Education bubble?

[southsider2k5]

http://www.economist.com/blogs/lexington/2...lythenextbubble

 

 

It is a pretty interesting read.

[NorthSideSox72]

I don't see a bubble there at all. But what I do see is, as college expenses keep going up far higher than the rate of inflation, that its furthering the unfortunate nature of how far the well-off and poor are from each other as they go through their lives. Higher college costs mean fewer poor students able to get degrees.

 

[Iwritecode]

It may be that fly-by-night privates have over-expanded - the U of Phoenixes of the world - but it would be a good thing to get rid of them

 

Completely agree with this. I had a horrible experience with a recruiter from UoP and I never even took a single class.

 

 

Here's another article.

 

http://washingtonexaminer.com/node/80276

 

This seems to be more of the root of the problem though:

 

A New York Times profile last week described Courtney Munna, a 26-year-old graduate of New York University with nearly $100,000 in student loan debt -- debt that her degree in Religious and Women's Studies did not equip her to repay.

[Texsox]

I don't see a bubble there at all. But what I do see is, as college expenses keep going up far higher than the rate of inflation, that its furthering the unfortunate nature of how far the well-off and poor are from each other as they go through their lives. Higher college costs mean fewer poor students able to get degrees.

 

 

Actually it may be the working poor that have that issue and the really poor, may not. Small sample size, one University in Texas - Pan American, but if your family income is less than $32,000 per year for a family of four, 100% of your tuition and fees are convered with a few hundred left over for books and such.

 

I believe it is the lower middle class and middle class that really feel the pinch. They earn too much for many forms of financial aid, yet with a mortgage, credit card debt, etc don't have a $1,000 per month per child in college.

[The Gooch]

Completely agree with this. I had a horrible experience with a recruiter from UoP and I never even took a single class.

 

 

Here's another article.

 

http://washingtonexaminer.com/node/80276

 

This seems to be more of the root of the problem though:

 

Do not go to an online University unless your company pays for it. Even then, if there are other options take them.

[Soxbadger]

For profit universities are a serious problem in the US, unfortunately they have more money than the regular people they sell the classes to, so the laws remain favorable to them.

 

My friend used to be a Dean for a school much like Phoenix.

[StrangeSox]

For profit universities are a serious problem in the US, unfortunately they have more money than the regular people they sell the classes to, so the laws remain favorable to them.

 

My friend used to be a Dean for a school much like Phoenix.

 

Mostly thanks to federal student loans, of course. 90% of Kaplan's revenues are from federally backed loans. They don't care if the student will never be able pay them back because the for-profits have already made their money.

[Soxbadger]

I didnt even want to get into that.

 

I just meant the school has more money to lobby congress than the individuals who they are ripping off.

[The Gooch]

Its a shame. Education is worthwhile but the system is broken. How do some of these online colleges get accredited? More importantly, why does financial aid keep giving their students money? I would love to see the default rates on loans of students from online universities vs students from traditional universities.

[southsider2k5]

It would be interesting to work out a system that punishes universities whose students default more often then others. Even banks have to becareful who they loan to because it hurts their reserve totals if it happens. Universities literally face no consequences for having a bad product or bad decesion-making.

[StrangeSox]

Its a shame. Education is worthwhile but the system is broken. How do some of these online colleges get accredited? More importantly, why does financial aid keep giving their students money? I would love to see the default rates on loans of students from online universities vs students from traditional universities.

 

They buy accredited but struggling schools. A small school with accredation is worth ~$10m.

 

Frontline had a great program: http://www.pbs.org/wgbh/pages/frontline/collegeinc/

[Soxbadger]

Its an entire system of scheming. Basically the school helps the person get loans, the school gets the money, the govt and the person are left to figure out the rest.

 

Its all about money, and these private colleges have enough to make sure that congress doesnt strip their ability to give govt loans and financial aid.

[StrangeSox]

It would be interesting to work out a system that punishes universities whose students default more often then others. Even banks have to becareful who they loan to because it hurts their reserve totals if it happens. Universities literally face no consequences for having a bad product or bad decesion-making.

 

They actually benefit by having a cheap, poorly run product as long as they can keep convincing people through high-pressure sales to sign up.

[StrangeSox]

Its an entire system of scheming. Basically the school helps the person get loans, the school gets the money, the govt and the person are left to figure out the rest.

 

Its all about money, and these private colleges have enough to make sure that congress doesnt strip their ability to give govt loans and financial aid.

