Saturday, May 15, 2010

Is Our Oil-Based Economy Absurd?

I got a kick out of one of Mark Fiore's recent animated political cartoons.  Enjoy.

EDIT--here is another oil-related cartoon that I enjoyed. I don't necessarily agree with all of these messages; I just find these political cartoons to be amusing.

Friday, May 14, 2010

Does State Spending on Higher Education Slow Economic Growth?

While reading this Associated Press report (pointed out to me by the But I Did Everything Right blog), I came across the following profound material:

Ohio University economics professor Richard Vedder [author of Going Broke by Degree: Why College Costs Too Much] blames the cultural notion of "credential inflation" for the stream of unqualified students into four-year colleges. His research has found that the number of new jobs requiring college degrees is less than number of college graduates.

Vedder's work also yielded something surprising: The more money states spend on higher education, the less the economy grows — the reverse of long-held assumptions.
If what Vedder says is true, then his study would be absolutely profound.  It makes intuitive sense that wasting a huge amount of resources on education that does not have economic value for society--educating more people than there are jobs for them in the fields for which they are training--would slow economic growth in some sort of way.  However, that is all just theory and conjecture on my part.  It would be great to have a formal academic study demonstrating this.  It's too bad that it would be drowned out by all of the propaganda from the higher education industry, the media, other pundits, and our politicians.

You can listen to an NPR clip where Vedder is interviewed, here:

Is a College Education Worth the Debt?

Tuesday, May 11, 2010

A Law School is PAYING Students $250 to Post On Its Blog in an Attempt to Encourage Students to Attend (and to take on huge amounts of loan debt).

Do we need any further evidence that the law school industry will stop at almost nothing to increase or maintain law school enrollments?  The Jobless Jurisdoctor posted about this first, but I think it is so damning that it deserves separate mention on this and other blogs.  According to the ABA Journal:

A new student blog at the Michigan State University College of Law may not provide all the answers. However, Kristen Flory, director of the school's marketing and communications department, promoted the idea and apparently sees Spartan bLAWg as a plus factor for persuading applicants about the benefits of attending school there.

About nine of the 18 law students who applied were accepted as bloggers and are now paid $250 to write at least two posts monthly, reports the Associated Press in an article reprinted in New York Lawyer (reg. req.).
If the law schools are willing to pay people to post positive content, proving that they are self-interested and in essence for-profit organizations, then why would they not attempt to manipulate their employment statistics or to at least present them in a misleading or fraudulent light?

I wonder, how do law school deans and administrators sleep at night knowing that their costly educational programs will destroy people's lives for decades?  (They probably sleep very well on fine silken sheets in luxurious 5000 foot mansions.)  Do any of these people have a conscience?

Sunday, May 9, 2010

PBS Frontline Airs Excellent Program on For-Profit Colleges

Earlier this week PBS's excellent Frontline documentary series aired an insightful program on for-profit colleges called College Inc., which you can watch online.  Although this was not about graduate and professional education nor even undergraduate education at legitimate colleges and state universities, it was still very worthwhile.  Rather, this was about education at the for-profit McColleges or College-Marts that have sprung up like dandelions across the land, such as the University of Phoenix, DeVry, ITT, and others.  I found the program to be very interesting because I knew little about these businesses, my never having paid much attention to them.  The New York Times also has an excellent article about for-profit colleges, here, which is worth reading:  The New Poor: In Hard Times, Lured Into Trade School and Debt.

Apparently, the cost of attendance is much greater than what I had ever imagined, perhaps reaching as high as a whopping $500 per credit hour.  (If you need 128 semester credit hours to graduate with a bachelors degree from a legitimate university, then the cost of attending at $500 per credit hour would come out to a whopping $64,000 over four years for a podunk bachelors degree.)  Much of this is funded by non-dischargeable federal student loans, and it sounds as though those loans are the lifeblood of these businesses.  [End the federal student loans (or, in essence, the non-dischargeability in bankruptcy of these loans) and these businesses would probably die.]  So, various types of accreditation that allow these businesses to fund themselves through students' federal student loans are essential.  Guess who is involved with investing in these for-profit colleges?  Wall Street, which is a sure sign that the owners of these for-profit colleges have students' and society's best interests at heart (not).

