May 17, 2011 9:00 AM Subscribe
The Higher Education (Debt) Bubble
posted by kliuless (185 comments total)
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- "[H]igh and increasing college costs mean students need to take out more loans, more loans mean more securities lenders can package and sell, more selling means lenders can offer more loans with the capital they raise, which means colleges can continue to raise costs. The result is over $800 billion in outstanding student debt, over 30 percent of it securitized, and the federal government directly or indirectly on the hook for almost all of it. If this sounds familiar, it probably should...
"What happens when the kids can't pay? ... The projected results are staggering: recorded defaults for the class of 2008 will nearly double, from 7 to 13.8 percent. With fewer and fewer students having the income necessary to pay back loans (except by taking on more consumer debt), a massive default looks closer to inevitable... higher education, for-profit or not, has increasingly become a scam."
While the prospects for debt slavery and modern-day indentured servitude are alarming, perhaps just as concerning is the increasing use of (facile) corporate management techniques by administrators to run the university like a business:
Formerly, administrators were more or less teachers with added responsibilities; nowadays, they function more like standard corporate managers—and they're paid like them too... Even at nonprofit schools, top-level administrators and financial managers pull down six- and seven-figure salaries, more on par with their industry counterparts than with their fellow faculty members. And while the proportion of tenure-track teaching faculty has dwindled, the number of managers has skyrocketed... the Department of Education estimates that by 2014 there will be more administrators than instructors at American four-year nonprofit colleges...
When you hire corporate managers, you get managed like a corporation... we have, in Bousquet's words, "the entrepreneurial urges, vanity, and hobbyhorses of administrators: Digitize the curriculum! Build the best pool/golf course/stadium in the state! Bring more souls to God! Win the all-conference championship!" ... Students apparently have received the message loud and clear, as business has quickly becomethe nation's most popular major.
- On the Bubble - "students have been willing to incur almost any debt load in pursuit of the credentials offered in higher education because those credentials appear to be the only way to secure a middle-class life... increasing numbers of undergraduates will graduate with student debt that will take decades to pay off, assuming they can find work at all. And many will feel compelled to incur still more debt for graduate training, with little subsequent improvement in their prospects"
- Number of the Week: Class of 2011, Most Indebted Ever - "The Class of 2011 will graduate this spring from America's colleges and universities with a dubious distinction: the most indebted ever."
- Study: Public, College Presidents Split - "The general public and university presidents disagree about the purpose of college, who ought to pay for it and whether today's students are getting their money's worth, a pair of surveys showed."
- Is College Worth It? - "A majority of Americans (57%) say the higher education system in the United States fails to provide students with good value for the money they and their families spend. An even larger majority (75%) says college is too expensive for most Americans to afford. At the same time, however, an overwhelming majority of college graduates (86%) say that college has been a good investment for them personally."
- The Value of College - "These interactive charts explore the attitudes of the public and of college presidents about the value, cost, quality, mission and payoff of higher education."
- Interactive Map: Return on Educational Investment - "To spark a national dialogue about educational productivity, we've attempted to evaluate the return on investment (ROI) of almost every major school district in the country. By productivity, we mean how much learning a district produces for every dollar spent, after controlling for factors such as cost of living and students in poverty."
- The Right Connection Between Housing Policy And Education - "Ultimately if your specific concern is delivering high-quality public services to poor people (who are, after all, the people who need them most) then you need to spend some time worrying about a state of play in this country that largely prices poor people out of wherever the quality of life is high."
- Teacher Quality In Finland - "whatever approach you favor, if you're talking about Finland (or South Korea or Singapore) you're necessarily having a conversation about how to get different people into the profession than the ones who are currently there"
- Trust For Teachers - "In Finland there are no standardized tests. In fact, there is really very little testing at all. Finnish teachers are not monitored or rated based on test scores, and teachers (as well as their students) have a great deal of autonomy. It is a system built on trust, and the film really drives home the notion that trust –rather than faux accountability – leads to real results, leads to teachers and students and members of government all wanting to live up to the trust given to them rather than simply scraping by."
- The Consequences of the First Brain Drain in U.S. History - "The U.S. has long benefited from immigration policies that entice the world's best and brightest to arrive, learn and stay in America. The consequent creative and productive strengths have contributed significantly to the nation's global leadership in countless fields, especially high-tech innovation. But now, for the first time in history, talent appears to be migrating the other way. Not only are foreign nationals returning home after getting a top-flight education in American graduate schools, but U.S. policy now actually encourages them to take their diplomas and leave. And why shouldn't they? China, India, Chile, Singapore and other nations actively recruit talent – including native U.S. talent – with attractive, career-advancing jobs and abundant research funding. How can America retain valuable human capital? Is high-skill immigration policy reform sufficient? How might it differ from low-skill immigration policy reform? Can more robust STEM (science, technology, engineering and math) curricula in U.S. schools take effect in time to compensate? Expect a lively debate among leaders from public, private and academic sectors with real stakes in this historic development."
- Craig Barrett, Former Chairman, Intel, Talks About Technology And Education - "You know, at the university level now, about 60 percent of the graduate students in engineering are foreign nationals - 60 percent... which means we're almost [ceding] engineering to foreign countries... At the university level, the worst thing in the world we can do is cut back on basic research in the universities, cut back on the state funding of the universities. That's the work force of the future. You know, and unfortunately, the U.S. is one of the very few countries in the OECD where the 25 to 35-year-old age group is worse educated than my age group."
- Sleepwalking through America's Unemployment Crisis - "This is much more than a problem for the here and now. High and intractable unemployment has serious negative long-term consequences that threaten to become exponentially worse. This is a crisis. Substantial international research shows that the longer one is unemployed, the harder it is to get a job. This erodes an economy's skills base and saps its long-term productive capacities. And, if unemployment is particularly acute among the young, as is the case today, too many of the unemployed risk becoming unemployable... At its root, America's jobs crisis is the result of many years of under-investment in human resources and the social sectors. The education system has lagged the progress made in other countries. Job retraining initiatives have been woefully inadequate. Labor mobility has been declining. And insufficient attention has been devoted to maintaining an adequate social safety net. These realities were masked by the craziness that characterized America's pre-2008 'Golden Age' of leverage, credit, and debt entitlement... The resulting job creation, though temporary, lulled policymakers into complacency about what was really going on in the labor market... Left to its own devices, America's unemployment problem will deepen. This will widen the already-large gap between the country's haves and have-nots. It will undermine labor's skills and productivity. It will accentuate the burden imposed on the gradually declining number of people who remain in the labor force and have jobs. And it will make it even harder to find a medium-term solution to America's worsening public-debt and deficit dynamics."
- Innovation: Still full of ideas, but not making jobs - "Americans once led the world in educational attainment, but this is now barely rising while other countries have caught up. That is a key reason why Dale Jorgenson, an economist at Harvard University, reckons overall productivity growth will average 1.5% in the coming decade, down from 2% in the previous two."
- America's jobless recovery: Useless men - "the government isn't doing what it ought to be doing to make things better. It's not investing in training programmes, and improving the incentive effects of unemployment benefit programmes, and breaking the cycle of poverty and imprisonment in high unemployment communities"