Sunday, June 10, 2012

How one family avoided the College Tuition Bubble

    Jerry Bowyer

Investments get to be bubbles partly because investors widely believe there is no alternative on which to spend their money. Dotcoms were seen as the only real growth play, so shareholders hung in there even after it had become clear that the pricing was uncomfortably high. Housing possessed a supposed unique level of riskless-ness as did the loans used to finance it.  Many investors have figured out that U.S. treasuries are deep into bubble territory, but, they ask ‘What other haven asset is there?’

It’s the same with the college tuition bubble.  Look at the comment section of any of the articles I’ve written about this topic during the past three years and you’ll see something like this: “Yes, most diplomas are from second rate schools in second rate disciplines and they are nearly worthless. And tuitions are sky high. But what alternative do we have? How do you get an education without it? More importantly, how do you get a job?”

It’s a legitimate question, one that I’ve been wrestling with for quite some time.  You see, I’ve been writing about the college bubble hypothesis for three years, but I’ve been living it for ten.

My oldest son, Christopher, was not college material. You probably have the wrong idea: it’s not that Chris isn’t smart. Chris is brilliant. But brilliance is not enough to make you college material. Something else is needed: at least an average level of compliance. Pliable personalities find it much easier to sit through the lectures, take the exams, write the papers, amass the pre-formulated proportions of certain credit hours in certain prescribed order, and fill out an enormous volume of paperwork for the privilege of entry into all of the above.

Some people find all of that to be easy; in fact, many like being told what to do. It gives them a sense of security. Other people find it all difficult, but do it anyway. The latter often seek release from the sense of institutional claustrophobia by embracing a life style of sexual and chemical anarchy in those enclaves of rebellion known as fraternities.

Chris just couldn’t do it. He couldn’t contort his mind into the arbitrary exercise known as SAT Prep. It was not that he didn’t want to learn. On the contrary, he was a voracious reader. It’s not that he didn’t want to work. On the contrary, he had not only worked for various family businesses from radio production to economic analysis and publishing since he was about 9 years old, but had also started a few micro-businesses of his own; web sites which he was able to sell at a nice little profit.

I understand Chris; I’m the same way. I barely graduated from high school. I would routinely skip class so I could go to the library and read my way through Mortimer Adler’s Great Books collection. College was similar. After an initial two semesters of compliant Dean’s list performance. I started blowing off classes which I didn’t like, dropping out of them, often after the drop out date. But while all that was going on, I was working my rear end off busing tables in the cafeteria, mopping floors, and scrubbing pots…and sitting in the library reading voraciously. A few professors took the trouble to let me learn my way. Mostly, they didn’t get me, and I didn’t get them.

Eventually, I gritted my teeth, switched to a business school, Robert Morris, focused like mad, got good grades and graduated two years later with a degree in accounting. I hated every moment of it. My hair went grey. I got a good corporate job with a solid salary. I hated that too.

After some dues paying I got funding to start an economic think tank. It worked: the foundation rapidly grew in influence and 9 years after graduation, I was invited back to Robert Morris not as a student, but as its commencement speaker. My career since then has been anything but normal and my work and learning style has been anything but compliant.

There are a lot of guys like that out there, and young women too. Christopher was one of them, and he was permitted to go his own way. Only two things were required of him: character and productivity. College, not being essential for either of those, was optional. And he agonized over the options. Lots of people told him that he absolutely must go to college. His mother, my ex-wife, was mortified by the idea that he would not go. But then again, Chris noticed that she had dropped out of a prestigious school half way through and nevertheless had a successful career as a professional proofreader/editor who was so much in demand that she was turning clients away.

Chris talked to lots of people about this, but the clincher for him was the advice he got from Ron Morris. Ron is a highly successful serial entrepreneur whose latest venture is an entrepreneurial talk radio network. Having sold his business for a tidy pile of cash, Ron was constantly receiving pitches from entrepreneurs looking for start-up investments. Many of those came from kids who had just graduated from prestigious universities. He told Chris that if he had a choice between betting on a 23-year old who had just graduated from a top school, or betting on a 23-year old who had worked for a small business, all other things being equal, he would choose the latter. Better still if the 23-year old had founded a small business—even if the business failed. Chris had his answer.

Now, this isn’t fairy tale stuff. He didn’t throw away his SAT prep materials, found Facebook and become a billionaire. He simply did his work for the family business which is largely producing this television program. He also owns and maintains a few websites which generate modest revenue streams (like this), and builds on a sub-contracting basis some sites owned by other people like this. He’s a frequent guest on Ron’s radio show and an occasional guest on Cornerstone Television Network.

He got a lot of flak from friends and acquaintances for his non-college decision, chiefly because he and his brother, Jeremy, during their college-aged years moved in a social circle of college students from Chatham University. They just couldn’t fathom it.

A couple of years ago, Chris married a Chatham girl, and a lot of their friends are her school friends. This provides a lot of helpful data about the school vs. school of hard knocks decision.

At age 27, Chris has no consumer debt, no school debt (obviously), no car debt and only a small mortgage. He has a small retirement account which he started with the proceeds from a web site he built in his teen years. He and his wife are homeowners. While some of their college friends are apartment dwellers, many are boomerang kids who have returned home to live with their parents. Almost none of the ones who are employed are employed in their chosen field of study. Income-wise, Chris is at about the same level as the subset of his college-grad friends who are employed. Asset/liability wise he is well ahead of the pack.

He has enormous personal freedom, which he loves. He is a man of good character, and he is productive. That’s all that is required. Everything else is optional – including college.


