how to deliver that at the lowest possible cost. I'm fairly certain that does not involve kickbacks, unless we've been suddenly transported to Zimbabwe.”
Like all businesses in a capitalist society, schools will charge as much as the customers will tolerate. If the government wants to offer a lower-cost alternative it can – and it does. However, there are many many state-supported colleges. But, aside from the military service academies, there are no federal universities.
In any case, the small sums involved in these silly issues involving Sallie Mae and other educational funding organizations have no detrimental impact on the post-graduate lives of students.
Post a Comment
“It matters a LOT to get the earliest possible start -- Over a mile distance (a working lifetime) other factors come into play, and the outcome could be quite different, but given the choice, I'll take the head start every time.”
You seem to think the only people against whom you compete are the people who enter the workforce the same day you do. Your position would hold a little water if that were true. But it’s not. Your argument also assumes everyone works for a paycheck handed out by others, such as a corporate employer. But that’s not the case either.
Meanwhile, probably the biggest asset booster since WWII is homeownership. My father-in-law is a good example. He worked and saved over his career as a doctor. He graduated from medical school at the end of WWII, was immediately inducted into the army, spent a couple of years in uniform, returned to civilian life and began a residency in his specialty. He was 35 before he started practicing. He bought a house in the Park Slope section of Brooklyn. It cost $20,000 in 1960, which was a fair market price at the time, and not viewed as a bargain. It’s worth over $3 million today. That house is the bulk of his net worth. His long-term neighbors have enjoyed the same experience.
A good friend of mine recently became the CFO of a bio-tech company. It went public a few days ago. His compensation includes a big chunk of stock. Based on its current price, his holdings are worth over $3 million. Meanwhile, he’s enjoyed a huge run-up in the price of his house. His career kicked off when he graduated from business school at the age of 30.
You wrote:
“ It's in my enlightened self-interest (and yours) to get as many people as possible to their maximum earnings potential as soon as possible.”
I didn’t know there was a “maximum” potential. But I agree there are trends in earnings.
You wrote:
“ It lowers my tax burden…”
You’ve got to be kidding! While this statement should be true, it isn’t.
You said:
“…and gives me more potential customers with more disposable income. If that weren't true, we would all move to Mexico City.”
Even Mexicans don’t want to live in Mexico City. Where do you get these ideas? If you’re suggesting people would move to a low-cost environment, only remittance people would pick ridiculous places like Mexico City.
You wrote:
”No, the best professors don't pour learning into any student's head, but they damn sure do inspire many to do their best.”
You’ve made my point. There are good students and good professors at almost every school. The hope is to match the right students with the right professors. But putting an average kid at Harvard isn’t the way to do it. As experience has shown, the black kids with sub-standard qualifications who are granted entry and given a free ride at Harvard have a terrible record. Their drop-out rate is so high it should embarrass the school.
You said:
“I had some incredible lecturers and some who were really abysmal.”
There isn’t a college student in America who’s had it any different.
You wrote:
“A remote-site JC could pick and choose from the best, wherever they were.”
Nonsense. Big-name profs earn pretty big bucks AND they revel in the prestige of their venue. They have no incentive to commoditize their product and sell it to the masses.
You wrote:
”I don't know enough about the U. of Phoenix to make any judgment of their program, but the company I had invested in used more of the video conferencing model.”
It’s remarkable to me that a guy who has invested in remote learning seems unaware of the magnitude of this industry. There are more than 30 public companies in the education business. The top competitors have market capitalizations well over $1 billion.
You claim:
”As to the ethical value of doing something that is not strictly illegal, even though the result harms someone, well, you have a lot of company in that assessment. A court recently ruled that the banks that helped Enron fiddle the books with phony deals that existed only on paper were not liable for damages done to ex-shareholders. The logic was that the banks' actions were not prohibited by law, so they weren't criminally liable for the actions that resulted. I don't agree, and never will.”
You need to get your stories straight. No banks cooked the books at Enron. The accounting shenanigans were handled by the consulting firm that went down with the Enron ship. The banks loaned money improperly. However, perhaps you know that Enron was acquired and much of its operations are humming along as they always did.
You said:
”The demand for a college education has less to do with the supply of high-school students than you might think.”
I realize that many people start college at ages well above 18. There’s nothing new here.
You wrote:
“The Dallas police department, for example, now prefers recruits with a four-year degree, because they know that the job has changed and will continue to change, requiring officers to become familiar with more and more high-tech equiptment, read and understand more and more about the law and forensics, become more knowlegable about management techniques, and the like. Similarly, many of the jobs we do today require more education than they did 30-40 years ago.”
Your statement about the police department is at best half true. To assure a racial balance on the police force, the standards for black and Hispanic applicants will be set at levels lower than those for whites. This will result in few black and Hispanic officers rising in the ranks. If police forces had to recruit only college graduates, we’d see nothing but white cops in this country.
You wrote:
”Were you shopping for a new Buick, you would have likely called your bank, credit union and S&L or gone on-line to shop for the best rate and terms. If the dealer sat you down with the GMAC representative (who kicks back a portion of the interest you pay to the dealer), the rep would quickly find he had to give you the best deal available or pound sand. I doubt you would have done as well at age 19 or 20. THAT'S why colleges and universities need to maintain the highest ethical standards when dealing with student loans.”
There two situations are barely comparable. Meanwhile, students taking student loans are not facing potential rip-offs. If they obtain other less traditional school funding, they might have trouble. But that lenders cited in the recent hoopla are not the schemers looking to defraud hapless borrowers. Really. Sallie Mae isn’t competing with loan sharks.
You wrote:
”One possibility -- no, 'conceivability' -- would be to load more material into secondary education, even if it meant adding a year to high school or even two.”
What about all your “head-start” concerns?
You wrote:
“There are many things that almost everyone needs to know that simply aren't covered today. Or detecting bullshit from pundits, preachers and politicians. Or a government class using "The Constitution" by Justice Wm. O. Douglas as a text. Or elementary accounting and budgeting for potential small business operators.”
There’s already a high drop-out rate. You’ve developed a plan that will raise the rate to eye-popping levels.
You wrote:
“A hundred-odd years ago, someone graduating from high school exited with every skill needed to work and do tolerably well in our society -- college was something reserved for doctors, scientists and a few other professions. Not so today.”
Even if this were true – which it wasn’t – it means nothing. Moreover, would you want to seek care from a doctor who studied only what was known about medicine 100 years ago? My mother’s parents – my grandfather and grandmother – graduated from Northwestern University around 1910. He was a prominent lawyer in the town of Creston, Iowa. I guarantee you he was almost destroyed by the Depression. His law practice never recovered. On the other hand, my father’s family was unscathed by the Depression. My father’s father did not graduate from high school. Nevertheless, he became a financial guy whose business was solid enough to skate through the 1930s.
You wrote:
”The need for a better education for us all will continue to increase. The only issue is how to deliver that at the lowest possible cost. I'm fairly certain that does not involve kickbacks, unless we've been suddenly transported to Zimbabwe.”
Like all businesses in a capitalist society, schools will charge as much as the customers will tolerate. If the government wants to offer a lower-cost alternative it can – and it does. However, there are many many state-supported colleges. But, aside from the military service academies, there are no federal universities.
In any case, the small sums involved in these silly issues involving Sallie Mae and other educational funding organizations have no detrimental impact on the post-graduate lives of students.
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