
The Coming Meltdown In College Education & Why The Economy Won’t Get Better Soon - dwynings
http://blogmaverick.com/2012/05/13/the-coming-meltdown-in-college-education-why-the-economy-wont-get-better-any-time-soon/
======
jellicle
Mark Cuban writes: "As an employer I want the best prepared and qualified
employees. I could care less if the source of their education was accredited
by a bunch of old men and women who think they know what is best for the
world. I want people who can do the job. I want the best and brightest. Not a
piece of paper."

So, I suppose I could be wrong, but I would be willing to bet a great deal of
money that Mark Cuban does not employ anyone in any sort of white-collar job
who doesn't have a college degree from an accredited college.

It's nice for Mark Cuban to say that, but the reality is if you submit your
resume to Mark Cuban Enterprises, Inc. where you list your education as being
from the First Internet School of Book Learnin', Mark Cuban's HR people are
going to delete it offhand. They're not going to call you. They're not going
to try to find out if you're the best and brightest. They're going to delete
it and call the guy who has Yale on his resume. Sorry.

~~~
mkramlich
Fuck college. It's not the only way to learn, to meet people, or to show your
expertise, capabilities and accomplishments anymore. We have this thing called
the Internet now. Write a book. Put a PDF online. Record a video of yourself
giving an intelligent speech or showing some useful talent. Put it on YouTube.
Write software. Put on GitHub. Answer technical questions well on
StackExchange (or whatever for your particular industry/field.) Apply your
supposed skills and talents on something tangible then put it on the web and
be findable. Fuck 4-6 years of your life and $100k in debt. Fuck all that.

~~~
krschultz
Fuck people who bitch about how expensive college is.

You know how much I paid for college? $0.

You know why I paid that? Because in high school I did a lot less than what
you outlined above, but it was enough to get a _scholarship_ to go to college.
Six great schools looked at my application and offered me somewhere between a
discounted rate and a full ride + stipend on top of that. And I was only 20th
in my high school class by GPA rank.

If you think that you can match a college degree based solely on self-guided
learning, then you should be smart enough to get a scholarship. It's the same
damn process. You need the self discipline to stick with a program of learning
and working, and you need the intelligence to learn without support. It's just
a question of whether you realize that in high school or later in life.

~~~
jamesrcole
There's a limited number of scholarships to go around, and for those who can't
get one, the cost will matter.

~~~
wtvanhest
There are tons of undergrad programs that are less than $10k per year. Big
state schools which will give you all the social experiences you need and some
of the learning.

No HR department can interview people without a degree when there are so many
people with degrees. A degree doesn't get you in the door, but is a minimum
standard for just about any job.

It is too bad school is too expensive, but it doesn't matter.

~~~
yashchandra
"It is too bad school is too expensive, but it doesn't matter."

It _does_ matter. The schools that are worth anything are too expensive
(exceptions are there of course) while the cheap ones (read < 10K a year) are
probably good for nothing. You are better off trying to get a job instead of
attending those _cheap_ schools.

~~~
wtvanhest
_It does matter. The schools that are worth anything are too expensive
(exceptions are there of course) while the cheap ones (read < 10K a year) are
probably good for nothing. You are better off trying to get a job instead of
attending those cheap schools._

You are saying this: Ivy/Private School > No college > State School

That statement is absolutely ridiculous.

~~~
prodigal_erik
If the value of college is dominated by its
<http://en.wikipedia.org/wiki/Signalling_(economics)> effect, a degree from
the "wrong" school could send such a negative signal (you weren't wise enough
to skip the degree even though you couldn't get admitted to the "right"
school) that the innate value of the education you received doesn't make up
for it. I hope this doesn't hold broadly, because I went to a state
university. But I would think less of someone proudly displaying, e.g., a
degree from a known <http://en.wikipedia.org/wiki/Diploma_mill>, so it's at
least possible for a degree to be worse than useless—the question is how
mediocre a school would have to be.

------
impendia
I am in my first year as a mathematics professor at the University of South
Carolina. Having moved here from Stanford, I've noticed several things.

(1) Many students are woefully underprepared. In my calculus classes I have
found that a great many of the students have not mastered high school algebra.
And these are the students who pass our placement exam, and aren't obliged to
take one of our many algebra and precalculus courses.

(2) Many of the students aren't all that motivated, and resented me for asking
a lot of them.

(3) Many of the students really _are_ highly motivated, and have impressed me
with their talent, and more importantly with their eagerness to learn.

But where will they work? There seems to be a relative lack of employers in
South Carolina for talented, ambitious people. "Relative lack" doesn't mean
none, but if I were advising, say, a talented and ambitious math and CS major
who was graduating, my first advice to him/her would be to leave the state.

And yet, we continue to enroll 5,000 new students each year. I wish I felt
there was a better light at the end of the tunnel for my students, at least
one that didn't oblige them to move far from home. But I am kind of feeling a
bit of a bubble.

For now, students continue to enroll in my calculus classes. Despite all their
complaints to me, they busted their asses and I am proud of them. I hope that
ten years from now they have reason to decide that their efforts were worth
it.

~~~
ntkachov
Most students are crap at math. That's a fact. There is 0 encouragement to
spend high school refining math skills.

Also don't confuse motivation with laziness, priorities, or time management.
To a psych major, calc might seem like one of those bullshit classes you have
to take. To an EE Major it might just be more hours of work that could be
spent sleeping.

~~~
_delirium
There is a relevance problem, yeah. I personally was motivated to _really_
learn calc in 1st year college, mainly by physics classes. I wasn't a physics
major, but I found the freshman physics class really interesting. In
_particular_ I found it interesting that via this tool, calculus, you could
actually re-derive the entirety of elementary physics (stuff like dist = v0 t
+ (a t^2)/2), and much more, via a procedure with more internal logic and less
arbitrary memorization. It almost felt like a successful good-cop/bad-cop
setup: bad-cop high school made me memorize a bunch of bullshit special-case
formulas, and then good-cop college explained to me that you could just do
calculus to derive the answer.

I could certainly see how those motivators wouldn't apply to all students,
though. Honestly they applied to me mostly out of personal, side-project-esque
interest. In CS I tend to use statistics and discrete math a lot more than
calculus, though calculus comes up occasionally.

~~~
hedgie
i hated math when i entered college despite having passed the AP calc exam in
high school. i didn't see the point and couldn't understand why i was learning
about functions. i had no idea how to even think about the subject beyond what
i had been told to memorize.

the second semester of my sophomore year i decided that my interest in
computers and desire to have a job lead to me changing my major from
psychology to computer science. i signed up for calc II as my first college
math class and felt exactly like you did, getting an A+ despite not having
taken math for almost 2 years.

i hated high school math because it felt like pointless memorizing of stupid
facts. i loved college math because it was about describing and reasoning
about these conceptual objects and i didn't have to memorize a thing if i
could just remember how to derive it. they explain how to think about these
objects, and once i understand the framework behind the subject i enjoyed it
much much more.

the fact they were reasoning, explaining/proving why the math worked, and
presenting the logic behind their thinking was enough to make me love it. i
went dual math/cs and eventually got a MS in pure math.

