With various colleges determined to really emphasize the “liberal” half of the phrase “liberal arts” by offering courses on Occupy Wall Street, in the Wall Street Journal, Glenn Reynolds proffers “A Syllabus for the ‘Occupy’ Movement.” No word yet if he’ll be teaching this course himself at the University of Tennessee in the fall:
Schools from New York’s Columbia to Chicago’s Roosevelt University are offering courses on the “Occupy” movement. This has inspired some derision from the right, but I think that derision is misplaced. There is much that a course on the Occupy movement might profitably cover. Here are some possible lessons:
1) The Higher Education Bubble and Debt Slavery Throughout History. Since ancient times, debt has been a tool used by rulers to enslave the ruled, which is why the Bible explains that the borrower is the slave to the lender. One complaint of many Occupy protesters involves their pursuit of expensive degrees that has left them burdened by student loans but unable to find suitable employment. This unit would compare the marketing of higher education and student debt to today’s students with the techniques used to lure sharecroppers and coal miners into irredeemable indebtedness. Music to be provided by Tennessee Ernie Ford.
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Heh, indeed. Read the whole thing.®
The really sharp professor will remind his students of the postmodern irony overload of their running up student loans to learn more about a protest about (among other things) running up their student loans.
The words “predatory lending” are tossed around with no regard for reality. To understand a scam, you must know who pays the money and who gets the money.
The scheme is actually predatory selling. A used car dealer convinces an 18 year old that he can buy his first car with a loan and a down payment. The dealer overprices the car by $3,000 as part of offering financing, and the teen stupidly agrees.
If the teen makes the payments, great. If the teen defaults, the dealer reposseses the car and can still collect against the teen for the full purchase price.
The predatory part is to convince the teen to buy the car at an inflated price. The dealer makes a nice profit on the car above the price that the car can be sold in repossession. This approach works only if the teen can repay the debt. If the teen declares bankruptcy, the dealer loses. The teen has the incentive to repay the loan, which is bigger than the teen would like but not impossibly large.
Predatory Selling: Sell something for an inflated price financed by a loan, then enforce payment.
The Shabby Degree scam has the following structure. It is all legal. The “scam” is that trusted institutions betray the trust assigned to them.
(1) A school sells an education to the student with no guarantee of its value. If asked, the school reports that it offers degrees primarily to satisfy intellectual curiosity.
Motto: Our degrees enrich your life whether or not you get a better job. The student is an adult; ask him why he wants the degree.
Motivation: Every additional student is mostly profit for the school, and the students with loans will pay up for this opportunity. Schools charge higher prices, financed by easy loans.
Mistake: The student trusts that a college of fine intellectuals would not sell him something which is not worth the fees.
(2) Our government arranges to loan money to the student in the name of equal opportunity. The easy money comes from Sallie Mae, the Student Loan Marketing Association. It makes student loans directly to accredited schools. The government guarantees that Sallie Mae will receive full repayment if the student cannot repay the loan. The government specifically excludes student loans from bankruptcy, so the loan cannot be dismissed or reduced by the student.
Motto: Every teen deserves a degree and a better life. Government support proves we are doing good.
Motivation: Politicians take credit for doing good. Schools lobby and support politicians with campaign contributions and honorary degrees. Schools are fundamentally a business.
Mistake: The student trusts that the government would not lead him into misery. Wise politicians are looking out for him.
Follow the Money
The schools make most of the money selling more and higher priced educations than could be supported by the individual finances of its students. They bask in the glow of government support. “We must be worth it, or the government would not be giving us this support.”
Why College Is A Waste Of Money – Consider the waste and dispair imposed by a college system that discards about half of the students who try for a degree.
Sallie Mae makes money. Most students can pay off their debt with a struggle. Sallie Mae gets partial recoveries by claiming the assets of the unfortunate students and co-signers. (Hey, they can go on welfare.) Loans that can’t be repaid are reimbursed by the government. Sallie Mae is a fine place for politically connected managers to make large salaries in nice surroundings, “doing good”.
Students and Taxpayers lose money. The students lose because they are tricked into buying an education which is valuable mostly because the certificate is required to get a job. Government support hinders the development of competing models which could deliver the parts of education which are valuable at less cost.
Many (or most) students buy an education which is worthless to them because it does not improve their knowledge, thought, or career prospects compared to what they spend. Many college students drop out with nothing but failure and debt.
The Great College-Degree Scam
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[edited] This supports the notion that credential inflation arises from a perceived need by individuals to demonstrate potential employment competence through a piece of paper, a college diploma. Employers are using education as a screening and signaling device, at a low cost directly to them (the taxes they pay), but at a high cost to prospective employees and to society as a whole.
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The Used Car scam depends on overpaying for the car. If the car is worth the price, then a few teens may use bad judgement, but they will not be encouraged by everyone involved to borrow the money to buy the car.
College is an expensive IQ test
The law says that a company cannot give an employment test unless it has been shown to be non-discriminatory in effect, that it doesn’t screen out people of color at a different rate than white people.
So, employers don’t create their own tests or use standardized tests. Interviewers talk randomly about whatever they want, using personal judgment to decide if the candidate is “a good match”. This is supposed to be less discriminatory!
The really sharp professor will remind his students of the postmodern irony of going to Harvard, Yale and Columbia and then chanting at the protests “We are the 99%.”
“Postmodern irony” – They won’t get it.
Q – Why did the chicken cross the Moebius strip?
A – to get to the same side.
Archer’s take: http://www.youtube.com/watch?v=xvicEn5nXSU