Karl has made mention several times that the Student Loan crisis is the next bubble. I agree whole-heartedly, and I happen to be a professor.

It was mention of the following that made me realize how dire this situation is. In a "university meeting" that is held three times each year, the university president shared with the faculty how much the burden has shifted from state support to student support (taxes vs. tuition). The figures are available online on the csus website at http://www.ct.edu/about/profile/

In 2000, revenues from the state (taxes) covered 62% of the cost of a student's education; in 2009, that rate fell to 47%. That means that the burden of cost covered by tuition (student loans) went from 38% in 2000 to 53% in 2009. When I mentioned this to students, they were less than perturbed. They simply replied, "We have to have the piece of paper."

When the cookie crumbles, the entire system is going to go down, because we are almost entirely reliant on enrollment now. Nothing short of a diploma mill. Just like the online degree sellers. No wonder I am the only one working so hard to teach.

Those percentages sound very close to our past and current funding from the state.

Quote:

"We have to have the piece of paper."

Yep...

I am hoping that others can share their state percentages, so that we can get a picture of this shift from taxes (today's money, no matter how nebulous) to loans (leverage and servitude).

It was bothering me so I went to get the actual numbers and I was way off. We're still 63% funded by the state. I'll have to dig for historical numbers as I'm pretty sure it has dropped by a sizable chunk over the years. I was just off in my percentages.

Quote:

"Most flagship universities received from 20 percent to 40 percent of their funding from their states, but the range of support was broad.

On the high end of the funding spectrum, Louisiana State at Baton Rouge averaged 55 percent, followed by the State University of New York at Buffalo (48.2 percent) and University of Wyoming at Laramie (46.6 percent).

On the low end, the University of Colorado at Boulder averaged 6.9 percent, followed by the University of Vermont at Burlington (9.6 percent) and Pennsylvania State University (10.7 percent).

For the University of Illinois for 2009-2010, the average was 17 percent, down from 19 percent in 2005-06.

http://www.suntimes.com/business/5076731....

Quote:

In 2010-11, the state funded just 17.6 percent of UW-Madison's budget

http://host.madison.com/ct/news/local/ed....

Quote:

Purdue... Indiana state funding covers ...18 percent.

http://www.purdue.edu/giving/annual_givi....]

Good state schools are horrendously expensive precisely because states are providing such a small percentage of the funding.

Quote:

"We have to have the piece of paper."

^ That.

This won't end well...

FWIW, Penn State is NOT a state university. It is NOT owned by the state of Pennsylvania, it is considered "state related" and gets some money from the state. The state owned universities can be found at http://www.passhe.edu/Pages/default.aspx. I am a professor at one of those universities.

Going on memory we are getting about 30 to 35% of our funding from the state, the rest is tuition and fundraising. In essence, like Rlaprof said, we are entirely dependent on enrollment. Even though we get money from the state I say entirely because a decent hit to our enrollment will break our budget totally.

Flap

bilge. sorry. too late at night and reading comprehension is low....

Take two.
According to the chart in this article ( http://www.ctmirror.org/story/12029/csus.... ), tuition was about $4000 in 2000 and $8000 in 2009.

In 2000, if the state were contributing 62% of the cost of education, then $4000/(1-.62) gives a total cost of $10,526, $6,526 of which is being covered by the state.

In 2009, if the state were contributing 47% of the cost of education, then $8000/(1-.47) gives a total cost of $15,094, $7,094 of which is being covered by the state.

The state decided that education was worth $568, or 8.7%, more in additional funding from 2000 to 2009.

The university system decided that education cost $4568, or 43.4%, more in 2009 than in 2000.

The student was made to pay $4000, or 100%, more for the "piece of paper" in 2009 than in 2000.

Seems to me that the state and university system don't agree on what the costs should be, and the student is picking up the tab on the disagreement.

Yes, and the only reason that can be made to work is that the student is being "offered" loans and among the terms are effective extortion aimed at his or her parents.

Rla & Flap: Do your colleagues get it or are they just happy to be part of the diploma mill?

Frank they get it and I would say most don't like it either. I think there are a fair number of us who liked the way the system worked (or at least appeared to work) when we got in years ago but are now not happy with things.

One thing that happened that gets no play is that during the boom years students kept demanding nicer and nicer amenities and didn't seem to care about cost. What happened was that each school had to build nicer dorms/rec centers/... or the students would go somewhere else. Now that all of the schools have a built in high cost structure due to these demands everyone is suddenly cost conscious.

A lot of faculty/administrators realized as it was happening that living standards were getting awfully high for students yet they also realized that to survive in the short run each school had to keep up with the Jones'.

Honestly if I would have known half of what I know back years ago I would have never gotten a Ph.D. I would have gone into sales as I don't mind walking up to a stranger and introducing myself and starting talking.

Flap

I saw this article today in our local paper. I'm sure that the people mentioned in this article aren't deep in debt in order to be at these schools with loans that can't be discharged. If they need assistance now, what happens when the graduate in this job market? Why are they in school? What are they studying? What do their prospects look like upon graduating? If their families are struggling now, why aren't they helping now instead of building a bigger anchor? It's appalling not only that this is happening, but that the piece in the paper doesn't even consider these questions.

http://www.tennessean.com/article/201202....

