One technique seems to be to tell the students that Washington wants to cut their so-called “aid” and then the little puppets shout and moan about the horrible pain of not getting the chance to write long term papers and do problem sets. (Yet when given the assignments, they also complain. Confused?) The schools seem to be forgetting to tell the students that the new regulations may actually be in their best interest because too much debt sure hurts. The kids just rail against the loss of aid.

Still, it wouldn’t be the NY Times without an obligatory nod to the so-called non-profit college industrial complex, their partner in the great American myth machine. Ms. Lewin ends the piece with a toss off sentence:

Students at for-profit colleges, about 10 percent of those enrolled in higher education, are far more likely to default on their loans.

Far more likely? I don’t know. Another Tamar Lewin at the NY Times reported that the repayment rates were pretty similar. The University of Phoenix had a repayment rate of 44% while the average public so-called non-profit was sitting around 54%. Is that difference worth the phrase “far more likely”?

The Western World keeps cutting its science research budget because of the economic crisis. As China rises—funneling tons of money into science—our obtuse politicians don’t realize that, without pure research, they are sentencing us to irrelevance and oblivion.

Suffice to say that this is blather. The world will be safe and the United States will go on overspending on other things with or without a big, fat research budget for the NSF, the NIH, DARPA and the other academic funding troughs.

The first irony is that the same people who are fretting over the loss of academic research budgets are the same ones that are frantically skipping immunizations and replacing their BPA water bottles with aluminum ones. And I’m just picking two of the latest science-is-dangerous memes floating around the Internet. I’m sure that once someone comes up with new research about the links between aluminum and Alzheimer’s disease we’ll be frantically looking for BPA bottles again, only this time they’ll be making them out of a slightly different hormone disrupter called BPB or BPC.

Sigh. I have to live with these people. I like them. I often share many similar opinions. But gads they act like children believing that the world will end if they don’t get their way, right away. So go ahead. Take to the streets. Call your congress critter. Tell them that the world will end if we don’t increase the deficit immediately.

And this brings me to the second irony of this bogus post. Supposedly the future is not going to happen or it’s going to be terrible if we don’t have more basic research. But what is debt? We’re borrowing from the future. So we can either have an empty future because we don’t do research or we can have an empty future because we presold the future to the Chinese. In either case, the US taxpayer ends up with nothing. Nada.

Yeesh.

This can’t bode well for universities who used to assume that smarts were worth something. The country– and perhaps even the world– has an oversupply of smarts. As Ms. Mann is discovering, supply and demand, not the prestige of a diploma, governs the size of the paycheck.

Ms. Mann is catching on and looking for jobs in health care assuming that this can’t be shipped overseas– a guess that seems pretty tenuous. One of my good friends routinely emails her doctor and visits in person rarely. Where does the US military treat the soldiers wounded in Iraq? Germany! Check out RioDental, a place that promises 66% off US prices. Global Medical Excellence promises US trained doctors and 80% off the price.

Yeesh. I can’t see US colleges continuing to spend at this level for much longer.

Katherine Mangan at the Chronicle of Higher Edumacation brings us a few gems in her article including Shahla Ala’i-Rosales, an associate professor of behavior analysis, who says that she herself already spend much more than 16 hours of required campus time. She’s just protesting because she knows that there are others out there “in the community”. Shopping? Doing research? Doing field work? I’m sure something can be worked out.

The evil fascists at the reins then use the oldest cliche in the book saying the extra time at the school is “for the students”. Eeewww. Icky. Maybe if they said it was “for research” the professors would jump at the chance to spend those hours.

While I hate to pile on Ms. Eastman in such a difficult time, I must say that I can understand the young man’s mortal fear. She borrowed the money to get a degree in photography. She was following her heart. She was listening to those blithe, breezy commentators who keep pointing to people who stumbled upon a fortune while following their bliss. What hogwash. Now she’s going to be paying off this debt forever. She’s indentured.

The rest of the column concentrates on finding solutions for another pair that still plan to wed despite the high debt. It’s not an easy problem and there’s no solution that is really functional. As much as I want to believe that love conquerors all, I can’t bring myself to tell young people to ignore the debt of your inamorata. Big debt can take a long time to unwind and that cash is going to be coming out of the family unit.

It just breaks my heart.

Infographic by College Scholarships.org

Who will pay? Graduates will pay an extra 10% of their first 10 years of full-time income. I wonder how people will react to such a plan. Sociologists have been finding work in corporations by studying marketing plans and they often report that humans are pretty risk averse. Cable and cell phone plans that offer all-you-can-eat and unlimited service are very popular, even though studies show that most people don’t come close to using all of the minutes or service they buy.

