College Doesn't Pay?

Not so sure about the NYPost's math here, but it's interesting that the conventional wisdom may be shifting...

"College degrees bring higher income, but at today's cost they can't make up the savings they consume and the debt they add early in the life of a typical student. While Ernie was busy earning, Bill got stuck under his bill."

What Counts

Yesterday I attended the funeral of my mother's oldest sister, Anna Lisa Crone. My aunt was a blonde beauty and a warm wit who spoke eight or nine languages fluently, and left behind her upbringing in rural North Carolina to marry and live among Russian intellectuals. She got her PhD from Harvard and taught in the Slavic department at the University of Chicago for nearly 30 years. At her memorial service, held in an ivy-shrouded Gothic chapel on the campus of the Divinity School, distraught colleagues and students stood up one after the other and bore witness to her achievements as a friend, scholar, mentor and teacher. My mother, who gave the eulogy, repeated that my aunt's essential engagement with life was as an educator even when she was a little girl, drilling her baby sister in Latin conjugations for fun.
Although she contended with sexism at the beginning of her career, my aunt survived to be lauded nationally and internationally for her contributions to the study of Russian letters and even more so, to the community of scholars who loved these 18th, 19th and 20th century writers--Derzhavin, Tsvetayeva, Turgenev--as much as she did.

My aunt was a specialist. She was an expert in a concentrated area of the humanities with no immediate economic payoff, the type of department that is most likely to be targeted for cuts in an era of scarcity like today's. Her life's work was not interdisciplinary or innovative when it came to technology or a million other buzzwords. She imparted her wisdom as a teacher the old-fashioned way, through time and intense attention, face to face.

I'm working on a book about the future of higher education: cost, access, productivity, specific learning outcomes, and many other values that can be measured. In honor of my aunt's memory, and of my parents, who are both lifelong academics as well, I will be working hard to keep in mind the values of education that cannot be measured.

Community Colleges Get Some Respect

Obama's main man Rahm Emanuel hinted at a big announcement that's coming from the administration soon to get 5 million extra students through community college in the next 10 years. Mainly the new funding will go toward vocational programs, likely through the reauth of the Workforce Reinvestment Act.

Obama's administration has been unusually respectful of the role of community colleges. I had the pleasure of interviewing Martha Kanter last month at Foothill-De Anza Community College in Los Altos, CA where she is the chancellor. She is the Undersecretary of Education-nominee --the first person with a community college background to be tapped for such a high position in the Department of Education.

I've said it before, I'll say it again: community colleges are the big, important, unsung heroes of the higher ed system in the US. They educate half of high school graduates, 11.5 million students in all.
Their enrollment is going up as the economy and their funding is going down. CCSF in San Francisco is having to cancel 800 classes for the fall unless they can find private donors to sponsor them.

Others have expressed concerns that expanding the role of community colleges, particularly with an emphasis on vocational training, will lead to a further stratification of our higher education system by class. Ideally, you don't want poor kids--solely due to income, not aptitude or interest--tracked into institutions with fewer resources overall, weaker liberal arts programs, and no original research. Conversely, middle class and rich kids who attend the four-year privates and publics may be overpaying for useless perks and filler and missing out on economically sound, reality-based vocational skills. ( I went to Yale: one journalism course, zero in personal finance. More would have been useful.)

I think the answer is to break down barriers among institutions to allow disaggregation of the various benefits of higher education, sharing of best practices and access to the best knowledge and research available, for everyone.

Cuomo Decides What to Do With Student Loan Blood Money: Lame

So a couple of years ago, NY Att'y General Andrew Cuomo pursued this huge crackdown on student lenders and college financial aid officers for improper business relationships and high-pressure marketing tactics. Total settlement payments collected: $13 million.

New York State is finally announcing what he's going to do with the cash: (1) create a "Web-based, live-operator staffed student loan center" to help students and parents choose the best loan options and minimize loan debt, and (2) produce a campaign of public service announcements about financing a college education, with an emphasis on avoiding loan debt.