------
MaxGabriel
This was the first comment on Cuban's blog. Can anyone comment on it? I
listened to the NPR Podcast, it is specific to private colleges; I am not sure
how public colleges fit in.

"The most recent Planet Money on NPR was about the cost of college. [1] They
point out that the price that has been rising is the “sticker price.” However,
the average price a student pays for college hasn’t risen (except to adjust
for inflation) over the past 20 years or so. The schools are raising the
sticker price as a marketing tool, so they can give big need and merit based
scholarships to woo desirable students.

The reason student loan debt has ballooned isn’t because students are paying
more, it’s because more students are paying. Federally subsidized loans aren’t
increasing the cost of education, they are serving their purpose to give more
people the opportunity to go to college.

I suppose your point that it is a ton of debt and we don’t have a job to give
to each college grad is valid. But, I am not sure the classification of it as
a bubble is valid because we aren’t really seeing a rise in the cost of
education."

[1] [http://www.npr.org/blogs/money/2012/05/11/152511771/the-
real...](http://www.npr.org/blogs/money/2012/05/11/152511771/the-real-price-
of-college)

~~~
learc83
>The reason student loan debt has ballooned isn’t because students are paying
more.

That's not true, I've seen numerous articles on the cost of public colleges
increasing much faster than inflation.

Anecdote: I dropped out of Georgia State in 2007, I'm going back now to finish
my last few semesters of a math degree.

The cost has more than _doubled_ in the last 5 years.

~~~
Retric
He just refuted that argument by denoting that 'price' as the sticker price.
New Mexico for example gives all students attending a state school with a high
school GPA over 2.5 a scholorship. The state could just directly give public
schools the same money for in state students and avoid the 'scholorship'
angle. But, this approach offers better publicity and if you have below a 2.5
GPA in a public high-school you might not be ready for collage.

~~~
mbell
> New Mexico for example gives all students attending a state school with a
> high school GPA over 2.5 a scholorship.

Where do you think that money is coming from?

~~~
Retric
Reducing the money they give to state schools. The stated funding source is
lottery sales, but money is fungible. It's actually becoming fairly common
_Tennessee, New Mexico, Maryland, Georgia, Florida, Louisiana, New York, South
Carolina, Missouri and West Virginia are among those sponsoring lottery-funded
scholarship programs._ [http://www.scholarships.com/blog/financial-
aid/lottery-schol...](http://www.scholarships.com/blog/financial-aid/lottery-
scholarships/137/)

~~~
learc83
Over time tuition costs begin to increase faster than lottery revenues.

Georgia has had the HOPE scholarship since 1993 (lottery funded), and since
2002 the amount covered has been steadily decreasing.

If student loan availability keeps increasing (causing tuition to rise), total
tuition percentage paid by HOPE will be negligible

------
hristov
I really do not like housing bubble to education analogies. There is a big and
quite obvious difference between housing and education. You cannot flip a
diploma. You can try to monetize it by getting a good job but it is not
something you can sell. The way you monetize it is by living your life a
certain way.

Education would be a big investment even if it were free. You still have to go
to classes. You still have to expend effort. And if you want to get your
money's worth out of your education you still have build a career. So you
cannot buy 20 diplomas on credit and flip them in a month for profit (as some
people used to do with houses). Which means that education is a completely
different beast. Every housing analogy is utterly idiotic.

Now that is not to say that there are no problems with education. Of course
there are. But they are different type of problems.

Personally I think too many loans are being given out because of the recent
proliferation of for profit schools with dubious teaching abilities and
academic standards. I think we need some kind of merit based system that will
limit the number of loans being given out. The merit based system may test
either the students or the schools or both, and only give out loans to those
that pass the test. Thus, we can limit the loans to only those that can
beneficially use them.

~~~
rsanchez1
In both situations, people get themselves in deep debt with the expectation
that they'll end up with a lot more money than they started. The housing
market collapsed because prices fell after everyone realized the majority of
the housing market was built on promises that could not be kept. The education
market will collapse because available jobs and salary fell (analogous to
prices in the housing market, and largely because of the housing market
collapse) and the promises made to young people that they will be able to
build a career cannot be kept for every student graduating today. I do not
like the analogy either, because it ends with the country hurting hard, very
hard.

It's easy to dismiss such analogies as idiotic when you assume that all you
need to do is "live your life a certain way" for the diploma to pay off, and
when you want to ignore the eventuality that the education market collapse
will cause tremendous damage. Both the housing and education market collapses
depend on promises made to homeowner and students that cannot possibly be kept
for everyone involved.

Of course, limiting loans based on merit is a great solution, but it's not a
politically palatable one. On one hand, politicians love to say that everyone
will get an education and it will be paid for no matter what. On the other
hand, what happens when students from well-off community meet merit-based
standards for loans while students from poor communities don't? Banks and
universities will be slammed for practicing discrimination. Sort of like how
banks were slammed for discrimination when they were lending less to
minorities and accused of discrimination based on race, when in reality they
were limiting loans only to those who could pay for them, but banks were
ultimately forced to give out subprime loans through legislation and we ended
up with the housing market collapse.

Common sense solutions are not adopted when you have politicians involved who
only appeal to the emotion of voters and seduce voters with promises of cheap
housing and education, and slam politicians who are fiscally responsible and
want to limit mortgages and student loans to those who have the ability to pay
for them.

------
glesica
This is just absurd. Non-accredited, branded schools will provide better
education for less money? Really? I assume he's referring to the growing for-
profit college industry.

Yet for-profit colleges are actually the biggest culprits driving up the
student debt. Students at for-profit colleges run up more debt, are more
likely to drop out, and are more likely to end up under-employed than those at
traditional universities.

This paragraph also bothers the crap out of me:

> The competition from new forms of education is starting to appear.
> Particularly in the tech world. Online and physical classrooms are popping
> up everywhere. They respond to needs in the market. THey work with local
> businesses to tailor the education to corporate needs. In essence assuring
> those who excel that they will get a job. All for far far less money than
> traditional schools.

Yes, students need relevant, modern, education, but education that is
"tailored" to corporate needs is a little worrisome. Extremely targeted
education might be sweet for the corporations hiring the graduates, but it
sucks for the students themselves.

Economists draw a distinction between general human capital and specific human
capital. General capital includes things like math and critical thinking,
skills that can be applied in a variety of situations. Specific capital
includes things like how to use a particular piece of software or knowing
which forms need to be filled out for a requisition.

General capital benefits employees because the employee is free to take his
capital and go elsewhere; the skills are transferable. This is what we see in
silicon valley where companies acquire startups just for their employees.

Specific capital, on the other hand, benefits the employer since the capital
is only valuable to a specific industry or company so the employee is limited
in where he can take his skills.

Everyone needs a mix of general and specific capital. But the balance has
implications for the economy as a whole.

