Spendthrift Colleges Getting What They Deserve

May 3, 2009 by  
Filed under Economics

college_degreeI read two interesting and ironically related articles in the business section of today’s paper. Both articles highlight the lousy jobs that many of our colleges and universities do in managing money and in delivering value to their students.

College Grads Working Non-College Jobs

The focus of the first article was on the number of highly-skilled workers in today’s economy who are scrambling to find any available job just to support themselves. But it was the broader data behind the article from the Bureau of Labor Statistics that I found the most interesting.

In the first quarter of 2007, there were 140,000 college graduates working full-time as a waiter or waitress. In the first quarter of 2009, that number had jumped to 193,000, a 38 percent increase.

In the first quarter of 2007, there were 647,000 college graduates working as a retail sales clerk or stockroom clerk. By the first quarter of 2009, that number had increased by 20% to 776,000.

Amazing.

Don’t get me wrong. We need and I appreciate the work done by frontliners in the food service and retail sectors. But let’s agree that you do not need – or even benefit from having – a college degree to wait tables or to operate a check-out line at Walmart. Yet that’s what an ever larger number of college grads are doing.

Do we need any more compelling evidence that there are way too many people wasting time and money going to college?

How does that happen?

Payback Time for Colleges

That question brings me to the related article I read, entitled “Colleges Face Closure in Recession.

When I first saw that headline, my first thought was “Good. We need a lot of these colleges to go out of business.”

As reported in the article, hundreds of private colleges have mirrored the behavior of American consumers by going on debt-driven spending sprees. In the case of the colleges, the spending was to add bells and whistles intended to attract the tuition money of students. If the students didn’t actually have the tuition money, the colleges steered them toward student loans. Everybody was happy – and severely in debt.

Of course, the debt affected the students more. It is tough to repay five or six-figure student loans waiting tables or re-stocking shelves.

Now it is payback time for the colleges. Students with money (even borrowed money) are in shorter supply. Many colleges can’t support themselves. Those shiny new student centers and deluxe dorm rooms are empty. What a shame.

Hopefully, this recession will act as a catalyst for a new equilibrium being reached between college supply and demand. There will be fewer colleges around trying to convince young adults that a college degree always delivers value worth any financial sacrifice. At the same time, many of these prospective students will learn that not everyone will need or benefit from a college degree.

The wild cards in all of this are the education bureaucracy and the attitude of our so-called leaders in Washington. These clowns have brainwashed themselves and many of us into believing that a college degree is not only essential but indeed an entitlement. The result is that more of our tax dollars can be spent sending kids to college who don’t belong or need to be there. More student loan debt is a side-effect of the “everyone go to college” disease.

I wonder if the restaurant kitchens and stockroom walls have places for the employees to proudly display those college diplomas?


Feed Mr. ToughMoneyLove

FREE UPDATES: If you enjoyed this, please subscribe to receive the newest hard truth from Mr. ToughMoneyLove automatically by RSS feed (what is RSS?) or by spam-free Email.

Share
  • Banner

Comments

2 Responses to “Spendthrift Colleges Getting What They Deserve”
  1. SJ says:

    Well first for those who end up @ fast food / retail etc. I would hope/imagine it’s a temporary fix due to the economy. If not the presence of a degree should (hopefully) help in making a career of it. At the very least the forced “hard work” and discipline college develops work etiquette to move up.

    However, I do agree there is an over-saturation of majors and what not; come onnnnn do we need thaaaat many people studying philosophy or leisure studies or english or so on… Which ends up fending into grad school =)

    Colleges that don’t meet the core requirements, such as a good valuable degree should fall.

    I never did think about the recession helping cleaning up schools, tho it’s kind of obvious.

    I think the thing is America is founded on the idea of the possibility of upward mobility. But the only way to get it usually is to develop the mind; Which invokes offering college to everyone who wants it (which is everyone b/c of schools convincing) instead of those who REALLY want it and have shown early that they have the skills for it. Basically cultural in-grained desire alone vs. individual desire and merit.

    I do think offering education to people who may not benefit fully is preferably to not giving enough but revisions need to be made.

    1. teach more basic skills…
    2. more merit based entrance and aid

    “These clowns have brainwashed themselves and many of us into believing that a college degree is not only essential but indeed an entitlement.”
    Nice =)

  2. Rick Beagle says:

    I am not going to disagree that our schools could use some work with regards to the quality of education that they are selling, nor that this is a pretty nasty economy. But with all of that said, a degree is only as useful as the person who wields it. I honestly believe we have had too many students who have been sent off to party for four years on Mom and Dad’s dime.

    Perhaps parents need to spend a little more time helping their children understand what hard work is? Just something to mull over….

    Peace.
    Rick Beagle

Speak Your Mind

Please leave a comment and tell us your version of the hard truth...