Degree value worth another look?

This article describes exactly what is wrong with the American educational system. As you can read, the general theme of this article is that even though college educations are getting more expensive while leading to less of a chance of a job, its still worth the costs. Let’s explore this idea.

First, the article claims that when considering lifetime wealth, those with college educations generally make more than those without. This is a trend pointed out most often by the higher education lobby (universities, textbook publishers, etc), all who have a stake in YOU going to college. But this trend reflects an even greater failure of the American educational system in general. The American educational system is predicated on the idea that without a college education, you will fail at life, and has been this way for many years. Thus, most K-12 schooling is aimed at the ability to achieve high scores on standardized tests; those benchmarks by which individuals are accepted to colleges. Therefore, if an individual does not go to college, they are stuck with little ability other than being able to take the SAT.

In most other 1st world nations, the educational system is much more invested an educational environment tailored to the needs of the student. For instance, in many European nations, students often spend high school in vocational training (keep in mind welders and plumbers, for as “white trash” as you may think such jobs are, make over $40/hr on average…and there is no indication that, at least for plumbers, people will soon stop pooping and the market will dry up). Of course, many students go on to get advanced degrees in mathematics, science, liberal arts, etc…but a whole segment of their workforce isn’t stuck after high school with no skills to make a life with.

Then we get to the next assumption: soon-to-be special education teacher Miranda Vanwynsberghe assumes that debt should be expected, regardless of what school you go to. Wrong! Most 1st world nations provide college educations free-of-charge. If that’s to “socialist” for you, consider many Ivy League schools are now providing full-ride scholarships to significant portions of their student populations right here in America. And by the way Miranda, your claim that a college education is the best debt you can have is arguable. Student loan debt has nowhere near the tax advantages of a mortgage, and you can’t borrow against your student loan debt either. In fact, given that education is intangible (as in you can’t sell it like you could a car or house), student loan debt is quite possibly the WORST kind of debt you can have.

….except credit-card debt, but more on that later.

The article continues to claim that college educations often lead to internships, which the article claims is one of the best ways to get a job in what is otherwise a terrible job market. But what does this really say? Internships are often touted as “on the job training”, and anyone who has taken one can tell you they probably didn’t utilize much of their college education in that internship. In fact, many internships could probably be handled by someone right out of high school. But instead, most are limited to college students only. On top of this, many don’t pay…mind you that students must still pay for the tuition credits for internship “courses” though. So what we have is a system where students must pay a college to work for free for a company/organization, with no real guarantee of a job after college. This college thing is sounding pretty good, huh?

But remember how student debt was almost as bad as credit card debt? I was wrong. It’s exactly as bad….if not worse. You see, if worse comes to worse, one can declare bankruptcy. Maybe a tornado hit your house and you lost all your possessions, whatever terrible scenario you want. Either way, when you are out of money with no possible source of income, you make a deal with the government which restructures your debt, often eliminating most, if not all, of your credit card debt (there are, of course, many other long lasting penalties as well, but that’s another article).

Student loan debt, on the other hand, NEVER goes away without it being paid off. Let’s say you die…and your parents and whole immediate family die….in a freak shark accident. You know what happens to your student loans? That’s right…it’s docked from grandma and grandpa’s social security checks. At least with the credit cards you might have bought something you could sell to help make up the loss (like a TV)…can’t do that with an education. From a certain perspective, a college education is quite possibly the most risky debt you could ever take on.

So let’s take a break to recap and see what we have: The State News, a newspaper committed to sucking up to the University (what was the last real hard-hitting investigative news story to come out of the State News?), publishes an article about how important a college education is. After all, like the article says, without a college education you’ll never get that internship, and without that internship, you’ll never get that job, and without that job, you’ll never make enough money.

Seems pretty simple, right? But why this approach? Isn’t there any other way to look at it?

Here is what I see:

Universities are credit companies….credit companies which help you buy something with no market value and to which you are tied to for life.