One of the things that traditional universities have been pretty good at is
general capital. This provides flexibility and resiliency to the economy.
People can move between jobs and even careers, from dying industries to
growing ones. They can fill jobs that hadn't even been invented when they were
in school. And they can actually acquire specific capital more readily (the
"ability" to learn).

Shifting focus to specific capital by allowing companies to control our
educational system threatens to turn the entire country into one big company
town, and that's a little frightening.

EDIT: Typo

~~~
eli_gottlieb
What I find disturbing here is the complete, total, hegemonic shift to
thinking of education as job-training.

~~~
potatolicious
When education costs so much that one needs to take out a loan that then takes
decades to repay, it must necessarily be job-training. It's practically
impossible to justify otherwise.

IMO it's impossible to expect the education system to be more holistic and
less training-oriented unless the costs drop to the point where it's realistic
to pursue it knowing there is not necessarily a monetary reward at the end.

~~~
glesica
I see your point, but I think you've made a couple assumptions that aren't
necessarily accurate.

First, higher education needn't be solely one or the other. There have also
been some important points brought up elsewhere in the comments about the
"sticker price" versus what students actually pay.

Additionally, this is a complex issue, especially in the US where the
perception of the value of a degree can vary wildly depending on the
institution in question. One part of the original article that struck me as
true is that high school students should be better coached during the process
of choosing a college or university and then choosing a major or
concentration.

The idea behind general human capital, though, is that it actually increases
the ability of the student to thrive in a dynamic economy. The returns on an
education with a significant "holistic" component are, at least in theory,
higher than those on an education that is weighted toward job training.

For example, while it is certainly true that borrowing $100,000 to study
pottery at a large university is probably not a good idea, there are enough
colleges and universities in the US that if a student really wants to study
pottery, he can do so for much less (for example, at a community college,
where tuition costs are still quite reasonable).

But really, pottery (to continue the example, though this is applicable to
many fields frequently cited as "useless") is closer to _specific human
capital_. This actually helps explain why the students commonly featured in
articles about these issues can't get jobs. They have been given "job
training" for jobs that don't pay well or hardly even exist.

If their programs of study had been _more_ "holistic" then perhaps they would
be in better shape today (of course it should go without saying that there are
counter-examples out there, I'm just talking about trends and averages here).

So _in some sense_ , it seems that part of the problem is that we already
focus too much on "job training", especially for low-return jobs. Of course a
degree in finance (business schools do a great deal of job training) is far
more lucrative, but the principle is the same.

~~~
eli_gottlieb
Actually, the largest single undergraduate major is "BA in Business". This
signifies the problem: the plurality of undergraduates are _not_ majoring in a
Liberal Art or Science (those arts and sciences worthy of a Free Man and
forming the basis of his intellectual life, hence "liberal") but in General
Hope-I-Get-a-Job Studies.

------
ntkachov
The other end of the problem is that kid's aren't even trying to flip their
degree. Most kids consider college and experience not an investment.

You're kid is the worst investor on the planet. Because instead of majoring in
Bioengineering they are majoring in psychology. And If they are majoring in
psychology they aren't out to get the best damn research positions over the
summer and publish papers, they are out working for the local supermarket.

I don't think most students have been asked "What return do you expect on the
$100,000 you are going to spend on this degree".

~~~
randomdata
_Most kids consider college and experience not an investment._

How many are there due to pressure? At the end of my high school career, I was
ready to enter the workforce. I was already working in the industry I wanted
to be in; there was little value to going from that perspective. Yet, the
pressure from teachers and peers persisted. I was going to fail in life if I
didn't go to school. You know the meme, I'm sure. I eventually succumbed and
enrolled. Thankfully, I realized in my first year that I was wasting my time.

I picked up another job, used it to hone my experience in the industry, and by
the time my friends were graduating, I was able to move myself into my dream
job. I really don't see how a post-secondary education could have improved
anything. It would have only been a hobby, which too is respectable, but not
the right fit for me at that point in my life.

There's so much malarkey that goes around about education, it leads young
people, without a clear view of how the world really works, to make hasty
decisions that often ends with a massive amount of debt. I admire those who
are in school for the right reasons, I just question how many really are there
for the right reasons. I know I wasn't. I'm just glad I realized sooner than
later.

~~~
brc
I think this is the relevant point that most people are missing by looking at
the trees instead of the forest.

It's patently absurd to think that every single person should go to college
and receive a 3 or 4 year degree. For a start, some people will not be suited
to study, and for a second, increased numbers of higher education
qualifications simply reduce the value of said qualification.

More people would be better served by direct time in the workforce and
specific vocational training.

But the meme of 'go to college or miss out' is pervasive, and continues to
cause massive amounts of people to put major time and money into their
qualifications. Education has become a sacred cow that nobody is allowed to
criticise, yet objectively there is no evidence that increased amounts of
college graduates are making a positive difference.

I'm all for continuing education - education should be a lifetime pursuit for
everyone - but the current model of growing universities and growing student
debt is clearly unsustainable. The growth has to at least stop at some point,
and probably reverse.

Until people start looking at the cost/benefit ratio objectively instead of
emotionally, nothing is going to change.

------
gliese1337
Many people, me included, frequently complain about all of the politics
required to get the least bit of funding for anything from my university. Then
I read something like this and that kind of trouble suddenly seems much better
than the alternative.

According to NCES[1], the average total cost per year of attendance at a
4-year private institution in 2009-2010 was $32,475. The cost for BYU was
$4,290[2]. There's tons of construction going on all the time, but BYU doesn't
add floor space without a donor who can guarantee long-term financial support
for the facility. And we still manage to have nationally and internationally
recognized programs in among other things, computer animation and ancient
languages, so clearly you don't need a whole lot more money to do good
instruction and good research.

It makes me wonder what exactly there is to cut that manages to use up all of
the 9-times higher costs of other institutions.

[1]<http://nces.ed.gov/fastfacts/display.asp?id=76>

[2]<http://yfacts.byu.edu/viewarticle.aspx?id=85>

~~~
MaxGabriel
This disclaimer was on the BYU website. Do you know how much that is?

"* A significant portion of the cost of operating the university is paid from
the tithes of The Church of Jesus Christ of Latter-day Saints. Therefore,
students and families of students who are tithe-paying members of the Church
have already made a contribution to the operation of the university. Because
others will not have made this contribution, they are charged a higher
tuition, a practice similar in principle to that of state universities
charging higher tuition to nonresidents."

~~~
gliese1337
Yes, I do. That's why I quoted the price for non-LDS students. The price for
tuition for LDS students, as listed on the same page, is about half of that;
but, as the disclaimer says, you also have to take into account that they're
paying an additional 10% of their total income.

~~~
MaxGabriel
Thanks! I am not really familiar with tithing, and when I first looked at the
chart I didn't understand that LDS meant you payed a tithe.

~~~
lotharbot
Tithing is required for LDS who want a "Temple recommend" [0] (which itself is
a prerequisite for temple marriage, exaltation, and so on.)

