Archive for June, 2011

June 30, 2011

Higher education is a prisoner’s dilemma

by Grace

In writing about Kevin Carey’s TNR essay about today’s bad job market for college graduates,  Matthew Shaffer puts it this way.

To use one economic jargon just once more: If this view is correct, our higher-education system is a big prisoner’s dilemma. Every individual person — the high-school senior and the human-resources manager — has a rational incentive to pursue a BA, but the system as a whole is massively wasteful. There should be a way to prove high intelligence and cultivate diligence and refine social graces that doesn’t cost tens (or hundreds) of thousands of dollars and four to six years, and saddle would-be entrepreneurs with debt (and, dare I add, afflict young people with the grievances and resentments of the academic Left).

Students are not learning much despite enormous amounts of money and time spent on campus, but a degree provides them entrée to a middle class job.  Employers find that job applicants often lack fundamental work skills, but use a college degree to screen for a basic level of competence.  Both students and employers are stuck, until a better way is found.

What Does Prisoner’s Dilemma Mean?  A paradox in decision analysis in which two individuals acting in their own best interest pursue a course of action that does not result in the ideal outcome.

June 29, 2011

‘managed to keep his partying under control for four years’

by Grace

What does a college degree signal?

According to a comment on Joanne Jacob’s post about “Undereducated Americans”,  this is what a college degree tells us:

Guy managed to keep his partying under control for four years is what it tells us. 

That’s good to know sometimes, but shouldn’t there be more efficient ways for employers to screen job applicants?

June 29, 2011

Online degree from London School of Economics for $5,000

by Grace

University of Michigan Professor Mark Perry points out that a degree in economics from the London School of Economics (LSE) can be had in three years and for $5,000.  Distance learning, that is.  Then he asks:

Why go to Harvard or Yale, where just one college class costs about $3,500, or almost as much as the entire BS degree from LSE?  Is this the college degree of the future?

I do think this will be a common option for the college degree of the future, driven primarily by cost issues.  If the LSE online program were to impose admission standards as stringent as those of its traditional campus cousin, it would probably elevate it to a higher prestige level.  We may soon see online university programs with selective admissions standards develop into an elite class of schools that attract top scholars.

From the comments:

…much of what you learn in college does not come from class. one of the benefits of being at a world class university is the exposure to the other students and to the faculty. much of the most interesting stuff i learned in college came from doing projects with faculty outside of the curriculum.

This is a valid point, and I’m sure I could come up with many more reasons to go with the tried and true certification methods instead of the online option.  However, ten years from now I may finder far fewer reasons.  Sometimes I wish my children were much younger and not going through the college process now.  Higher education may become much more affordable for our grandchildren.  At least we can hope.

June 28, 2011

E-reader ownership doubles in last six months

by Grace

That sounds about right.  “All” my friends and relatives either own e-readers or are talking about which one to buy.

The share of adults in the United States who own an e-book reader doubled to 12% in May, 2011  from 6% in November 2010.  E-readers, such as a Kindle or Nook, are portable devices designed to allow readers to download and read books and periodicals.  This is the first time since the Pew Internet Project began measuring e-reader use in April 2009 that ownership of this device has reached double digits among U.S. adults.

Around Christmas time, it seemed as if all “everyone” was getting an iPad, but apparently growth in tablet computer ownership has slowed down.

Tablet computers—portable devices similar to e-readers but designed for more interactive web functions—have not seen the same level of growth in recent months.  In May 2011, 8% of adults report owning a tablet computer such as an iPad, Samsung Galaxy or Motorola Xoom.  This is roughly the same percentage of adults who reported owning this kind of device in January 2011 (7%), and represents just a 3 percentage-point increase in ownership since November 2010.  Prior to that, tablet ownership had been climbing relatively quickly.

I own neither an e-reader nor a tablet computer; I’m still in the “talking about” stage.

Source:  Pew Internet

June 28, 2011

Typical undergrad ‘could not write a paper or solve an algebra problem’

by Grace

When skeptics of college for all are dismissed as “elitist” by David Leonhardt, Arnold Kling responds with a reason for his views.

My elitism comes from the few years I spent as an adjunct at George Mason. The typical undergrad in my course could not write a paper or solve an algebra problem. I doubt that adding more students at this margin is the way to raise people’s incomes.

I keep hearing that about these typical college students, so I have to believe it’s true.  Before we make “college for all” such a high priority, let’s fix the problem of so many high school graduates  unprepared for college-level work.

Related:   36% of college students take remedial class.

June 28, 2011

Community colleges ‘really aren’t that cheap’?

by Grace

Pushing students into community colleges for the first two years of college is often touted as a major way to reduce education costs.  However, community colleges really aren’t that cheap.

Average community college E&G budget per student

Community colleges have lower total costs than public regional colleges because they do less research and public service, and provide fewer student services. Instruction costs are slightly lower, but community colleges are only providing lower division courses whereas the public regional also provides more expensive upper division and master’s level courses. In fact, instruction costs for lower division students may be higher at the community college than at the public regional college or the public research university.

The average community college cost per student of $10,985 compares with $6,705 and $9,204 for the hypothetical four-year colleges (CELS) Vance Fried created as part of his study, Opportunities for Efficiency and Innovation: A Primer on How to Cut College Costs.  However, real life public regional colleges  average $14,703, so for now community colleges still look like a good deal.

Fried’s numbers look good on paper, but if some philanthropist (Bill Gates?) would fund his hypothetical college we’d learn if it can really be done.

