Paypal founder says there's a Bubble in Higher Education

[chr5648]

Re: Paypal founder says there's a Bubble in Higher Education

The level of education has also fallen substantially. No wonder its a bubble, when you can sell the myth of knowledge.

Here is an ENTRANCE EXAM for HIGH SCHOOL in Jersey City in 1885

http://www.digitalhistory.uh.edu/qui...chool_test.cfm

[dcarrigg]

Re: Paypal founder says there's a Bubble in Higher Education

And then match that with the decline in "old fashioned" artisan skills and the parallel decline of related employment and apprenticeships, and you have a complete sea change from independent tradesmen to a slave labour employment model; where no one is allowed to improve themselves when they cannot be controlled by debt.

Hear, hear!

[LazyBoy]

Re: Paypal founder says there's a Bubble in Higher Education

Lets Not forget the 529 Plan. Nothing like an Investment scheme hatch by Government and FIRE Industry Executives - thats a recipe for Financial success.

An entire Generation of Debtors have been convinced that they need to hand their Money over to a FIRE Industry firm every month if there is ever to be any hope of Junior Attending Harvard or Yale or Princeton.

Another great scheme to minimize Taxes in the future and minimize investment returns while firms like Fidelity collect fees.

Hmmm... I've been meaning to get that 529 (or some other education specific) account going for my two year old. Maybe my procrastination has paid off.

But what exactly are you on about? What exactly is so bad?

(Because while I agree with many of the points in these threads – not everyone needs to go to college and the ROI is tricky – yes, my kid needs the option.)

[BK]

Re: Paypal founder says there's a Bubble in Higher Education

I'm Not aware of any 529 Plans that give me the wide variety of Investment choices I can get through a taxable account. I'd like my childs college fund to have exposure to equities that do very well with inflation.
I also like the flexibility to sell equities that have done very well and go to cash// also keep a portion of cash to buy things when they are on sale. The 529 Plan Companies will sell you on the Power of Dollar Cost Averaging over time and Modern Portfolio B/S. My cynical nature tells me Fidelity (and other firms) are more interested in 529 fees than whether my child as the Money to cover College costs in the future.
Silver and Silver related equities been very beneficial to my childs college fund - I'm not sure you can do that with 529s and lighten up when necessary.

Some time soon a portion of my childs college fund will be invested in the etf TBT - I'm not aware of a 529 Plan that will allow you to do that.

I am not a 529 expert - so, please correct me if I'm on the wrong track.

I'd love to hear I'm wrong and I'd love to hear there are some good 529 plans - I'm doubtful.

[EasternBelle]

Re: Paypal founder says there's a Bubble in Higher Education

What about the future?





Hussman just made a great comment this week about these types of statistics where you plot to graphs that whose variables might or might not be related to each other, but just both have an upward trend:

" I guarantee that there's also a correlation of more than 80% between the height of a baby kangaroo in Melbourne and the cumulative number of eggs laid by a hen in Oklahoma since early 2009."

[dcarrigg]

Re: Paypal founder says there's a Bubble in Higher Education

What about the future?





Hussman just made a great comment this week about these types of statistics where you plot to graphs that whose variables might or might not be related to each other, but just both have an upward trend:

" I guarantee that there's also a correlation of more than 80% between the height of a baby kangaroo in Melbourne and the cumulative number of eggs laid by a hen in Oklahoma since early 2009."

That's fair enough. Correlations are simply relationships. One must use one's own judgement in drawing inferences. It does seem to me more logical that a real relationship exists between oil consumption and employment (commuting for one) than between the height of a baby kangaroo and the number of eggs laid by a hen. But I would always encourage everyone to question assumptions and use their own best judgement.

[dcarrigg]

Re: Paypal founder says there's a Bubble in Higher Education

I'm Not aware of any 529 Plans that give me the wide variety of Investment choices I can get through a taxable account. I'd like my childs college fund to have exposure to equities that do very well with inflation.
I also like the flexibility to sell equities that have done very well and go to cash// also keep a portion of cash to buy things when they are on sale. The 529 Plan Companies will sell you on the Power of Dollar Cost Averaging over time and Modern Portfolio B/S. My cynical nature tells me Fidelity (and other firms) are more interested in 529 fees than whether my child as the Money to cover College costs in the future.
Silver and Silver related equities been very beneficial to my childs college fund - I'm not sure you can do that with 529s and lighten up when necessary.

Some time soon a portion of my childs college fund will be invested in the etf TBT - I'm not aware of a 529 Plan that will allow you to do that.

I am not a 529 expert - so, please correct me if I'm on the wrong track.

I'd love to hear I'm wrong and I'd love to hear there are some good 529 plans - I'm doubtful.

I am no expert either, but I don't think that there is a very wide range of options for 529s. I think you get more flexibility from the Coverdell ESAs, but there are income limits and an extremely low $2,000 cap per child. Still, it might be a partial solution for you. I'm sure somebody here knows better than I...

[lakedaemonian]

Re: Paypal founder says there's a Bubble in Higher Education

Which all reminds me of the current battle I have with my wife....my view on this (state schools should meet our children's needs) vs. hers (go to the best school that you can that provides the appropriate education...which definitely includes, private).

Our 15 year old is a pretty good student, but not top of his class and unlikely to get serious scholarship $$$.....and there's no way we could afford to send him to a top or second tier $200K in four years private university....no matter how much I've saved! For me, the ROI just isn't there, when you factor probability of high future earnings into the equation, ie, I don't look at just the outliers.

