Got a kid going to college soon?
Anybody paying $200k for a degree in the Humanities from an also-ran private college is getting taken WORSE than a Madoff victim... and the ONLY reason that the Ivy League school's grads are getting this kind of money for NON-TECHNICAL educations is due to Wall Street. If your kid does not want to work on Wall Street, skip the expense. Ivy League social workers don't seem to make the same dough. If, for some reason, the financial services industry contracts severely in the coming years... well, you will have to take that into consideration.
Back to the article.
Those were for SALARIES. Plenty of these grads went on to start companies and make millions and millions. One does not have to remain an employee all of their lives.
Of course, at the end of the article is the feel good "what if your kid's not bright enough to grasp math and science?" In that case, don't listen to the pitch from these jerks. Help this type of kid with down payments and other financial help by not wasting your money on some feel-good-horse-sh*t degree (unless you are rich... in that case do whatever floats your boat).
In the economy of the next decade or 2, they are really going to need all the help they can get. Just look at how much money they are going to need to save to get to the $1.5 million they will need in retirement. Take the $200k you were going to waste on the Poetry degree from NYU, send them to state school, take the $160k difference and buy rentable farm land (that is, productive land that you can rent to farmers). Your kid will have a very comfortable retirement and will keep your picture over the mantle piece for the rest of his/her life, extolling the genius that is you for generations to come.
20 comments:
Let's not denigrate all college degrees just because there is no "Bachelors in Household Plumbing and Air Conditioning" major. As I've said before, a degree in ANYTHING shows you will accomplish things that you don't want to do (namely, doing anything else other than studying, writing papers, etc.) It is a certificate saying your chances of being a productive employee is higher than a person who has not accomplished such a "test" as getting a degree (my 21-year job has nothing to do with my degree.)
If you really wanna do something for the kids, revamp the typical high school education to include about a third of their time learning: legal primciples, finanical principals, medical principals, and maybe a little plumbling, electrical, computer and auto repair -- this is for EVERYONE.
When the kids complain "Why do I have to learn Trigonometry? I'll never use it!" there is some truth in that.
Bur:
Merely wanted to share my thoughts will guys with high school kids that are getting a ton of BS shoved at them. Most of us have unlimited wants and limited budgets.
I am not denigrating anything (other than over paying).
Family wealth will needs be preserved in the current and future environment me thinks.
As I see it the real issue with college is that the market is glutted. Federal money being handed out freely, especially to women, has kept the demand high for seats in the classroom and therefore the price.
This glut means that there are finally more than enough Ivy League grads to fill every position and then some.
In other areas social engineering type legislation has lead to plenty of avenues around degree qualifications which just gluts the market more.
It was only natural that as the government threw billions in grants and automatic loans at education that the cost would inflate and continue to inflate more.
Bur,
I'd add nutrition and cooking to the list. Re-instate Phys-ed, and lose 12th grade entirely. By that age they are so itchy to get out of high school they don't learn anything anyhow. Leave in the math. It's what separates us from the animals. My uncle didn't think he'd need trig either. Then he became a tool and die maker.
Regards,
Coal Guy
Coal guy,
I completely agree. I think we should just send kid through 10th grade and pay for two yrs of community college. Saves a whole lot of money. Washtenaw is like 1800.00 a yr in district compared to 10-12000 a yr for high school. It would be a huge relief on state budgets and set the students on a cheaper overall college path.
I think they actually have a dual enrollment high school at most colleges that give an assoc and high school diploma when done. I want to say Washtenaw was like 2500-3000 yr this was 10 yrs ago though
Dex,
There is a lot to be said for apprenticeships in the trades too.
Regards,
Coal Guy
How about classes in entrepreneurship? I worked at multiple colleges and was a college student for the better part of a decade, and even the business courses I took focused more on economics/management and very little on nuts and bolts stuff. How about every major from Art to Engineering have a course that focuses on writing businesses plans, getting business loans, assessing markets etc. from the perspective of that particular degree. So more students leave Liberal Arts education looking to start a business/create a job for themselves rather than always 'looking' for a job.
The trade schools do a much better job of pushing the 'start your own business' mentality at least in certain trades where this is more of the norm.
A reality check is also sorely needed in Higher Ed, but its become just a business looking to fill seats to pay the bills--even if its only a handful in each class that are truly successful financially in this day and age.
