Posts tagged ‘college bubble’

Debt and Risk Aversion

Our debt has a way of focusing us on downsides, because debt turns a continuous income curve into two discontinuous lines: “solvent” and “insolvent.” More generally, debt has a way of magnifying life events. When things are going well, debt can help them go better: You can buy a house and a car, or you can buy a bigger house and a nicer car. But when things are going badly, debt can turn a slight income loss into a major disaster.

Most Americans now have a lot of debt, whether they’re ordinary workers or commercial landlords. Which means that most Americans have to be extraordinarily sensitive about letting their income cross the line where they can no longer support their debt payments. Which in turn means that already sticky prices may become positively glue-like.

Too Much Debt Is Making Us Sticks-in-the-Mud

Tags: , , , , ,

High School and College Admissions and DECA

One thing that jumps out of the IHE article is that this proposal is a creature of elite prep schools. Most American high schools have, at most, a handful of students who are realistically competitive at elite universities, but elite prep schools aspire to place a substantial fraction of their students there. Alas, that college admissions offices expect to see grades puts elite high schools in the embarrassing situation of implicitly comparing their students to one another.

. . .

From 1898 to 1919, Harvard, Yale, and Princeton opened up their admissions requirements by adopting the College Entrance Exam Board and abandoning a Greek-language requirement. These reforms made admission more open to non-elite boys, who as a rule were unable to take the schools’ proprietary entrance exams and attended high schools that did not offer Greek. As a result, the Ivies saw a sizable increase in Jewish students, and Columbia even experienced WASP flight, which its peers dreaded. Although Harvard discussed an explicit Jewish quota in 1922, this proved unpalatable, and so between 1922 and 1926 the big three Ivies adopted admissions boards that gave a heavy emphasis to qualitative evidence of “character” (read: WASP culture emphasizing muscular Christianity, club membership, and athletics over book learning) as a pretext to limit Jews.

Decades later, the University of California system, within which both Karabel and I are sociologists, adopted a similar policy to ensure racial balance. Traditionally, about half of the UC class was admitted by a GPA and SAT formula. The beginning of the end of this policy came in 1995 and 1996, when a Board of Regents vote and ballot initiative barred the use of affirmative action at the University of California, without which the flagship campuses of the university admitted notably fewer blacks and Latinos and notably more Asians and “decline to state” as freshmen. (White students were stable.) In response, between 1998 and 2001, the university switched to a system of comprehensive review greatly emphasizing qualitative evidence of character, and this had the desired effect of bringing the undergraduate body a bit closer to the state’s overall ethnic composition.

Basing college admission on well-roundedness and character is both noisy and cumbersome. Anyone who regularly writes letters of recommendation knows that they consume an enormous amount of time to write, and anyone who regularly reads them knows that they typically convey minimal actual information, largely because by convention they are almost never negative. Admissions essays at the undergraduate level are even worse, serving primarily to demonstrate the insatiability of credulous admissions officers for bromides.

However, the time consumed by writing and reading the materials in the admissions packet is dwarfed by the effort that goes into shaping lives to fit them. One of the biggest impacts of the demand for well-roundedness is that making a well-rounded child is an enormous drain of time for families. Garey and Valerie Ramey’s NBER/Brookings paper “The Rug Rat Race” (72-page PDF) suggests that our culture of intensive parenting is driven by competition for college admissions. They find a pronounced rise in time spent on child rearing since the mid 1990s concentrated among college-educated parents. Tellingly, the pattern does not hold in Canada, which has a less hierarchical college system. Nor does the pattern apply to underrepresented minorities, whom colleges already seek and who experience diminishing marginal returns to résumé-polishing. To treat time spent raising kids as a problem sounds heartless, but when the increased time consists of chauffeuring kids from activity to activity or “helping” them with projects, this is a brutal war of attrition against rivals to the meritocratic elite, not quality family time. In the long run, this may lead not only to endless stress for parents and kids alike, but also to lower fertility, since if you make something more costly, you get less of it.

The sick irony is that giving great weight to well-roundedness and character is seen as egalitarian. Test prep serves the role of Satan in the theodicy of meritocracy, a ready explanation for the association between test scores and social class of origin. What this myth overlooks is that most scholarly studies of test prep estimate that it raises SAT scores by a piddling couple dozen points out of 1600. Nonetheless, our suspicion of the SAT’s well-known association with household income provides an egalitarian rationale for the regressive turn to all variety of precocious “achievement” as the basis of college admissions, as if test scores could be bought but résumé-padding could not.

