Curious, if the rate of return is catastrophic why do Americans keep borrowing money to go to ultra expensive Liberal art schools and continue to pay for useless degrees? (ie womans studies,etc..) Won't the free market cause demand to drop once word gets around that ending up paying 1400 a month in increasing debt to earn 650 dollars a month fetching coffee is a bad idea? So how does this make economic sense that people continue to borrow money to purchase a useless asset? Typically when something is overpriced and it provides catastrophic non dischargeable debt with a negative return on investment people would stop investing in such an instrument. But yet it seems prices and demand keeps going on. This seems to be unique to America. http://www.alternet.org/economy/106...ery:_student_debt_is_getting_way_out_of_hand/ Golden has taken a three-month hardship deference on her student loans but is well aware that the longer she pushes off payments, the higher the interest will climb. She had hoped to consolidate her loans, which are now at $112,000, but every place she called either no longer handles consolidations or turned down Golden because she was not employed full-time. Since there's no way Golden could possibly make her $1,400-a-month payments on a part-time barista's salary, she brokered a temporarily reduced payment of $650.
Because people are stupid And University of Phoenix which is partially owned by Bush family is taking advantage of it, enrolling thousands of youngsters whose tuition is paid by the government. So they are making money from our taxes. I hate this system
people do a lot of things because they've been told 'this is what you do'. If they stop and think about what they are doing and why, they wouldn't do it. You're right to question this
Because they are looking for cultural and personal enrichment. Not everyone wants to be a droid who's sole purpose in life is bringing in the biggest paycheck.
You can do that without going 200K in debt reading in some classroom about what others have done instead of living life while the world moves on and working like a slave for minimum wage as your debt keeps going up and up till infinity. I travelled the world myself, studied on my own and did read books , went to see plays at broadway,museums etc.. there is plenty of ways of enriching your cultural and personal life. You can learn a lot by traveling the world and experiencing different cultures and peoples. So now she is a slave droid fetching coffee for people doing menial labor, how the heck is that "Personal enrichment?" and not being a droid, when she is doing menial labor and long hours of it? She will probably die broke with never being able to get out anywhere ever and stuck in her neighborhood till she drops, probably having to be cremated by the state and buried in some unmarked state landfil when she dies. It is not about the biggest paycheck or having the biggest McMansion in some neighborhood or the most toys, but about financial freedom and being able to be free to experience the world and all that life has to offer. At least when I am on my dying bed, I will have a shit load of great memories to cherish with no regrets.
The media loves these stories of students who have made major errors in borrowing for their "education". There are plenty of them. They almost always involve students not poor enough to qualify for outright grants and with insufficient achievement to earn scholarships. Many of these stories involve students at for profit institutions, or the lower eschelon of public and private non-profit institutions. Furthermore, a classical liberal arts education is often confused with job training. In general, at elite schools, the students who can afford to pay do pay, i.e., their parent can afford it, scholarships and fellowships cover much of the expenses of the bright students of limited means. Their expenses may be supplemented by loans of course. Government grant money that does not have to be repaid is available for the highly qualified if they can meet a means test. These grants and loans are indexed to tuition, and these schools know this; thus they have little incentive to keep their tuition low, nor can they afford to do so, without threatening the elite quality of their faculty and facilities. At the other extreme are the for profit institutions. These schools are more focused on job training, but their main objective is profit. They have very low admission standards and hire the least expensive faculty they can get away with. Students at these schools can also qualify for Government grants and government sponsored loans. However endowments that could pay for scholarships and fellowships are essentially non-existent. Their students often get an inferior education though their training for specific low level jobs may be adequate. Then there are a large number of public and private colleges and universities that fall between these two extremes. It is possible to get an excellent liberal arts education, and job training too, at many of these schools. Students from the latter two categories of schools are likely to be the ones with the most problems related to high college debts and unemployment. An obvious concern is with for profit schools that imply that they are giving their "students", or perhaps "enrollee" is more appropriate here, a "college" education, when in fact they are mostly focused on job training, and because of these schools' limitations, it is usually a lower paying job. Many students can't get jobs if they have a certificate or "degree" from these schools, because they were admitted with a defective primary and secondary education, and that in turn hampered their ability to absorb the training they were paying for. (In other words these students have weak math skills, can't read beyond the Junior high level, and have quite limited vocabularies.) Then too, the very nature of these for profit "schools" makes it quite likely that their students will get, at best, a mediocre education, and possibly mediocre job training as well. I do have some personal advice for anyone with young children. And that is to spend your money and time giving them the best, enriched primary and secondary education you can afford. Consider sending them to one of the elite, private boarding schools for their last three years of high school -- a Choate, a Saint Paul's, or a Phillips Exeter perhaps. If you do that, their College education will take care of itself. In other words spend your money on the early years of their education, and you and they will have to spend very little on the later years.