June 27, 2011

Leading reasons for high college costs are research and public service

by Grace

Higher education insiders sometimes point to the increasing cost of auxiliary services like student housing and bigtime athletics as a major cause of large tuition increases. This is a red herring.  Yes, over the years dorms have become nicer and food more abundant and edible, and as a result, room and board charges are higher. But higher room and board charges are not a major culprit in the drastic increases in the cost to students of attending college; it is the massive run-up in tuition.  Similarly, football coaches make a lot of money and the costs of these athletic programs can be high. But football at many universities generates so much revenue that it can pay its own way, plus covers the cost of the minor sports and women‟s athletics.   Football, good food, and hot tubs are not the reason for runaway college spending.  Rather, the root cause is high E&G [education and general] costs.

As part of his new study,Opportunities for Efficiency and Innovation: A Primer on How to Cut College Costs, Vance Fried created a hypothetical college to find more efficient ways to run institutions of higher learning.

The College of Entrepreneurial Leadership & Society was created on paper as part of an earlier study to determine what a high quality education would cost if a college‟s operations and management were designed with a focus on efficiency and effectiveness.  In the earlier study, I first designed a hypothetical college complete with students, faculty, curriculum, and buildings.  Then I created a detailed pro forma E&G budget for the college.  To make CELS more applicable to a wider range of school comparisons, I designed two institutions: CELS 3.2 and CELS 1.2. CELS 3.2 corresponds to a top of-the-line, comprehensive undergraduate college with 3,200 students, while CELS 1.2 is for a similar college with only 1,200 students….

My guiding design principle for CELS was never spend money unless the resulting additional student benefit is clearly greater than the additional cost….

The Most Obvious Cuts: Research and Public Service
Since CELS‟s primary focus is on undergraduate education, the most obvious spending cuts built into the hypothetical budget are to eliminate spending on research and public service.  While these may be worthwhile activities in their own right, they add little, if any, to undergraduate education.

Research cost are actually underreported in this table because industry accounting convention allocates most faculty salaries to instruction even though some faculty spend much time doing research.  Consequently, about 40% of instruction costs at research universities are actually research costs.

Fried recognizes that research is a worthwhile mission of some universities, but it should not be subsidized by students in the form of higher tuition costs.

Other recommended cost-cutting strategies from this study:

  • Optimize class size
  • Eliminate or consolidate low-enrollment programs
  • Eliminate administrator bloat
  • Downsize extracurricular student activity programs

Found at The College Puzzle

June 27, 2011

Lack of jobs for college graduates is old news

by Grace

Kevin Carey doesn’t worry too much when he reads all the dire warnings about today’s recent college graduates unable to find good jobs.

For going on four decades, the press has been raising alarms that college degrees may no longer be a sound investment. Two things about these stories have remained constant: They always feature an over-educated bartender, and they are always wrong.

According to Carey, college graduates will continue to be valued by employers dealing with increasingly complex technology and globalization.  He cautions against predicting the future based on today’s crushing economic conditions.  The ebb and flow of the world economy means that today’s bartending college graduates are likely to become tomorrow’s high-earning professionals.  He gives examples of some sad luck stories from yesterdays’ headlines, along with the happy endings.

…. Back in 1982, the Post wrote about Mel Rodenstein, a Peace Corps alum with a master’s degree in international affairs who was slaving away in a “mindless” file clerk job, forced to cut coupons and subsist on rice and beans. He went on to a series of nonprofit management jobs and, by 2010, was a senior research project supervisor at the Johns Hopkins University School of Health. In 1993, a Post article titled “Grads Without Jobs” described two young women graduating from good state universities who planned to spend a year wandering North America in a station wagon because “there are no jobs anyway.” Today, one of them lives in Silver Spring, Maryland, and runs her own H.R. consulting firm. The other got a PhD and works 20 feet away from this author in a Washington, DC think tank.

June 25, 2011

Parents pessimistic about their children’s future

by Grace

Here’s some doom and gloom to match our overcast weather in the Northeast today.  Results of two recent surveys indicate parents are concerned about their children’s economic future.  I can relate.

Ipsos poll of adults aged 18 and older with a child under the age of 18 conducted March 2011:

only 41 percent of parents surveyed think that kids will have a better standard of living. It’s a major tectonic shift in our national belief system, but given the events of the past decade, it’s not that shocking.

Bloomberg poll of adults aged 18 and over, conducted June 17-20, 2011:

Fifty-five percent said they expected American children to have a lower standard of living than their parents do today.

Keep in mind that most parents expect their children to enter the work force with a college degree.

The vast majority of parents expect that their children will pursue a college education. Among those with one or more children under age 18, 94% expect at least one of their children will go to college.

From the Ipsos survey, here are some of the things parents are doing to prepare their children for an uncertain economic future.

  • Encouraging their children to work toward a well-paying career choice: 40%
  • Talking openly with their children about their own personal or family finances, i.e., family income and family expenses: 31%
  • Putting money aside for college education: 28%

The hardest part might be actually knowing what a “well-paying career choice” will be 10 or 20 years from now.

Related:  47% of Americans say college is for career preparation

June 24, 2011

When is an ‘award’ really a loan?

by Grace

Sometimes the language in a college financial aid award letter can be confusing.  One of the things that comes up often is the topic of this CollegeConfidential discussion.

Why are financial aid packages that are nothing but the opportunity to borrow money called “awards”?

Yes, in the weird world of college financial aid, the chance to borrow money is considered an “award” to a student.  To be fair, most of these loans are subsidized and sometimes interest charges are waived while the student is still in school.  Still, it doesn’t seem right, especially when the college can claim to meet your full financial need mostly by loans.

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