[0]
[http://en.wikipedia.org/wiki/Temple_%28LDS_Church%29#Entranc...](http://en.wikipedia.org/wiki/Temple_%28LDS_Church%29#Entrance_requirements)

------
gfodor
The author is right about some things, wrong about others. He's right that
student debt is a timebomb. Anyone who knows a student struggling with it
realizes this. The amount of debt students are saddled with is astronomical,
and has turned this generation into a one of indentured servitude to their
financiers. Something is going to have to give.

He's wrong, at least somewhat, on what the future holds. There are multiple
roles to a university, and multiple motives to developing a higher education.
I think some of these roles are ripe for disruption, others not so much.

It's hard to imagine graduate-level research happening in any other
environment than an academic university. It's easy to imagine an undergraduate
education in engineering or mathematics being delivered and certified
completely through the internet.

Harder to imagine, but possible, are "micro-universities" which pop up
organically that criss-cross with meatspace, which re-use existing course
materials for information transfer but also incorporate the less tangible
things such as "learning to learn" and in-person collaboration. I can imagine
seeing job candidates walk in the door that have a completely custom
education, self-driven by their own particular desires and nurtured and
accredited as focused, disciplined study by these micro-universities.

It's truly an exciting time in education. I imagine the initiatives we're
seeing now from Khan Academy, Coursera, and Udacity will be looked back upon
as groundbreaking but charmingly rudimentary 10 years from now. I expect big
things as more and more smart people begin to tip-toe away from traditional
educational models and take bigger risks, both as students and as teachers, by
inventing new models for education.

~~~
tmh88j
>It's easy to imagine an undergraduate education in engineering or mathematics
being delivered and certified completely through the internet.

Mathematics, yes. Engineering, no. Am I one of the outliers that feels labs
are essential to solidify what you've learned that week in class? Sure you can
learn EE basics such as mesh analysis, but when you start to venture into
logic design courses where software alone won't cut it things get tricky. For
the majority of people, debugging a robot in even the most introductory
courses would be a nightmare without an experienced person or even someone to
look over it with.. How about chemistry students. Good luck setting up a lab
at home. How ME classes dealing with material properties and testing?

There are plenty of courses that do work out well online, but some cannot
simply stand alone.

------
vannevar
_Can someone please explain to me how what is happening in higher education is
any different ?_

Sure. The big difference (enormous, really) is that unlike homes, there is no
secondary market for diplomas. We talk about an education as an investment,
but in truth the 'asset' is us. One reason the housing bubble was so
devastating was that if one person defaulted, _it marginally depressed the
value of everyone else's home._ If someone defaults on their student loan, it
doesn't make everyone else's education less valuable. The student loan debt
problem is much more like the credit card debt problem, which exacerbated the
housing bubble but on its own had nowhere near the cascading impact. Student
loans are a problem, but they are not a crisis. We should be much more
concerned that there has been no meaningful banking reform since the 2008
crisis, and that banks are still gambling on dangerous derivatives whose real
risks are unknown and quite possibly incomputable.

------
cageface
_You borrow as much money as you can for the best school you can get into and
afford and then you “flip” that education for the great job you are going to
get when you graduate._

Maybe there is a bubble in higher ed but this analogy is pretty shaky. The
most obvious difference between a house and a degree is that you _can't_
"flip" a degree.

~~~
EzGraphs
Agreed. There are similarities between the higher ed and housing bubble:

* Lots of quick money available

* Government loans and programs,

* Speculation about the relative return on investment that does not match the observed reality

But a house is an asset with a specific tangible transferable value. A college
degree is a certification and not transferable in any specific way. It muddies
the waters to see the bubbles as identical, and it suggests that they will
resolve themselves in exactly the same way (which is at least questionable).

------
SagelyGuru
Having taught at a university for many years, I came to realise that I can
predict students' final results really well just by setting them a simple
exercise in the very first lecture, before they learned anything. In other
words, the results are dependent entirely on their ability. The employers
should be able to set similar tests themselves.

Furthermore, it might make more sense to both employers and employees to hire
bright 16-18 year olds and give them an in-house apprenticeship. Even if they
are paid initially less than graduates (do the accounting on that, versus
servicing huge loans after four years of no earnings).

What I am trying to say is that a typical recruitment target, a bright
graduate, was just as smart at 18 and you could have got him first, cheaper
and happier, then. After those four years with you, if you are any good at
inspiring and advising, he should also be a lot more use to you than straight
out of college.

------
ender7
I agree that the price of a college education is too high. I don't see how
this justifies the conclusion that "therefore, people should stop going to
college and take online courses."

Most medical care is overpriced, but that doesn't mean that you shouldn't get
a heart transplant.

I am deeply skeptical that online courses or for-profit education will result
in anything but a horrible mess.

(this is not to say that it's impossible to succeed and do quite well without
a college degree, but it's _much harder_ \- it's harder to get hired and it's
harder to acquire the knowledge and experience necessary to be qualified for a
position)

~~~
randomdata
_but it's much harder - it's harder to get hired and it's harder to acquire
the knowledge and experience necessary to be qualified for a position_

Is there any data to back this up? If we assume college is a four year
undertaking, even if it takes you three years of work to find the job you are
looking for without a degree, you're still expending less effort.

My anecdotal experience says it's not even difficult at all. I was able to
land my first job in the industry I still work today on my first attempt in
high school. Though I recognize that not everyone is so lucky.

~~~
rayiner
Try getting a job in any non-software engineering field without a college
degree.

------
ahsanhilal
For those who are interested in student debt, there is a really good website
called Project on student debt:

<http://projectonstudentdebt.org/state_by_state-data.php>

The problem really lies in the fact that the US cannot find the right answer
for the basic question: Is Higher Education a public or private good? There is
no wrong answer, just that answer is really required to form good student
expectations regarding the economic system, and what they should invest in a
degree. Right now the US government subsidizes higher ed in various forms and
manners, in order to bring the cost burden down. Pre-2008 crisis, the US govt
used to mostly guarantee debt taken out by college students in order to bring
down the rates. Banks would then securitize these loans, cut them up in
tranches and sell them on to investors, pretty much like MBS's (mortgage
backed securities). However, in the financial fallout a lot of students could
not get loans so the US government decided to give out more grants etc.

However, the example of UK is quite interesting as well. The average student
debt in the UK is lower due to a large part of costs being carried by the
govt. Though, this does not effectually increase unemployment rate either.
Lower debt != great unemployment and greater happiness. Also, historically
civilizations with higher quantity of credit flowing around in the economy
seem to do better as well.

