
Dear Class of ’13: You’ve been scammed - DanielBMarkham
http://www.marketwatch.com/story/dear-class-of-13-youve-been-scammed-2013-05-17?link=MW_popular
======
codva
I really have little sympathy for somebody that attends an out of state or
private school and racks up $100K in college debt getting a sociology degree.
My son just finished up his freshman year as a history major. However, he is
going to the perfectly good public school located 15 minutes from home, and
living at home. It's costing me $5000 a semester in tuition, which isn't chump
change, but isn't going to bankrupt me either. If he had to take on some debt
to get his degree it would be manageable. We could have made it cheaper still
by having him spend the first two years in community college. College costs
are out of control in the US, but that doesn't mean we have to blindly pay
them.

~~~
purplelobster
You have little sympathy? So for someone who doesn't live near a university,
doesn't have daddy pay his tuition for him and provide free housing and food,
it's just tough luck? Like another commenter said, that's $40k in tuition,
probably another $40k for housing, food and other expenses during that period
of time. Your attitude is not productive, and sounds to me like the typical
"fuck you, I've got mine" attitude.

~~~
demallien
Noooo, not what the GP is suggesting at all. The GP is saying that local
public schools generally pay subsidies to instate students, so that's not a
very expensive proposition. He's saying that it shouldn't be $40k + $40k, but
rather $10k + $0k (live at home with parents). Racking up an unnecessary
$70k/annum debt is something of a self-infliceted wound if that more expensive
option isn't going to pay itself off through increased earnings later in life.

~~~
codva
Exactly, and thank you. There are a lot of options between borrow 100% of a
4-year degree at the most expensive option available, and don't go to college
at all. I think most people that want to go to college can find an option that
works without burdening them with life-crushing debt. It might not be 4-years
of the typical undergrad experience at State U though. You might spend a
couple of years at community college. You might take 8 years to finish because
you are working your way through school. There is nothing wrong with any of
those options.

------
JeffJenkins
At the University of Waterloo where I went we had a co-op program where people
would get (usually) reasonably well paid internships. We switched between work
and school every 4 months, so when you were done you had a 4-year degree and 2
years of work experience.

This both drastically increased the value of the degree—it was very common to
end up getting a job in one of the places you did a co-op term—and gave you
some money to help cover your costs for each upcoming school term. It also
helps that Canada subsidizes its universities, but I still would have had 30k
in tuition alone if it weren't for co-op. As it was I left with ~13k in debt
and I had lived reasonably comfortably and chosen to never work while I was in
school.

I really don't understand why co-op hasn't been adopted almost universally.
It's hugely beneficial to all parties.

~~~
ampersandy
Waterloo's co-op program has been absolutely incredible. I'm fairly confident
that most of my classmates will graduate debt-free (or very close) and already
have several job offers on the table.

------
Morphling
I get that paying for your education is pretty bad, but as someone who is
enjoying free bachelor level education in Finland I can tell that the amount
of quality teachers is pretty low, our small campus has maybe 4 teachers I'd
consider competent.

I'm also the kind of guy who'd enjoy extracurricular clubs, but sadly out of
the few hundred students at our campus total of 3 of us (me included) are
interested in club activities and only student body event that gets more than
10 people attending is yearly "drinking cruise".

I can't say for sure that these two things are related, but I have a hunch
that since people aren't actually paying for their education most don't take
it as seriously and thus people just do the bare minimum they can get away
with. Or maybe it's just the general level of education which is so much lower
nothing feels "real" at least considering how much I read U.S. based
engineering students whine about...

~~~
purplelobster
Go to most of the small colleges in the US and you'll probably see the same
thing. I don't know what it's like in Finland, but from what I've experienced
at Swedish universities it also varies a lot. Uppsala, Lund, KTH etc have
great student life and I didn't feel that people took it less seriously than
at the american university I've been at.

Sure, we don't pay tuition, but usually parents don't pay for their childrens'
living expenses during college either. I have about $50k in debt (very low
interest loan), all from living expenses for 5 years. That plus the loss of
income during this time means you can't really slack off.

~~~
Morphling
Yes, it is true that most students in Finland do take the government backed
student loan, but I for 't taken it. I get few hundred euros student welfare
from the government and rest I make up with part time jobs and working summers
+ living in a student housing is pretty cheap.

