How To Destroy The Value Of College
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2017-06-05 11:35 by Karl Denninger
in Education , 358 references Ignore this thread
How To Destroy The Value Of College
[Comments enabled]

It wasn't that long ago that I could resoundingly recommend that teens in the US who had an interest in any sort of "STEM" field go to college and get their degree.

I've not been able to make that argument for the "social arts" or the "liberal arts" for close to 20 years, but as recently as 10 years ago it was still an excellent argument, even at the inflated, debt-laden price, for STEM-related fields.

About five years ago I started to sound the alarm even in the STEM fields, as the offshoring and H1b abuse got bad enough that with few exceptions the risk had risen to unacceptable levels even in those fields, considering that your risk profile extends out at least four years from when you go to college and usually five or six.

Now, today, it appears I was right to be concerned -- and I can no longer make any sort of argument for post-secondary education at today's prices in the United States.

Monthly salaries plummeted 16 percent to 4,014 yuan ($590) this year for a second-straight annual decline, data from recruitment site show. The Ministry of Education estimates that 7.95 million will graduate this year, almost the population of Switzerland.

$590 per month?  That's about $7,000 a year folks.  Can you survive on that?  Nope; it's less than you'd make working part time in retail.

Now is there some "parity adjustment" for distance and putting the work over there?  Sure.  But how much?  Not six, seven or ten times as much!

That's the problem in a nutshell and it will immediately turn into personal financial suicide as soon as you take any sort of debt to attend school.

See, sunk cost is fine -- it's money you had, you spend it, and if there's no return on the investment (or one that's too small) you lose the investment but your future is not destroyed.

Do the same thing when debt is involved and you're done.

This country must pull the "federal financing games" out of colleges -- all of them, without exception, period.  That will force prices to collapse to what people can actually pay out of their pockets.

Learning is never bad but going into debt on a speculative bet when your competition makes 1/10th what you think you're going to earn is not only foolish it's downright suicidal and those who promote and promulgate such systems are defrauding you when they suggest that such is a "good investment."