James Altucher: College is a scam — so let’s make money off it

[marmar]

College is a scam — so let’s make money off it
Commentary: Debt creates generation of indentured servants

By James Altucher


NEW YORK (MarketWatch) — We can’t deny it anymore: College is a scam and a bubble — and the reasons why appear below. But I’ll be the first to admit it’s going to take years for that bubble to burst. And while college tuitions are still skyrocketing and student-loan debt is creating a generation of indentured servants, we might as well benefit from it.

Many stocks will continue to go up from the multidecade college bubble, even as it eventually bursts.

The Washington Post Co. , which owns Stanley Kaplan, gets all of its earnings from the education side of its business, while Blackboard is the firepower underneath online course management. Google has all the knowledge in the world at your fingertips and also is trying to get into the online course management game. And Apple’s increasing MacBook Air sales are due to colleges buying them for their labs. Then there’d probably be a basket of the cheaper online education schools like Apollo Group, etc.

....(snip)....

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, “Did you take Statistics 101 in college?” That spurious statistic is making the rounds but fails the basic test of an accurate statistic. It has selection bias. It also ignores cause versus correlation. That’s Chapter 1 of the Statistics 101 textbook. 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. Twenty years later, let’s see how they are doing. ............(more)

The complete piece is at: http://www.marketwatch.com/story/college-is-a-scam-lets-make-some-money-off-it-2011-05-26?link=mw_home_kiosk

[sudopod]

1. So because this guy didn't learn how to program in college

higher education is worthless?

lol.

[End Of The Road]

2. I think this has left everyone speechless. n/t

[Poll_Blind]

3. As a person considering going back to college, I'm not sure if this is a heresy or some....

...earth-shakingly uncomfortable truth.

PB

[Hannah Bell]

4. if you're young enough, consider plumbing.

[Poll_Blind]

5. I'm 38, will have about 60k to throw at schooling. What say you?

:shrug:

PB

[TransitJohn]

12. Take geology and go into petroleum.

I'm 39, it's what I do, and I'm assured a job for the rest of the years I have to work. Good luck. :hi:

[Poll_Blind]

13. Did you get a Bachelors or Masters?

Anything you're comfortable with sharing, I'm all ears for. Or PM me if you like. Hadn't heard that seriously mentioned before...

PB

[TransitJohn]

15. BS. Wellsite services is what I do, also known as mudlogging.

I work half the year (month on, month off), and pull in $65-72k/year. I could be pulling in around $100k, but I like having a month off to be with my kid. (Joint custody with ex-wife, works perfectly). Here's a quick look at jobs on Rigzone right now:
http://www.rigzone.com/jobs
In the search box, type mudlogging, and look at the results. I wanted to paste a direct link for you, but their scripting just returns a generic 'job search results' link.
On edit: also, browse through 'specialty services' and 'geosciences' categories on Rigzone to get a better idea of the plethora of jobs open in the field.

[Poll_Blind]

17. Much thanks for the information!

Seriously, I'm grateful for all the tips that DUers have been able to give me, off and on, in the last few months!

PB

[erodriguez]

10. I'm with you on that one

I'm a former teacher looking for a career change. A career teacher will be a rarity, especially in NY. There is an awful law that will base teachers' evaluations and job security on how students do on standardized tests. 40% of teachers' evaluations will come from those tests. Knowing how so many outside forces can influence test scores and that students are not randomly assigned, lasting to retirement will be a matter of luck and ass-kissing.

I'm in my thirties and don't want to be dismissed in my fifties. I've seen with in my own family what happens when you are laid off at that age. It's basically early retirement. Ready or not.

So my options are make as much money as possible while I'm still young or get into a field that will always be needed and can't be outsourced.

Plumbing works.

[Hannah Bell]

20. i think plumbing is a winner. there are many kinds of plumbing & once you're in

you can branch out to whatever.

you can work for corporations, work in construction, work for the public sector, work for someone else's plumbing business, or work for yourself.

and it's something you can do as a sideline -- odd jobs -- even if you're doing something else.

and bonus -- you can fix your *own* plumbing, too.

here's another thought -- it's not likely to be rendered obsolete by technical changes.

another thought: take up a high-end craft in your spare time -- like making faberge eggs or deluxe doll house furniture -- something small and not too equipment-heavy but very deluxe.

since the market power is moving to the top, there are going to be lots of wealthy to superwealthy buying high-end baubles. follow the money & hone your craft, something unique. that way your hobby also generates income once you master it.

for young people, have a secondary skill that can generate income. don't be a dillentante; if you decide to do something, try to master it. everything you can do = potential income source, even if on a small scale.

[JoePhilly]

6. This guy is a dope.

First my anecdotal story.

I grew up with a groups of about 20 guys ... we lived in the same area Philly, but went to different High Schools. Most went to one of three catholic high schools, a few of us to public high schools.

Out of that group ... about 10 were accepted to college. The others went to trade schools, or straight into unions.

Of that 10, only 5 finished. 3 of those us obtained advanced degrees.

Out of those 20, the top earners are 4 of the 5 who finished college.

The 5th, decided to be a high school football coach, which is what he loves to do.

Almost every successful person I know has a college degree.

I tend to think that those claiming that such degrees are a bad investment, also want their kids to have less competition.

[ProdigalJunkMail]

7. Maybe I am in an odd group of peers

but in the tech field a college degree usually isn't worth the velum it's printed on. I hire and fire and I would much rather have a youngster with a little hands on time than anything from a university. Now, a tech degree or cert might get you in the door at the entry...but then you have to earn anything above or beyond that.

Most of my peers have either no college degree or a degree in a field unrelated...average salary among them : $89K

sP

[Sonoman]

9. Here's mine...

I went to the first day of the First Grade and never went back.