------
cstross
You won't get that free education at Cambridge any more; it'll set you back
£9000 in tuition fees every year, because successive British governments
_deliberately copied_ the US system.

It is to weep ...

~~~
tezza
? I went to Uni in Oz in 1995. We had then the exact system the English just
put in place ( called HECS )

Students pay nothing up front... Not a penny. And you pay nothing until you
get a job. Even when you have a job the repayment is tiny ; esp in relation to
to other taxes like fair dinkum Income Tax

How is this a bad thing ? Tax payers were nice to me to provide me the loan in
the first place, and were nice to let me pay it back at my own pace.

~~~
frobozz
In England and Wales it's a bad thing, because it's another example of the
"pull the ladder up" generation doing what they do best.

The people who, in the 1970s&80s, benefited from grants, free tuition, and the
ability to claim unemployment/low-income benefits in the summer holidays are
the same people who are implementing these policies.

They are the same people selling the lie of "get a degree, get a good job",
then offering unpaid internships to new graduates, or insisting that even the
doorman needs a degree.

These are people who had "jobs for life" with year-on-year inflation
matching/beating pay increments if they stayed still, or decent career
progression if they didn't. They are now telling us that we can't expect that
sort of treatment from them, and implementing "up or out" pay policies (even
if they don't have any "up" positions to offer, because they are "flattening
management structures").

These are also the people who will retire in 5-10 years time with Final Salary
pensions from the schemes that they, themselves, have closed to the rest of us
(because they took "payment holidays" in the good times).

They are also the people who bought up all the housing at prices that a normal
(at the time) middle-class single income young family could afford, then sold
it on at prices that only better-off mid-30s DINKYs could afford.

Just because we can't win all of these fights (and have already lost some),
and just because some of the individual fights might seem trivial, it doesn't
mean we should just roll over and take it without complaint, either for
ourselves, or the current generation of schoolchildren and undergraduates.

------
jaxbot
I'm class of '13 for grade school, entering college this fall at a state
university. I've been programming since I was 8, and from what I can tell, my
self-teaching has put me at a level above people fresh out of school with a
flashy degree that says "hire me." I'm not good with words, but my point is
this. I find it terribly concerning that I'm paying $50k to go to a school to
learn something I already know, and know well, to take classes on subjects
somewhat connected to what I'll do in a future career, to get a job full of
incompetent idiots who get the same paper as me.

I'd appreciate some critiques on my thinking process

~~~
sunsu
If you actually are as good as you say you are, then don't go. Spend the time
getting real work experience.

~~~
jaxbot
I consider myself pretty good; I honestly have no baseline, but I've spent
several years working with PHP, HTML5, JavaScript, I've learned Node.js, and
I've built several working prototype projects over my high school years.
They're clean, follow standards, and have been great learning experiences for
me (trial and error beats lectures, for me).

This being said, I have a bad feeling that my portfolio won't outweigh a
degree. I don't know why degrees are valued more than actual knowledge, but
that seems to be what the data shows.

~~~
irrationalidiom
> I consider myself pretty good; I honestly have no baseline...

This is your only blocker to success. I also had a lack of self confidence --
I put this up to the pedestal we put university degrees upon.

By what you've done so far, it sounds like you are better than most 90% of
people finishing with Computer Science degrees. There are employers who can
see that -- but most recruiters do not (though they do latch on to buzzwords).

Demonstrate your passion and your skill and you'll easily get a job
_somewhere_ in the industry.

------
TDL
"You have just paid about three times as much for your degree as did someone
graduating 30 years ago."

Aren't more people going to college these days than people were 30 years ago?
The "conspiracy" doesn't exist, the fetishizing of higher education happened
in the open. It is a tragedy that a great system of learning (liberal
education) has been so watered down and over-sold.

------
Vivtek
As the parent of a college freshman, let me say that this is one significant
reason we've relocated to Budapest. (Not that this would be a help to most, as
our daughter is bilingual in Hungarian.)

~~~
michaelochurch
+1 Budapest. Beautiful, underrated city.

When I was there, I did some of the best creative work of my life.

------
irrationalidiom
Australia is similar in the regard, except the Federal government covers part
of the full course cost, the rest being covered by a CPI indexed loan (HECS)
which needs to be paid back once employment income exceeds $38k per year
(taken from tax refunds -- we have tax deducted every payday).