As with many for-profit businesses, advertising consumes a considerable percentage of some of the schools' budgets.  It was also mentioned that the cost of the contract-based faculty at some of these schools was less than the advertising budget; the percentage of money spent on the educational product is not great.  (I think it was reported that one school only spent around 10% on faculty--the educational product.)  It also looked like some of the schools may have used telemarketers (!!!) to call people (in presumably low-income neighborhoods) in an attempt to sell them on the idea of going to college.  Admissions and finance counselors may have even received commission-based or at least sales performance-based compensation for trying to convince people to go to college.  So, in essence, some of the schools may have been telemarketing federal student loans and convincing people to take out federal loans on a commission-like basis!

The problem?  Many of these people end up being burdened with non-dischargeable student loan debt and degrees that have questionable economic and employment value.  Of course, many will not find jobs in the fields they trained for and won't be any better off than they were before but will have student loans to pay.  The program also reported about a couple lawsuits.  For example, some nursing graduates are suing one of the schools because, although the program was accredited and allowed them to obtain legitimate nursing licenses, their degrees were not credible in the job market and thus did not really allow them to obtain employment as nurses.  They said that their pediatrics internship was held at a day care center.  (On a side note, you have to wonder whether the accreditation has meaning any longer and whether the accrediting body was doing its job properly.)  In another case, students who had entered into a psychology PhD. program allege that they were (fraudulently?) told that the program was accredited when it was merely seeking accreditation, which means that they cannot obtain licenses to practice as psychologists, essentially rendering their podunk PhD's worthless.  I'm under the impression that these students received a hard-sell; they may have been sold on the program by people who were, in essence, salespeople for the college.

So who are these for-profit colleges marketed to?  They seem to be marketed to the lower classes, especially to minorities and people who might be the first member of a family to ever go to college and whose relatives wouldn't know (better) to advise them to attend legitimate, more established colleges and universities.  Also, presumably many of those people would be unable to gain admission to state universities.  It was also mentioned that (far less expensive and "non-profit") community colleges are packed and that now people are having difficulty gaining admission to them, leaving the for-profit mills as their only higher education alternative.

So why are all of these people, non-traditional students whose backgrounds probably would not allow them to gain admission to state universities and perhaps even crowded community colleges, so desperate to go to college?  Because our nation's economy is in the shitter and everyone has been indoctrinated with the notion that the only way to advance economically (or to merely be able to obtain a lower middle class job) is to get a college education.  Presumably, the only jobs they can find otherwise are dead-end poverty-wage jobs, so why not roll the dice on these for-profit colleges?  Since our politicians and economists, in their great wisdom, allowed American manufacturing (as well as knowledge-based) jobs to be sent to India, China, and Mexico, to be filled with foreigners on H-1B and L-1 visas, or (more likely to affect the students attending these for-profit colleges) given to masses of immigrants (both legal and illegal) the students are under tremendous pressure to find knowledge-based employment.
The end result is that the job market will be flooded with these McBachelors degrees.  (Traditional state universities and established private colleges were already flooding the market.)  Also the bachelors degree will become the modern equivalent of a high school diploma, except it isn't free.  However, in spite of all of this higher education, knowledge-based, college-education-requiring jobs will not magically materialize into existence to accommodate everyone who has a college degree.  All of the time, money, and resources invested in this unprecedented amount of higher education will change almost nothing about the state of our nation's job market.  It will not create jobs or wealth for anyone other than the owners of the colleges, some administrators, and perhaps some faculty (if they receive decent compensation at all which I highly doubt).  Instead, in reality, it is all just a huge amount of economic waste.  Consequently, our society will be filled with unemployed or underemployed-and-out-of-field people with student loan debt and our nation may gain the distinction of having the most well-educated Walmart employees.

I have been railing against the problems of degree overproduction in graduate and professional education for years.  Prior to a viewing of College, Inc. I was aware of the existence of the for-profit schools, but I was unaware how expensive they were nor that the scope of these operations was so large.  Thus, I highly recommend a viewing of this video.  Hopefully Frontline will one day do a report about the law school and graduate school scams at "non-profit" state universities and private colleges, but I doubt it.

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