I was the only kid in the classroom who could really read and add, subtract, multiply and divide numbers. I refused to go back and threatened to go live with my crazy uncle. My mother continued to teach me.

Today, I am nearing 60 and have not had to work for the past 25 years.

I suppose one could surmise that my schooling was, indeed, beneficial.

Sonman

[Poll_Blind]

14. Would it be untoward to ask the natural question: What was your vocation when working?

The whole middle part would seem important. I understand if you're not comfortable with sharing more but the only person I've known in a similar situation actually became one hell of a welder and managed to retire rather comfortably sometime around 45/50 after working on custom/nuclear projects.

(?)

PB

[Silent3]

8. Certainly tuition at many colleges is a scam...

...but that's a different matter than the general value of a college education.

[Zoeisright]

11. College is not a scam. We need more people in college.

It teaches you how to think and most college courses stress logical reasoning skills, which are sorely lacking in this country.

Unfortunately, it costs way too much. There should be some type of control on tuition rates.

[FreeJoe]

16. I just had dinner with our college interns

Our college interns just started. I took them and their mentors (all interns we hired in the last five years) out to dinner last night. College is definitely working them. I'm really excited to have them here.

Assuming that they like working here, perform well, and keep their grades up in school, they are practically assured a job after graduation. Depending on their majors, these jobs pay quite nicely. The worst of the lot will probably start in the mid 60s and the best will be making over 100k (that's not including benefits, which are generous).

What really amazed me is how many kids we recruited turned us down. I expected with the economy being the way it is, kids would take anything. I think we had a 50% rejection rate.

It is true that in some of our areas (mostly operations and IT), people without degrees sometimes get hired. That's usually either for entry level jobs (significantly below college hire positions) or hiring people with lots of experience. For people with proven working records, I've never paid much attention to degrees when setting compensation.

So is a degree worth it? I think it is if you take full advantage of it. If you coast through school in a major not in demand in the marketplace, don't build connections, and don't take on internships, it probably doesn't make sense from a pure economic standpoint. Whether it is worth it from an intangible perspective depends on the person and their situation.

[JDPriestly]

18. I finally figured out why Republicans think college is so useless.

Many of them studied business. That is generally a very useless major unless you are in accounting or economics or something challenging.

They should study languages, history, something that stimulates your mind and makes you think for at least a few years of your life as part of their "communications" and "business management," "public relations," "marketing" classes.

[laundry_queen]

19. hmmm

I can see both sides to this. For instance, if you live in an area where you can get an entry-level job in the field you would eventually like to study in, and do that for a year or 2 while still living with your parents, you can save enough to pay for most of your tuition. Some parents don't like that though, so make sure you have a plan and explain it to your parents - and stick to the plan. However, with the economy the way it is, you'd be lucky to get any job, never mind one in the field you'd eventually like to be in.

I am also of the mind that one should go and get the degree if they can afford it. If you can manage to get it while you're young and your parents can help you out paying for it, then do it. Work 2 jobs in the summer (if you can get them). If you can't get a summer job, take more courses so you can graduate earlier. As someone who started university, then dropped out (for numerous reasons - one of them money) and is now back at school full time as a single mom at 35 years old, I SO regret not just making it happen in any manner possible. I am now paying nearly 3 times as much in tuition as I did 16 years ago.

And yes, some people CAN become good entrepreneurs right out of high school. I went to school with a few. Many of them had parents who owned their own businesses so they had guidance. I think finding a mentor is very important if you want to go this route. And if you DO, I still think school is important, just take a class at a time. Before you know it you will have a diploma or degree. I have SO many friends going this route. They have a full-time job or own their own business and are taking a class or 2 here and there. Many are only a few classes away from a diploma. And they aren't in debt at all either.

I think this guy puts it a little too bluntly. I certainly don't think post-secondary education is a scam. What I think is the problem is the expectation that no matter WHAT subjects you take, no matter what you major in, that a degree will get you a job. Schools love to flaunt their employment stats. So much of it is exaggerated or lies. Look at where the growth is in the economy. Check out which fields and careers have the lowest rate of unemployment. Then go for it. Or take up a trade first. If you don't care for it, at least you'll be working when you go back to school and you will have less or no debt.

Ah, I wish I'd have known then what I know now....

[chrisa]

21. Short of joining a "diploma mill," college is always worth it, imo.

Salaries from graduates from college are much higher than those who never went to college by average.

[conflictgirl]

22. I disagree - college is only worth it if you can do unpaid internships

After facing a 10-month period of unemployment my husband decided to go back to school and finish his degree. He got his degree in accounting specifically because it was reported to be a field in high demand. He graduated in April 2010 and is still working at the same job he had while in school (which doesn't pay very well - only about half of what he had seen as the average starting wage for a new accounting grad.) Now we have his student loans to pay and he doesn't even get interviews because he has no accounting experience.

He went to a job fair a few months ago and talked to reps from some of the top accounting firms in the area, all of whom told him that he should have done an unpaid internship while he was in school and because he didn't, he'll have a tough time getting a job. He has a family to support - there was no way he could have done an unpaid internship and they never told him while he was in school that his job prospects depended on that. I think the odds are stacked against people trying to change careers later in life. College was most definitely a huge losing proposition for us and I'm not sure we'll ever recoup the losses.

edited to fix a mistake

[U4ikLefty]

23. I went back to college at 36 & it was the best time of my life.

I grew into myself while in college. I enjoyed every minute of the pleasure & pain.

Today, I am a professional engineer & make good $$$.

..but that's all gravy. Even if college didn't get me the "career", it gave me a rich life...I would do it over in a heartbeat.