EduBubble

The blog FlusterClucked figured that  1/40th of our population of lawyers will retire this year and so we should only produce the same amount to replace them. There are some that suggest we need even fewer replacements because so many lawyers are either underemployed or unemployed.

How many lawyers is that? About 19,000. And how many do we produce 45,000, give or take a few. That means closing 75% of the law school. Harsh. The numbers are always staggering when you look at them. We’re not overproducing by 5 or 10%, we’re massively overproducing.

Daniel Bennett has a good posting over at the Center for College Affordability detailing some of the shenanigans at Chicago State University. As the battle of funds gets tighter,  the tenured geniuses over in not-for-profit land seeking to maintain their light teaching loads and travel budgets decided that they would need to push the “for profit” universities out of the lifeboat.

Bennett’s posting narrows in on the long piece, “College Dropout Factories” by Ben Miller and Phuong Ly.  While the article is really about how the poor and unsuspecting are bamboozled into worthless courses at places like Chicago State University, Bennett focuses on the riches given to the ruling class. We hear of one administrator who “brought five relatives and a university administrator with her on a nine-day Caribbean cruise for a ‘leadership conference.’”Since it’s all laundered through the university it’s technically not profit, but it should seem like profit to anyone with a brain.

The posting is clearly trying to score some political points because it singles out Senator Durbin’s connection to the featherbedding because he has been a critic of the for-profit schools. I think that Mr. Durbin is probably stuck in the same reality distortion field as the rest of the not-for-profit world. Profit sounds bad to the tenured folks who don’t think of their $200k+ salaries as “profit”. Nope. That’s an investment in excellence and, OMG, if the governor cuts one little bit of their princely salaries the state will slide into the red hot magma in the core of the planet.

This sounds like small potatoes to me. I’ve seen enough research conferences on Hawai’i and listened to enough researchers who schedule meetings at ski resorts in the winter and beaches in the summer. These are just the average tenured schmoes. The real leadership is constantly building itself 20,000 square foot mansions and paying itself seven figure salaries. The real goal is to ask why the university folks are able to enjoy so many wonderful trips and huge salaries while wearing the mantle of good-guy, not-for-profit.

It’s not a good time to be a Dean of a Law School. First you’ve got the hunger strikers asking for accurate statistics about their graduates. Then you’ve got the mainstream press listening to the out-of-work lawyers frantically blogging away about their poor fortunes.

After Leslie Kwoh wrote a basic introductory piece in the Newark Star-Ledger,  John Farmer the dean of Rutgers Law School in Newark decided that silence was not the best policy. His piece includes such gems as

• “But the real value of legal education is not, and never has been, primarily economic. It’s not about money; it’s about freedom.”
•  ”Legal education gives students what 99.9 percent of humanity yearns for but is denied: control over one’s own life. “
• “it’s a license to express that freedom in service to other people. “

Ah, I thought all of us were entitle to life, liberty and the pursuit of happiness, but it seems like only those who pay the full freight at a law school can have freedom.

Alas, I don’t think Mr. Farmer has the same feeling of freedom. To him, it’s a chance to raise prices indiscriminately, the ability to hire administrators on a whim and pass the costs onto the students, the ease of making “no guarantees” that your product is worth anything or will function as described, etc. etc.

It’s hard to feel freedom when you’re under $100,000 or $200,000 of debt. If we buy Janice Joplin’s theory that freedom is just another word for nothing left to lose, we run into a problem with dealing with numbers. The law school graduates don’t have nothing, they have less than nothing. Just like Alicia Torres, the woman who needed to raise $90,000 to pay off her student loans and take a vow of poverty by joining a convent, the average lawyer doesn’t have the freedom of having nothing. The law school debt is a form of indenture.

I feel sorry for Mr. Farmer who’s going to keep trying to come up with more justifications to keep fools walking in his door. But really. Did he really say that the benefits aren’t economic? Yeesh.

Anya Kamenetz wrote a great book called DIY U, but I think she’s a bit too caught up in the hype of the TED conference. That’s a problem because she’s written a long mash note to the conference organizers for Fast Company calling it, in the best magazine hype tradition, the “new Harvard.”

I like the quality of the conference and the focused lectures. I love the fact that they distribute the videos for free. But I think the price is outrageous. They charge $5000+ to attend and the conference is only a few days long. Harvard is a relative bargain because they charge $50,000+ for 30 some weeks. You know you’re overcharging when Harvard seems inexpensive.

