The Market Ticker
Commentary on The Capital Markets- Category [Education]
2015-03-04 11:44 by Karl Denninger
in Education , 527 references
 

The cracks in the dam have begun to show, and water is spurting from them.  Meanwhile, the ivory tower, gold-encrusted with the many millions of taxdebtor dollars (many forcibly extracted from impressionable young people via knowingly-false starry-eyed claims peddled to same) is beginning to sway as the foundation has been undermined -- and will soon come crashing down.

SWEET BRIAR — In an announcement that stunned students Tuesday, Sweet Briar College said it will close at the end of this academic year because of “insurmountable financial challenges” blamed on the dwindling number of women interested in single-sex education and the pressures on small, liberal arts schools.

The "insurmountable financial challenge" is charging young adults upward of $100,000 for four year degrees all-in when a liberal-arts education is, in most places, a recipe for a sub-$50,000 a year salary.

This, in a nation where tax burdens on such people in the "middle class" reaches 25-30% of one's base pay and is guaranteed to rise due to deficit spending and entitlement decisions that cannot possibly be paid on existing cash flow is utterly insane.

It was once the case that you could get a liberal arts degree for about $3,000 a year including books with no other mandatory costs.  That is, roughly $100/credit hour.  You could live off-campus as you decided but if you wanted to live on campus block-constructed dorms of modest expense were available, making the $5,000/year full-in college education, absent discretionary spending, quite possible.

This, in turn, could be worked for during summer vacation and a part-time, mostly weekend-hour job during the school year, making the proposition one of an entirely sunk cost.  Thus, if you only earned $40-50,000 a year after getting your degree you were still ok.

That is no longer possible and it is the intentional acts of the higher-education "industry" that have made it so, along with the idiotic bleating and advocacy for more loans on looser terms that have driven costs to the moon.

Undergraduate tuition is $34,935, and room and board costs $12,160. In 2013-14, 99 percent of undergraduates were awarded aid (a mix of grants/scholarships, loans and work-study) that averaged $18,914.

The full 4-year cost here is $200,000!  Even with "financial aid" the cost is still over $100,000 for four years, and what's worse is that in all probability half or more of that "aid" is loans, which means the graduate comes out of this school having sunk more than $100,000 into their so-called "education" while carrying back $50,000 more in debt!

This is utterly insane and indefensible.  It was indefensible a decade ago and it is today.  

Any school peddling such a system of so-called "education" is selling something has negative real value ex-costs, and they know it.

If you're a parent and assist, recommend or even sit silently while your kid applies to and goes to such a place you are either an idiot or worse, you are actively conspiring in destroying your now-grown child's economic future.

In short, you, along with the faculty and staff of any such institution, are monsters.

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