The Trap of Minority Studies Programs

Posted by John Ellis

When Naomi Schaefer Riley was fired by the Chronicle of Higher Education for her trenchant remarks on Black Studies programs, most of those who criticized the firing saw in it a display of the campus left's intolerance. Fair enough, but this episode also has a much broader meaning.

In the late nineteenth and early twentieth centuries, large populations of poor immigrants arrived in the U.S.--Irish, Italians, and Jews from Russia and Poland. Their extreme poverty placed them at the bottom of the social ladder, and they were often treated with contempt. Yet just a few generations later they were assimilated, and their rapid upward social mobility had produced mayors, senators, judges, and even Presidents from among their ranks. None of this could have happened without first-rate public education.

To be sure, they worked hard to get ahead, but they were not obstructed by something that afflicts the have-nots of today: as they walked through the school gates they were not met by people intent on luring them into Irish or Italian Studies programs whose purpose was to keep them in a state of permanent resentment over past wrongs at the hands of either Europeans or establishment America. Instead, they could give their full attention to learning. They took courses that informed them about their new land's folkways and history, which gave them both the ability and the confidence needed to grasp the opportunities it offered them.

When we compare this story with what is happening to minority students today, we see a tragedy. Just as Pinocchio went off to school with high hopes, only to be waylaid by J. Worthington Foulfellow, minority students are met on the way to campus by hard-left radicals who claim to have the interests of the newcomers at heart but in reality prey on them to advance their own selfish interests. Of course, what black students need is the same solid traditional education that had raised Irish, Italians, and Jews to full equality. But that would not serve the campus radicals' purpose. Disaffected radicals wanted to swell the ranks of the disaffected, not the ranks of the cheerfully upward mobile. Genuine progress for minority students would mean their joining and thus strengthening the mainstream of American society--the mainstream that campus radicals loathe.

Faculty radicals worked hard to put the kind of coursework that had served others so well out of the reach of minority students. They stigmatized those courses as Eurocentric, oppressive, and dominant-class oriented, and they worked successfully to remove them from curricular requirements. The very idea of upward mobility was made to appear a capitulation to the corrupt value system of the dominant class.

As thinkers, campus radicals are poor role models for students. Their ideas are simple and rigid, and they rely heavily on conspiracy thinking that infers far too much from too little. They are powered by emotional commitments that are highly resistant to the lessons of experience. As a result, their cherished ideas are now virtually obsolete, and strike any reasonably well-informed observer as downright silly. The minority students that they attract into their orbit are dragged down to this low intellectual level.

This background is the key to the fury that Naomi Schaefer Riley¹s criticisms of Black Studies dissertations unleashed. Radical leftists have achieved considerable influence on campus in part because they were able to add substantial numbers of incoming minorities to their numbers. They need those students in self-destructive Black Studies courses that keep them resentful and under-educated. But that is only possible if they can maintain the illusion that they help and support black students, rather than exploiting them. Ms Schaefer Riley was a threat to that illusion, and that is why she was attacked so vehemently.

Black Studies does have one thing right: black students are indeed oppressed. What they have wrong is who is doing the oppressing. People of good-will on both sides of the political aisle should join together to insist that black students be given the same chance that other groups got to join the mainstream. This latest version of the plantation ought to be abolished.


Personality testing to screen out British teachers who lack social skills or cannot cope under pressure

Such tests are not very reliable but may be better than nothing

Trainee teachers face personality tests to weed out those who lack social skills or cannot cope under pressure.  Students will be asked to fill in questionnaires before they can begin training courses in a drive to boost the calibre of staff.

The tests are designed to gauge applicants’ abilities to manage their time, relate to pupils and handle pressure and criticism.

The new checks – introduced from September – are part of an overhaul of teacher training with the aim of raising standards in state education.

An estimated £68million is spent each year by the Government on training teachers who quickly move on to other jobs.

Officials said ‘easily measurable competencies’ are already assessed during recruitment to teacher training courses.  But the ‘more difficult competencies’ which are ‘also deemed essential to becoming a successful teacher’ are not covered.

From September, training providers will be supplied with an approved list of ‘non-cognitive assessments’ to use during the recruitment process. The tests will be used to ‘complement’ existing procedures such as interviews and group exercises.

Tests used in trials assessed criteria such as interpersonal skills, time management and emotional resilience, including the ability to ‘perform when under pressure’, ‘keep emotions in check’ and ‘handle criticism and learn from it’.

Sample questions included ‘Which of the following best describes you?’, with candidates asked to tick one of six boxes on a spectrum between ‘methodical’ and ‘flexible’.

About 35,000 students are accepted on to teacher training courses each year, but around one-third drop out of teaching soon afterwards.  While some quit for personal reasons, many are simply ill-suited to the job.

Earlier this year, the Department for Education demanded ‘better testing of candidates’ interpersonal skills’ before teacher training.  Following trials, the Government this week announced that screening tests will be available to all recruiters for training courses.

While the personality tests will not be compulsory, most course leaders are expected to insist their candidates take them.

Ofsted will for the first time be inspecting teacher training providers for the quality of their selection processes.

Further measures already announced by Education Secretary Michael Gove include a toughening up of literacy and numeracy tests for trainee teachers.

Ministers are concerned that existing tests are too easy and allow trainees with a poor mastery of English and maths to slip through.

A spokesman for the Government’s Teaching Agency said: ‘By screening applicants for a  range of attributes and behavioural competencies that are considered essential to good teaching, we will reinforce what is already a rigorous selection process.’  He added that the testing would ‘help select and recruit the most suitable, high-quality trainee teachers’.


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