That said, a typical university student will accumulate $9000 a year of HECS
debt.

And yet Universities continue to cry poor, cutting student services and
teaching staff, despite increased revenues from full fee paying international
students over the past decade.

I'm perplexed as to why this is.

Edit: Just found this: <http://www.nteu.org.au/library/view/id/3828> \-- RMIT
University spent $8.2 million on 19 "senior executive and council members".
That's ~$431k a head, or according to the Union "125 HEW 6 academic staff."

~~~
adekok
[http://deltacostproject.org/resources/pdf/trends_in_spending...](http://deltacostproject.org/resources/pdf/trends_in_spending-
report.pdf)

Page 24:

> In all institutional groupings—public and private—tuition prices increased
> faster than education and general spending per student. This suggests that
> both public and private institutions are becoming more dependent on tuition
> as a source of general revenue—not just to pay for education and related
> expenses, but as a general subsidy for all functions, including research and
> service.

Page 33:

> The primary cause of tuition increases in public institutions is not
> increased spending, but rather cost shifting to replace losses in state
> appropriations and other revenues.

What would you rather have?

1) Low tuition subsidized by higher taxes when you're working

2) higher tuition but lower taxes later on

The market seems to have chosen (2). Whether or not taxes are _actually_ lower
is another question.

Personally, I think it's horrible to graduate with 80K+ in debt. To put it
into perspective, my parents graduated with minimal debt. Their first debt was
the purchase of a house, for about the same amount as student loans are now.

What would you rather have on graduation? Student debt, or no student debt and
a house?

~~~
irrationalidiom
Government funding for student places has increased slightly over 10 years,
and full fee income (private places) has increased massively.

See page 124: [http://www.unimelb.edu.au/publications/docs/2012-annual-
repo...](http://www.unimelb.edu.au/publications/docs/2012-annual-report.pdf)

------
jswinghammer
30-40k of debt seems a lot less than many people I have known are in with
degrees that will never be meaningful to employers. Parents need to adjust for
the world as it is and teach their kids that degrees can be profitable to them
in the right fields and without debt. I've known several people who had 100k+
worth of college debt and very little to actually show for it.

The debt is the real problem here. If you have a degree that isn't going to do
anything for you then that's bad but with debt everything is so much worse.
Debt makes any problem you have so much worse.

------
Alex3917
This article is completely wrong. The basic claim of the article is that
according to the College Board, the amount students actually spend to attend
college has increased 300% over the last 30 years. Is this actual true?

College Board does track the amount students spend, they call this statistic
net sticker price -- that is, sticker price minus all grants, scholarships,
and tax credits. However, they only track net sticker price back to 1990.

The figure that this article is citing is sticker price, which isn't the
amount that students spend, as the article claims, but rather it's just the
list price. (This guy is basically quoting the fake price that's crossed out
on Amazon that no one actually pays so that they can trick you into thinking
you're saving money.) Here is the difference, with both statistics carried as
far back as they go from the College Board data:

"The average sticker price for yearly tuition and required fees (not including
room and board) at private non-profit 4-year institutions increased from
$10,378 in 1972-73 (2012 dollars) to $29,056 in 2012-13. At public
institutions the cost increased from $2,225 to $8,655.

The net yearly tuition and required fees (sticker price minus total grant aid
and tax benefits) at public 4-year colleges for in-state residents increased
from $1,840 in 1990-91 (2012 dollars) to $2,910 in 2012-13 . At private non-
profit institutions the net price increased from $11,060 in 1990-91 to $13,380
in 2012-13."

Sources: CollegeBoard -
[http://trends.collegeboard.org/sites/default/files/cp-2012-t...](http://trends.collegeboard.org/sites/default/files/cp-2012-table-2a2b.xlsx)
\- Tuition and Fee and Room and Board Charges over Time in 2012 Dollars,
1972-73 through 2012-13, Selected Years

[http://trends.collegeboard.org/sites/default/files/cp-2012-t...](http://trends.collegeboard.org/sites/default/files/cp-2012-table-7_0.xlsx)
\- Table 7 - Average Net Price for Full-Time Students over Time — Public
Institutions

[http://trends.collegeboard.org/sites/default/files/cp-2012-t...](http://trends.collegeboard.org/sites/default/files/cp-2012-table-8.xlsx)
\- Table 8 - Average Net Price for Full-Time Students over Time — Private
Institutions

This isn't to say that it's impossible that the net sticker price has
increased by 300% -- it may have, or may not have, there's no way to know. But
the College Board data certainly doesn't doesn't show this, which is the claim
the author is making.