So lets say you’re a high school senior confronted with a choice: go to  college and pay an extra 10% or try to make it on your own. This is a tough one because people tend to overestimate how much they’ll make. The optimistic go-getters might say, “10% for 10 years? No way!” And the smart ones will be right because aside from some narrow technical fields, making money has little to do with the lessons from the classroom.

Now let’s say your an employer. In the past, you might choose college educated workers because they’ve got a certain extra something, a certain ability to say “je ne sais quoi.” But now you’re going to need to pay Big Man on Campus an extra 10% to cover his living expenses and his loan. Maybe you’ll choose those that didn’t go to college.

When education was bought and pursued by the parents, it was a much easier sale. It was a fixed price  like the fixed price cell phone contracts. And so the parents kept repeating the mantra they learned from their parents who lived through the First Depression: College is good.

This idea of committing to paying 10% sounds tricky. Everyone thinks they’re going to be rich. Everyone thinks they’re going to be the one who gets that one job for Post-Racial Abiotic Zoology Theorists. So they’ll look at the 10% and think, “Gosh, they’re going to really sock it to me when I start pulling in $300k/year as an exec.”   So maybe the kids will shy away from public colleges and maybe even education in general. That might not be so bad.

My guesses at these values were semi random although I tried to use some real numbers from 401K news stories. Gillen’s is a better attempt and one that should be studied. My only reservation is that it seems a bit too low, but I’m just basing this on the anecdotal stories I hear from parents and friends. Many parents I know take on even more debt than their kids.

But empirical evidence should weigh heavier than some guy yakking over beer to his friend about the huge home equity loan. So let’s welcome this and hope they’ll inspire more and deeper study of the shadow debt. This is great.

Gotham Personnel seeking knowledgeable, hardworking individual to fill Head Chef position on a temp to Permanent basis for the special events department at well know upscale Law School.Head chef will be responsible for creating and introducing new menu items, manage all aspects of the BOH kitchen with team of up to 5 kitchen personnel, must have all proper certifications/Credentials.

I love the idea that the Executive Chef must make sure that all of the folks responsible for chopping, mixing and making everything yummy have the proper certifications and credentials. Maybe this is what Paglia means by “revalorizing the trades”. If anyone has to maintain the hegemony of pieces of paper, it’s the college industrial complex. Bon Appetit!

I don’t have much time to dig into these things, but I signed onto LinkedIn and started searching the public resumes of the graduates from 2009. I only got through the first two pages, but I found this:

• Many are employed as associates at firms. I counted 20.
• Two are listed as clerks for judges.
• Two others have legal jobs like being a Vice-Consol for an embassy.
• A number list past jobs at Duke Clinics and other university positions, a common technique that schools use to claim 100% employment.
• Many don’t list employment. I found at least 10 with titles that aren’t likely to encourage me to spend $200k+ for a Duke Law degree:
  • Entrepreneur, Law School Graduate and Experienced Financial Analyst
  • Community Development
  • Student at Duke University – The Fuqua School of Business
  • Accounts Executive at Institute for Higher Learning Government Relations, Law, International Development – Raleigh-Durham, North Carolina Area
  • Professional
  • Financial Services Attorney – Charlotte, North Carolina Area
  • Real Estate Broker at Self Employed
  • Attorney and Entrepreneur at Attorney and Entrepreneur
  • Trade Policy and Regulatory Affairs
  • Experienced Finance Professional

I hate to make any concrete judgement from this list. There are certainly some impressive jobs at top name firms. There are even a few clerks. But I would be a complete fool to bet that an accurate accounting would prove 100% of the people are employed in any normal sense of the word.

I know entrepreneurs take risks. I know some people are good consultants. I know that not everyone rushes to update LinkedIn with news of their new job. But many of the listings look like people who will jump at a job that comes along.

Does anyone want to do a better search? I’m sure a journalist could really have fun by calling up a bunch of the folks and see how many of them are searching for work. Then ask whether they really had a job at graduation. It only takes 1 to spoil a claim of 100%!

• “When middle-class graduates in their mid-20s are just stepping on the bottom rung of the professional career ladder, many of their working-class peers are already self-supporting and married with young children.”
• “The elite schools, predicated on molding students into mirror images of their professors, seem divorced from any rational consideration of human happiness.”

Still I can’t help but wonder how the college industrial complex will react to her meme calling for “a sweeping revalorization of the trades.” Well, yes, it’s a good idea. But I’m guessing that plumbing is doing just fine without the benefit of fancy, college-grade worlds like “valorize.”