It never amazed me how often Ivy League Educated Colleagues found ways to drop their Educational Pedigree into conversations. Higher education is another over-inflated use of money, to some degree its just become a work permit. But currently, its not even that with 50%+ new college graduates unemployed.
I don't have a overly high opinion of College students as Students--except for a small minority most watch more TV/Facebook/video games then they do study. I don't remember who said it but the quote Education is lighting a fire, not filling a bucket I think applies. Without the zeal to learn and self-educate one will never be that great in a given field, despite credentials.
I still see article's saying 6.8% interest is a good deal for student loans. OK so most students currently can't pay their loans back in 10yrs, thus they have to take graduated payment structures that under the life of the loan--doubles the money they initially borrow roughly. But when they quote stats in the media the talk about "owing 20k" whereas in reality, this person is going to be paying 40k, since fewer and fewer parents are able to help pay for school. The working poor get screwed the worst, since they usually are eligible for subsidized loans, but not the free grant money that the kids whose parent's don't work get.
I met more people working as professors that had little to no real experience working--outside of academia--ever! It was amazing to see Professors of Psychology/Business etc.that only experience was getting their PH.D and maybe doing a post-doc. A seen Academia as suffering from Fantasy Island bubble thinking, although they have admissions people marketing the best case rarest scenario's rather than having a super cool short guy and Khan to meet and greet you!
-Meiyo
Not everyone can have their own business, though that idea is pushed as hard by its advocacy group as the group who push the wonders of for-profit college degrees. There is not enough capital, not enough resources, not enough space for everyone to open their own Jimmy Johns, or nail salon, or African food store.
This country needs a lot of very average grunt office workers (2/3rds of workers in America work in offices) in real $$$$ industries like transportation, REAL banking, medical, insurance, construction, aerospace, education and government contracting. Blame the colleges all you want, but the colleges and universities create WAY more future taxpayers than any bunch of entrepeneurs, more than 50% of whom are out of business within 5 years, taking all their family and friends' invested money down with them (no bank will ever fund a startup business).
This country need MILLIONS of entrepreneurs... It will ALWAYS need MILLIONS of them... and they don't have to all be Steve Jobs. Plenty of guys will open a small business, make a very good living, and put couple of units in the bank.
When I was a retail stock broker in the 1990's I must have called hundreds of thousands of small business owners. They are not all nail salons. And they had money.
Bur:
Do you always take the contrary view? Everywhere? In everything?
I'm not doing anyone any favors by saying "You are so right!" Is this a blog or is this a place to get both sides of a story so you can make up your own mind? :)
And you will have to admit .. for all the gnashing of teeth and anecdotal evidence that "The End Is Near," ain't none of it has happened, not one seriously bad thing, and every indicator says tomorrow the sun will rise, just like any other day. There is plenty of cheap energy and mountains of food (and real estate) .. for now.
(I've already told you I'm invested in commodities of all kinds, I've stockpiled what I can, I'm out of the S&P, I've acknowledged that 360% debt to GDP is gonna give us 20 years, at least, of malaise, I've said the Chinese may or may not be the end of the American empire .. what more do you want? :)
In 10 years, the US will be down to half or less of present 2010 oil consumption.
By 20 years, 2030, the US will be down to 5 million bbls/day of oil consumption. Domestic production of 3-4bbls, tar sands 2-3bbls, and 0bbls imports.
We need to find some way to live with this and still enjoy life.
Cheers, Marshall
PS Bur are you saying that the 2008 financial collapse(a very bad thing) did not happen? We are going into third year after that event and the economy has NOT recovered in any measurable way.
Bur- you said
"This country needs a lot of very average grunt office workers (2/3rds of workers in America work in offices) in real $$$$ industries like transportation, REAL banking, medical, insurance, construction, aerospace, education and government contracting."
How do you come up with projections that we will need zillions more bankers, insurance adjustors, construction workers, educators, and goverment contractors in our massively energy constrained future?????
More office grunts??? You poor child. Office workers are needed in an environment of increasing social complexity to manage human, industrial and resource flows. We are headed to a state of much LOWER social complexity. Meaning we will need less organizational effort(office workers) as we go forward.
