The Higher Education Churn
Only 41% of students complete a 4-year degree in 4 years. 70% of those who don't will leave school with loads of debt and never get a degree.
When you view America's institutions of higher learning as what they have become, their attacks on the skilled trades and people like Mike Rowe begin to make sense.
Higher education, both public and private, is an industry. It is sort of a multi-level marketing scheme funded by government backed, unsecured loans and taxpayer funded grants.
It doesn't matter to the colleges and universities if underprepared or unqualified students are sucked into a year or two of college and fall out with nothing but a load of debt. That is probably a big part of their business model - the basic, general classes typically "taught" in the first two years are also likely to be the largest (lowest cost per student) and taught by instructors who are relatively cheap as compared to the professors who teach smaller classes at the higher, more specific levels.
This is a lot like the old bait and switch con married to stock "churning".
Churning being the excessive trading of assets in a client's brokerage account to do little more than generate commissions for the broker or brokerage.
Churning students that have little chance of success just to collect tuition is the human form of churning. And it is especially pernicious when they do it to kids while collecting the same tuition as for the later years, but the cost is far lower.
Several government and private sector entities confirm this pattern.
According to graduation statistics, only 41% of students complete the requirements for a four-year degree in four years. Of the 59% who don’t, some go on to get a four-year degree within six years, but roughly 70% fall out in the first two years and never achieve a degree.
So those 70% took on debt that they still must repay for nothing. Bankruptcy doesn’t discharge the debt, the lenders and the higher education industry lobbyists made sure of that.
How great it must be to be in an industry where, no matter if you fail your customers, you are still guaranteed to be paid, right? What a great business model!
Like every other thing on the face of this planet, uniqueness means value. When something is rare and special, people will pay more to possess it.
There was once a time when a 4-year degree was unique and special, and due to those characteristics, they brought value to the job market. I do not think that is true any longer. Bachelor’s degrees have been devalued by the explosion in the number of worthless scholarship and the lowering of standards to achieve the degrees. The ubiquity of 4-year degrees has reduced them to the value equivalent to that formerly accorded to a high school diploma.
The big difference is that neither you nor your parents had to take on a load of debt for you to graduate high school.
I’m with the people who are calling for students to understand their return on investment for themselves and consider rejecting a costly, yet worthless degree in favor of going into the skilled trades now. It makes no sense to get a degree that leaves you owing $100K (plus interest) when you are only qualified for a $30 to 40K job upon graduation – especially when plumbers and welders are in extreme demand and are making $80K a year with no school debt.
We have friends, the son of whom turned down a “traditional” college education in favor of a one-year program to become an electrical lineman. It is entirely possible he will be making six-figures in a couple of years, and it is unlikely this job will ever not be in demand. He can always get a degree in his spare time and never take on a penny of debt if he so chooses.
In today’s economic environment, I believe he made the right choice. He has essentially begun a personal economic portfolio based on an indispensable skill. That’s the right basis for a career.
Of course, this is not to say that in all cases, higher education is not a good thing – but for many, it is an albatross hung around their neck that they will never escape.
It doesn’t have to be that way.
Reasoned choice is the key.
Freedom to choose means being free – for life.
I skipped college and elected to learn on my own. Best decision I will never regret.
I did go to college ... for two years. I contracted with a local company, and got a lot of experience doing that. And then, I got a full-time job, and never finished my degree.
I'm now an IT Architect Specialist (fancy title for a programmer who influences the design of the system) for the largest banking/software/services/merchant services/wealth management company in the world.
Did it come easy? Heck no. Years of 60 hour weeks, night support, etc. But I'm in the top 10% of the company (which, sadly, influences my 401(k) contribution percentage), and with just a High School diploma.
Could that be replicated now? Probably not. I got my first full-time job in 1985, by word of mouth from a college friend to the company that hired me. That just doesn't happen anymore.
But hard work and talent SHOULD be able to get you far. College, even then, didn't teach me what late nights on the DEC PDP-11 and IBM 4341 writing "stuff", like a mail system in PDP assembler that eventually was used in about a dozen colleges via the DEC DECUS share system.