She’s looking around and seeing that the plumber is making more than any of her students will ever make. What does the college industrial complex traditionally do when it spots an area where people are making money? Create a degree program that gives people the proper foundation for making that money, allowing the talkers to make some cash from the doers.

And so the valorization of the plumbers will begin with plumbing theory and the introduction of some latin or other fancy nomenclature into the dialect. Where before a plumber might “run a pipe” to a new sink, the future plumbing theorist will “revitalize an arid space in the housing envelope by carving a wormhole through ordinary space time for water propagation.”

Then some plumbing theorist will discover the same Gödelian logic bombs in the piping domain and everyone will fret about unbuildable homes where the water never reaches the people. Someone will write Gödel, Escher, Bach and Möe the Plumber, and then some Generals will read it and everyone will sit around asking DARPA for research funding to find a way to weaponize these unworkable plumbing schemes. Eventually some Navy Seal will slip into Kim Jong Ill’s mansion and ruin the plumbing by adding a new pipe– I’m sorry– carve a wormhole in the piping space. The crowd of plumbing theorist PhDs back at Plumbing ARPA will cheer and the 4 star general in charge (SINK HYDRO), will go up to the Joint chiefs and say that the $750m spent on Hydro Command was well worth it.

Boy, I can’t wait for the valorization to begin.

As I’ve mentioned before, we’re not even beginning to count the shadow or hidden student debt:

• Students often pile on extra credit card debt during their time in school.
• Parents often pile on credit card debt.
• Parents take out PLUS loans which pay for school but aren’t seen as student debt because they’re given to parents.
• Parents often take out loans on their home equity.
• Parents often take out loans on their 401k. (22% of Fidelity customers have a loan on their 401k.)
• Parents often defer maintenance on homes and delay purchasing cars. If the next owner of the house needs to put on a new roof, the price of the house is going to go down too. So the deferred maintenance can be like a loan.

When I say parents, I should say grandparents, uncles, aunts and siblings too. This clock doesn’t even begin to go into the amount of debt we’re accumulating to send kids to college.

And need I point out that the debt is owed by everyone because many of the loans are guaranteed by Uncle Sugar. Everyone thinks they’re getting a good deal and squeezing every nickel out of the system, but come April 15th, every one of us gets to pay off the debts in default. Whoo hoo!

Let’s face reality. Most of the adjuncts are going to be gone in a year or two because they eventually figure out that the university will never give them a real job. The tenured faculty, on the other hand, won’t be going anywhere unless they’ve got a ton of grants and even then only a few Deans wants to take a gamble on someone who’s so eager to leave their old school. Bidding wars rarely work out in the long run.

In fact, forcing the state college profs to suck down a 20% pay cut will probably have little real effect on quality at all. Oh sure, a few success big names might bolt but they were probably primadonnas who never taught courses to begin with.

I’ve watched Mark Yudof blather on about how Berkeley’s English department is number one in the country and then point a gun at it. If the taxpayers don’t cough up more cash, the English department dies. Hah. I say call his bluff. Most of them probably don’t go anywhere near the undergraduates if they can help it and really who cares if the poor Berkeley kids are forced to live with, say, an English department that’s ranked 40th or 50th? There will be very little noticeable difference in their life after college. It’s not like Starbucks pays more to barristas from top ranked English departments.

(After briefly re-reading this, I’m forced to include some CYA language about excellence. I do enjoy the contributions of the people who are at the top of their fields. They are nice to have around. But I think it’s a mistake for the schools to get in bidding wars over these guys. The 10th ranked prof is usually just as useful to the students as the first. And the Univ. of Cali has been terribly addicted to overspending on big talent. As Bob Samuels discovered, 3843 people in the Cali state system make more than $200k/year. I’m sorry. That’s $200k per 30 week so-called year.)

Yet I’m sure that the universities will continue to churn out the bogus stats claiming that today’s undergraduates are only paying 1/nth of the cost of running the university. They neglect to mention that the cost of putting a smiling face in front of the classroom is such a tiny part of the cost of running the university. If 50% is going for retirement costs and 50% is going to pay for research fun, is it any shock that the fresh face in front of the classroom is some adjunct getting close to nothing?

This story from Greg Zuckerman and Jenny Strassman at the WSJ shows just how Wall Street speaks about the for-profit education center. They want to know whether the abuses can be curtailed and if so, will the money will keep rolling in. It sounds like some hedge fund weenies went down to Washington and got some assurances that the cash will keep flowing. Money works in miraculous ways down there.

I’m guessing that the for-profit sector should be able to jam up the process in Washington because at the end of the day, the for-profit and the so-called not-for-profit have the same problem: they’ve got an overpriced product and people are balking at mortgaging their future to pay for it. We can talk for hours about repayment rates but the differences aren’t significant. One gets 50% of the kids to repay their loans and the other gets 35%. Big deal.