Similarly, the author claims that the average student this year at a private
college spent $29,000 on their education. This is also a blatant lie. As you
can see from the actual College Board data, which this guy claims is his
source, the real figure there is $13,380. And it's not like this guy doesn't
know the difference, since the data for both is on the same page -- this
entire article is just a bunch of blatant lies designed to promote whatever
his bullshit agenda is.

~~~
Goladus
The only problem with the article is overly emphasizing the "you are being
scammed" angle. The article actually covers it from two angles, and the "net
sticker price" is only the right metric for one of them (an individual student
evaluating the ROI of their own personal education). Looking at the system as
a whole, average net sticker price is the wrong metric. That's _hiding_ real
costs in the system. "Why is there $1 trillion of student debt?" "Why does
education cost so much?" "How can we reduce the cost of education?" You can't
answer any of those questions if you ignore subsidies.

Many grants and all tax credits especially are funded by the government and
contribute to demand inflation just like any other customer. Other grants and
scholarships are funded by charities and 3rd parties. If you're looking at the
system as a whole you can't rule out those sources of funding as not being
part of the cost. Colleges still treat that as demand and set their prices
accordingly

~~~
nostrademons
The difference between sticker price and net tuition (I don't understand what
you mean by "net sticker price", that seems to conflate both metrics) is
usually the result of price discrimination by the colleges. They raise sticker
price so they can charge wealthy applicants more, and then offer generous
financial aid so they can charge poor applicants less. It is a subsidy, but
it's a subsidy _within_ the organization.

Similarly, many of these financial aid grants at elite institutions are often
funded through alumni donations and investment income off the endowment. This
is also a voluntary transfer payment from rich to poor.

If you want to measure the incoming tuition flows into college, the metric you
probably want is net tuition + government funding. That excludes transfer
payments within the organization from rich to poor and donations to non-profit
scholarship corporations, but includes funding from tax revenues.

~~~
Goladus
_It is a subsidy, but it's a subsidy within the organization._

The original version of my comment explained this but I removed it for
brevity. But yes you are right. From what I understand the money flow,
especially at elite institutions, can be very complex.

Also "net sticker price" was the term used by the commenter I was responding
to.

------
quackerhacker
Attending a "prestigious," college usually means that you NEED to make it. I
use to pressure my own self into a mental state that, "I need to achieve in
life... a career, a business, something that shows my valor, my intellect."

A college degree, I believe, will get you further in a career (or at least an
interview),...but getting the interview, that's what college is for! I don't
believe that BS saying "it's not what you know, it's who you know." What you
know, is equally important as to who you know, because if you don't know
diddly squat, who you know will laugh you away.

To clear up any presumptions...I'm a college dropout that passed on going to
SFSU, because I didn't want to go back to the bay area, but if I could change
it...hmmm college degree or criminal record. (easy choice)

------
the7nd
I graduated high school last year and decided to forgo a $40,000 college to be
an entrepreneur.

I regret nothing.

Unfortunately, my parents are doing the silliest thing imaginable and are
forcing me to go to college now. I dread reading articles like this four years
from now.

------
vinceguidry
The hack overuse of <X Industrial Complex> makes this article very difficult
to take seriously.

The real military industrial complex and the regulatory capture it described
was far more serious and dangerous than this ever could be, producing war
after war on the backs of the poor to serve tiny oligarchies.

Compared to that, this is just a schoolyard tussle.

------
amalag
Just look at the bright side, we are using that money to pay $40k - $50k a
year for prisoners.

~~~
JacksonGariety
But big brother makes $40k - $50k off of those prisoners anyway and puts it
towards building weapons for our "war."

All good, right?

------
rlu
Oh look, it's this article again..

------
jupiterjaz
Cynicism aside that was a pretty entertaining read.

------
michaelochurch
It's better to understand this as an extortion dynamic than a single
conspiracy.

 _Mafia_ is a good analogy. There is no "Mafia" (except for werewolves, if
anyone gets the allusion). There are various crime families and connections
between them are loose to nonexistent. "Mafia" is a term people make up to
describe what are actually a heterogeneous set of people who just happen to
compete in such a way that they get the benefits and the externalities fall
out on society (just like an upper class).