My freshman year dorm was built out of cinderblocks. The layers of paint didn’t come close to hiding this fact. We were too busy with everything else, though, to notice. I’ve been dreaming about it because the news comes that LA spent $574 million on a new Taj Mahal for a new high school that looks just as fancy as the new buildings put up by many colleges.

“There’s no more of the old, windowless cinderblock schools of the ’70s where kids felt, ‘Oh, back to jail,’” said Joe Agron, editor-in-chief of American School & University, a school construction journal told the Associated Press’s Christina Hoag. “Districts want a showpiece for the community, a really impressive environment for learning.”

About ten minutes later, I was browsing through the Washington Post when I discovered the beautiful pictures of house that the darling of university architecture departments everywhere, Frank Lloyd Wright, built for his son. Check out the tenth photo in the collection. The bedroom was made of — you’ve probably seen this coming– yes cinderblocks. And there’s not even any paint to dress it up. Was it ironic? Jail-like? Or just a room that is simple and beautiful. Oh the irony.

 I remember how Michael Moore and Ben Hamper used to complain about how mind numbing the assembly line jobs were in Flint, Michigan. Surprise. Between the robots and the willing foreigners, the poor, bored folks of Michigan don’t have to worry about that any more.Now, the computer and the algorithm are doing the same to the educated people. Rich Karlsgaard wrote a good piece for Forbes about how the “cheap revolution” was displacing all of the workers who used to be cogs in a wheel. The manual labor cogs are gone and now they’re coming after the Dilbert-grade office dweebs who don’t think they’re doing anything important. Surprise. You’re not and the boss will figure it out eventually and replace you with an algorithm.Karlsgaard does a good job saying what I’ve always felt. It’s not possible to say that all college is a waste of time because there will be some weenies who spend hours in the lab and use a good fraction of that knowledge to create a new drug. That’s the 5%. Most of the gladhanders, the sportos, the ones who smile and  nod at the professor will gain little. Heck, it’s not just the ones who went to get their ticket punched because society told them that they needed a degree. Every major, every field of study, and every approach to learning is at risk of discovering that they’re part of the oversupply. 95% will discover that it was $200k+ down the rat hole.

David Levi, the dean of the Duke School of Law, tries to put lipstick on the pig by telling the world that new graduates aren’t worthless. Apparently no one wants to pay for fresh, naive talent when there are so many older lawyers looking for work. It’s the sort of public relations crud that the leadership of every organization is expected to churn out.

Alas, he’s been caught in the BS hall of mirrors for too long because he seems to be believing the kind of PR crud that others spew:

Indeed, I often have heard distinguished lawyers in all kinds of practice say that one of the aspects of being a lawyer they value the most is their interaction with, and instruction of, new and young lawyers. They say this not because young lawyers are worthless, but because they have so much to offer when properly guided.

Sigh. Doesn’t he remember that parents often make up such platitudes about changing diapers or wiping up vomit?

The problem is that there’s not enough legal work to go around but Mr. Levi doesn’t want to do what responsible market leaders are forced to do from time to time. Farmers kill off their livestock when they cost too much to feed. Manufacturers shut down plants, layoff workers and even go out of business when the markets turn against them.

Mr. Levi, though, has never worked during such a downturn. He could either shrink the size of his schools, fire some of his tennis buddies, or try to talk the rest of the lawyers into hiring the kids who paid $200k+ to be called Duke Lawyers.

The wonderfully titled blog, “But I Did Everything Right”, said it best:

You, Mr. Levi, and every other Dean of law schools are robbing our students blind. You have a duty to your students. Skaaden Arps doesn’t. Jones Day doesn’t. Neither does Mayer Brown. You have publicly acknowledged the problem, unlike most Deans. I will give you credit for that. Now create a solution.

Yes, I know that professors love to joke that the administration is morally/mentally/intellectually bankrupt, but aside from a few surprising cases like Antioch, most professors don’t have to worry about actual economic bankruptcy. We’re still coasting after boosting tuition to the sky. There’s money all over the place and the universities are spending thousands of dollars per square foot on fancy, architecturally shocking libraries– libraries that are largely being replaced by the Wikipedia. One friend of mine is so cynical that he thinks that all deficits at universities are complete fictions invented by the administration to stick the shiv in the back of some department head by taking away a chance to hire two or three new absolute geniuses.

Now Mark Taylor delivers a nice Op-Ed piece via the NY Times decrying some of the new efforts of expansion. He focuses on NYU and Columbia, but he could be speaking of many places. Both want to spend billions to increase the size of the campus and absorb billions of dollars in real estate, no doubt to build more multi-disciplinary centers of excellence in metastudying.

