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Inquiring minds are
reading about student riots at
the University of California.
Students at the University of California’s flagship Berkeley campus took to the streets on Friday night,
vandalizing university buildings, burning trash cans and clashing with police
in the latest expression of frustration over cuts to the educational budget
in California.
In November, the University of California Board of Regents voted to raise
tuition by 32 percent. At the same time, professors were asked to take pay
cuts or be furloughed, classes were eliminated and class size increased.
Protests erupted across the University of California system, particularly at
UC Davis and UCLA.
Student
Loan Defaults Soar
Please consider Defaults on student
loans rising
Every year, tens of
thousands of college students and graduates stop making payments on their
student loans.
For more than a decade, that loan-default rate was in decline because the
federal government toughened penalties for schools with high shares of
defaults. Now, the rate is increasing again and not just because of the
economy.
The problem is particularly acute in Arizona, which has the nation's highest
overall default rate on federal student loans: 9.8 percent in fiscal year
2007, the latest figures available.
But more than default rates, it is the high levels of debt that are provoking
alarm among consumer advocates. That has heightened scrutiny of for-profit
schools.
Tuition at for-profit schools can easily top $10,000 a year. The average
loans for a student who earned a bachelor's degree totaled $32,650 in the
2007-08 school year, compared with $17,700 at public universities. At
community colleges, the average for two-year degrees was $7,125.
In Arizona, for-profit schools are booming. They have more than doubled the
number of students they serve in the past five years, and more students are
at for-profit schools than all three of the state's public universities
combined.
Last school year, for-profit schools enrolled nearly 468,000 students,
according to the Arizona State Board for Private Postsecondary Education, a
state agency that licenses and regulates most for-profit schools. About 55
percent were from Arizona, and the rest lived elsewhere and attended school
online.
In December, the University of Phoenix settled a whistleblower lawsuit in
federal court for $78.5 million over recruiter-pay practices. Two former
enrollment counselors sued in 2004, alleging the school defrauded the
government of billions of dollars in financial aid and violated federal law
by paying recruiters based on enrollment. The company said the pay practices
were legal because enrollment was not the sole determinant. The university
did not admit any wrongdoing.
Nationally, for-profit schools had the highest share of defaults in the United States in 2007: 11 percent. Community colleges had a nearly 10 percent rate, and
private, non-profit universities had the lowest rates, at 3.7 percent,
according to the U.S. Department of Education.
Student Loan Scam
The article mentions various reforms such as curbing recruiters, requiring
more up-front disclosure, and educating borrowers about the loan process.
The real problem is the entire student loan system is a scam. The government
guarantees student loans so colleges have every reason to make the loans no
matter how poor the student or how high the cost of education relative to job
pay upon graduation.
Government guaranteeing the loans makes the money readily available to all
takers driving up the cost of education.
My friend "BC" had this to say....
Millennials had
better learn quickly that they face coming of age through middle age and end
of life in a world in which they will be forced to consume one-third to half
as much in per capita energy terms and associated material production and
consumption.
Thus, they should be rioting to cut taxes and to cut government including
cutting funding for places like "Berzerkley" and the many worthless
programs and costly administrative and pension payouts.
What "Berzerkley" or a state or private university confers on the
vast majority of students is a "credential" and
"legitimacy" within the existing division of labor and state tax
farm. Their "education" is mostly in terms of being conditioned to
conform to the costly state superstructure, including submitting to tax,
wage, and debt servitude for life.
What they will "learn" in terms of actual occupational skills,
self-reliance, and productive wealth creation they could learn at a much
lower cost (and higher return to them) than 4+ years of university
"education" by actually doing something productive, paid or not, as
a youth.
Rioting for more government largess extracted eventually from their meager
paychecks in the future is suicide and merely sustains for a while longer the
system they perceive themselves to be opposing or attempting to reform.
They are wasting their valuable time and youthful vitality rioting against
the intractable state when they could be using their time and efforts to form
productive private associations in parallel or outside the existing division
of labor and social and political superstructure.
Expect More Riots
My friend "HB" countered with ....
There will be more
riots, and over more issues. Students are traditionally always the first to
riot, since most of them are young and rebellious, and therefore it's easier
to get them to engage in street protest and vent their anger.
The only groups that may even be more riot prone are French farmers and Greek
public workers.
How Good Is That Education?
Pray tell what is someone going to do with a degree in English literature,
social science, journalism, history, French, political science, or math?
Exactly how many jobs are available in those areas compared to the number of
students getting such degrees?
Sadly, we can even ask the same questions about computer science. In the late
1970s all the way to 2000, a degree in computer science came with a
near-guaranteed job. Now, computer science graduates must compete against
someone from India or Russia who is willing to work for a lot less than they
ever imagined.
In the early 1970s tuition at a top school like the University of Illinois was $250-$400 a semester. Now tuition is $10,000 with no guarantee of a job.
But hey, as long as government is guaranteeing student loans, places like the
University of Phoenix are glad to offer an "education" to everyone
coming their way.
Education System Benefits Recruiters, Administrators, Teachers, Staff
Funding schemes, loan guarantees, influence pedaling, and especially
government meddling have combined to make education a great deal for
recruiters, administrators, professors, and staff.
Unfortunately, there is little benefit to the students for the price they
pay. Indeed, the biggest education many students will receive is to learn how
compound interest combined with poor salaries will make them a debt slave for
life.
Mish
GlobalEconomicAnalysis.blogspot.com
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Thoughts on the
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global markets.
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