 

The Gainful Employment Rule survived the latest budget talks over Republican and some Democrat opposition.

 

http://prospect.org/csnc/blogs/adam_serwer...ent_rule_surviv

[southsider2k5]

They actually benefit by having a cheap, poorly run product as long as they can keep convincing people through high-pressure sales to sign up.

 

Exactly. It would be much more interesting if there were high default rates so instead the federal government put a cap on how many/much loans it would make to a certian school. I bet educational problems in schools would become a much higher priority.

[StrangeSox]

Exactly. It would be much more interesting if there were high default rates so instead the federal government put a cap on how many/much loans it would make to a certian school. I bet educational problems in schools would become a much higher priority.

 

The proposed Department of Education rule change for student loans, which has faced heavy industry opposition:

http://www.ed.gov/news/press-releases/prop...d-debt-earnings

[Iwritecode]

Do not go to an online University unless your company pays for it. Even then, if there are other options take them.

 

At the time my company would've paid for some of it. But about halfway through the registration process I realized what a big mistake I could possibly be making and got out.

 

Then I spent an hour on the phone with the recruiter who tried to convince me otherwise.

[The Gooch]

At the time my company would've paid for some of it. But about halfway through the registration process I realized what a big mistake I could possibly be making and got out.

 

Then I spent an hour on the phone with the recruiter who tried to convince me otherwise.

 

I used to be a contract recruiter for one of those online Universities. Needless to say, I wasn't there for very long. Bad product, shady sales schemes, and overall a heartless business. I compared stories with a friend who spent time with another online college and he had stories basically identical to mine.

[Texsox]

It would be interesting to work out a system that punishes universities whose students default more often then others. Even banks have to becareful who they loan to because it hurts their reserve totals if it happens. Universities literally face no consequences for having a bad product or bad decesion-making.

 

I like this idea if a couple issues could be resolved. Wouldn't this hurt Universities whose enrollment is poor? It would seem that students from poor backgrounds and parents who do not make much money would default at a higher rate. I worry that we start encouraging Universities to turn down poor kids because of a potential default issue. Who actually checks the credit worthiness and make the loan? I didn't think the schools themselves were involved at that end. And finally, if someone else does make that decision, isn't the school more like a retail store in this transaction?

[StrangeSox]

I like this idea if a couple issues could be resolved. Wouldn't this hurt Universities whose enrollment is poor? It would seem that students from poor backgrounds and parents who do not make much money would default at a higher rate. I worry that we start encouraging Universities to turn down poor kids because of a potential default issue. Who actually checks the credit worthiness and make the loan? I didn't think the schools themselves were involved at that end. And finally, if someone else does make that decision, isn't the school more like a retail store in this transaction?

 

Schools like Phoenix and Kaplan target the poor for exploitation.

[The Gooch]

Schools like Phoenix and Kaplan target the poor for exploitation.

 

This.

 

And Tex, the credit is only checked when students request a plus loan (graduate or parent plus). Subsidized and unsubsidized government loans usually cover tuition and plus loans are for those who need extra money.

[Soxy]

Just a couple of notes.

 

The legislature is trying to crack down on the for-profits.

The Chronicle: colleges scramble to comply with 90/10 law

The Chronicle: Senators mull changes to 90/10 law

The Chronicle: many for-profit colleges manage defaults to mask problems

 

Personally, I'm concerned about the Pell grants and the constant threat to make them go away.

 

This was a rather interesting and, mostly, related article about education, wealth and poverty. But we still are seeing very, very, very low levels of baccalaurate attainment among the lower classes. I imagine as we continue to see prices increase we're going to see over all lower and lower levels of attainment across the board.

Franklin's Sister

 

Also, according to that original graph, I am VASTLY underpaid.

[Texsox]

Schools like Phoenix and Kaplan target the poor for exploitation.

 

But how do you simultaneously go after the Phoenix's of the world and avoid schools in low income areas?

[StrangeSox]

But how do you simultaneously go after the Phoenix's of the world and avoid schools in low income areas?

 

How the DOE outlined it above? How various other agencies/groups go after people who are exploiting the poor and don't go after people who are actually helping the poor?

[southsider2k5]

How the DOE outlined it above? How various other agencies/groups go after people who are exploiting the poor and don't go after people who are actually helping the poor?

 

And who is the most likely to default on their loans? (Its a guess, but I bet it is right) Even though it makes sense, I bet the program gets labeled racist in the next 10 years when it starts disproportionally affecting minorities.