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Mark Cuban on the higher education bubble

by Grace

MARK CUBAN ON THE HIGHER EDUCATION BUBBLE:

This comparison between higher education and the newspaper business seems apt.

The Higher Education Industry is very analogous to the Newspaper industry. By the time they realize they need to change the costs to support their legacy infrastructure and costs will keep them from getting there.

Easy loans

Its far too easy to borrow money for college.  Did you know that there is more outstanding debt for student loans than there is for Auto Loans or Credit Card loans ? Thats right. The 37mm holders of student loans have more debt than the 175mm or so credit card owners in this country and more than the all of the debt on cars in this country. While the average student loan debt is about 23k. The median is close to $12,500. And growing. Past 1 TRILLION DOLLARS.

We freak out about the Trillions of dollars in debt our country faces. What about the TRILLION DOLLARs plus in debt college kids are facing ?

The point of the numbers is that getting a student loan is easy. Too easy.

You know who knows that the money is easy better than anyone ? The schools that are taking that student loan money in tuition. Which is exactly why they have no problems raising costs for tuition each and every year.

Purpose of college

As far as the purpose of college, I am a huge believer that you go to college to learn how to learn. However, if that gaol is subverted because traditional universities, public and private, charge so much to make that happen, I believe that system will collapse and there will be better alternatives created.

Reading this on Cuban’s blog, I was amused by his writing errors.  I’m sure he writes quickly and eschews basic spell checking.  Somehow, it’s entertaining to see “its” and “thats” with missing apostrophes in a billionaire business magnate’s writing.  The lesson might be that perfect grammar and correct spelling are not always essential for good communication.  There are probably a few other self-made billionaires who can’t be bothered to know when to use “it’s” instead of “its” *.

* Actually, I think the more common mistake is to add an unnecessary apostrophe.

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Posted on May 21, 2012 at 5:23 am in blogging, financial aid, higher education bubble, need-based aid   |  RSS feed

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5 Comments to “Mark Cuban on the higher education bubble”

    
  1. Grace
    May 21, 2012 at 6:07 am

    My post might highlight another lesson – that writing errors can be sufficiently distracting to take away from the main message. After all, my main comment on Cuban’s comment had to do with his mistakes.

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  2. gasstationwithoutpumps
    May 21, 2012 at 6:54 am

    I liked the the confusion of “goal” and “gaol” (a British spelling of “jail”) even better.

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  3. Amy P
    May 21, 2012 at 10:26 am

    I’m starting to think that student loans may be a sort of natural intelligence test. If you take out a lot of them (mid to high five figures), you fail. If I were an employer googling one of the student loan victims during a hiring process, I’d be rather interested to know how incurious and bad at arithmetic they are by their own admission. Bonnie’s stories of the difficulties of getting students to pay attention to emails are another data point. It seems to me that not being able to figure out which emails are important is a disqualifying personality trait, although maybe some of them eventually become more detail-oriented.

    I’m also starting to wonder whether the high debt associated with for profit higher education doesn’t have a lot to do with the sort of students who are attracted to for profit programs (namely academically weak students with a lot of outside commitments who have already failed elsewhere). I think a lot of the language used to talk about college today creates a very passive picture of the educational process: you pay your money, you ride the conveyor belt 4 to 7 years and you get your degree. What’s lost is the idea that learning is an active process and that college is a sort of all-you-can-eat buffet. No matter how much or how little you learn, you’re paying the same, so you might as well pick up as much as you can while you’re there.

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  4. Grace
    May 21, 2012 at 12:45 pm

    I think the amount of student loans a person has as an indicator of intelligence might just stick in my head. It doesn’t help that so many of these students do sound stupid when they’re explaining how they got into their predicament.

    A neighbor was telling me about her grandson taking out massive loans to go to a good (not great) law school, and one of my first reactions was “how dumb was that!”. It’s not always fair to make those judgments, of course. But I can’t help what my brain is thinking!

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  5. Grace
    May 21, 2012 at 12:51 pm

    Boy, that expense reporting software sounds very poorly designed and exceedingly frustrating. Ignorant of knowing anything having to do with how these things work, my first reaction is, “there should be an app for that!”. (I imagine one reason the solution is not that easy is that any fix has to be integrated into the entire system, making it very complicated.)

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