As the article points out, more and more students are taking out more and more loans. Typically, a student’s financial aid package is a combination of federal loans (Pell Grants) and loans through a financial aid company. Often, universities (like MSU, for instance), recommend a loan facility…is it by chance that this facility often has lower interest rates than any other? No…this recommended facility happens to be owned BY THE UNIVERSITY. Just in the same way that car companies want to help you finance that new car, MSU wants to help you finance you education.

Why? Cause they make money off it…durr.

First, MSU can sell your debt to investors. Cha-Ching. Second, with a 7.1% increase in tuition this year (on par with the last 5 years at MSU), you’re going to be taking out A LOT in loans…even more debt MSU can sell. Cha-Ching. Third, and best of all, even though students take out and more and more to get that college degree, entry level jobs have generally stayed level in terms of starting salaries….that is, if you can even find a job…something the University doesn’t guarantee. Keep in mind too that the percentage of students with jobs one year after graduating doesn’t account for what that job is. Sure, you could be a new accountant. You could also by a fry-cook at Burger King. Or a construction worker employed temporarily who just happened to be working when MSU came to see about their loans.

Sure, MSU can claim a relatively high measure of students with jobs after college, but it doesn’t mean those students are making the money required to pay off student loans. More likely, they are only making enough to pay off the monthly interest…if that. Thus they spend years, never being able to pay down the principle AND pay the interest AND be able to afford a decent living or start a family.

CHA-CHING!

After all, a lifetime of you paying interest on your loan to the University is a lifetime of free money to them. They literally had to do NOTHING to earn it. Not guarantee you a job, not guarantee a re-education when the first one they gave you is out-of-date, not even invest in facilities or resources you will could use to get a job…NOTHING.

And, as I’ve said before, with a house or a car, you could at least sell the item to someone else and transfer the debt to them. Not here…you can’t transfer your experience in the 300-student ISS lecture…because an education is invaluable.

Invaluable
–adjective
of inestimable worth

Universities have become corporations and profit is now their primary motive. MSU was the first land-grant university, and inspired the Morrill Land Grant Act of 1862, a law signed by Abraham Lincoln. Land-grant colleges, as enumerated by the law, were intended to provide the working class access to higher education. In a time when only the richest-of-the-rich attended college, MSU lead the way as a place where farmers and mill-workers could get quality educations. The idea behind this was that by educating the working class, they would be able to improve their economic status, and thus the general economic status of society would rise.

Today, Lou Anna K Simon is more interested in making sure foreign students can come to MSU than Michiganders. Even though Michigan citizens pay taxes which fund an institution designed to improve the status of Michiganders, LKS works every year to make sure more and more foreigners can take the place of domestic students. Why? Cause international tuition is higher than in-state tuition. IE, more money for the University.

The once grand intention of the Land Grant College is dead. MSU is no longer here to educate the masses, but to strangle them. After they cater to foreigners (how many millions did they waste on that Dubai campus?), they might be able to find a spot for you. But you can guarantee, they’ll be right there to help you sign up for student loans. After that, whether you get a job, or even graduate, it’s no matter. You are now in a bondage of debt which will result in a continuous revenue stream of your sweat and blood.

Welcome to corporate college.

Georg S is correct. The archaic belief that mortgage debt and student loan debt are GOOD DEBT has been proven a total lie—and an extremely costly one.

If you select a major that is unmarketable and has no job prospects, then you are a fool. If you do pick a useless major, then plan on grad school in a high demand field—if you can afford more student loan debt. I suppose that for many of you—where your parents are paying for your college education—it doesn’t really matter right now. But, eventually, they will cut the financial umbilical cord and watch you fail to thrive.

Here are the good majors:

Engineering—especially chemical
Nursing
Accounting—CPA
Medical Doctor
JD—juris doctor—for the money, esp combined with MBA
Computer Science
Statistics—Mathematics—actuarial science

MSU also has some great programs in construction management, packaging science, hotel administration, and turf/ag science where you can get a great job.