Conspiracy theories are an attractive proposition because you can "blow up the
room where they meet". If only it were that simple. The reality is that the
types of people who are in power are naturally extortionist-- it's probably
genetic-- and such people are naturally drawn to the power they gain in
numbers, but too individually arrogant and selfish to form comic-book
"Conspiracies" (cf. "The Empire" in mid-90s console RPGs). In reality, lower-
case-c conspiracies exist all over the place, but there's no "one room where
they meet".

Ok, now onto the expensiveness of college and (as mentioned) urban real
estate, it's an _extortion_ economy. It's a protection racket. Colleges are
(at least in theory) able to _protect_ people from falling to the bottom, and
that's the service they sell these days. As the U.S. middle class shuts down,
demand for the few remaining seats becomes nearly infinite. That's why college
tuitions are crossing the $50,000 barrier and rents are skyrocketing in the
few locations where it's possible for a young person to start a career. The
U.S. middle class is being "obsoleted" and people, in panic, are clinging to
the few successful institutions (top universities, star cities) that appear
high enough to survive the flood.

You can view this as a generation getting "screwed" but I see it as a mix of
good and bad. We also live in a time when participation in technology is
becoming available to the masses. This really is the best and worst of times.
We could win big and change history, or we could be the worst loser generation
the world has seen in hundreds of years. It's still not determined yet.

I look at the upper classes and see insecurity and weakness. Sure, they're
parasitic and mostly evil, but they also are afraid of something. I'm not sure
what yet. But a lot of their parasitic hyperconsumption is them throwing a
huge party before the curtain drops on them.

I still believe in Avenue 1. Avenue 1 is that we level up on technology and
education and make a better world and just outperform these assholes. We build
better companies and institutions and allow them to decline peacefully.
(Avenue 2 is a violent, worldwide revolution against the current global elite
that will probably kill ~4 million before it concludes.) We don't have to
fight them directly; we just build things that are superior to what they can
come up with, and gradually draw power through positive means. Avenue 1 means
we, as a generation, build something like what Silicon Valley was before it
became VC-istan.

I see a lot of opportunity. Sure, those in our generation who hoped to have
the easy route to corporate executive sinecures have lost that opportunity
forever; but Avenue 1 is a real possibility.

~~~
sid6376
Why do you think once "we level up on technology and education and outperform
these assholes", we will not become assholes ourselves? Tangentially related,
but this[1] is one of my favorite articles from Less Wrong. A quote from that
article "The young revolutionary's belief is honest. There will be no
betraying catch in his throat, as he explains why the tribe is doomed at the
hands of the old and corrupt, unless he is given power to set things right.
Not even subconsciously does he think, 'And then, once I obtain power, I will
strangely begin to resemble that old corrupt guard, abusing my power to
increase my inclusive genetic fitness.'"

[1] <http://lesswrong.com/lw/uu/why_does_power_corrupt/>

~~~
michaelochurch
This is my main reason for preferring to do it nonviolently (Avenue 1). We
need to be building things that give power to the currently powerless and
decentralize control, not the other way around. If we take power "for
ourselves", we find that what we call "ourselves" is infiltrated by the worst
kinds of people, and then _they_ push us out.

I don't have any _moral_ problem with killing the current global elite. For
what they've done to this world, they're effectively our property, to do with
what we wish. That said, I prefer to offer them full amnesty so long as they
decline peacefully. (They'll even remain fairly wealthy; just not dominant
anymore.) Even if it's abstractly morally acceptable, there is a major moral
cost to violence nonetheless. Once we start it, how do we stop it? Also,
violent revolutions tend to draw in the worst people (who are attracted, as
noted, by the power). Our side is 99.9% of the world; not everyone in that set
is good.

Best is a nonviolent revolution centered on decentralization of power (giving
power away to the currently powerless in order to build a healthier and more
robust world) because the sorts of people who are attracted to such a movement
are the kinds you want. When you start killing people and blowing shit up and
"ruling" old-style (see what happened to communism) then you are taking power
(perhaps with the stated intention of giving it back some day) and you get a
lot of mercenary assholes in your effort who don't really care about the
ideals and just want to cause harm.

