Friday, December 23, 2011

The College Industrial Complex

College is just like war and the united state's prison system - it's an industrial complex, where government throws lots of money at an otherwise unsustainable system.  Basically, here's how it goes - government does massive intervention in the student loans market, making it easier for more people to go to college, since there's easy money available to do so.

Governments institute rules for private colleges and industries, that 10% of their revenue has to be from non-government tuition, so these institutions have to raise their tuition rates.  This forces more people to either take student loans or turn to the government, which in turn creates a vicious cycle of raising tuition and more government intervention in the market.

Public colleges and universities are worse, as they hike up tuition not necessarily out of necessity, but out of the freedom they have to do so.  They ride on the questionable statistic that "those who go to college make a million dollars more in their lifetime!" and so on, using that as justification to charge outrageous tuition rates.

Now, what's the solution to this problem?  Price controls?  Is there a better, free market alternative to such madness?

Get government out of the student loan market!  Don't guarantee student loans that private banks do, and don't fund student loans with taxpayer dollars. Allow private banks and individuals to do loans to those who are most likely to be able to pay it back.  Socializing it, just like government intervention in any other market, just makes it more expensive, hurting lots of people involved.

Basically, by getting rid of these loans then college attendance will drop.  Which is a good thing, too many people these days go to college, get a stupid degree, and aren't able to get a decent job worth the money they invested into that degree.   Colleges and universities will have to adapt due to huge drops in enrollment -  cut all their stupid spending (eg: Million dollar paychecks to football coaches), and in order to make money again will have to lower prices to let students be able to afford going again.

Now, I'm not saying that college is worthless for everyone, I'm just saying it is worthlesss to most people.  The number one degree given by the University of Utah is economics degrees, but I'm willing to bet that with the internet as an excellent resource, they would have learned more without sitting in a huge auditorium filled with hundreds of other students.  Another example is Computer Science degrees.  I've heard stories of kids in their 20's applying for programming/software related jobs but not having a lick of experience in software, even though they have a piece of paper saying they're certified!  What's the point of being certified if you aren't useful to an employer?

Peter Schiff has an excellent video on the topic:

An excellent movie to expound on the subject is "College Conspiracy", released earlier this year by the National Inflation Association.

No comments:

Post a Comment