Also, even if you have this degree—this piece of paper—you still have to be good at what you do and have the intangibles that employers want. And that’s only if you don’t want to starve. If money is not that important, then please go ahead and major in art, music, education, political science, the language arts.

Good luck—you’ll need it

George S. says “Universities are credit companies” that finance loans via credit “facilities” they own. That was news to me. I’d like to know the names of these “facilities” so that I can check out their ownership.

George S. also says that grandma and grandpa will inherit a student’s debt liability if the student and the student’s parents all die and the grandparents survive. That’s also news to me. I’d like to know exactly which Federal or State laws make this so.

I agree with his assessment about public funding. When I went to MSU as an in-state student (the late 60s and early 70s), nearly all my educational costs were paid by the taxpayers of the State of Michigan (probably close to 80%). Today that percentage is closer to 20%. Today’s students should be livid about this, but they don’t seem to be. My generation would have been raising hell about having to pay for old foggy welfare while getting virtually no higher education financial help. Turn off the video game for a few seconds and look at the writing on the wall: it says, “You’re getting screwed”.

I believe George hit it right on point. I graduated from MSU two years ago, and have had no luck finding a job. Looking out of state, is not always an option especially when you have no means to get out of state.

I think we call all see what this is leading to. The privatization of education is under weigh. MSU consistently wastes money. For instance, Wells hall is being renovated and an art museum is being constructed, while none of the dorms on campus(with the exception of butterfield) have air conditioner. Where is all the money going? The fact of the matter is we all need to write our congressman/women about the issue. I mean steroids in baseball and gangsta rap managed to get to captitol hill at some point or another, so why can’t this issue come to the forefront. The more that higher education becomes financially inaccessible means the more the UNITED STATES will slip in terms of international intellectual ability. I would encourage the msu students and all people in michigan to protest. It makes no sense to take out 100 thousand dollars worth of loans to only make 50,000 a year. The jig is up! Debt slavery is definitely not the way to go. Its nothing worse that money being out of your hands before you can spend it yourself.

State/Federal laws do not govern the repayment of loans, the loan contract itself does. Nevertheless, student loans are notoriously hard to discharge. Why? Well the government wants students to go to college, so they pass policies making student loans easy to get (How else can you explain giving $20-$40 grand loans or more to a teenager with no job and with no credit rating?). The other side of this is that the loans are allowed to be nearly impossible to discharge, thus essentially guaranteeing repayment regardless of circumstances. Just because you don’t know this, doesn’t make it not true. If you want specific cases and statutes, use Google…it’s not that hard.

Same with your other criticisms. The reader comment section at the bottom of the webpage of a student newspaper isn’t really the place to request others to dig into the bowels of companies to give you whatever proof you want, just so you can deny that it isn’t good enough for you and push your agenda.

If you want to know something, look it up.

Newsflash: If you have to put yourself into horrible debt, you better have a guaranteed 100k job (read: physician or vet)

Here are some organizations working for student loan justice.

Rev Jesse Jackson’s Reduce the Rate Campaign: cap all education lending at 1% interest

www.reducetherate.org

Student Loan Justice, a grassroots org by and for student-debtors. Aims to educate the public about the educational loan racket and restore consumer protections on education debt

http://studentloanjustice.org/

Students should pay $1 per year to go to college. Not a dollar more.

Out-of-state students and International students should pay a bit more, but not that much more. Say $20 per year and $300 per year. If that poses hardship, they too can pay $1 per year and put in some in-state public work.

Thanks Georg S for pulling apart the nonsense logic, that students mortgage their lives for a chance at the “job market.”
The job market is not a place where value is stable, consistent, or uniform. Consider that a public employee’s work was valued at X, and then after austerity rhetoric, now that America is broke, we find that their value is at X – concessions – concessions – concessions. Or their value is 0, layoff. Two weeks ago a Borders employee was valued at Y. Now that the company has initiated complete liquidation, this bookseller, along with thousands of co-workers, is valued at 0, layoff. Meanwhile an employee at another bookstore or an online bookstore is still valued at more than 0.

