Student Loans and the Education Bubble. I was early for a meeting on friday afternoon and found myself sitting in a chat between a University President and members of the faculty.
One of the faculty members asked the President about the "education bubble. " The President gave his thoughts on the topic and then unexpectedly turned to me and asked what I thought. I am a product of student loans. Goldman Explains Why The Amount Of Total Student Loan Debt Has Quadrupled Since The Year 2000. Goldman's Alec Phillips and Hui Shan are out with a very good note about the size and implications of student loan debt in the American economy.
Student loan debt has gotten a ton of interest over the past year since A) it's growing B) there's a heightened interest in all things credit-boomy C) the bad job market has made the existing burden even more onerous. Good clean student loan stats aren't that easy to come by, but as of Q4 2011 there was at least $870 billion in student loan debt outstanding, says Goldman, and that number has quadrupled since the year 2000! So why the big surge? Alex Phillips and Hui Shan give four reasons: The cost of attending college has risen. Meanwhile, here's a pretty interesting chart on the correlation between unemployment and college attendance. Goldman Sachs. PIMCO's Bill Gross Blasts Job Creation, College Education. In an unusual mid-month commentary, PIMCO chairman Bill Gross says fiscal balance alone will not likely produce 20 million jobs over the next decade.
He said the government must re-think how it approaches job creation, and said that a college education was a waste of money. “It is becoming obvious that the 2012 election will be fought on a battlefield of job creation,” Gross writes in the July issue of his monthly newsletter. “ A 9.1% official unemployment rate, and a number nearly double that when discouraged and part-time workers are included in the rolls, portend an angry and disillusioned electorate, which will include millions of jobless college graduates ill-trained to compete in the global marketplace. He notes that over the past 10 years under both Democratic and Republican administrations, only 1.8 million jobs were created while the available labor force has grown by over 15 million. least it used to serve a purpose. Is College a Waste of Money? ‘Short’ College Through Online Education Stocks. PIMCO provocateur and bond fund legend Bill Gross garnered much attention in his latest missive questioning the value of a college education in today’s tough economy.
Gross praised efforts to promote entrepreneurship or vocational training, while assailing the conventional liberal arts degree, which he described as “a four-year vacation interrupted by periodic bouts of cramming or Google plagiarizing.” The PIMCO portolio manager is clearly onto something. It is clarifying for investors to know what not to invest in, and there may be ways investors might “short” a conventional college path whose value is in decline.
A website that offers college advice recently described what it called the “law school bubble,” lamenting the plethora of graduates with six-figure indebtedness and little prospect of employment. The medical profession may be no better than law from a financial perspective, according to Boston University economist Laurence Kotlikoff. Peter Thiel: We’re in a Bubble and It’s Not the Internet. It’s Higher Education. Fair warning: This article will piss off a lot of you.
I can say that with confidence because it’s about Peter Thiel. And Thiel – the PayPal co-founder, hedge fund manager and venture capitalist – not only has a special talent for making money, he has a special talent for making people furious. The BS Bubble. I've had lots of people ask me my thoughts on this article by Techcrunch's Sarah Lacy: "Peter Thiel: We're in a Bubble and It's Not the Internet.
It's Higher Education. " And let me start by saying "thanks" -- I'm glad you think my opinion on education would be relevant, interesting, important, whatever. True, I spend almost all my time thinking about it, even though I'm no longer a college student or an educator. Why Peter Thiel Giving $100,000 to Students to Drop Out of College Isn’t Really An Education Story. I cringe at the notion of offering children money on the condition they do our bidding.
Schools of hard knocks. Is Law School a Losing Game? Here he is, sitting one afternoon at a restaurant on the Upper East Side of Manhattan, a tall, sandy-haired, 27-year-old radiating a kind of surfer-dude serenity.
His secret, if that’s the right word, is to pretty much ignore all the calls and letters that he receives every day from the dozen or so creditors now hounding him for cash. “And I don’t open the e-mail alerts with my credit score,” he adds. “I can’t look at my credit score any more.” Mr. Wallerstein, who can’t afford to pay down interest and thus watches the outstanding loan balance grow, is in roughly the same financial hell as people who bought more home than they could afford during the real estate boom. He spent it on a law degree. Well, every angle except one: the view from law schools. In reality, and based on every other source of information, Mr. But improbably enough, law schools have concluded that life for newly minted grads is getting sweeter, at least by one crucial measure. Burden of College Loans on Graduates Grows. While many economists say student debt should be seen in a more favorable light, the rising loan bills nevertheless mean that many graduates will be paying them for a longer time.
“In the coming years, a lot of people will still be paying off their student loans when it’s time for their kids to go to college,” said Mark Kantrowitz, the publisher of FinAid.org and Fastweb.com, who has compiled the estimates of student debt, including federal and private loans. Two-thirds of bachelor’s degree recipients graduated with debt in 2008, compared with less than half in 1993. Last year, graduates who took out loans left college with an average of $24,000 in debt. Default rates are rising, especially among those who attended . The mountain of debt is likely to grow more quickly with the coming round of budget-slashing. Some education policy experts say the mounting debt has broad implications for the current generation of students.
Why We’re Building Skillshare. “Learning is not a product of schooling but the lifelong attempt to acquire it.” – Albert Einstein Skillshare is a community marketplace to learn anything from anyone.
Our mission is to flip the traditional notion of education on its head and democratize learning. We’re building Skillshare because we believe the world needs a learning revolution. Piquing your curiosity, finding new passions, and learning new things should be a lifelong process. As our team started to think about what the educational landscape of the future could look like, we got excited by the range of possibilities. This exploration led us to think about the difference between learning and schooling. We believe that the world’s most abundance resources are knowledge and skills. TEDxNYED - Jeff Jarvis - 03/06/10
Is U.S. Higher Education A Bubble Economy? (Infographic Video) Plenty of smart people seem to think there’s a bubble in higher education. And for good reason: The cost of a college education is skyrocketing and student debt is growing out of control, at the very same time that college graduates are struggling to find jobs. When they do, it’s often in positions that hardly require any of the "critical thinking" they were told a college education would teach them. Critics might count all this as mere alarmism--but the data backing up the trends is so freakin’ crazy. Just watch this video created by Education News.
So what’s going to happen in the face of all this data? The "market" for higher education simply isn’t pure enough. Thus, the colleges and lenders pushing student loans upon kids know that they can pile on crazy dollar amounts and never have that debt erased in bankruptcy court. But enough economics!