The US empire with it's 800 military bases and widespread networks of resource importation to US homeland is dying as we speak. The USD is on a deathwatch as the props are being kicked out on a nearly daily basis. Have you noticed the International news? It is one reverse for USD and empire after another- almost of a daily basis. The world is tired of US financial and military domination and is pulling the plug.
A world dominated by Chinese muscle is not a pleasant thing to contemplate but how this evolves will be beyond our control.
My guess is that we will need many more small farmers, repair people, salvage industrialists, bicycle mechanics, medical GPs and physicians assts. Get you kids mentally prepared for a different world.
Get real guys,
Marshall
I don't doubt everything you say is worth watching. Yes, there was a "hiccup" in 2008, but that was inevitable given the high quantities of bad debt (behaviors are already changing -- mine included).
Even then, the unemployment rate (officially) is 10%. Not 50%, like in basketcase Zimbabwe or Nigeria, but 10%. All the people I know who NEEDED to have jobs still have jobs. It is all nice speculation, but we haven't even had one good bank riot or one gas station close, and we've been going thru this for three YEARS!
Every 75 years or so the world goes thru a huge asset bubble (watch Niall Ferguson's "The Ascent of Money" series on PBS -- they'll rerun it) for the last 500 years. It hurts, but it is nothing new.
The order of events is the same ..
People start to struggle cause of economic change (China). They fill their budget holes with borrowed money so they keep their standard of living.
At the same time, banks (The Fed) start to offer low interest rates on everything, making the borrowing of money easier.
People start getting excited about the latest thing (real estate, tech) that will make them rich with very little work.
Prices on assets rise as everyone starts buying the same thing. At the same time, money borrowed skyrockets to buy the things with.
Business goes into overdrive to take advantage of good times, producing everything times two (houses, energy, food).
The bubble bursts (always does -- trees don't grow to the sky). Prices for everything drops (houses, stocks). Jobs making things are lost. We end up with oversupply of everything (energy, food, houses, stores)
However, the debt remains, and must be paid for. People overborrow and suddenly realize they will have to spend less to pay off those credit cards. Economy goes into a funk for years.
Rinse and repeat. Happens every 75 years -- last one was the Great Depression. Same thing. All this started with the Tulip & South Seas bubbles in the 1600s.
My youngest son is graduating next April and coming home to live (with his wife). If they don't have any expenses, they can pay off all loans in under two years, even if he only works part time. We are fully expecting that he will end up owning the family apiary and selling honey and wax for a living. Do I regret the money I spent on education for my 5 oldest kids? You bet I do. The one son actually working at something that required a degree did not take one course in the field he ended up in. Not one. It was all on-the-job training. One daughter is a real estate agent who makes actual money as a bartender. The other is a stay-at-home mom who will go back to school to get a nursing degree at some point. The $50,000.00 we dropped on the girls was wasted really, other than keeping them busy for a few years. The son who is graduating wants to be a social worker or therapist. Really! How many more of these do we need in an era of state budget crisis? My oldest son owns his own internet security company and will retire a multi-millionaire before his 37th birthday. He flunked out of college three times. That was money well spent. If I had it to do over again I would have sent them all to community college and given them the money saved as a gift on graduation. As most of my kids are adopted, they could have gone to CC for free.
Kathy:
I miss hearing your good common sense and real, adult experience. Please chime in more.
I sent my oldest to very exclusive private schools since pre-school. No matter how I try to justify it, it was simply not a good investment. Of course, as in economics, we don't know what WOULD have happened had the resources been applied elsewhere... he is exceedingly bright, but I have tried to guide him to a state school, no debt, and a graduation bonus - but its his decision. That's the thing with kids... they turn out just as we did... imperfect adult human beings.
Bur:
Nobody anointed me, or anybody else, the only arbiter of good sense... but you positions seem to be FOR the sake of argument...
Lastly Bur... you tend to speak in the macro, with occasional forays into the micro, while I tend to address the micro, with occasional forays into the macro... but only to complain about it. I don't really think there are any good macro solutions, nor do I think there have been many good macro outcomes from past decisions in the U.S. (with the exception of the U.S. Constitution and the Bill of RIghts). "The Government that govern's least govern's best".
The government does do somethings right. How about that water you drink? (Not out of the well in your backyard but the other water the other 300 million people drink.) Think clean water and air happened all by itself?
Glad you can pull yourself up by your own bootstraps. Not everyone can. :)
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