What’s the point of higher education today? Higher education today trains individuals to consider themselves as a collection of marketable skills, to engage in games of risk and chance (like borrowing enormous sums in anticipation of future earnings), and to feel most worthwhile when they demonstrate the potential to secure corporate profits.

Largely absent from this entrainment is an accurate grasp of what is meant by a “jobs market.” It is not like your traditional exchange system, where people might dispense with money altogether and barter goods or share skills. It is not a supermarket, where supply and demand are represented by real commodities set at particular prices of exchange.

The jobs market is basically a lottery, a slightly rigged lottery that selects for obedience to the corporate bottom line (maximize and privatize profit while externalizing costs onto the public).

There is no reason that public education should be diverted from the cause of community service, into slotting students for corporate HR. Many people are regarded as complete failures in the eyes of corporate HR, and rightly so. After all, the corporation is an inhuman institution.
But in spite of (or perhaps because of) this failure, they are complete successes at being human beings. This different interpretation is not pointed out as often, since a capitalist economy values money and the power to secure more money over being kind or having good human relations (except where having good human relations will secure more money). After enough rejections a job applicant maybe starts to internalize the values of HR.
That is a real tragedy.

1$ per year is what the governor costs the state, as he quickly sells off state functions to his corporate sponsors.

My response to austerity rhetoric (tighten your belts, we’ll share the sacrifice and by we I mean you) there’s no reason for any university student to pay more than 1$ for what’s been theirs all along—a way to learn, grow, and serve the people.

“There’s no money” is a flat out lie. There’s money for education, road repair, pensions, housing food utility assistance, medicare, and medicaid. It’s just going to banking and finance, the ultra-rich, and the war machine (five armed conflicts at present).

And along with cuts to vital public resources like social security, medicare and medicaid, an end to in-school interest subsidy is also on the table to avoid a federal “shut down.” That would mean that if you take out a federal loan, interest accrues starting day one as it does for unsubsidized federal loans and private loans. Federal and private education lending are both rigged such that they stand to profit immensely more off of student-debtors should they default on their loans. A common scenario is that the lender company sells the loan back to itself and sends its subsidiary collecting agency. These transfers are all funded by the student-debtor by way of penalties and interest.

$1/year in-state tuition and not a dollar more.

America is not broke.

George S.:
How about naming just one of the student loan “facilities” owned by MSU?

Without question, MSU—and all universities and colleges—facilitates the student loan racket—via their respective departments of financial aid. And don’t we all have to fill out the FAFSA forms?

I paid off $325,000 of student loans. It took me 6 years. It has just as much to do with your spending habits, as it does your new post grad income. But the interest, which you CANNOT deduct when you make over $100 k/year, was compounding each year at 6% or so—which was almost $20,000 per year just in INTEREST! So I really had no choice but to pay these loans off ASAP. That was on a salary of $120,000 per. But I chose one of those “good” major that the previous blogger mentioned, what about the other 90% of bachelors and post grad debtors? They are totally screwed.

Great article! Excellent debate! With MSU recently raising tuition above their promised level, we are forced to lose $18 Million—a huge story. This topic—and I elect you as lead writer—needs a ton more attention. During the school year, MSU students MIGHT actually get pissed off enough to demand change!

Clearly whoever wrote the comment about the “good” majors for making money didn’t do their research. First of all, the majority of those “majors” aren’t undergrad degrees in any event. They require either professional school of some nature (med school, law school, or at least a master’s). So if you are one of the unlucky few who gets bogged down in a “pre-[whatever]” degree and then doesn’t successfully complete the post-grad education, you’re stuck with a basically worthless degree and all of the debt. And including JD in there made me laugh as well. If you’ve been paying attention at all (which those of us int he profession are forced to) you’ll see that law schools around the country are pumping out new lawyers at a rate the market can’t support. A law degree is not the “money-maker” people think it is. And tacking an MBA onto it just adds to the debt load of the would-be lawyer that can’t find work. So if young people are being told that going into law is a good profession to pay your debts quickly, that is completely and utterly false. Most of them will be lucky to even find work in the field within the next 5-10 years. And if you want to stay in Michigan?? Well, if you find a job at all, you’re probably looking at 45-50K as a starting salary unless you’re one of the very lucky few. Never mind the 100K of debt…

