Is Higher Education Worth a Lifetime of Debt?

Our latest Sacred Cow to gore: Higher education.

Just this week I've demolished the housing "recovery" (was it in a 12-step program?) The Pareto Principle and the Next Wave Down in Real Estate (August 24, 2009), torched the fantasy that Medicare is sustainable The health care elephant in the room: Medicare (Daily Finance) and also deep-fried network/cable TV Television, Symbolic Capital and Empire (August 25, 2009) now... good golly, is nothing sacred? Short answer: not here. The next sacred cow dragged up to be gored: Higher Education.

Correspondent David C. summarized the Medicare-like trend in higher-education costs-- double the growth of inflation--and questioned the value of all those "must-have" degrees. David recommended this thought-provoking article: M.I.T. Calls Academia's Bluff (Gary North) and added these comments:

According to this web site, Financial Aid.com, "A good rule of thumb is that tuition rates will increase at about twice the general inflation rate." I went to Dunwoody College of Technology, AKA private votech, for about $4,000 a year in the early 90s and now it costs about $16,000 a year! After all, in our culture, parents are expected to pay the full cost of college. As if one must get a higher education or they're screwed to a lifetime of crappy low-paying jobs. Then there's the snobbish view if you don't have a college education you're a moron. Academia pushes the "lifelong learning" dogma as if the only place you can properly learn is in school, they do this of course to increase their customers... I mean students.

I've always wondered why the cost to get a "higher" education goes up so much. Is it a conspiracy by the elites/rich to keep poor people ignorant? Or maybe to keep the middle class in debt servitude? Or maybe greedy teacher salaries? Or maybe too much bureaucracy? Or maybe schools that think they need state of the art facilities in order to provide a quality education.

Whatever the reason the increasing costs are going to make a "higher" education from academia impossible for more people. Maybe that's a blessing in disguise, for what is the real value of a college degree these days?

With the average student $20,000 in debt it seems to me a college education is overrated especially in the current depression, few students will find the good paying jobs they are entitled to... I mean want.

The link above is a provocative article on the future transformation of academia in the Internet age.

A while ago I came to the conclusion that most schools aren't really interested in giving a well-rounded education; they're more interested in money and prestige. I see the ads on TV for the Votechs that say: be a graphic designer, be a video game designer, be a photographer and travel, be a videographer and shoot music videos, etc. (see some of the glam jobs here: msbcollege.edu)

Well, these ads are misleading, they imply that it's easy to get these jobs, just go to our school and spend lots of money and we'll give you a degree and then you'll have a glamorous job. I know that it's hard to get an art-related job because I tried. There are few art related jobs to begin with and even fewer that pay well. The reason the schools run these ads is because these are glamorous jobs that attract more students and more money.

Thank you, David. We might recall at this point that Andrew Jackson (among many others) studied law on his own and passed the bar exam. That may seem like an outlier from the distant past, but if MIT is offering much of its curriculum on line, then what's to keep a motivated student from studying a subject on their own and learning it well enough to practice it as a profession?

I want to make it clear I am not suggesting a university or vocational degree has no value. But we need to look at the issues David has raised. If it puts a family or a student in essentially a lifetime of debt, exactly what is the value of that education? Precisely why has education skyrocketed in cost?

My brother-in-law graduated from M.I.T., promptly earned a Masters from that institution and then went on to earn a J.D. degree from another prestigious university as well. Yes, these three degrees put you in a superstar class which practically guarantees you a high-paying corporate-America or government gig.

But not too many of us reach those heights. Most of us are mere mortals. And the truth is that there are not unlimited positions open for super-qualified technocrats. The winds of change blow all the time and PhDs in chemistry and other fields have found themselves very unemployed.

As a mere mortal, I earned a B.A. in 1975 in four years, and paid for it myself with no loans. (I did receive a $250 scholarship one year; don't laugh, that paid a full semester's tuition, fees and books.) As I paid for everything myself, I recall tuition was exactly $89.25 per semester (the University of Hawaii was a two-semester system), and student fees were $27 a semester.

Books were horrendously expensive (another needless rip-off), about $100 a semester. so the total cost of my 4-year university education (3.5 GPA, woo-hoo, even with my work scehdule to support myself) was about $1,800.

Adjusted for inflation (BLS calculator), that comes to around $8,000 in today's money--yes, for the entire four-year degree at a large, well-funded state university. (My one-room hovel was $120 a month and I got by with a used car and cheap food I made myself.)

Today, it's not unusual for students to exit college with debts exceeding $80,000 or even $100,000. That's ten times' what I paid in the 70s-era recession (the 1974-75 recession was brutal, and the 1981-82 one was even worse).

The dirty little secret of higher education is that most graduates are not qualified for any particular job, nor do they have life-skills for starting their own own self-employment/ independent living-by-whatever-means-are-necessary.

If you can't get a job, scrape by with experiential moxie or have the skillset to start self-employment, then precisely what is the value of a college education? Basically, it boils down to clearing the hurdles. That's good, but what about that crushing $120K debt?

I know this will raise all sorts of ideological hackles, but here's the European system (yes, there are variations, but this is it in a nutshell so please don't quibble): most people are not "college material." They are funneled into apprenticeships and vocational programs which teach them real live skills in baking, mechanics, medical technologies, etc. which enable them to step into a job they have learned from the bottom up.

The "elite" students who are academically ready for university are admitted and most of the expenses are paid by the government. In many nations such as Denmark, students are paid a stipend while attending the university. (Don't have an envy-triggered coronary.)

Once you're in and you do your coursework, then you can usually go to graduate school, even if the subject has no bearing on real-life jobs. The government also pays you to study abroad--nothing's too good for their young academic hotshots.

Compare that to the U.S. system in which votech and university students alike are saddled with debt-serf loans, many of which are not paid off until the "student" is in her/his 40s or even 50s.

Is this "worth it"? In certain technical fields such as stem-cell research and network security, it certainly pays off. But for the average B.A. or B.S., it provides very little training or qualification for a job market which is undergoing structural changes. Please read Endgame 3: The End of (Paying) Work (January 21, 2009) for context.

Clearly, the entire cost structure of higher education is totally out of control. Please read Lowering the Cost Structure of the U.S. Economy (August 29, 2008) for context.

Given these forces--the web, the end of (paying) work and the high-cost structure of higher education-- the viability, sustainability and even utility of an incredibly costly university/votech system is in question. Yet all we hear is endless propaganda that "education is the only hope for our nation." Perhaps, but what if every student is indebted for life? How many of us will be qualified to engineer higher-efficiency solar panels, etc.? How many video editors will be paid a living wage?

In sum: by all means go to college if you can afford it, for your own fulfillment; as for becoming qualified for paying employment at the cost of a lifetime of debt--think it over. A degree certainly won't hurt but it may no longer open doors to paying jobs as it once did.


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