The Class of 2013 Got the Biggest Scam of All

... an overpriced college education. Graduates are now hugely in debt, unlikely to find a well paying job, and can no longer default on student loans.

Education costs have sky-rocketed faster than inflation. They say 300% more even after inflation over the last 30 years. Somehow the higher education system continued to drive tuition costs up without any pulse on reality. There's a non-stop stream of new parents jumping through admission hoops. An then there's always the unemployed looking to re-invent themselves.

Higher education is recession resistant but the great recession might change that. Some schools are struggling as more students default on student loans. And how soon before families decide it isn't worth the risk? Will tuition rates flatten out as schools attempt to compete for a smaller number of applicants?

http://www.marketwatch.com/story/dear-class-of-13-youve-been-scammed-2013-05-17?dist=lcountdown

Here's some telling charts showing % delinquencies and % loans outstanding for each state.

Overall it appears the northern states have a higher loan % and the southern states have more delinquencies.

http://economy.money.cnn.com/2013/05/17/delinquent-student-loans/?iid=HP_LN

Until people start making smarter decisions involving secondary education, both in the schools they attend and the choice of major, the trend will continue. I know of someone who has a degree in "tourism" from a major university give years ago, now baby sits kids. Not sure who got stuck with the school bill.

Shame we continue to piss away our manufacturing base, because beyond popular belief, manufacturing is king when it comes to economies. This whole promise of a "service economy" is a washed up pipe dream.

The Bernank just gave a commencement speech and told the class to be ready to re-invent themselves over and over. Sounds like we will continue to have our high paying jobs outsourced. It might make little sense to spend the time and money specializing in a particular degree.

Fifty years ago retirees had guaranteed pensions. They could work in up and coming fields like plastics and semiconductors. This generation may have little to look forward to even with a promising degree.

I hope there are a bunch of revolutionary things to come.

Congress could be passing a bill to prove a college's worth to potential students and families. It's all about informed consent. The bill would "mandate that institutions receiving federal student aid dollars collect and publish statistics on past graduates-including graduation rates, average student loan obligations and average starting salaries."

Former Sec of Education William Bennett has a new book called "Is College Worth It?"
He says only 150 of America's 3,500 colleges are actually worth the cost of attendance including (annual tuition): Harvey Mudd College ($43k), California Institute of Technology ($40k), Massachusetts Institute of Technology ($42k), Stanford ($43k), and Princeton ($40k). I personally think they'd be better at half the price.

Diseasel wrote:

The Bernank just gave a commencement speech and told the class to be ready to re-invent themselves over and over. Sounds like we will continue to have our high paying jobs outsourced. It might make little sense to spend the time and money specializing in a particular degree.

It would appear people are not truly vesting effort into degrees that have a corporate need. That's got to be a major consideration, or it should be. Will the degree I'm obtaining have value and a market after I graduate? Or have I pigeon holed myself into a niche area that has limited desire in the job market?

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Fifty years ago retirees had guaranteed pensions. They could work in up and coming fields like plastics and semiconductors. This generation may have little to look forward to even with a promising degree.

Yep somehow we all were convinced that having the company paid pensions was a bad thing. We continually accept less and less. The wage disparity from the top to the bottom has never been greater than in any time of our country's history.

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I hope there are a bunch of revolutionary things to come.

I'm not so optimistic here. We had the internet revolution of which we were the hub of innovation and execution. We're continuing to piss that away though outsourcing for cheap labor.

How many times in our lifetime will we get a chance to carve out an all new industry? I believe the chances are few if any.

War is not an industry. Delivering Pizza and doing nails isn't an industry. Health care is not an industry as there's not a tangible durable good that can be transferred and sold many times over that many people are involved in delivering. Think about how many people and business entities are involved in the production of a washer and dryer, or an automobile both directly and indirectly. Manufacturing still seems to be king when it comes down to brass tacks. History indicates where manufacturing is located is where prosperity is found. At one time here in the US we had over 80% of the world's manufacturing. This time corresponds to our most prosperous, go figure.

Exactly. That inevitable job loss when a new industry blossoms.

Sounds like the cable industry might contract as the internet gets fully rolled-out and content providers bypass that middleman cable industry.

Lots of talk of getting rid of program bundling via satellite and cable providers. I could see that rippling through the television/entertainment business which may not be a bad thing.

Smartphones are becoming a commodity, not much more bells and whistles to add. Unless Apple pulls their head out, they may lose more and more marketshare and that'll kill jobs.

Social media has little hope to make much of a difference in the job outlook.

The auto continues to struggle. Europe is a drag on profits. We'll see how it all pans out.

The defense industry is contracting.

The healthcare industry bubble is bound to pop.

The music industry is contracting.

The banking industry isn't very hopeful.

There's a few promising things coming down the pike but they tend to be products and not new science: 3D printers, oil/gas production, drones, robots, Google Goggles,...

The "College Industry" is really just an extention of the public school system. A funnel of money to certain special interests.

As always, it depends on what degree you have and what college you attended. I went to a state college with 2 degrees, one in education and one in environmental. Each of those are only a step ahead of a degree in Psychology that without a masters is useless. My wife went to a state college, was the first person in the engineering department in 17 years to graduate with a 4.0 and got her P.E. Job offers are still offered to her 24 years later. My son attends private college for 58K per year, scholarship is $36.5 per year. He will leave college with a masters in mechanical and electrical engineering. He is in one of the 10 ten engineering colleges in the country. 600 graduates per year, 750 companies come to the school to recruit graduates every year. Is it a gamble, maybe, but the odds are stacked in his favor. He has designed robots since high school and it is a very sought after program.