"Cheap Financing of Education Can Put a young Life Underwater

John McCrea:

Note the irony here: The only education system that actually worked for him was the self-education kind. And it is what is going to help him work his way into the highest-paying career.

His top-20 law school and private education in general are not to blame; they're in the business (yes, the business) of providing a service that's in demand, no matter how misinformed their "customers" may be. If you've got foolish customers who will overpay for something worthless, who's really to blame? Oh, right, the institutions that hand them the money, at high rates of interest, so they can buy the goods--law degrees, for instance--that won't work for them. Cheap financing of education can put a young life underwater, just as junk loans for McMansions did in the housing market, where older lives were put underwater. Too much debt, too little equity in the product itself: the worker or the house.

The current administration has pursued a cheap-money approach to student loans in order to produce as many four-year-degree students (and not always graduates) as possible. Instead, the goal should be to assess which schools and degrees can be the quickest to bring well-trained workers to market. When workers emerge from their initial education and find jobs, they'll soon learn what skills can drive their careers forward; that's the time for graduate school or further training courses. That's when speculation turns into investment: a known need, and then a wise outlay to meet it. Our economy needs the most cost-effective education/hire ratio possible, and we should also measure retention to make sure schools are meeting needs. Mr. Overqualified trusted that his expensive education was an investment; instead, it was a fraud. Let's stop this nonsense.

Posted by Jim Zellmer at March 10, 2013 3:06 AM
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