http://www.newser.com/story/104122/law-schools-making-too-many-lawyers.html

Actually, MSU didn’t raise tuition more than 7.1%. The tuition rate that was set by the university is 6.9% higher this year. The calculation that they are using when they say they raised it more takes into account a rebate that the university decided to give…AFTER setting its tuition rate…from federal stimulus funds. That doesn’t change the rate they set as the tuition rate, they just decided to do the right thing and put money back into students’ pockets when they got the stimulus. And it hasn’t been decided yet whether the university is losing the $18 million in funding, there is a hearing tomorrow. Given the facts, I would be very surprised if we do actually lose the funding. It is just an error in a database.

If you want students to get riled up about something, it should be the fact that state funding has dropped from 70% of MSU’s funding to 20%. The university really has no choice but to raise tuition in these circumstances. But young people don’t vote in the same number that older people do, so politicians don’t make higher education spending a priority.

@ Well Done:

This is a terrible article, and there is no debate. Calling Hayhoe’s brown-nosing legitimate journalism is like calling Fox News’ defense of Murdoch non-biased. Pretty much everyone who has responded has made it plainly obvious that the real experience of people is the legalized racketeering by the Admin, lead by Don Simon.

And whether it was 7.1% or 6.9%, does it really matter? The Admin pledged years ago to halt tuition increases…that never happened. If this really is the only option the Administration has, I don’t really see the need for their “leadership”. If there is only one thing to do (and therefore nothing to decide), we don’t need to pay a board of people massive salaries to sit there and take the credit. Fire the Administration, or find someone actually has the skills to do more than just the easiest thing.

…and they did raise it 7.1%, otherwise this wouldn’t be an issue.

It’s not a question of whether they raised it 6.9% or 7.1%. It’s a question of whether they raised it 6.9%, which is less than the 7.1% limit set by the state in order to receive the “extra” $18 million in funds (which isn’t extra…it’s just less of a cut than the already unprecedented, massive cut they made this year) or if they raised it 9.4%, which is more than the 7.1% limit. Try to keep up.

So tell me, if you were in charge, how would YOU handle the 15% budget cut THIS YEAR ALONE from the state? People complain about more and more out of state and international students coming to MSU when it’s “Michigan taxpayers footing the bill” but that is less true every year. State funding used to make up two thirds of the university’s budget; now it is less than a quarter.

NoDebate:

Why don’t you pay him/her to solve those problems? You honestly want this person to sit down and solve these problems for free while you go along and pay Simon and Co.? That’s idiotic, and another example of the self-righteous, “life’s hard, get used to it” generation whose reckless actions got the state and country into this mess in the first place.

“It’s not 6.9 or 7.1, but 7.1 or 9.4….you just gotta look at it the right way”….typical bureaucratic obfuscation designed to cover up corruption and shoddy leadership.

It’s plainly obvious you are a Administration sympathizer less interested in making education affordable than helping Lou Anna pad her retirement package. I wouldn’t be surprised if the Admin pays your salary.

A) The dark and mysterious Admin you speak of does not pay my salary…I don’t HAVE a salary, I am a student taking out loans.

B) I didn’t suggest anyone do anything for free. I was merely saying that it’s easy to sit on the sidelines and whine about how dumb the people in charge are when really it’s a complex situation and there isn’t an easy solution.

C) It’s not about “life’s hard, get used to it”…my point is students should NOT get used to it, instead students should get off their butts and make some noise. But the anger shouldn’t just be directed at the university – tuition raises are a symptom of a much larger problem, which is the yearly decrease in education funding by the state (in Michigan and elsewhere).

