Think before you go to college

Think before you go to college, says blogger/professor Glenn Reynolds in a Reason TV interview. What are you going to study? Will you be able to repay student loans? His book, The New School, predicts “the information age will save American education from itself.”

College enrollment is slowing

College enrollment shows signs of slowing, according to the Hechinger Report. Students and parents say they’re worried about taking on debt for a degree — or a few years of partying — that may not lead to a job.

Despite discounting tuition more heavily, more than 40 percent of private colleges reported enrollment declines. “We are seeing the beginnings of a cool-down,” said Barmak Nassirian, associate executive director of the American Association of Collegiate Registrars and Admissions Officers.

While the number of students graduating from high schools has declined slightly since building to a peak of more than 3.3 million in 2009, the cause of the college enrollment drop-off is largely skyrocketing tuition and concern about debt, Nassirian and other higher-education officials said.

“I do think we’ve reached a tipping point in terms of what cost might do,” said David Hawkins, director of public policy and research at the National Association for College Admission Counseling, or NACAC. “The cost of college is really beginning to alarm families. And that creates a real threat to enrollment.”

Second- and third-tier private colleges with small endowments could fold as students become more cost conscious.

A syllabus for the ‘Occupy’ movement

As universities rush to offer courses on the “Occupy” movement, Instapundit blogger Glenn Reynolds, a law professor, proposes a syllabus. One of his possible lessons:

1) The Higher Education Bubble and Debt Slavery Throughout History. Since ancient times, debt has been a tool used by rulers to enslave the ruled, which is why the Bible explains that the borrower is the slave to the lender. One complaint of many Occupy protesters involves their pursuit of expensive degrees that has left them burdened by student loans but unable to find suitable employment. This unit would compare the marketing of higher education and student debt to today’s students with the techniques used to lure sharecroppers and coal miners into irredeemable indebtedness. Music to be provided by Tennessee Ernie Ford.

For younger readers, Reynolds is referencing “Sixteen Tons” a song we used to belt out at my elementary school in an upper-middle-class suburb of Chicago.

You load sixteen tons an’ what do you get?
Another day older deeper and debt.
St Peter don’t you call me I cause can’t go:
I owe my soul to the company store.

There also was Drill, Ye Tarriers, Drill, in which we worked all day for the sugar in our tea (pronounced tay) down behind the railway.

Most new jobs don’t require a degree

Most new jobs don’t require a college degree.

Also on Community College Spotlight: Bubble, bubble, toil and trouble.

The entry-level master’s degree

The master’s degree is the new bachelor’s, writes Laura Pappano in the New York Times. Nearly 2 in 25 people age 25 and over have a master’s, about the same proportion that had a bachelor’s or higher in 1960.  “Several years ago it became very clear to us that master’s education was moving very rapidly to become the entry degree in many professions,” says Debra Stewart, president of the Council of Graduate Schools.

The professional science master’s, or P.S.M., which combines job-specific training with business skills, is growing rapidly.  “Humanities departments, once allergic to applied degrees, are recognizing that not everyone is ivory tower-bound and are drafting credentials for résumé boosting,” Pappano writes.

 “There is definitely some devaluing of the college degree going on,” says Eric A. Hanushek, an education economist at the Hoover Institution, and that gives the master’s extra signaling power. “We are going deeper into the pool of high school graduates for college attendance,” making a bachelor’s no longer an adequate screening measure of achievement for employers.

Colleges are turning out more graduates than the market can bear, and a master’s is essential for job seekers to stand out — that, or a diploma from an elite undergraduate college, says Richard K. Vedder, professor of economics at Ohio University and director of the Center for College Affordability and Productivity.

Not only are we developing “the overeducated American,” he says, but the cost is borne by the students getting those degrees. “The beneficiaries are the colleges and the employers,” he says. Employers get employees with more training (that they don’t pay for), and universities fill seats. In his own department, he says, a master’s in financial economics can be a “cash cow” because it draws on existing faculty (“we give them a little extra money to do an overload”) and they charge higher tuition than for undergraduate work. . . . He calls the proliferation of master’s degrees evidence of “credentialing gone amok.” He says, “In 20 years, you’ll need a Ph.D. to be a janitor.”

Students say the programs give them industry contacts. Employers say a master’s signals a higher level of commitment to the field.

The obligatory anecdote features a history graduate, working as a $7.25-an-hour waiter and living at home, who was rejected for tutoring and tour-guide jobs because he doesn’t have a master’s.  He’s going for a master’s in Jewish Studies with hopes of working for the CIA, though Pappano suggests “teaching, museums and fund-raising in the Jewish community” are more likely.  Or waiting tables, a job he started in high school. Many nonprofits are short on funds and laying off staff, not hiring.

Via Instapundit, who’s been blogging about the higher education bubble.

Student debt bubble will pop

The higher education bubble will pop soon, predicts the wonderfully named David Swindle, who worked as a student loan debt collector and then a “default prevention” manager from December 2007 through July 2009. Collectors rarely collect money, Swindle writes.

Instead my job primarily entailed tracking down borrowers so they could put their loan back into forbearance or deferment so they would not default. Borrowers for loans dispersed between the early ’90s and the passage of Obamacare have a wealth of perks for those who are unable or uninterested in making payments. Lose your job? No biggie, you’re eligible for 2-3 years worth of unemployment deferment. Have a job that’s not paying you much? Chances are you’ll be eligible to use some of your 3 years’ worth of economic hardship deferment. Have other bills that you’d rather pay instead of your student loan? No problem, Sallie Mae and many other lenders offer sometimes as much as FIVE YEARS worth of forbearance time. Well, what happens if you’ve burned through all the time and still want need time off from having to pay? Sallie Mae offered 3 years of Title IV administrative forbearance that had the same qualifications as the economic hardship deferment. Thus, as a collector I’d regularly come across borrowers who had gone YEARS without ever making a payment and the loan’s capitalized interest had just grown and grown and grown — much to the bank’s delight.

When all the deferment and forbearance deals run out and the borrower still doesn’t pay, it usually takes a year of delinquency to put a loan into default.  As loan guarantor, the federal government reimburses the bank for almost everything owed. Then the loan is sold to a collection agency, which will add another 20 percent in fees.

. . . the borrower will often have the opportunity to “rehabilitate” the loan to bring it back into good standing. Usually they do this by making a year or so of auto-debited or at least consecutive payments. Then the loan returns, though much larger. But what also comes back? ALL of their deferment and forbearance options are reset back to zero because it’s basically a new loan. Then the whole cat-and-mouse process of putting off paying the loan, trying to hide from collectors and skiptracers, and letting the interest capitalize more and more can just start again.

The default rates don’t show the number of people who owe more and more on college loans, Swindle writes.

Who pays for college? Who gains?

College pays for bachelor’s degree graduates, though it pays a lot better for graduates of selective colleges and universities than it does for those who go to unselective colleges, concludes a new report. But the return on investment isn’t all that great for taxpayers.

Also on Community College Spotlight (and taking the other side of the argument): Higher education is a huge bubble that’s about to burst.

I congratulated my sister on being the mother of two college graduates: Her son Alan earned a computer science degree in March and daughter Lee earned a degree in cognitive science a few days ago.  “I’m the mother of two unemployed people,” she said.

Ever more

The more we spend on higher education, the more we spend on higher education. Do we really need more college graduates? Spotlight follows the bubble debate.