Over the years, I’ve posted numerous articles for ABCO Technology’s webpage. At times, in researching material I run across an author who has something meaningful to add to the discussion. Today, I’m republishing an article written by Jack Hough. Mr. Hough writes for Barrons Magazine. His latest article, entitled, want to earn a degree in outrage examines some interesting facts about obtaining a college degree. The tone of his article isn’t against attending college. Jack Hough points out that a college degree should have a purpose. One main flaw is that colleges should not be able to judge their own product. The important aspect to consider when going for that degree is to determine a definite plan and purpose for future employment after completing your course of study. Now let’s get to Mr. Hough’s article.
Photoshopping one kid’s face onto another kid’s pole-vault picture is almost always funny. One exception is when a media executive pays $200,000 for the
job as part of a scam that gets her kid into the University of Southern California. It spoils the humor even more if she disguises the payoff as charity
to claim a tax break.
That’s one allegation among many in a sprawling college-admissions scandal unveiled this past week. An investigation by more than 200 federal agents led
to charges against 50 people in six states. Parents had test administrators bribed. They claimed that their kids had learning disabilities to get extra
test time. One actress accused of paying $500,000 to pass her daughters off as crew-team recruits had previously confessed to falsifying a preschool application—not
in real life, but in a 1993 episode of Full House. If aggravated irony isn’t a crime, it should be.
My personal outrage meter ought to be registering an eight out of 10 over this case, but it’s stuck at 4.5. The problem is I recently uncovered some other
scandalous college facts as part of a sweeping investigation using Google for nearly an hour. Among them:
New York University charges $6,500 for Calculus I. That’s tuition and fees, not books, residence, and a Vespa scooter. The rules of calculus were laid
down more than 300 years ago by two guys in wigs. You can learn everything for free on YouTube. So where does all this pricing power come from? Hold that
thought.
It’s not just math, and it’s not just NYU. The sticker price for the average private four-year college is now over $50,000 a year, including room and board.
Do you know what else $200,000 in cash can buy a 22-year-old? A $3 million retirement, if the money is invested at about a 6% year return until age 68.
Stanford University let in 4.3% of applicants last year. It ranks among the top U.S. schools. The number of applicants has more than tripled over the past
30 years, but yearly enrollment has barely budged.
That’s remarkable, because those 30 years have witnessed the birth of the web, which has enabled all sorts of once-tiny enterprises, especially right down
the road from Stanford in Silicon Valley, to connect with vast numbers of users. Some things you just can’t do online, of course. Like visiting Disney
World in Florida. Only Disney World has figured out how to grow attendance from 20 million a year to 55 million over the past 30 years.
Harvard’s admission rate is about 5%. Princeton’s, too. I’m not saying elite schools resemble a supply-restricting cartel. I’m saying that no hospital
would be proud of turning away 95% of patients. To applicants, these schools can seem less in the business of teaching than in the business of culling
the brightest students and branding them for lifelong success. No wonder some Hollywood power moms are going Full House on the admissions process.
The financial payoff of a college degree is looking shaky. I know: The average college graduate earns significantly more than the average nongraduate.
But that income premium has dropped for students born in the 1980s, and even more important, the wealth premium for those students has fallen off a cliff,
according to a recently published study
by the Federal Reserve Bank of St. Louis.
Also, it doesn’t take a $6,500 calculus class to judge the financial payoff for a college degree, but it does require a fairly robust set of inputs. Ignore
any analysis that doesn’t mention the time value of money. I have yet to see one that adjusts for slowpokes and dropouts. Among students who started at
a four-year college in 2010, only 60% had graduated six years later.
Anyone with a reasonable shot of completing a college degree should do so. There are nonmonetary benefits related to career fulfillment, social status,
health, and more. But the fact that so many kids will lose money on a thing that ought to be cheap is at least as scandalous as impersonating a pole-vaulter.
U.S. student debt stands at $1.5 trillion. Not to sound ungrateful to lenders, or to the federal government for nudging them toward students, but whenever
we want to make something more affordable in America, we seem to come up with one answer: artificially puff up buying power against constrained supply.
See housing and health care for other examples. What eventually happens is about as comfortable for consumers as trying to sneeze with a mouthful of mashed
potatoes.
Did you hear that Walmart has started deciding for itself which steaks in its grocery section look likely to grill up juicy and flavorful? Just kidding.
Much as we like Walmart, we’d never trust it with a job that important. That’s why we have an army of U.S. Department of Agriculture inspectors to judge
beef “prime” or “choice” based on marbling. Yet colleges confer their own degrees, and so are the main judges of their own product, education. That’s not
scandalous, but it might hold the key to making college affordable.
Here’s my prediction: Somewhere hunched over a $180 textbook on data structures and algorithms right now is an indebted 20-year-old who will one day create
a new system for measuring student achievement. This will allow us to tell which schools impart the greatest student improvement per dollar of cost, and
not just which schools the brightest kids flock to. Brand names will become less important than performance. The cost of college will crash. Schools will
innovate to survive, then thrive.
Just in case, I’m going to keep stashing money in those college accounts for the kids. And maybe push them into crew.
Write to Jack Hough at
jack.hough@barrons.com
A vocational education in information technology could be the answer for many who are reading this article. Call our campus between 9A. M. and 6 P. M. Monday through Friday at (310) 216-3067.
Email all questions to: cpascal@abcotechnology.edu
Financial aid is available to all students who qualify for federal student aid.
ABCO Technology is located in Inglewood California less than two miles from LAX.
We are at:
11222 South La Cienega Blvd. in STE #588
Los Angeles, Ca. 90304
Train and certify for your information technology career today!