. . .

If you want a vision of the future, imagine a plutocratic elite preening to college admissions officers about how sophisticated and nuanced it is, forever.

Elite High Schools Plot to Undermine College Admissions

For an alternative, see DECA:

– “Owning Their Future: The Joy of DECA, Part I

– “Inspiration in a Blue Blazer: The Joy of DECA, Part II

It is interesting to observe the moral preening among parents as they attempt to get their children into the “best” schools.

Tags: , , , , , , , , , , ,

Credentialism and “Meritocracy” and Philosopher Kings

Does America Really Need More College Grads? – George Leef

The Chinese imperial bureaucracy was immensely powerful. Entrance was theoretically open to anyone, from any walk of society—as long as they could pass a very tough examination. The number of passes was tightly restricted to keep the bureaucracy at optimal size.

Passing the tests and becoming a “scholar official” was a ticket to a very good, very secure life. And there is something to like about a system like this … especially if you happen to be good at exams. Of course, once you gave the imperial bureaucracy a lot of power, and made entrance into said bureaucracy conditional on passing a tough exam, what you have is … a country run by people who think that being good at exams is the most important thing on earth. Sound familiar?

The people who pass these sorts of admissions tests are very clever. But they’re also, as time goes on, increasingly narrow. The way to pass a series of highly competitive exams is to focus every fiber of your being on learning what the authorities want, and giving it to them. To the extent that the “Tiger Mom” phenomenon is actually real, it’s arguably the cultural legacy of the Mandarin system.

That system produced many benefits, but some of those benefits were also costs. A single elite taking a single exam means a single way of thinking:

The examination system also served to maintain cultural unity and consensus on basic values. The uniformity of the content of the examinations meant that the local elite and ambitious would-be elite all across China were being indoctrinated with the same values.

All elites are good at rationalizing their eliteness, whether it’s meritocracy or “the divine right of kings.” The problem is the mandarin elite has some good arguments. They really are very bright and hardworking. It’s just that they’re also prone to be conformist, risk averse, obedient, and good at echoing the opinions of authority, because that is what this sort of examination system selects for.

. . .

[T]his ostensibly meritocratic system increasingly selects from those with enough wealth and connections to first, understand the system, and second, prepare the right credentials to enter it—as I believe it also did in Imperial China.

And like all elites, they believe that they not only rule because they can, but because they should. Even many quite left-wing folks do not fundamentally question the idea that the world should be run by highly verbal people who test well and turn their work in on time. They may think that machine operators should have more power and money in the workplace, and salesmen and accountants should have less. But if they think there’s anything wrong with the balance of power in the system we all live under, it is that clever mandarins do not have enough power to bend that system to their will. For the good of everyone else, of course. Not that they spend much time with everyone else, but they have excellent imaginations.

America’s New Mandarins – The paths to power and success are narrowing. So is the worldview of the powerful.


Tags: , , , , , , ,

Higher Ed Bubble, Demographics and Roe Effect

The Roe Effect, combined with way-too-high college tuition and fees for a lousy education, the resulting student debt, and underemployment of recent college grads is going to lead to many more colleges closing in the coming years.

A waning number of high school graduates from the Midwest is sparking a college hunt for freshman applicants, with the decline being felt as far away as Harvard and Emory universities.

The drop is the leading edge of a demographic change that is likely to ease competition for slots at selective schools and is already prompting concern among Midwestern colleges.

“You can’t create 18-year-olds in a lab,” said Brian Prescott, director of policy research at the Western Interstate Commission for Higher Education in Boulder, Colorado. “Enrollment managers are facing an awful lot of pressure that they can’t do much about.”

Denison University, in Granville, and the College of Wooster, both project about a 13 percent drop from within the state. Ohio residents make up about a quarter of Denison’s student body and about a third at Wooster. Denison and Ohio Wesleyan University have boosted travel outside the state to attract prospective students, especially in California and the Southwest.

Dwindling Midwest High School Grads Spur College Hunt

From April 2013: Colleges Struggling to Stay Afloat

Too many high school students are told they must go to college when many of them would be much better off getting trained in a 1 to 3 year program learning a trade or earning a certificate in a practical skill, like welding. See
mikeroweWORKS Foundation
Don’t Go to College Next Year
Don’t Send Your Kids to College
Phi Beta Cons

Tags: , , , , , , , , , , , ,

Sordid Links

Tags: , , , ,

Is Your College Degree Worth It? from Jared Moore

College has never been more expensive to attend. Now you can check if your degree is worth the cost.