He points out that NYU is already sort of bankrupt. They have $2.2 billion in the endowment, a wonderful number that’s comforting to many I’m sure. But they also have $2.22 in debt. That difference is minimal, much smaller than the gap presided over by our favorite pinata, Shirley Ann Jackson. She could teach the folks at NYU a bit about how to run a school. She continues to draw a huge seven figure salary while running up $750m+ in debt backed by an endowment of $500m+.

Now technically NYU isn’t really bankrupt because it could always sell off some of its land or a building. There’s a real demand for those in NY City, unlike RPI’s buildings in Troy NY where I’m not sure anyone wants to live. But both NYU and Columbia want to buy more real estate which will surely boost their debt and push them closer to the bankruptcy line.

Real estate is different for a university. The buildings are pretty much all the school has because all o fthe adjunct professors go home at night. When you or I buy a house, we live in it and sell it eventually. It’s often an investment, although an investment that can go south as well as north. Most universities don’t trade parcels of land very often and so they’re not really an investment or even part of the endowment. Can anyone imagine Columbia selling the main campus especially after the movie “Ghostbusters” made it so famous?

When universities consume land, they generally raise their costs. These new buildings are going need to be maintained by NYU and Columbia. Mr. Taylor makes the very good point that the undergraduates are probably going to pay some of the increased costs. That’s not a good thing for the students or even for the schools in the long run. And when your balance sheet is filled with bad things instead of good things, well, that’s the road to bankruptcy.

Let’s unpack a fascinating piece by Tamar Lewin in the NY Times. It seems that the for-profit schools aren’t so profitable for the students at least. Many can’t repay their loans leaving them on the shoulders of the taxpayers.

At some for-profit colleges, the repayment rates were startlingly low. For example, 33 of the 86 Corinthian Colleges’ Everest locations had repayment rates of less than 20 percent — and at several, the rates were less than 10 percent.

At the headquarters of the University of Phoenix, the nation’s largest for-profit education company, the repayment rate was 44 percent, compared with 38 percent at DeVry and 27 percent at Kaplan University, a unit of the Washington Post Company.

These are scary bad numbers to me. I always thought that 80 some percent could repay their loans and we were only fighting to defend a smaller fraction of society. It looks like almost everyone who goes to these universities can’t make enough to service the loans. So much for the idea that education really helps.

What about the not-for-profit schools? It turns out that they’re better but not much better:

  in 2009, repayment rates were 54 percent at public colleges and universities, 56 percent at private nonprofit institutions, and 36 percent at for-profit colleges.

Then I found this next quote to be absolutely hilarious and indicative of the way that the not-for-profit schools seem to imagine that they’re somehow cut from an entirely different bolt of cloth.

“I think it’s notable that the for-profits are the only type of school where the majority of students are unable to repay their loans,” said Debbie Frankle Cochrane, program director at the Institute for College Access and Success, which has called for tighter regulation of for-profit institutions.

Since the not-for-profit schools have repayment rates that are slightly above 50%, Ms. Cochrane magically scolds the for-profits for being below 50%. But a repayment rate of 54 to 56% is still a huge social disaster for the taxpayers and the students who invest so much of their time and life in a degree.

I can imagine Ms. Cochrane or some other not-for-profit apologist telling the 40 some percent who can’t repay their loans not to worry. There will be some way you can “use” your degree, the schools like to say. Be imaginative. There’s work for people who are “good”.  Yeah. What a pile of horse manure. Maybe the kids who deal with Ms. Cochrane and her ilk will be able to “use” their experience as farm hands.

A nice piece by Daniel Bennett and Zac Bissonette in Forbes left me thinking: why doesn’t the University of Phoenix donate itself to some wonderful non-profit foundation and effectively turn non-profit itself. Since the folks in government seem happy to pound the for-profit sector while completely ignoring the precious flowers over in the non-profit world, why should the University of Phoenix and the others continue to fight.

Up at Rensselaer Polytechnic Institute, they’re building a brand new 20,000 square foot mansion for the president who also gets $1.6m a year in salary. Their kids graduate with a huge amount of debt and then tell the NY Times that only the lucky ones are getting jobs. But since it’s a non-profit institution, no one seems to care. The University of Phoenix can turn non-profit, save a huge bundle on real estate taxes and continue to pay $300,000 or $400,000 to the so-called deans because that’s what all of the not-for-profits do.

Heck, I wouldn’t be surprised if the for profits couldn’t come up with some huge tax write off for donating themselves and sell this write off to some big multi-national that needs to shelter some taxes. I really don’t know much about taxes but I do know that not-for-profits have a great deal. So why should the for profits fight?