Monday, December 1, 2008

Higher Education

The next disaster (or one of the next disasters) will be the student loan market.

WE, the People, have convinced young folks to go into debt up to their EYE BALLS to become highly educated and credentialed Shakespearean scholers, Massage Therepists, Woman's studies, Art Appreciation, etc... unfortunately for the these students, the market does not and will not need their new "skill set" and will place no monetary value on the education.

But Sallie Mae will want their loans repaid.

If you are a parent with children coming of age and getting ready for college, don't let the system destroy your savings or enslave your kids. The price of a "college education" has exceeded the rae of inflation by 3X or 4X for decades - PRECISELY because of the availability of student loans (the same thing that happened in the housing market). If those loans were not there, those colleges would not have gotten away with this outrageous escalation in their "fees" (tuition).

The massive receission we are facing, and the subsequent energy crisis, will obviate the need for a degree in "Massage Therapy". The best values will be in technical degrees from public institutions. In a 10 to 20% unemployment world, things will be very different than you have been led to believe.

Don't fall for it. If you have the money you would be better off GIVING it to your kids for a downpayment on a house rather than the increased tuition at a private school rather than public school. If your kid has to go into debt... Not at gun point.

Mentatt (at) yahoo (d0t) com


bureaucrat said...

Back to the Mexican-American friends ....

#1: borrowing $250,000 to go to vet school in the Caribbean cause he couldn't get in stateside

#2: spent $40,000 and counting for DeVry "University" (when I was growing up, it was "DeVry Institute")

(#2a: sister of #2. $12,000 for Certified Nursing Assistant school. God knows where she found that money.)

#3: wants to go to Nursing School, like every one these days. Has no $. Working $10/hr job presently.

#4: $20,000 for haircut school (1 year), plus two years of tips-only doing an "internship"

I feel for these guys. They haven't a clue how badly they are being used by the education "industry."

After my family spent $60,000 cash in 1985-9 to put me thru Northwestern, I'd tell these guys to not bother with all this loaned money, but they don't listen to me.

Greg T. Jeffers said...

Technical education usually has value. I hope it works out for your friends.

The education "industry" is ALMOST as as the religion "industry" in the "fales hopes and exagerated claims department".

Now it is $160 to $200k for Northwestern - NOT WORTH IT. A state school would be 60k, the student would have to make an awful lot more money to make up for the potential $140k plus interest for eternity...