Higher learning is just an overpriced, speculative investment......

Jodi - posted on 05/21/2011 ( 5 moms have responded )

3,562

36

3907

Is education the next bubble?

Higher learning is just an overpriced, speculative investment that typically rewards graduates with dismal career prospects, says billionaire Peter Thiel

Billionaire libertarian businessman Peter Thiel, the founder and former CEO of PayPal, is perhaps best known as the venture capitalist who gave Facebook the angel investment it needed to really get started. But, increasingly, he's getting attention for his controversial views on higher learning. Last year, he launched the Thiel fellowship, which gives grants as large as $100,000 to 20 tech entrepreneurs who drop out of college by age 20 to pursue their own ideas. Then, in a National Review interview earlier this year, Thiel said that higher education is a "bubble in the classic sense," because education is "overpriced," something people have "an intense belief in," and an investment that's unlikely, in the majority of cases, to have a positive return. He made the point again last week at TechCrunch. Given the "financial disaster" of student loan debt surpassing credit card debt, does Thiel have a point?

No, education isn't about returns on an investment: The concept of the education bubble is based on horrifying, false logic, says Freddie deBoer at L'Hote. "To see an education, college or otherwise, as merely a way to increase the amount of money you make is a terrible corruption and fundamentally unsustainable." Increasing earning potential was never meant to be the sole purpose of education, and if it's reduced to that, we're all in trouble.
"Yet another casualty"

Well, college is overpriced: College has gotten too expensive, with state governments cutting aid to public universities, says E.D. Kain in Forbes. But let's not abandon institutions of higher learning. If needed, we should raise taxes to make public universities more affordable. "Yes, education costs money. But that money should not fall squarely on the heads of middle class kids who are forced to take out tens of thousands in debt just to attend school."
"A college education should not result in crushing debt"

And grad school is a particularly poor investment: College is still a good decision for most young Americans, but I can't say the same about grad school, says Conor Friedersdorf at The Atlantic. Grad school has become a socially acceptable way to drink beer, read, and go into massive debt in your 20s. "Upper-middle-class Americans tend to overvalue the non-financial benefits of grad school." Thiel's wrong about a lot. But at least he's "challenging the cultural assumptions that cause a lot of people to make bad life decisions."
"Is there an education bubble?"

http://theweek.com/article/index/214400/...

Now, not being familiar with the cost of university/college in the US, I can only assume it is incredibly expensive. What are your opinions on this?

MOST HELPFUL POSTS

[deleted account]

I do not think the main purpose of college is financial return, I think it is more about broadening opportunities in fields that one would enjoy working in. In my state, public school teachers, who require at least a 4 yr degree, earn less than welders, who are trained on the job. If it were only about money, we wouldn't have any teachers.

College is expensive, and tuition costs are inflating at more than twice the national inflation rates, but that is more because of cuts in public funding than money hungry universities.

Right now, public tuition averages around $7,500/yr for in-state students ($12,000 for out of state), and private tuition averages about $35,000/yr.

If a student is forced to take on the entire tuition in student loans, then yes, of course it would be financial disaster. Parents need to cover some of the cost, yet I hear so many saying "My parents didn't help me!" or "They need to learn the value of their education!" In our generation college was much less expensive (remember, inflation for tuition is higher than national) Second, they are not going to learn that value until it is too late--there is no way a teen working part time after school can save up enough to go to college without loans, most don't even try, so they will take out loans which do not have to be repaid until they are well out of school. Students attending school on loans tend to be have higher drop out rates and lower grades than those attending on mom and dad's dollar.

Tara - posted on 05/21/2011

2,567

14

114

Very interesting article, I just watched a documentary regarding this topic in the US. Here's the description of the doc.

"College Conspiracy debunks many myths, including the belief that Americans with college degrees earn $1 million more in lifetime income compared to high school graduates without a college degree.

The most important basic fact that most Americans don’t understand about 4-year colleges is that most Americans spend 6 years attending them before graduating. With U.S. tuition inflation for private colleges averaging 5.15% over the past half a decade, assuming this same rate of tuition inflation continues, a college with tuition of $30,000 today will have tuition of $38,563 in the sixth year a student attends it.

In College Conspiracy, NIA analyzes the total cost to attend college by factoring in not just rapidly rising tuition expenses, but also the interest payments on student loans, and the lost income that college students would have earned if they worked at an average entry-level job that doesn’t require a college degree.

NIA’s investigation has determined that the organizations that helped create and promote the $1 million in additional income myth, included General Equivalency Diploma (GED) recipients as being high school graduates.

The truth is, GED recipients are not real high school graduates and they are being used to unfairly skew down the average income of high school graduates without a college degree.

This has the effect of artificially inflating the amount of additional lifetime income that college graduates earn over high school graduates. College Conspiracy shows the real numbers that never get discussed in the mainstream media.

The college-industrial complex has created not only myths, but outright hoaxes, in order to scam American students into becoming indentured servants for life. Three years ago when 15 new pharmacist schools were about to open in the U.S., the college cartel bribed economists to come out with phony research reports showing that the U.S. was experiencing a huge shortage of pharmacists."

There you go.... I believe there is an education bubble about to burst in the US. I think that too many people go to college etc with the idea that they will make a million more in their life time, or that they will always get the better paid position etc. etc.
and too often than not, so many of these grads go on to deliver pizzas, waitress, etc. just to pay off their huge debts that they incurred trying to get ahead of the pack...

http://topdocumentaryfilms.com/college-c...

5 Comments

View replies by

April - posted on 05/21/2011

3,420

16

263

Welll. I have a bachelor's and a masters, while my husband did not stay in college long enough to obtain a degree of any kind. He has a great job that pays amazingly well. He makes more money than I have ever made in any job I had that required a college degree. When I eventually get a teaching job, he will still make more money than me. In fact, he will probably have his promotion by then and will be making double what I would make as a new teacher in the public school system. I love that have the opportunity to become a teacher, but I am definitely jealous that my husband does not have student loans, did not finish college and still has a great job. It really makes me wonder what the right path for my son is. I dont want him to drown in debt from student loans like his mother, but i want him to have an education too!

Johnny - posted on 05/21/2011

8,686

26

322

I could not agree more with everything Kelly said.

Wipe that look of shock off your face.

If you view college as a path to to wealth and a steady job you may well be disappointed. But it still has a great deal to offer our society. We will simply stagnate if we do not encourage and explore every possibility for gaining new and retaining old knowledge. College is not the be all and end all, but it plays an important role. The last thing we should be doing in the faceof the astounding level of ignorance and denialism of science that seems to be growing is to destroy institutions of higher learning. They do have lots of problems to be sure, but it should be fixed not dismantled.

Sneaky - posted on 05/21/2011

1,170

33

131

I am very, very happy that I live in Australia and will not be paying my uni debt back for many, many years.

And I am operating on the 'horrifying' theory that education equals financial rewards.One day, when I am child free, I will reap the financial rewards of having a higher education because I will be able to get a job, in the field I want, as opposed to taking a full-time job stacking shelves because I have been out of the work force for 10 years.

Join Circle of Moms

Sign up for Circle of Moms and be a part of this community! Membership is just one click away.

Join Circle of Moms