The Great College Hoax (skills, degrees, illiteracy, school)

[OC Investor2]

Interesting article in Forbes.

The Great College Hoax

Higher education can be a financial disaster. Especially with the return on degrees down and student loan sharks on the prowl.

................were victims of an unfolding education hoax on the middle class that's just as insidious, and nearly as sweeping, as the housing debacle. The ingredients are strikingly similar, too: Misguided easy-money policies that are encouraging the masses to go into debt; a self-serving establishment trading in half-truths that exaggerate the value of its product; plus a Wall Street money machine dabbling in outright fraud as it foists unaffordable debt on the most vulnerable marks.


The Great College Hoax - Forbes.com (http://www.forbes.com/leadership/forbes/2009/0202/060.html - broken link)

[zman0]

$194,000 in debt at "up to" 12%
$145,000 in loan payments
to reduce the principal by $21,000.

The only way I can get that to work is a 12% interest rate with payments of $2,100/month over six years on a 20 year loan. So the "$145,000" that they paid was really only $25,000 per year. If both were making "six-figure incomes" right out of law school, I find it hard to believe that the $2,100/month student debt was that onerous.

Obviously an example of people living beyond their means and looking for an excuse, other than their own financial mismanagement.

I do see the point the article is making, even if it is filled with some absurdities. College isn't for everyone, and all college degrees aren't created equal. The real "hoax" of college is that a degree is enough to get a good paying job, and it doesn't matter what field. The idea has been perpetuated that mathematical illiteracy, scientific incompetence, and lack of writing skills are not hurdles to a valuable college education.

College still has value, despite what Forbes says, but the insincerity of college administrators to admit the higher value of scientific or technical degrees over humanities is a major contributor to the idea that college is a scam.

[Rei]

College still has value, despite what Forbes says, but the insincerity of college administrators to admit the higher value of scientific or technical degrees over humanities is a major contributor to the idea that college is a scam.

The thing is, not everyone has the ability or interest to study science or engineering....

[sike0000]

I agree with some of the article but I don't have much sympathy for the couple. For two lawyers both earning 100k plus out of school their student loans are not that bad. The only reason they are that high is because of poor choices made regarding school, type of loans etc. You don't spend 100 k for a JD and plan on working at a local little law firm. You bust your butt to graduate top of your class so you can work at a firm where there is a chance of partnership and making 300k/year. IMHO

I partially agree with the 1 million more over the course of a career for a college grad. If they did their homework ahead of time. I don't think a college student loses that much money for 4 years versus someone who goes straight into the work force. I don't know too many 18 year olds making 30-40k a year. In fact I don't know any making over 20. Our son made a whopping 10k.

I have close to 80k in loans. That is not that bad considering I make 30K more then I did without the degree. And probably 50k more than if I had not gotten my first degree. My payments add up to about 7K of my gross per year. Pretty good trade off I think. I think everyone should really research what they are getting into. Are you willing to sacrifice a salary for something you enjoy doing? Teachers come to mind. Lots of education, continuing education and not much of a salary depending on the field. Those lawyers have 1k per month student loans but they gross 8k minimum. Even after taxes they are sitting pretty. And their salary will only go up. For the education they got my wife and I will trade lives with them. Including their debt as long as I can have their job

And their loans are not all 12%. My consolidated are 2.75%. Even private are under 10. Did they go to a loan shark?

they were probably trying to keep up with their impression of how a high paid Lawyer life should be like.

[zman0]

Originally Posted by Rei

The thing is, not everyone has the ability or interest to study science or engineering....

My point was that a blanket statement like "the average salary for a college graduate is $40,000/year" is deceptive, while a statement like "the average starting teaching salary is $30,000/year; the average starting engineering salary is $50,000/year; and the average starting history salary is whatever you make in tips for the night" is far more descriptive, and helpful to a student looking at taking out $40,000 in private loans for tuition.

[tribecavsbrowns]

Originally Posted by zman0

College still has value, despite what Forbes says, but the insincerity of college administrators to admit the higher value of scientific or technical degrees over humanities is a major contributor to the idea that college is a scam.

There are plenty of people for whom a humanities degree is more valuable than a scientific or professional degree, even speaking strictly in terms of earnings potential, if you want. These people usually have a high degree of both financial comfort and innate intelligence. It's a good decision for these people (again, even speaking strictly in terms of earnings potential) to invest in themselves early on through a good liberal arts education. Sure, most people going to college now don't fall into this category, but that doesn't mean it's the province of school administrators to tell individuals which category they do fall into. Plus, people get enough reflexive "oh don't study English, you'll be living in a cardboard box" BS from their friends and relatives, it's not like they need school administrators to tell them that, too.

Or, I'll put it this way: Colleges deal in the currency of education. If you want career advice, see someone who specializes in such. Or get to know yourself a little better.

[juniperbleu]

Originally Posted by tribecavsbrowns

Or, I'll put it this way: Colleges deal in the currency of education. If you want career advice, see someone who specializes in such. Or get to know yourself a little better.

I'd agree. I never met a history major (or art, art history, English, music, or education major) who was getting their degree to be rich. Nor did any of them think that they'd be making a high salary straight out of college. They did it because it interested them, they had a specific career path in mind that required the degree, or just had no idea what else to do. It's not exactly a hard thing to figure out that certain fields pay more than others, regardless of a degree.

[PurpleLove08]

Originally Posted by zman0

Obviously an example of people living beyond their means and looking for an excuse, other than their own financial mismanagement.

I do see the point the article is making, even if it is filled with some absurdities. College isn't for everyone, and all college degrees aren't created equal. The real "hoax" of college is that a degree is enough to get a good paying job, and it doesn't matter what field. The idea has been perpetuated that mathematical illiteracy, scientific incompetence, and lack of writing skills are not hurdles to a valuable college education.

College still has value, despite what Forbes says.

To the OP:

Crazy, I read that article a couple of days ago at the local bookstore.