As the number of students enrolling in college has increased, college costs have climbed as well. Between 2000 and 2011, the average cost of attending a private, not-for-profit, four year degree granting program increased over 37%, including tuition, room and board.

Is Your College Degree Worth It? Find Out

Higher education productivity, as measured by academic degrees granted by American colleges and universities, is declining. Since the early 1990s, real expenditures on higher education have grown by more than 25 percent, now amounting to 2.9 percent of US gross domestic product (GDP)—greater than the percentage of GDP spent on higher education in almost any of the other developed countries. But while the proportion of high-school graduates going on to college has risen dramatically, the percentage of entering college students finishing a bachelor’s degree has at best increased only slightly or, at worst, has declined.

Addressing the declining productivity of higher education using cost-effectiveness analysis


Unfortunately, it seems that the future Aldous Huxley predicted in 1932, in Brave New World, is arriving early. Mockery, truculence, and minimalist living are best, then enjoy the decline. However, we do need a Revolving Door Tax (RDT) and to prosecute politicians and staff and their “family and friends” who profit from insider trading.

Tags: , , , , ,

What does college cost?

Tags: , , , ,

The Higher Ed Bubble is Leaking

A growing number of liberal-arts colleges are supplementing their traditional glossy brochures touting ivy-covered libraries and great-books seminars with more pecuniary pitches: Buy seven semesters, get one free. Apply today, get $2,500 cash back. Free classes after four years.

The schools are adjusting their marketing to attract students at a time when families are struggling to foot the bill for college—and increasingly concerned about the potential payoff. Some of the most aggressive offers come from the most financially vulnerable schools: midtier, private institutions that are heavily dependent on tuition and sit in regions with shrinking pools of college-bound high-school seniors.
. . .
The pressure on liberal-arts schools is coming from several directions. Nationwide, the number of graduating high-school seniors this year is expected to decline to 3.32 million from a projected all-time high of 3.41 million during the 2010-11 school year, according to the Western Interstate Commission for Higher Education. And fewer college-bound seniors are choosing private four-year schools: Between 2006 and 2011, the percentage of students at those schools dropped to 20% from 22%, according to the College Board Advocacy and Policy Center.

For students headed to college, tuition is a bigger issue than ever. The average cost of public and private schools jumped 92% between 2001 and 2011, compared with a 27% rise in the consumer-price index. Last year the average amount that students at public colleges paid in tuition, after state and institutional grants and scholarships, climbed 8.3%, the biggest jump on record, according to the State Higher Education Executive Officers Association.

Colleges’ Latest Offer: Deals: Liberal-Arts Schools Dangle Bargains in Response to Concern Over Cost, Value

Continue reading ‘The Higher Ed Bubble is Leaking’ »

Tags: , , , , , , , , , , ,

Colleges disappearing?

The paradoxical effect of the full-recourse [student] loans is that banks are happy to provide almost unlimited funding to a slice of society rich in ill-conceived ideas.
. . .
As if the debt burden was not enough, potential employers are checking credit reports. High student debt can render you unemployable.
. . .
An entire generation has been set up for debt servitude. We are eating our young. The source of the problem is a complex and nuanced confluence of factors. The chronically profligate boomers, stressed by inflationary pressures and dazed by the equity and real estate downturn, are in no position to help their kids pay for college.

2012 Year in Review: Free Markets, Rule of Law, and Other Urban Legends, by David Collum


In fifty years, if not much sooner, half of the roughly 4,500 colleges and universities now operating in the United States will have ceased to exist. The technology driving this change is already at work, and nothing can stop it. The future looks like this: Access to college-level education will be free for everyone; the residential college campus will become largely obsolete; tens of thousands of professors will lose their jobs; the bachelor’s degree will become increasingly irrelevant; and ten years from now Harvard will enroll ten million students.
. . .
Why, after all, would someone pay tens of thousands of dollars to attend Nowhere State University when he or she can attend an online version of MIT or Harvard practically for free?

This is why those middle-tier universities that have spent the past few decades spending tens or even hundreds of millions to offer students the Disneyland for Geeks experience are going to find themselves in real trouble. Along with luxury dorms and dining halls, vast athletic facilities, state of the art game rooms, theaters and student centers have come layers of staff and non-teaching administrators, all of which drives up the cost of the college degree without enhancing student learning. The biggest mistake a non-ultra-elite university could make today is to spend lavishly to expand its physical space.