------
ninguem2
Mark Cuban should be able to afford to hire some unemployed English major to
proofread his blog posts.

~~~
jongalloway2
Yes, or use a browser or blog client with basic spell check / grammar check.
That was painful to read.

------
robomartin
During the early part of my working life I had the experience of not getting a
job due to the fact that I did not have a degree. It was a junior embedded
programming job.

I was 19 and just getting going with the college thing. The guy that got the
job had a degree in landscaping and had taught himself some programming with
an 8085 board that was popular at the time. I know because the owner of the
joint was kind enough to tell me.

I was probably too young to put-up a fight and state my case with authority.
By the time this interview came about I had probably built and programmed no
less than eight computers of my own design. I had programmed in assembler and
written my own Forth compiler. I probably knew the architectures of nearly
every popular microprocessor available at the time (80xx, 65xx, 68xxx). I had
been an electronics hobbyist since probably the age of 13. I knew more and had
certainly done more than the aforementioned job-robbing landscaper.

Again, I'll mark that off to, at 19, not having the chops to state my case and
fight to demonstrate that I was the better candidate. As it turns out a few
months later, as luck would have it, I would land an entry level engineering
job where skills and work ethic were valued far more than anything else. I
rose to a level of being solely responsible for multi-million dollar
engineering projects while still attending school.

In my case it turned out OK in the end. The issue is that a degree is a check-
mark item that a lot of companies use for filtering. Just one look through job
on Monster and you can see that lots of them have degrees as minimum
requirements. If you are dealing through an agency you might not get past the
first filter, no matter what you know and what you've done.

In the case of Mr. Cuban, it'd be interesting to hear about examples where his
organization has hired people in spite of not having a degree from a
traditional institution.

~~~
krschultz
Sadly, it's never too late for it to backfire onm you. Although it has 'worked
out ok' up to this point, I had a neighbor who was 58, and in 2008 when the
company did a round of layouts, they fired him because he was the only guy in
the department without a degree. They had to pick someone 'objectively', and
that was their criteria.

------
josscrowcroft
This is a fantastic article but I really wish people would stop saying "I
could care less"

It's _"I couldn't care less"_ , as in, _it wouldn't be possible for me to care
any less if I tried, because I care so little_.

If you say "I could care less" you're logically implying that you _do_ care

------
bryogenic
While this article talks about how bad things are I think an interesting
solution was written up here [pdf] [http://www.fixuc.org/wp-
content/uploads/2012/01/FixUC-Propos...](http://www.fixuc.org/wp-
content/uploads/2012/01/FixUC-Proposal-03_28_2012.pdf)

The idea being you go to school for free and the University only makes money
from a percentage of your future pay, thereby ensuring that it's students are
actually prepared for the work force.

More here:
[http://www.forbes.com/sites/jamesmarshallcrotty/2012/04/23/f...](http://www.forbes.com/sites/jamesmarshallcrotty/2012/04/23/fix-
uc-plan-ends-tuition-as-we-know-it-is-it-bloody-crazy-enough-to-actually-
work/)

~~~
Swizec
The problem I have with this is that _university should NOT prepare you for
the work force_.

Universities are awesome! We ruined them when we started thinking of higher
education as preparation (or even requirement) for the workforce.

University should prepare you to be a thinker, a scientist and just generally
an educated person. As soon as it becomes vocational the whole point is lost.

We don't need to "fix higher ed", we need to remember why we created it in the
first place - to teach a small percentage of the population how to use
_critical thinking_.

~~~
ntkachov
Great. They fail at that too. There have been a few studies that show that
after 2 years of college, the difference in reading, writing, math, and
critical thinking are negligible.

So if you're not good for the industry, you're terrible at what you're made
for, what good are you?

~~~
Swizec
This probably depends a lot on the course one is taking. I have a feeling
(from observing the people around me) engineers are a lot better at critical
thinking and logical reasoning after a couple years of college than they were
coming out of high school.

From my observation it takes about ~4 years for the really observable
differences to settle in ... it might also just be maturity. Difficult to say
:)

~~~
_delirium
It's definitely my experience that it's hard to find people with high levels
of mathematical knowledge who don't have a 4-year, technical-field bachelor's
degree. It's of course possible this is merely a correlation, but I would at
least _hypothetize_ that the students who've finished a four-year degree in an
area like mathematics, computer science, electrical engineering, or physics,
have more mathematical sophistication than they would have had if they had not
finished that degree and taken/passed the mathematics classes it required.

It's not impossible to self-teach, but as far as I can tell, self-taught
people usually don't self-teach mathematics, at least not successfully. Among
self-taught programmers without CS degrees, for example, it's quite common to
find people who are skilled coders, but much less common to find people who
have a strong mathematical grounding.

Heck, if you want someone who _really_ knows statistics and data mining, to
take one example, I haven't met many people without grad-school experience who
fit the bill. Masters degree is good, some PhD experience is better (finishing
a PhD doesn't matter as much; ABD is fine).

~~~
base698
So far for me 100% of candidates claiming self taught can barely code a for
loop, much less explain at a high level how a compiler works or the difference
between a heap and the heap. In most cases they don't even know the
foundations of the language in which they are most efficient.

Most people I know are also self-taught and read a lot of the theory. If they
are self-taught, what in God's name are they using to teach themselves?

------
reader5000
I think the more interesting aspect is how long are we going to keep the choke
hold on graduates who are currently drowning in debt and will be for a while.
Is it a net win that the Dept of Education gets paid while a substantial chunk
of would-be middle class Americans can't purchase cars / houses / children and
are generally disincentivized to produce by their $1300/mo debt service? Will
we start to see a parade of law suits from former students against their
universities? The situation really is absurd.

~~~
ChristianMarks
The 1 Trillion in debt will be used to fund lobbying for additional state and
federal budget cuts; outsourcing and off-shoring more jobs; lowering taxes for
wealthy corporations; adding to the 1600 companies in 18 states that get to
keep some or all of the state withholding taxes their employees pay; raising
the cost of medical care and health insurance; and funding think tanks to
persuade people to believe that universal health insurance is evil, so that
private insurance companies will continue to flourish at the expense of
entrepreneurs and to ensure that labor and capital remains immobile.

------
fumar
I graduated from college three years ago.

When I signed the loan I was 18 and did not fully understand how much a loan
would affect my life. It was very easy to receive an unsubsidized loan. I did
not really think about too much to be honest. Growing up in a nice suburb. It
was just the norm. My friends older brothers took out loans. My older friends
did the same.

I grew up middle class. My parents had good jobs. I started working when I was
sixteen. I did not do great in high school. In college I did very well. My
last two years were the hardest. I worked fulltime. Having no free time was
difficult. Still, I loved learning and it was a valuable learning experience.
I was able to manage fun life, work life, and school life.

I worked hard at getting a good internship and a high GPA. At the end, in
2009, it was very hard to get job interviews. As a recent graduate, I could
not get my foot in the door anywhere. I ended up a high end luxury store. It
paid the bills. I recently quit because of family stuff I had to take care
off. Now, I am jobless. I realized I have to start from square one. I am
applying for internships at startups in Chicago.

Working for thirteen dollars an hour was just enough to make a living. I saw
how many people without loans or college degrees had a better lifestyle. They
did not have to worry about a large percentage of their income going back to
the government. I am still unsure if it was the wrong choice. I learned more
than I ever planned.

