Tuesday, May 15, 2012

For Whom the Bell Tolles

Should every kid go to college?

This question is the source of much debate and angst in our country. Only two generations ago, it was rare for a young man, and almost unheard of for a young woman, to attend college and earn a degree. But that was also a time when the Industrial Revolution was in full swing. Many young men were lured away from the hard life on the farm to work as unskilled laborers in the coal mines, steel mills, and factories. It was still hard work, but better than having the family scratch out an existence on the farm.

That generation - my grandparents - were also the grownups when our country fell into the Great Depression, then were compelled to enter World War II after the attack on Pearl Harbor. It was their children who ended up on the front lines of that war.

Tom Brokaw gave those born in the early part of the 20th Century the title "Greatest Generation." I don't disagree. They came into this world at a time when a family was more likely to own a horse than a car. Their childhood was shaped by the agony of the Great Depression. As young adults, they fought and won World War II.

Then they went to college. One of the greatest pieces of legislation ever passed by our federal government was the G.I. Bill, which enabled millions of our veterans to earn a college degree. They became the engineers, scientists, businessmen, and all the other professionals who led our country to a level of prosperity never before seen.

Their journey was unique, and it made them tough and determined. They came back from WWII fearing little and believing they could accomplish much. And they did. Yes, they put a man on the moon, but they also built most of the infrastructure of our country and established our great industrial presence in the world. One of the spoils of their WWII victory was that most of the rest of the world's industrial capacity had been bombed into rubble, and it would take decades for our competitors to recover.

They wanted to give their kids - my generation - everything: a nice suburban life away from the squalor of the cities; good, clean, new schools; and recreation instead of chores. And they wanted us to go to college so we "wouldn't have to work with our hands" like they did. So we grew up thinking that the skilled trades led to a less-than-desirable life - a consolation prize for those not smart enough or rich enough to go to college.

A public university education seemed more affordable in my day. I think the tuition at Ohio State was about $300/quarter when I was a freshman in 1971, and the full-meal dorm fee was only $400. A four-year degree could be had for about $8,500 plus spending money.

Today tuition, room and board at Ohio State is more like $20,000 - PER YEAR.  That's a ten-fold increase!

Of course, family incomes have grown as well over those 40 years. My Dad was an electrician for one of the largest industrial corporations in this country, and his W-2 income didn't surpass $10,000/yr until about the time I came to OSU. So the cost of college was about 20% of our family income.

At today's college cost of $20,000/yr, family income would have to be about $100,000/yr to be the same percentage. According to the 2010 US Census data, the average household income for our ZIP code is about $70,000, meaning OSU costs nearly 30% of family income.

No wonder college students are piling up mountains of student loan debt. Because the public school one's kids will attend is determined by one's street address, many families have already mortgaged themselves to the hilt just to buy a house in a great school district. There's not a lot of room to pay these kinds of college costs on top of that.

But we've come to think of a college education as a necessity - like it's impossible to have a 'good life' without going straight from high school to college, and graduating at age 22 or so with a bachelor's degree. So we help our kids as much as we can, but more and more of them will graduate from college holding one piece of paper signifying that they've earned a degree that may or may not help land them a high paying job, and other piece of paper saying they're deep in the financial hole before they even get started.

I believe there are two key things which have gotten out of whack, and my generation is the perpetrator.

First, the cost of a college education is a consequence of political forces not so much concerned with raising the overall intellect of our country as they are making more money. By that I mean that the political decision to artificially lower the borrowing cost for student loans is not making a college education more affordable, it's making it more expensive - transferring wealth from parents and taxpayers to the education community.

This is happening in exactly the same way as the access to cheap loans to unqualified buyers drove up home prices.  Houses that weren't worth the taxes that had to be paid on them suddenly were selling for many multiples of what they had been before.

That bubble eventually popped. A great many of the folks who were granted those subprime loans couldn't make the payments, and ended up defaulting. But at least they could let the bank foreclose, and walk away from the debt. Can't do that with student loans - they follow you for life.

Likewise, colleges have been raising their tuition year after year, just because they've learned that as long as they don't raise tuition so rapidly rapidly so as to attract insurmountable political pressure (a "Boiling the Frog" strategy?), students will continue to line up and take out their loans.

Because colleges are professional services entities, they spend the bulk of their money on compensation and benefits of the faculty and staff, just like a public K-12 school system. In the case of Ohio State, that fraction is about three-fourths of the General Fund spending, according to their most recent budget. They plan for salaries to increase by 2%/yr, and benefits costs to increase by nearly 6%. With the State of Ohio cutting back on higher education funding in the same way it has cut K-12 funding, this growth in personnel costs will largely have to be covered with ever-increasing tuition.

I believe the second problem is that we're doing a disservice to both the younger generation and our economy by perpetrating the belief that every kid needs to go to college straight from high school if they want to have a good life.

Certainly, some kids are fully ready for college when they graduate from high school, and have access to financial resources which allow them to push right through to a degree, enabling them to start life with no debt. There's nothing wrong with that.

