Thursday, August 13, 2009
Student Loans and the College Credit Crash
Taking on $100k in student loans for an under grad degree is a thing of the past. Taking out a mortgage on the family ranch to pay for little Jimmy's college education ain't happening anymore. The scholarship endowments have been HAMMERED, and the (college) credit market will not go back to 2006 in the life time of anybody reading this.
Paying ANY amount of money for a degree in many of the humanities will prove to be something only the very rich, and very poor, will be well served in doing.
The old "frog in boiling water" applies. Nobody notices that the water got too hot - until now. In REAL terms there has been NO inflation (if you take housing into the mix) for nearly a decade - yet colleges and private schools feel it is their G-d given right to jack their fees about 7% per year (on average). Anybody reading my stuff knows that 7% compounded means a DOUBLING of tuition fees every decade or so (rule of 72 or e). Got that?
(Consumer prices are down by 2% in 2009, but my son's private school went up by 5%... WTF?
You see, these institutions have made the same lethal error that the municipalities have made. They made silly assumptions and and then made promises they cannot keep based on ever expanding credit availability to pay for their product (student loans for degrees in underwater basket weaving, woman's studies, and African American/Gay/Native American/Polish American/ Irish American et al... studies). Boy, would I feel good about a degree in African American studies from Harvard with the head of the department so bloody dumb he got arrested for disorderly conduct in his own home (not).... that should lead to an important career wasting taxpayer's money some place important.
America spends BILLIONS so that young adults can have 4 leisurely years partying, ordering in pizza, and swapping STD's with their fellow students - with just a bit of studying thrown in for positive distraction. WOW! That ought to prepare them for the real world, eh?
(Think I exaggerate? Compare the 4 year experience of the average student at your average state school with the 4 year experience of a cadet at one of the U.S. military academies. I think you will find the differences quite glaring (and no, I am not advocating a military career... just pointing out the obvious)).
Sorry, but in a world of intense credit contraction and oil supply contraction the market will NOT be able to support that system under any circumstances. Being the last grad out the door before they close those ivy covered halls for good will not be worth the price of admission under any circumstance. Especially for an education in something that can't actually DO anything.
You don't need $100k in debt in order to study history and many of the other humanities. Join your local library - its free. And study - we NEED historians (clearly, the elite do not know their European history terribly well... if they did, they would not be so hot for gun control... and I am not talking about Nazi Germany... take a walk through the history of the Dark Ages and the subjugation of the peasants by the nobility and royalty, the elite of the time... the elites had weapons... the peasants had rape, murder, and robbery.)
At some point SOMEONE is going to notice that we do not need another PAID lecture on a host topics. These lectures can be seen over and over again over the CENTURIES on youtube or whatever takes its place. Pi is Pi, e is e, and 2 +2 will still be 4 in the year 2500. The internet is the ULTIMATE tool for distributing education - text books don't even come close... so why has it not been embraced? MONEY. Yea, I know I am exaggerating... but you get the point...
Our educational system is yet one more boondoggle.
Libertariananimal (at) gmail (d0t) com
Posted by The Short Story Man at 10:29 AM