I see what you mean but be honest, the disconnect between earnings and debt build up is there not only for art students or is it? I have to be honest and admit not being all that familiar with the concept of going so deep into debt to get a degree. I live in europe and over here getting a degree costs you maybe 15K? Most people here who study arts,philosophy or arts history or stuff like that end up teaching mostly getting paid 2K a month for 12 hours a week work and 4 months holiday a year... I agree enriching your (cultural) life can be achieved on an individual level as well but face it for most who have to work very hard to get by travelling a lot etc turns out to be a pipedream so I guess chosing a more dreamy and less job oriented study is a way of trying to steer your life in the direction you would like to see your life evolve. If you fail to arrive at the destination you at least will have a nice journey to look back on. Maybe that's the logic behind it. Just like very few studying finance will end up working for Goldman Sachs but many end up trying to haggle old ladies out of their pension money.
A bit confused on this last point. There is no doubt in my mind that the elite Eastern boarding schools have some of the most intelligent students around and are a fast track to gain admissions to Ivy League schools. On the other hand, gaining admissions to the schools you've listed above is no small task, more than likely requiring the parent to spend quite a large sum of money on private elementary schools (which aren't exactly cheap either). As far as college taking care of itself after that...how? No doubt the child will have a better shot at getting into a prestigious college or university, but the parent will still have to foot the bill in most cases. If you were to total up the amount of money it costs nowadays to send kids to the best elementary schools + best high school/prep schools + undergrad, we are literally talking $400,000 or thereabouts. To say that this is obscene is an understatement.
Regarding the OP's question...It's obviously a relevant question in this economy...At the same time though, the liberal arts colleges operate in their own universe, with a minimal amount of practicality. The best ones are successful in graduating students into high paying careers, mainly because they have an active alumni network that will take care of its own. It's more a function of a tight knit, exclusive social network, very little to do with the actual value of the education itself. That being said, the fringe element of these schools, with kids who decide to focus on completely impractical majors with no real foresight on what to do upon graduation, are really in a heap of trouble. Whereas 10-15 years ago, they could graduate and still find employment in some non-related industry, nowadays with such high unemployment amongst college graduates, I'm certain that companies will not hire somebody who doesn't have some background in the field. The fact of the matter is that it's about time most of these schools are served a reality check. This is why the student loan market needs to be completely overhauled and dealt with in a manner that forces universities to trim the fat, stop their multi-million dollar vanity construction projects and put a cap on tuition increases. Then again, the higher education industry is not at all different than many other sectors of our economy that serve less and less relavence every year.
This is a silly topic. You get far more out of a liberal arts education than any other school. Overpriced, yes - but comments by someone like "reading in some classroom about what others have done instead of living life while the world moves on" is just plain dumb. Now we might be talking about two different things. If you said why do people major in womens and gender studies as opposed to CS or Math - that is a different discussion. But you can bet your penny sized trading account that graduates of top institutions liberal or not get the same jobs.