Quote:

A lot of faculty/administrators realized as it was happening that living standards were getting awfully high for students yet they also realized that to survive in the short run each school had to keep up with the Jones'.

Just my opinion, but that's bs. They "did it" because they got rewarded for it in some fashion. There's always more students than "room" so they weren't going to loose anything due to shrinking enrollment. I suspect the administrators had multiple wet dreams over their "beautiful" buildings and the like ... they did it to stroke their own egos.

Again, JMO.

Widgeon,

You tour two campuses with majors you are interested in. One has modern facilities, apartment style dorms, fitness center with LCD TVs everywhere...the other still has soviet-era highrise dorms, dated but still completely functional fitness equipment/center.

What do you choose?

Sure there are some admin pet projects but it really is a matter of out doing the next best university to keep enrollment continually rising.

I don't believe the student body of the "mainline" campuses is increasing. Generally, on-campus enrollment peaked in the early 80's. For instance, U-Wisconsin was over 48k students in the early eighties ... now 43k and it's been that way for years now. Same story elsewhere. The "new enrollment records" that are being touted (I think) are due to on-line, evening, classes, etc. Again I say, there is no shortage of resident students and these campuses would fill-up under any circumstances. The excuse for building that they have to 'keep up w/ the Jones' is (to me) just a convienient cover.

Sure maybe the big state flagship schools are stagnant. I haven't done much research out of state.

I do know that our enrollment is rising year after year. Yes, our on-line is helping significantly, but our on-campus enrollment is exploding thanks to aggressive marketing toward international students. Our domestic enrollment is DOWN but on-campus enrollment overall is still clipping along at a great pace thanks to a tremendous amount of international students.

My husband finally gets it! Took an article in the "Princeton Alumni Weekly" for him to understand why it doesn't make a hill of beans what you spend on your post-secondary school education (or even, if you get one at all) ...

http://paw.princeton.edu/issues/2012/03/....

Quote:

David Czapka ’07 graduated from Princeton shortly before the financial crisis hit and enrolled in graduate school at Penn State, with plans to become a professor of English. Soon, however, he realized the life of an academic wasn’t for him. So he switched gears and, after getting his master’s degree, began to look for a job in publishing.

Bad timing. By then, the recession was on, and the publishing industry had stopped hiring.

Without a salary, Czapka moved back to his home in Wayne, N.J. He sent out 50 résumés, made calls, sent follow-up emails. “Truth be told, I didn’t get one response back. Not a phone call, not a single response,” he says. He picked up an application for a low-wage job at a nearby Barnes & Noble store, thinking he could make contacts in publishing by working with ­inventory.

Back in his boyhood room at home, Czapka pulled out the application and started to fill it out. He wrote down his name. His birth date. His Social Security number. But then he stopped and set it aside. “I had not worked a $7-an-hour job since I was 16 years old,” he says. “This seemed like an enormous step backward.

“Once I realized I didn’t want to do that, I felt pretty lost,” he remembers.

...

Nine months after graduation, barely more than half — 56 percent — of those who graduated in 2010 had held at least one job, according to a May 2011 report by the John J. Heldrich Center for Workforce Development at Rutgers University, which was based on a survey of 571 graduates nationwide. Of all college graduates since 2006, 14 percent reported that they were unemployed or working part time and looking for full-time work.

According to the report, 23 percent of the 2009/2010 graduates took a job without health benefits, compared to 14 percent in 2006/2007. Thirteen percent of graduates accepted a temporary job, compared to 9 percent in 2006/2007.

“The dismal sense of college graduates’ financial future is yet another sign of the corrosive effect of the Great Recession,” Rutgers professor Cliff Zukin said in releasing the report. “Even young graduates of four-year colleges and universities, who are typically optimistic about their futures, are expressing doubt in another cornerstone of the American dream — that each generation can enjoy more prosperity than the one that came before it.”

More at link.

I don't doubt it's hard ... but 50 resumes is next to nothing.

The vast majority of Princeton grads feel entitled to have their choice of creme-de-la-creme jobs just waiting for them by virtue of their prestigious ivy league degree. The "old American know-who" is more important than the "old American know-how."

Welcome to the real world.

In the 21st century the "know-who" is built on vaporware. The "know-how" is where the future lies. That's why continuous self-learning and on-the-job skills advancement is the key to success for anyone wanting to be very successful.

I'm a little jealous of these young graduates, at least they know beyond a doubt that any additional debt is a terrible idea...

After I get butt****ed I know that whatever I did to cause my trousers to be around my ankles was a very bad idea.

However, I still got butt****ed.

There is no student loan 'crisis'
By Tami Luhby @CNNMoney

http://money.cnn.com/2012/03/30/news/eco....

"We have to have the piece of paper."

Yep, which is why imo this will continue on for some time yet. What other alternatives do they have if they want to get a decent paying professional job? Employers won't even interview you yet alone give you a job unless you have a minimum of a Bachelor's Degree. Blue collar work is pretty much out of the question these days too with all the illegals out there stealing jobs. Kids gotta do what they gotta do to make a living now and colleges know that. It's a great racket they have managed to get themselves running by convincing employers that only people with degrees are worthy applicants.