In case you're wondering, my wife and I met at college ( a private, second tier, university). She managed to go there with a mixed package of grants, student aid, student loan (I helped pay it off) and scholarship money. I went paying full price, thanks to mom going back to work when I was in 5th grade and the family living modestly.

It's a real sales job on some peoples perception that these colleges provide such superior value over their less vaunted peer-group schools.

Kind of like buying the no-name product vs. the popular brands at the supermarket (for many things, not all).

Hi Wayiwalk,

I'm about 10 years behind you with the age of my children and my wife and I have been having similar conversations.

We are fortunate to have a good bit set aside for our kids education...but since we will likely be partially or fully paying for it...we are going to be intimately involved in the choice of school and program.

I'm of a very similar mind in that my intended focus will hopefully be on removing the emotions that can easily cloud good judgement when it comes to higher education and focus on the realistic "return on education dollar invested."

We are also likely to encourage our children to consider opportunities beyond just the university education we place on too high a pedestal, such as seeking trade qualifications, apprenticeships, overseas volunteerism, and military service.....either instead of university education or in combination with it.

My focus is on seeing my children develop very high level interpersonal skills, language skills, tangible/marketable skills, and critical thinking/problem solving skills....none of which necessarily require university education to acquire.

I'm seriously tempted to tell my children they are on their own financially education wise...and continue to invest and grow the money we have allocated for their education and use it to stake them in a private venture or two when they have matured and are ready to take the training wheels off.

Or maybe I'll just point them here:

http://www.cofo.edu/ozarks.asp

Interesting school that was relatively unknown a few years ago....and is now suddenly on the radar in a BIG way....for very obvious reasons.

[Jay]

Re: Paypal founder says there's a Bubble in Higher Education

I am no expert either, but I don't think that there is a very wide range of options for 529s. I think you get more flexibility from the Coverdell ESAs, but there are income limits and an extremely low $2,000 cap per child. Still, it might be a partial solution for you. I'm sure somebody here knows better than I...

My kids 529's are in TIPS. Uugghh. The options stink. I have a feeling that I will be paying for their education with the money I make (and have made) in PM's and also from what I have saved not owning a house (at least I won't own until I see the whites of the housing markets eyes, and I don't see whites!)

I am tempted to just invest on my own without a 529, but I guess there is part of me that is still sentimental for the old Roman regime and its structure.

[Jay]

Re: Paypal founder says there's a Bubble in Higher Education

My kids are 4 and 2, with one on the way. They are fantastic and I hope to be able to give them whatever the best education is at the time that they are ready to go. That may be not going to college, an experience that has been perverted in the last few decades. The amount of real learning isn't what it could be at most institutions, hence the landscape for education may be very different by the time my kids are ready. The amount of bureaucracy and waste in most schools is ridiculous. But I don't have a crystal ball, so I stash capital for their future as best I can. If college is what they need I will give them the best I can afford.

My secret hope is to outlast this economic swamp we are in, meanwhile making a real return on my money while most don't. I wish everyone was going to be peaches out of this mess, but they just aren't. And if there is any semblance of an actual market in education when my kids go to school, I would expect that if most everyone else has spent two decades getting financially hammered, and I have made a real return, if even a small one, it will be enough to get my kids to where they fit best. There is some realpolitik for you.

[EasternBelle]

Re: Paypal founder says there's a Bubble in Higher Education

'It does seem to me more logical that a real relationship exists between oil consumption and employment (commuting for one) than between the height of a baby kangaroo and the number of eggs laid by a hen. But I would always encourage everyone to question assumptions and use their own best judgement.'

Sure, that might be so, but what does it mean? If you have a growing population, in order to maintain the general standard of living you would need more jobs, more energy, more housing, more food. So you would find that kind of linear relationship in any of those variables (all else being equal). If you have enery efficiency gains or change in the structural buildup of the economy, the behaviour of consumers changes in view of high petrol prices, change in the household size that seems to me the more meaningful way to look at those relationships that you would otherwise imagine to just be expected to grow in tandem with population as a baby kangeroo is generally expected to grow into adulthood.
So I don't understand what your chart wants to actually say about the future? You think reduced oil consumption means less jobs? That would certainly not be necessarily true as there is still so much energy efficiency gains to be made in the US economy
Eastern Belle

[Chris Coles]

Re: Paypal founder says there's a Bubble in Higher Education

Everyone needs to remember that the entire economy is teetering and unstable; thus long term predictions may not succeed. But there are some things that stand the test of time. One being the industries that strongly re-bound when the economy turns. Look at history and see the fortunes made in Steel and shipping. Once the economy turns, there will inevitably need to be a return to good old fashioned making things. All of our old fashioned industries were led, not by college grads, but managers that rose from an apprenticeship, right up through the company, learning new skills as they travelled. If the FIRE economy collapses, so will education and the reason will be the lack of funding for so many students with no long term prospect.

History will answer many questions, not only for the parents, but also for the children too.

[reggie]

Re: Paypal founder says there's a Bubble in Higher Education

Higher education is proportional to higher societal indoctrination, so says Theodor Adorno's Dialectic of Enlightenment. As American's influence and power dwindles, so does the need to maintain higher levels of indoctrination, as there are other techniques available for managing the public mind.