College changed my life in many positive ways. I am still an avid learner. I
started reading news.ycombinator because I wanted to learn more about
programming. I am enrolled in Udacaity right now. I also taught myself graphic
design in the last year.

------
scoofy
Student debt is not like housing.

1\. Education is an game-theoretic arms race. It's very valuable iff you are
the only few who have it. If you do not have it your are at a serious
disadvantage. This creates an incentive to perpetuate the current
overspending. This, obviously, is a recipe for entirely too much wasteful
spending on education, and that needs to change, but i don't see how it
creates a higher education 'crash'.

2\. A diploma is not a commodity. You cannot sell it; you cannot flip one. You
cannot speculate on it beyond the initial investment. No one is going to give
you a education equity loan. It is not treated as collateral. Your diploma
will not be repossessed, therefore the lenders need to be more conservative
when issuing student loans (leave that to the actuaries).

While i will admit there is the potential for losses in the ABS market, these
are typically guaranteed loans. Will this create problem for the Fed? If the
economy continues in the doldrums it's certainly a possibility, but comparing
these securities to the chaos the CDS market sent us through, i doubt it.

------
arnoldwh
The point I thought was interesting was how Mark Cuban talked about the
Innovator's Dilemma for many universities that don't believe in or support
online learning.

I'd venture to say the education model experienced this same sort of ID
(Innovator's Dilemma) when writing/print became available to the masses.

What was traditionally taught via in-person sessions (e.g. Socrates => Plato
=> Aristotle) could now be written down and distributed. Sure, if you optimize
for depth of learning, you won't get anywhere near the quality of having
Aristotle teach you in person. Then again, unless your last name is "The
Great" (Alexander), you're probably not going to get Aristotle as your
teacher.

What we're seeing now is remarkably similar. You have elite legacy
institutions available to a few, while technology has progressed enough to
make it available to the masses. I understand the point about how great a
"signal" it sends to potential employers and why that's necessary, but now
that more and more of your work can be online, it's easier than ever before to
send the right signals.

------
Tsagadai
First off, I know education != going to college. But let's be honest, some
people who spend years of their life studying full time are probably learning
more than people who watch a few videos after work. It takes a long time for
most people to learn certain skills and without a dedicated place, timeframe
and support network they probably won't learn those skills by themselves.

I don't think spending too much on education is going to cause the next bust
of America. I think it will be a case of everyone else spending so much more
than the US. In a services-based economy your main capital is your people.
Many traditional universities will fail, because there are too many mediocre
schools (also cheaper alternatives and expanding high-end schools). This will,
however, result in fewer people studying anything past high school.

There are significant problems in the US higher education market but hoping
for its demise will not fix things. Good luck competing in a hypothetical free
market against far more educated populations.

------
jeffool
Here's a revolutionary idea: let's make bankruptcy easier.

I've paid more than I borrowed, and I still owe more than I've paid. I have
dozens of thousands of dollars in student loan debt, and I'm on the doorstep
of defaulting on some of it.

Mark Cuban's right. The money is insanely easy for everyone to get. Sallie
Mae, AES, and the rest are happy to give students money. Colleges are happy to
take money from students, and pass or fail (I failed), bad situation or not,
the guarantors will get their money from the student. Legally, you can't
escape that loan via bankruptcy. The guarantor can even garnish your wages.

I don't WANT to support bankruptcy. I certainly didn't think I'd be in the
situation to have looked into it when I took that first loan out in 2002. But
a funny thing happened on October 17, 2005. On that date, all federal student
loans, even private ones, became effectively immune to dismissal via
bankruptcy.

Now, the law still says "excepting such debt from discharge under this
paragraph would impose an undue hardship on the debtor and the debtor's
dependents", but call a lawyer. They will tell you, flatly, "you can't dismiss
any federal student loan debt through bankruptcy." Not "it's hard", but "you
can't". (Seriously, call one up for free and ask if they handle bankruptcy
cases with large amounts of student loan debt.)

As it is, currently the only loser in the system is the borrower. The school
gets their money up front, the lender gets theirs from the guarantor, and the
guarantor gets theirs from the borrower, even when it's blood from a stone.

1/5th of students default on their debt. That's not even counting those that
make payments, but are barely getting by. Let people get out from their
student loan debt, and, well, I'm not talking about dumping a trillion dollars
into the economy. But many people who can barely make rent (or those like me
who can't), are suddenly covered. I'm off couches and renting an apartment.
People in apartments are buying homes. People scraping buy are making leisure
purchases.

~~~
atlbeer
So when this debt is dismissed from your balance sheet who repay's the lender?

Apart of the reason of the low cost to borrow for student loans is baked in
the non-dismissal of the debt. It lowers counter-party risk for the lender
therefore they will give a lower rate to the borrower.

If you allow student loan debt to be dismissed with bankruptcy then you
increase counter-party risk and increase the cost of those loans originally.

~~~
jeffool
No one? (Or the guarantor, who then isn't paid back.) That's what I meant by
"bankruptcy." Maybe, if they had "skin in the game", they'd be more inclined
to be more responsible in their lending.

Or maybe the answer comes in capping the amount that can be paid back on
amounts given, so that after paying for $x for $y borrowed, or paying for Z
years, it doesn't matter how much you have left (thanks to compound interest),
the debt is considered "paid".

Either way, loans will be harder to get, yes. Fewer people will be able to
afford school at its current prices. Schools will have to make a choice of
cutting back significantly, or trying to cater to those students who can't
afford loans that would have paid for Ivy league schools. Community colleges
will have to be community colleges again, vocational schools vocational.

I do know that currently, schools don't care where the money comes from, and
lenders (and guarantors) don't really care where it goes to, and each loan
that is too much for the borrower to pay back essentially becomes a money
printing press. We keep paying, and many keep going further in debt to them.

Our system now can not last forever. A quick Google tells me that in the past
35 years, tuition has risen >900%. That number will continue to balloon as
large as possible, until there is reason for it to stop. Maybe those
alternative education models Cuban mentions vaguely (we probably know well
what we means), but maybe this is what changes it. Allowing bankruptcy.

As long as possible, schools will continue to take as much money as they can
get, to offer more, and bigger. And so far, lenders/guarantors seem content to
let every person take that loan, and put a noose around their necks, as we've
been told since we were children "go to school, do well, go to college, do
well, you will do well in life". And as much as people here may value
independent drive and self-teaching, I think we can agree that "the system"
very much encourages people to attempt a college degree.

At least when the multi-billion dollar banks got into trouble, they had two
options: go bankrupt and strike a deal with those they owed, or get bailed
out. People only have one, "keep paying." And at some point, that just becomes
indentured servitude.

------
linuxhansl
One more example why "let's fix the problem by providing cheap money" never
actually fixes the problem. The "cheapness" of the money will just be priced
into the goods (houses or education in this case).

(As an aside, the same is true for the tax-deductible interest on mortgages
nonsense. People think they actually save money, when in fact that advantage
is immediately priced into the houses.)