The not-for-profit idealists probably thought that they could toss the for-profits under the bus and preserve the funding lines for themselves but I’m guessing that they make the same fundamental mistake as the other dreamy believers in education: they see themselves as wonderful and all others as bad. And so they’re blind to the fact that most of the so-called not-for-profits are actually more expensive than the for-profits and many offer returns that are dramatically worse. The kids getting degrees from Harvard in Comp Lit may have wonderful repayment rates, but that’s just because the parents are paying for it all. The degree still condemns them to downward mobility unless they find a real career.

The Wall Street folks are probably smart to focus on Washington and the decision over funding because the education sector is effectively semi-nationalized now, but they’re foolish if they don’t concentrate on the larger tectonic shifts in people’s core beliefs. When people start abandoning the belief in the power of the college degree, the stocks will really collapse.

As Pender is from the Bay Area, she tunes right into the rates for Cal Berkeley. This school educates the very best, right? People are constantly suing claiming that the Berkeley admissions department is discriminating against their kid with 2400 on the SAT. Ah, but how many of these perfect roses are paying their student loans? Only 73%! This is said to be good because the average public university has a rate of– get this– about 50%.

This statistic isn’t perfect because it lumps together the non-paying kids with the kids who’ve got a legit deferment like the one granted to those who go on to grad school. Some have a semi-legit excuse because they’ve decided to double down and go for a PhD in Advanced BioTheater Theory. So while it doesn’t measure pure deadbeatedness, it does calculate the load on the taxpayer who covers the interest and eventually the principal for those who aren’t paying.

I’m hoping someone will generate some numbers that explains how the semi-legit deferments change these values. While I realize that many of the Bezerkeley kids are so love struck with the college industrial complex that they’re off getting PhDs, these values should average out over time. The graduates from 2010 may not be paying yet, but the graduates from 1995 should have a PhD by now and ready to start paying off some bill. Right?

73% is a staggering number because it means 27% aren’t able to pay off their debt. Berkeley is relatively cheap and so its loans are relatively small. It’s a great school so people should be employed and making enough to repay things. If 27% can’t sustain the debt, it makes me wonder even more about the foundations of this enterprise.

Now that the US government pressures the so-called for-profit schools for more accountability and better statistics, someone besides me is going to start asking why can’t the so-called not-for-profit schools can’t generate the same statistics. The Center for College Affordability has been asking for better metrics and even creating their own listings. Daniel Bennett, for instance, calculated the maximum debt for a law school student using the new formula. ($44k!) Why don’t we ask about placement rates and employment?

But that’s not how it was done. I was just about to say, “Good luck with that plan” when I remembered a friend describing his decision to get a masters degree so he could get a teaching job. Wasn’t that a gamble, I said? Technically, yes, he replied, but the school offered good statistics. He got into one that offered close to 100% placement. He went and they found him a job just like they promised.

These programs show that universities are quite capable of both calculating statistics and running their programs in responsible ways. (Here’s one. This lets you search a bit.) His program was proud of placing 90-some percent over the last ten years. Greed might encourage them to increase the size of their school, but they aren’t likely to do that unless they know that they can get the students who will eventually get jobs. They don’t want their placement rate to drop because that will hurt their long term sustainability.  (He went 10 years ago, btw, and I wouldn’t be surprised if their rate has dropped because of the economy.)

The teaching masters aren’t the only programs. The Columbia med school post baccalaureate program promises placement rates of 90%.  They know that parents are going to say, “You want me to spend another %$@$%^ $50k?!?!?”

In the near term, the college industrial complex will continue to balk at the regulations being pushed on the for-profit sector. They’ll say they can’t measure placement. They’ll point out that people get degrees in philosophy for intellectual sport. They’ll say it’s all unfair and that they’ve never offered guarantees. They’ll be right, of course, because they’ve stacked the deck in their favor over all of these years. We’ve all been conditioned to expect that it’s all the students’ fault. But it doesn’t have to be that way. The college industrial complex is capable of calculating statistics that serve their students’ interests not just their own. The teacher prep programs prove it.

Christopher Matgouranis over at the College Affordability Club wrote a nice defense of the need for more quantitative rankings and won me over. He pointed out that schools insist that kids take SAT tests and submit grade averages. Why shouldn’t the kids ask for good, reliable numbers from the schools? Default rates and average debt are useful and I’m glad the numbers are being added to the Forbes/CCAP rankings. I just hope they take into account the shadow debt that isn’t counted by these stats.