Un-scamming College

A recent posting at Marketwatch (May 26th) entitled “College is a scam — Let’s make some money off it” by Robert Altucher stopped me short. I can best summarize through some quotes that I believe fairly represents his position, a perspective that I have been reading with increasing frequency elsewhere as well. The piece was written to provide investment advice for the myriad of publicly held enterprises that have gone into the education business and have been increasingly shaping both the landscape of higher education but also the perception of it in many circles. I’ve left out the many references to the share values of X and Y companies.

“We can’t deny it anymore: college is a scam… Student loan debt is now greater than credit card debt for the first time ever. After the huge debt crisis we experienced in 2008 and the financial bust in housing that ruined so many lives you would think we would be having more of a national discussion on this but we just aren’t…As a result, for the first time ever we are graduating a generation of indentured servants rather than the entrepreneurs, innovators, artists, and inventors that America is known for. I just hate seeing Americans go down the drain… 44% of graduates in 2009 are either unemployed or hold jobs that don’t require degrees. So in other words, these millions of young people are five years behind their peers and many are holding over $100,000 in debt. What a shame…”

“People tell me, “school teach kids how to think”. To that I say, “learn how to use a library.” And while we’re at it. Put more computers in the library. The knowledge is out there. We don’t need to owe the banks and the government $800 billion to get knowledge… People tell me, “there’s a huge income gap between people with a college degree and people without a college degree.” To that I say… It (this statistic) has selection bias..It also ignores cause versus correlation… A true test would be to take 2,000 people and separate them into two groups of 1,000. Group A is not allowed to go to college. Group B goes to college. 20 years later lets see how they are doing. Obvious this test will never get done but the basic idea is common sense. Take people who are equally intelligent and ambitious and give them a five-year head start and with no debt. They are going to do very well, I have no doubt.”

“Some people say, “College teaches kids how to socially interact and network.” That’s great. But it doesn’t cost (for example) $300,000 for little kids to make friends. Join Facebook for free. And start networking on LinkedIn.”

“Well what about teaching …the classics like Plato. How does art and beauty persist generation after generation. My answer: People with passion will read. I didn’t read a book while in college. But I read several thousand in the 22 years since. If people want knowledge they will seek it out with a hunger like you can’t even imagine. You can’t force feed passion or knowledge.”

“What about if you want to be a doctor? Clearly you need a degree. Maybe. Are you saying you want to heal people or are you saying you want to be an MD? Try working for a few years cleaning people’s bedpans and learn a little about the medical industry. For anything you want to do in life, try it first rather than waste money and time learning something you ultimately never think about it again.”

“Again, tuitions have gone up 10 times faster than inflation in the past 30 years and three times faster than health-care costs in the past 30 years. We need to have an active discussion on this as a society. Meanwhile, the greatest entrepreneurs, artists, and inventors in history either didn’t go to college, were kicked out, or dropped out.

This is all fine, you might say, but what are the alternatives?” And what if I’m now old enough to know that I’m not not an entrepreneur, artist, or inventor? While I believe Mr. Altucher’s point of reference was mostly in regards to education for those of us below the age of 24 or so — though I think most of the target audience for proprietary universities are adults – the ‘value’ of institution based (whether private, public/land grant, or corporate) education as we know it – is going through a period of doubt and re-evaluation. The outcome is meaningful to us as students, academics, parents, citizens and probably every other role we hold and play in contemporary society.

I think we need to be careful not to confuse the institution of education as it is from what it can or should be and toss judgments such as ‘scam’ or ‘school’s not important or worthwhile’ around loosely. I think there are alternatives, some which jive with Altucher’s if you follow the trail of his blogs… but I’d rather open this to responses and rejoin this topic in dialogue with those.

I hope we can engage this conversation.

m fiddler


One Response to Un-scamming College

  1. I agree that the loan bubble will burst eventually. Because a loan business is abusing and being abused is no reason to disrespect (dis) the educational system. The name of the game is still credentials. Hiring, if and when it occurs, will require credentials. Sure a few hotshots made it without a degree. That was true in the industrial age and it is true in the information age. Education is purchasing those credentials. It is an investment in knowledge and skills. Just because some grads have not found a job is the fault of a changing economy, it is not the fault of an education system.
    What the loan system does do is separate the dependent variables from the independent variables. A person with a $100k loan may not be free to innovate, change management, speak up against unjust corporate greed as Althuler suggests. One with a dependent variable is not a free as the ones who had the means to attend college with no debt. A system designed to bring about a closer society via opportunities actually has just the opposite effect. Those indentured students are not upper class people: they are the hard working lower to middle class people. In that respect school loans are a dangerous vehicle.
    Knowledge is an investment in a commodity that can be sold over and over again and you still have it in your inventory to sell again. We must consider what is the total price of this margin interest credit?

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