Vedder: College aid should reward achievement

Federal college aid should reward achievement, argues economist Richard Vedder. The expansion of federal aid has “contributed to high dropout rates, mediocre levels of student work effort and academic performance,” underemployment for college graduates and credential inflation, Vedder believes.

44% underemployment for new grads is OK

44% of Young College Grads Are Underemployed (and That’s Good News), writes Jordan Weissmann in The Atlantic.  In a weak economy, many new graduates have to take jobs that don’t require a college degree, argues Weissmann. It’s worse now “because the economy got fed through a wood chipper during the recession and we still haven’t picked up all the pieces,” not because a bachelor’s degree has lost value.

The unemployment rate among recent college graduates tends to move “in step with unemployment among all working age adults,” he writes. New graduates are having problems because everybody is.
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College graduates during the 80s and early 90s were as likely to be overqualified for their jobs as young graduates today, according to New York Fed President William Dudley. Most graduates then eventually found professional jobs.

The obvious difference between higher education today and in 1990 is the cost of a degree, and the amount of debt students take on to finance it. So while failing to land a college-level job straight out of school might have been tolerable in the past, today it might mean severe financial hardship, especially if students aren’t savvy about how to handle their student debt (three words: Income. Based. Repayment).

There’s evidence that young people who graduate into a recession and start lower on the job ladder never recover completely.

I’d like to see a good survey asking whether collegebound students understand their likely future earnings and loan payments. Do they know the risks? If they did, second- and third-tier private colleges would have to slash tuition or go out of business.

Be deeply suspicious of promises that a bachelor’s degree will raise earnings significantly, warns Tim Donovan on Salon. If the “higher interest rate convinces even a few 18-year-olds not to take on huge debt for that Musical Theater degree, maybe it’s not so bad,” he writes.

More entry-level jobs require college degree

One third of employers say they’re hiring college graduates for jobs that used to require a high school diploma.

Another day older and deeper in debt

Federal student loans aren’t based on students’ ability to repay — and many will not.

Arrested for a credit union hold-up in Madison, Wisconsin, 49-year-old Randall H. Hubatch said he owes $250,000 in student loans and wants a long prison sentence. Hubatch earned a bachelor’s in English in 1998 at University of Wisconsin, Madison. He added a law degree in 2004. He works at the university as a custodian. He wore a hat with UW’s mascot — Bucky Badger — for the robbery and was wearing it when arrested.

Via Glenn Reynolds, author of The Higher Education Bubble.

McKinsey: Teachers overestimate students’ skills

Teachers overestimate their students’ employability, according to research conducted by McKinsey & Co. Graduates often are judged unready for the workforce by potential employers, leading to underemployment.

While teachers more or less understood which skills employers would value, they had overly rosy view of how well their students had mastered those skills pretty much across the board. In particular, educators think their students are significantly better at problem-solving and more computer literate than potential employers do, and that they have far more hands-on and theoretical training when they graduate from a post-secondary school.

Employers complained the most about job applicants’ “ability to take instruction, their work ethic, their problem-solving skills and . . . language proficiency.”

10 low-earning college majors

Anthropology leads Kiplinger’s Worst College Majors for Your Career. It combines low pay and high unemployment. Anthro majors are twice as likely as the average college graduate to end up working in retail in a job that doesn’t require a college education.

Unemployment rate: 6.9%
Recent grad employment rate: 10.5%
Median salary: $40,000
Median salary for recent grads: $28,000
Projected job growth for this field, 2010-2020: 21%
Likelihood of working retail: 2.1 times average

Many anthropology graduates “are studying a culture they didn’t expect: the intergenerational American household, as seen from their parents’ couch.”  Nearly a third of recent grads are in low-paying office or sales jobs. Recent graduates average $28,000 per year, less than the median pay for someone with only a high school diploma. Students interested in foreign cultures would do better to major in international relations, Kiplinger suggests.

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Fine arts, film/photography, studio arts, graphic design and drama/theater also are low-earnings, high-retail majors.  Also on the list: philosophy and religious studies, sociology, liberal arts and my major, English.

I’d guess that arts and theater majors understand they’re going to struggle to make a living. Do sociology majors know their odds?

Ann Althouse quotes from Kurt Vonnegut’s A Man Without a Country:

If you want to really hurt your parents, and you don’t have the nerve to be gay, the least you can do is go into the arts. I’m not kidding. The arts are not a way to make a living. They are a very human way of making life more bearable. Practicing an art, no matter how well or badly, is a way to make your soul grow, for heaven’s sake. Sing in the shower. Dance to the radio. Tell stories. Write a poem to a friend, even a lousy poem. Do it as well as you possibly can. You will get an enormous reward. You will have created something.

I’m not sure writing bad poetry constitutes practicing art or enlarges the soul.