The End of the University as We Know It

Somehow, recently, a lot of people have taken an interest in the broadcast of canned educational materials, and this practice — under a term that proponents and detractors have settled on, massive open online course (MOOC) — is getting a publicity surge. I know that the series of online classes offered by Stanford proved to be extraordinarily popular, leading to the foundation of Udacity and a number of other companies. But I wish people would stop getting so excited over this transitional technology. The attention drowns out two truly significant trends in progressive education: do-it-yourself labs and peer-to-peer exchanges.
. . .
There’s a popular metaphor for this early stage of innovation: we look back to the time when film-makers made the first moving pictures with professional performers by setting up cameras before stages in theaters. This era didn’t last long before visionaries such as Georges Méliès, D. W. Griffith, Sergei Eisenstein, and Luis Buñuel uncovered what the new medium could do for itself. How soon will colleges get tired of putting lectures online and offer courses that take advantage of new media?

Two more appealing trends are already big. One is DIY courses, as popularized in the book Fab by Neil Gershenfeld at the MIT Media Lab. O’Reilly’s own Make projects are part of this movement. Fab courses represent the polar opposite of MOOCs in many ways. They are delivered in small settings to students whose dedication, inspiration, and talent have to match those of the teacher — the course asks a lot of everybody. But from anecdotal reports, DIY courses have been shown to be very powerful growth mechanisms in environments ranging from the top institutions (like MIT) to slums around the world. Teenagers are even learning to play with biological matter in labs such as BioCurious.

Fundamentally, DIY is a way to capture the theory of learning by doing, which goes back at least to John Dewey at the turn of the 20th century. The availability of 3D makers, cheap materials, fab software, and instructions over the Internet lend the theory a new practice.

The MOOC movement is not an indicator of educational evolution

massive open online course (MOOC) – Wikipedia

Tags: , , , ,

No College Degree, No Problem

Employers require degrees because the degree is considered a proxy for skills, knowledge, or ability. Managers don’t have time to vet every candidate thoroughly, so they depend on this institutional stand-in for a value judgment. It borders on irresponsible, but they do it. Some of the time, it works. But, understanding why they rely on degrees in the selection process should help you address what they really want: Proof you can do the work and proof that you have the sophistication to grow in the job.
. . .
Resumes and degrees are not always valid indicators of ability to do a job. So, help employers by giving them other ways to judge you. No one says this is easy — sometimes you have to be clever. I know one guy who followed a manager to a professional conference, chatted him up, talked shop, and got an interview and an offer. This shared personal experience tops any formal credentials — but it’s a lot of work. It should be. Managers are sometimes foolish to hire based on a piece of paper, or on a sheepskin — because candidates who deliver credentials can’t always do the job.

No College Degree, No Problem, by Nick Corcodilos (emphasis added)

Every manager today can attest to the truth of this statement: “candidates who deliver credentials can’t always do the job.”

Community colleges are one of America’s incredible resources for adults. Check out the courses available at your community college. And for goodness sake do NOT borrow money to attend school.

What is going on? And what can we do about it? McKinsey argues persuasively that a big part of the problem is that educators and employers operate in parallel universes—and that a big part of the solution lies in bringing these two universes together: obliging educators to step into employers’ shoes, employers to step into educators’, and students to move between the two.

The best way to do this is to revamp vocational education, which outside the German-speaking world has been treated as the ginger stepchild of the education system. Governments have poured money into universities. Universities have competed to sing their own praises. As a result, parents and their offspring have shunned vocational schools: many students surveyed by McKinsey chose to go to academic schools despite thinking that vocational ones would give them more chance of finding work.

The great mismatch: Skills shortages are getting worse even as youth unemployment reaches record highs

U.S. Community Colleges by State – Univ. of TX

List of community colleges – Wikipedia

“It’s an extraordinary opportunity for a woman out of vo-tech school being given a job so quickly,” [Keith Hammond, welding teacher at Cumberland Perry Area Vocational Tech School] said. “Her TIG welding skill got her this job.”

But for [Molly] Soule, the confidence she gained while attending CPVTS proved most valuable.

“Vo-tech is such a wonderful opportunity, even if you don’t know what you want to do,” she said. “It gives you so much confidence and so many skills that you can use in life. It’s really a great thing.”

Perry County welder takes one giant leap for womankind


Mockery, truculence, and minimalist living are best, then enjoy the decline. We also need a Revolving Door Tax (RDT).

Tags: , ,