D) It’s not just which way you look at it. Tuition was set last year, and then LATER there were stimulus funds that the university could have used in a number of ways, but decided to give a temporary tuition rebate. That doesn’t change the amount they originally set for tuition, or the fact that this year’s tuition rate is 6.9% higher than last year’s. Governor Snyder is holding out that $18 million like it’s a prize when really it just means a 15% CUT in ONE YEAR instead of an ever larger cut.

Beau is no Glenn Beck; he’s NOT Fox News material. Give him a little credit for taking an honest, objective look at the value of a college education and the impact of predatory student loan practices by the lenders on those people fortunate enough to have a college degree—but who are having no luck finding a good job in this economy.

Regarding good majors, the statistics don’t lie, but I qualified my statement by stating
that one must have the intangibles—not just have a diploma.

More to the point, is the issue of college kids selecting a major with no real job prospects in that field. Furthermore, why does a university dump so much money on the school of education, when only 25% of students can find a job here?

Wow. I just stumbled on this and let me say, whoever this defender of the Administration is seems shady. I mean, come on…prove that you don’t work for the Admin. It just doesn’t make sense that you’re a student that advocates for letting the Administration do what it does….wouldn’t it make more sense that you choose a school which doesn’t behave this way, instead willfully engaging as a part of the problem. It’s kind of hard to claim that you’re both against higher tuition and in favor of the Admin’s actions. Your 1984 doublespeak is a clear giveaway of who you really work for.

It’s not doublespeak, if you read what I actually wrote. I’m not advocating for letting the Administration do whatever it wants; I am trying to get people to see that there is a larger problem that is contributing to higher tuition, which is the decrease in state funding that has taken place in almost every state, year after year. Until students start being a more vocal group (AT THE POLLS, where it matters), politicians will keep pandering to older voters.

The reason I think the whole “was tuition raised 6.9% or 9.4%?” is a bunch of bull is because again, it is the state government looking to split hairs so they can screw MSU out of another $18 million on top of a 15% cut.

My point is not so much to defend the Administration but to get people to stop reacting like puppets. The state says MSU raised its tuition beyond the 7.1% and people get all in a tizzy but where were they a couple months ago when the Governor’s budget was released and screwed over every university in the state?

You can believe what you want, but I am a student. I’m against higher tuition, but from my viewpoint it has a lot to do with state education funding and people should be paying more attention. When your state funding is cut year after year and your main source of revenue besides state funding is tuition, I just don’t understand how you can’t see that the two are linked!

Dear Readers:

Please forgive the PR student we hired to defend the Administration’s position. Like most organizations trying to hide shameful activity, we figured we could hide it by commissioning an article that creates diversions from the facts and someone to defend it on the comments. Unfortunately, our decision to cut funding for the PR program in favor of our new campus on the Moon has backfired.

Please understand that the members of the Administration are the victims here….after all, the decision to cut program funding while raising tuition instead of finding new revenue streams was a difficult one.

But it’s not all about cuts. We know that careful investment will come back to the University many times over. That is why today we are proud to announce MSU-Moon, a new $900 million lab on Earth’s nearest celestial neighbor. At MSU Moon, moon-travelers will now be able to complete 12 degree programs, with more options through online supplementation.

Some might say that building a campus on the Moon seems like a waste of resources, but they clearly don’t understand the complicated situation the University faces in the 21st century. MSU-Moon places Michigan State on the cutting edge; it is a bold new initiative which places our world-class education on another world. Now, MSU is leading the way in moon-based education.

To address a different issue, today the Michigan legislature will be examining our tuition adjustments. DO NOT FORGET, without our state handouts, the future of our students is doomed. It is the legislature’s decision to give us less funding which is at fault, and pointing out our inability to generate meaningful revenue from something other than higher tuition just goes to show you don’t understand the situation.

After all, with the quality of today’s MSU degree, how could you?

Sincerely,
The Administration