Ok, another source of independent, easily accessible information for navigating the byzantine financial aid system is not a bad idea. Perhaps the Project on Student Debt could expand its excellent efforts along these lines into call-center model.

But PSAs? Really? Do students or families need to see TV commercials about the evils of loans?

America's Biggest Personal Debt Items

At Cnbc.com, in ascending order: Payday loans, small business loans, farm loans, car loans, tax debt (unpaid taxes), home equity lines of credit, and of course student loans (now at $583 billion).

Update :Good point! Medical debt, which is huge, is not included on this list b/c it's "not reliably tracked."

Advice For The Young And Jobless

NYT blog coverage of an event at the Century Foundation which I moderated yesterday...
My takehome messages from the event:

1) The job market is really terrible for everyone right now, but no one is better equipped to compete than young college grads.
2) The long-term outlook is much better than the short-term outlook.
3) The real opportunities lie in helping others (both people in your own social network, who are your richest resource to find work and vice versa, as well as actual job openings in education, health care, nonprofits and social services.)
4) What this country really needs is a labor movement to improve the quality of all jobs.

Hear Me on the Takeaway Talking Foreclosures, Health Care

Great show. I always marvel at live radio and how calm everyone stays under pressure. Another guest, a woman who almost lost her home, was supposed to call in but they couldn't reach her, so it was just John Hockenberry & me for 10 minutes.

How Much Student Debt is Too Much?

I have an answer on the New York Times' Room for Debate blog.

Podcast on Young People and Credit Unions

Private College President: Please, Save Us From Our Own Wasteful Ways!

“If we’re going to change our ways, we’re really going to need to be pushed,” Mr. Diver said, referring to colleges generally. “It’s not going to well up from within.”

Next Crisis for Business: Consumer Credit

From The Big Picture:






From Harvard Business Review:
(Ratio of household debt to earnings.)

So the average American household OWES 20% of their assets, 28% of their net worth, and 130% of what they earn in an average year. That includes mortgages, student loans, auto loans, and credit card debt--everything.

This bubble--everything but mortgages-- actually has yet to pop, and when it does, all kinds of businesses will be affected, according to a great article by William Jarvis and Ian MacMillan in the HBR.

That's because most of the American economy depends on consumer spending. 68% of the entire economy, to be exact, up from 63% in the 1950s.

People are furiously trying to get out from under this debt. Savings rates have bounced from -0.5% to almost 6% in scarcely a year. Until they pay it off, the US economy can't recover. And after they pay it off, it's hard to see how we can go back to the spending rates the economy depended on before.

5 Ways To Fix Colleges

So glad to see the Times staying on this topic.

"AMERICAN education was once the best in the world. But today, our private and public universities are losing their competitive edge to foreign institutions, they are losing the advertising wars to for-profit colleges and they are losing control over their own admissions because of an ill-conceived ranking system. With the recession causing big state budget cuts, the situation in higher education has turned critical. Here are a few radical ideas to improve matters."

Compared to the previous Op-Ed on the topic they ran, "End The University as We Know It," this one is a lot more practical and down to earth, but less provocative and memorable.

Opening the books on accreditation is a great suggestion. An extra year of compulsory schooling is interesting, but maybe too one-size-fits-all. I'm not sure that I agree that college should pay for huge mass-marketing campaigns though.
The two pieces taken together encompass a dichotomy in the way we tend to think about the purpose of higher education. One side is economic development and extending opportunity to the disadvantage. The other side is the advancement of knowledge, the liberal arts, and innovation.

What's Good for GM

"It's hard not to see GM's bankruptcy as a signal moment in a larger history. If mighty GM can fail, cannot also the United States? And the answer is, absolutely." The company's stark decline is "a rebuff of the notion of exceptionalism," notes Neil. "Any organization that fails to sufficiently safeguard its means of self-correction and reform, that forsakes long-term investment for short-term gain, that piles up debt year after year, will eventually fail, no matter how grand its history or noble its purpose.""

(Via Slate)