Where I am from university education is free. Of course seats are limited, so
you need to be reasonable smart (but by no means a genius) to get in. Not
ideal either, but at least your education is not defined by your wealth or
your willingness to go into debt.

------
Lednakashim
There is no clear financial connection. The only way to make a strong
financial connection is to imagine a default scenario; where thousands of
students can't pay off their loans. There is little evidence for this as
student loans tend to be cheaper then housing loans (It is impossible get 300K
of student loans) and they tend to have nicer terms less ways to default.
Perhaps whats happening is some kind of social slavery where it is harder to
peruse ones dreams due to loans, but its not a financial bubble.

~~~
colinshark
I'm 27. Suburban lifestyle. Went to college. I'm thinking of my 15 or so
closest friends. None of them have ever bought a house or a new car. I'm
drawing my own conclusion that the economy is going continue to be depressed
for a long time.

------
drone
This general topic has been of a lot of discussion in my household lately. My
partner, let's just say she's been pursuing a career in the arts (as a
classical performer). Her and I both recognize that the median salary for
people in her career path is around $38k/year. She has been conditioned to
believe that no one can even attempt to get into her chosen career (many times
more applicants than available positions, to use the terms loosely) without a
master's degree from one of the top schools, and again through one of the top
studios in one of the top schools.

The problem here is that once she was accepted, we did the math. We'd be
taking on an additional $60k in debt for this two year program, in addition to
the existing $40k in debt already accrued. That makes a total of $100k in
debt, at an average interest rate of 3.5%. All, for the "opportunity" to get a
$38k/year job.

Even though she recognizes that the financials simply don't work, she has a
hard time with the concept, and still is looking for ways that we could afford
it. I've been working hard with her to show her different paths into the
market (using more standard entrepreneurial tactics: building a team, creating
opportunity one step at a time, building a market for your "product" over
several years, etc.) but the professors keep telling her she can't get the job
without the additional degree.

Sometimes, I wonder if the professors are not simply selling themselves and
"capturing" their market. Then again, I consider they're likely not being
manipulative, they simply only know the paths they took...

~~~
saturdaysaint
You guys should look up the forums full of angry law and humanities grads with
no job prospects and devastating debt - [http://chronicle.com/article/The-Big-
Lie-About-the-Life/6393...](http://chronicle.com/article/The-Big-Lie-About-
the-Life/63937)

~~~
drone
The sad part is, she has plenty of real-world examples around her. Her part
time job singing is also staffed with people who got their grad degree, who
barely get by on a few part time private teaching jobs and the few part time
singing jobs. She watches them struggle to even pay their loans, but the story
keeps being told "But it may be that they're just not as good as you."

Part of it, I suspect, is that especially in music, they start training and
teaching kids when they're very young. This is all they know by the time they
leave their undergrad studies, and accepting the idea that the path they've
been on their entire life may not be viable sounds a lot like "giving up
before the race is over." Rational arguments be damned.

------
galfarragem
One of my college teachers used to say: "People should come to college just
for one thing: to make friends".

It seems funny but in college you get the possibility to meet people that
excel within any field of knowledge (mentors or other students that can become
your partner in a startup for example). People in college have TIME to hang
out together, that is crutial. I took already some online courses and is not
the same. They are just a complement in any education. Sorry.

------
EzGraphs
The typical university tuition is over-priced. Once can get employable
credentials or education with much less of an investment. That said, a
comparison with the housing market does not provide a particularly clear
parallel of the dynamics involved.

* In the housing market, there were a significant number of investors speculating and "flipping" properties. A major difference with college degrees is that they have a single owner.

* A brand new pool of college applicants becomes available each year. Based upon borrowing practices and selection of majors, they for the most part appear unaware of the consequences of the expense. The initial four-year degree is generally only acquired once per buyer.

* A house could be sold or re-possessed to immediately recapture some of its value. There is no way to resell a degree to effectively withdraw a portion of its cash value.

The common factor that will have a more immediate effect is the availability
of government loans. If there would be a "credit crisis" for education that
would result in student loans becoming more scarce, the resulting reduction in
demand could lead to something of a "bubble burst" scenario.

------
dkrich
I agree with everything he wrote, except for the predicted outcome. With the
housing crisis, there was a bubble that burst because the credit markets froze
and suddenly nobody had access to capital. That is what caused home prices to
collapse. It wasn't that people suddenly realized that homes weren't a good
investment.

With college, most of the loans are guaranteed by the federal government. Some
are issued by the federal government. If there is a bubble, the fallout will
be with the American taxpayers and not the colleges. Politicians can't (and
shouldn't) allow universities to go belly-up. Recently there has been a
backlash against traditional colleges, and much of that criticism is well-
deserved. But the reality is that the U.S. has the greatest higher education
system in the world. It is probably our single greatest competitive advantage.
Mark Cuban talks a good game, but where does he think scientific research and
development takes place? I can assure you it isn't the University of Phoenix.

If student loan debt continues to accumulate at the pace it has been, then the
power will shift from the government to the students. What happens if tens of
thousands of college grads simply cannot pay their debts or choose not to?
After all you can't pay back money you don't have, and it's not as if there
are tangible assets for the government to take. It's like the saying goes- if
you owe the bank $1,000, you've got a problem. If you owe the bank $1,000,000,
they've got a problem. The government has to start limiting these loans and
the problem will correct itself. People should never be enabled to buy things
they can't afford. Much of the housing crisis was caused because the
government wanted everybody to own a home, and now the student loan crisis is
happening because the government wanted everyone to attend college. But not
everybody can own a nice home, and not everybody can afford to attend a
college with $40,000 tuition.

------
zissou
The real problem with college education in the US is that the majority of the
students don't start to plan their career until after college is over. Far too
many believe the value is in the piece of paper, so that's all they care
about, which turns out to be a terrible allocation of your resources.

Obtaining a job is a signalling game. Having a degree is one signal you can
provide to employers, but there are also many other equilibria. In other
words, there are many ways to signal a good match to an employer.

A person's "college years" need to not only be treated as a time to figure out
what you want to do with your life, but perhaps more importantly, what you
DON'T want to do with your life. The notion of leaving high school then going
to college and finishing in 4 years as being the "right way to do it" lacks
some key pieces of relevancy. Figuring out what you don't want to do doesn't
just teach you what you don't want to do, but it also teaches you wisdom;
wisdom that can only be gained by real world experience.

------
rs3123
"As an employer I want the best prepared and qualified employees. I could care
less if the source of their education was accredited by a bunch of old men and
women who think they know what is best for the world. I want people who can do
the job. I want the best and brightest. Not a piece of paper." \- a
counterpoint: I teach in the business school at an accredited public land-
grant university in the US northeast and interface with several HR managers /
campus recruiters from major companies nearby, including a fortune-5 and three
fortune-50 cos. Almost all companies have minimum GPA cutoffs to even
interview a student. Higher GPA increases a student's chances of getting
hired. Recruiters frequently ask professors to recommend the best students in
their class. That "piece of paper" mentioning the student's grade is fairly
important, as are people-skills and attitude. Doing well in class signals a
candidate's work ethic.

------
crazygringo
I would love to see some kind of "university achievement test" that you could
take at the _end_ of college, or at the end of simply studying on your own.

A test that would actually evaluate real critical reasoning and analysis of
the sort that you're "supposed to" develop at university. (Of course, writing
such a test well would be extremely difficult, and it would probably have to
have a different version tailored for each kind of major.)

But it could serve two purposes: first, it could allow intelligent and driven
students to bypass college completely, but still have something that will give
them equivalent respect from employers.

But secondly, it could also reveal that many colleges aren't providing
educations worth anywhere near what they're charging, and thus either drive
prices down, or else force them to raise their standards.

~~~
ch00
Good idea, but I think some sort of achievement test at the high school level
would be even more effective at revealing the quality of preparation students
have received for college.

Fortunately we already have tests like this and not surprisingly, they show
that students are terribly underprepared for an undergraduate education in
nearly every subject.

Clearly an undergraduate education received today is not commensurate with the
costs to the student, especially when the student hasn't be rigorously
prepared for a collegiate education in high school. But the problem is so much
more than the price of tuition.

------
moocow01
I think the bigger question is what will the meltdown look like and how will
it change our society?

------
BarkCuban
Mark Cuban needs to take an college writing class. I thought this was written
by an 8th grader.

------
Havoc
I agree with a lot of the points raised in the article. However, the author
makes it sound like going to university is a foolish choice. Sure its
overpriced & the crappy degrees aren't any good, but on the whole going to uni
is still the correct call in most cases.

Round here its just a matter of selecting a sufficiently vicious degree.
Worked for me: I had (multiple) employment offers lined up ~6 months into the
4 year course. So did the majority of my classmates.

Perhaps I'm biased since it clearly worked out for me, but still I think this
whole thing about tertiary education being overrated is BS - at least for the
proper degrees.

------
Ra1d3n
In the USA. Don't forget that. I'm a masters student of computer science in
Austria and my debt is (depending on month) 0€ - 500€. Same in Germany. Same
probably everywhere in the western world except the USA.

------
crasshopper
Cuban: "Can someone please explain to me how what is happening in higher
education is any different ?

You can't refi an education or sell your education to someone else. You can't
pay someone to refurbish your education while you're working at your day job.
You can't rent out two thirds of your education while living in the crappy
part. And so on.

I'm not saying there's no bubble, but the two asset classes are clearly
different.

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mfieldhouse
Every time I see a discussion about university education, the wrong question
is always being asked and debated: "Do you really need degree X for job Y?".

Of course domain specific knowledge and further education is a good idea. The
3 questions that need to be asked are:

1: Is it relevant to the job? 2: Could the material be learned quicker and
more in depth working on the job instead? 3: Is university overpriced?

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kennethcwilbur
The analogy to the mortgage market is wishful thinking. Remember the massive
fraud that led to the easy lending that led to the money drying up when the
fraud was discovered? There is no similar pattern of activity in traditional
education.

Higher education disruption is unlikely. It is difficult for an uneducated
person to accurately assess the value offered by a school.

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ThomPete
The only thing that will make the economy better is if more people try and
create businesses and find niche areas that allow them to hire people.

To do this risk taking and courage is needed. Two things you do not learn in
the university. We need more people who are ready to challenge their fear of
failure than their intellectual score card.

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starrunningb
The problem with most colleges is that the extrinsic cost doesn't equal the
intrinsic value of most degrees. People go to college because of the "truth"
that a degree will lead to a better salary, but the bubble pops when you
graduate with a $100,000 in debt but can only get a minimum wage job.

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mathattack
He nails the key issue - cheap easy money that can be flipped later for a high
paying job. Of course the job may or may not be there. It's worth it for
Harvard, but perhaps not for Bradley.

~~~
hedgie
not sure that's the case.

"Here, however, is what was explosive: Dale and Krueger concluded that
students, who were accepted into elite schools, but went to less selective
institutions, earned salaries just as high as Ivy League grads. For instance,
if a teenager gained entry to Harvard, but ended up attending Penn State, his
or her salary prospects would be the same.

In the pair's newest study, the findings are even more amazing. Applicants,
who shared similar high SAT scores with Ivy League applicants could have been
rejected from the elite schools that they applied to and yet they still
enjoyed similar average salaries as the graduates from elite schools. In the
study, the better predictor of earnings was the average SAT scores of the most
selective school a teenager applied to and not the typical scores of the
institution the student attended."

there's a guy at work with a phd in math from princeton. there are plenty of
people with his job title that didn't spend all that money to get there. most
of them went to the great in state engineering school and spent far less money
for the same result.

[http://www.usnews.com/education/blogs/the-college-
solution/2...](http://www.usnews.com/education/blogs/the-college-
solution/2011/03/01/the-ivy-league-earnings-myth)

~~~
gammarator
Interesting, although the authors note a caveat:

"As with the earlier study, there were some students who did fare better
financially if they attended elite schools. The students who fell into this
category were Latino, black, and low-income students, as well as those whose
parents did not graduate from college."

Its worth noting, though, that the Ivys provide much smoother entry into jobs
in high finance than less selective schools, so if one's only goal is
maximizing salary it does make a difference.

~~~
hedgie
maximizing salary is exactly what the study looked it. the approximation of
finance = top salary is less accurate than the data they used.

i'm not sure that's true either. remember the study is comparing people who
could have entered an ivy but didn't with people who did get into an ivy.
since state schools admit more people with lower rankings who's to say that
the smooth entry in high finance is due to the degree? it could be the ability
of the person who got accepted to the ivy that makes the difference.

it may be more difficult at first, but an terrible ivy educated quant isn't
gonna stick around very long. and a good state school educated quant may take
longer to get in but eventually get there anyways. which is what the study
actually suggests.

this is odd in finance since the real measure of someone in that field is
revenue generated. no one cares you went to podunk state if you outperform
everyone else. i know someone who's absolutely brilliant with a math phd from
a state school that is working as a quant now. now that he's in his career is
gonna be determined by revenue generated, not the degree on his wall.

you can't really control for a financial job salary either. they're heavily
based on bonuses and hence performance of the trader. if they are making bank
it's likely related to the natural ability that got him into the ivy in the
first place. which is the same level as those people who went to a state
school that were followed in the study.

like most fields, the people at the top of finance make disproportionately
more than those in the trenches, who are not rich by any reasonable
definition. if you worm your way up in a traditional company/create a
successful product the same imbalance in pay exists. but for finance, we judge
salaries based on the top performers, where as for engineers we tend to think
of the average.

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yashchandra
undergrad degree: 4 years is a waste of time. make it 2. rest should be spent
doing practical work (not coffee making interns). initial 2 years: focus on
communication skills, analytical skills and just simply how to carry yourself
in the world. Learn how to manage money, time and your lazy ass. grad degree:
Unless you want to be a researcher or you just like being in school, this is
useless PHD degree: Enough said.