But many kids aren't so lucky. They might not have taken high school as seriously as they could have, or just aren't academically or emotionally ready for the rigor of college studies. A report published by the Ohio Board of Regents says that about 40% of the kids who graduate from a Hilliard high school will end up taking remedial math or English when they get to college, and 10% will need to take both. Many will drop out of college, with time (and potential income) lost, no degree, and in debt.

Maybe another path for those kids is to get some training in a trade, and spend a little more time sorting out their lives before deciding to make the investment in a college education. There remains in our society a demand for electricians, plumbers, carpenters, auto mechanics and the other traditional and honorable skilled trades.

And there are all kinds of new jobs appearing. For example, I recently had a couple of medical tests done which required ultrasound imaging. I asked the young people doing the imaging where they got their training, and both said they had earned an associate's degree at Central Ohio Technical College, a public institution allied with OSU-Newark.

Hilliard City Schools has for many years been a member of the Tolles Career and Technical Center. We are one of seven public school districts who make an education at Tolles available as an alternative to traditional high school. Students can graduate from Tolles with both a high school diploma as well excellent training in various skilled trades, many in high demand.

It took me lots of years to earn my college degree. In many ways, I think my path was the best one possible - at least for me - taking all the tough math and sciences right out of high school when I still remembered how to do calculus, then business courses a decade later when I was beginning my managerial career and understood the application for those skills, and finally the humanities and social sciences when I was in my 30s, and a little more understanding of the richness and variety of life in this world. It was a pay-as-you go approach, with a little help from scholarships as well as my employer, who had a generous tuition-assistance program.

Life is messy and unpredictable. It's also full of wonder and discovery. Maybe slamming right from kindergarten to a college degree or two isn't all that good a thing to do when you end up graduating to un/underemployment and a mountain of debt.

And maybe if we shift our buying of college credits from a time in our lives when the magnitude of the investment isn't fully realized to a time a little later when we better understand the potential return on investment, we'll be better consumers, and will balk at the upward march of tuition.


  1. I think there's reason to question the value proposition for higher education -- more so as self-education opportunities explode online.

    In the same way that High School is supposed to teach us study habits and learning techniques that we'll apply in higher education settings, though, I think an awful lot of a good college education has to do with learning how we'll work with other professionals later in life.

    As you hinted, though, some kids go to college with no idea whatsoever of what they might want to do with their lives, and this really marginalizes the value of their education. Despite this, skipping or postponing college is a fairly radical move right now for kids (and by extension, their parents) who hope to work in any kind of professional field.

    Moreover, there are some powerful self-reinforcing beliefs at work to keep it this way. For instance, not only is there a financial incentive for colleges to keep generating more revenue, but each new college graduate wants to see the perceived value of their newly-earned degree grow, and there's no better way to do this than to make next year's graduates pay just a bit more for theirs.

    Until we as a society are able to wrap our heads around the idea that a degree is a pretty vague proxy for real knowledge and learning (and is valued thusly), we'll continue to see a strong marketing component in all aspects of education.

    Interestingly, the idea that kids should give strong considerations to careers in skilled trades would seem to hinge on whether one sees an ongoing deterioration of the middle class in America, doesn't it? Some of these trades might once have led to really good lives, but this reality has been under attack for quite a few generations now, and I don't see any signs of that trend letting up.

  2. The traditional view of college is that what we perceive today to be a 'liberal arts education,' which many now consider almost worthless ("and what did you hope to do with that philosophy degree?"). But the central idea of a liberal arts education is, I believe, to expose young adults to the collected wisdom of many many generations of thinkers, from the ancients to the contemporaries. It's about learning how to think, and not about learning a trade.

    Those of this perspective believe one then goes on to learn the skills of a profession in graduate school: medicine, the law, engineering, etc.

    We've come to treat undergraduate education mostly as a trade school with some 'rounding' courses thrown in. That's certainly what the engineering curriculum looked like when I was in college, especially after OSU decided to shorten the engineering curriculum from five years to four back in the 60s. There was simply no time to take any humanities or social sciences outside the core required of all OSU students.

    Interesting notion that escalating tuition is a motivator to get a degree now rather than later. I think we have to factor into that equation the cost of changing majors when one has a false start - which is less likely if one pursues a degree after spending some time in the field.

    I think the kinds of skilled trades in demand evolves continuously. My encounter with the young folks studying medical imaging is an example. There was no such thing as ultrasound imaging when I was in high school. Yet today, there is great demand for technicians in this field.

  3. Paul, I think it would be an excellent community discussion on what our remediation rate here in Hilliard really is. I remember 4 years ago addressing this issue
    at the public forum section of the school board meeting trying to ask how we can be rated so high if our remediation was in the 30% range. The response was less than warm ! So if we are indeed Excellent with distinction, but our college bound students are not ready
    and need remedial help at the college level, which aDDS TO THE COLLEGE DEBT OF A STUDENT,how about the administration and board admit this is an issue and
    communicate this very serious issue and steps to be taken to get our remdial rate into a proper level and perspective. Also if we keep inviting our state reps like Cheryl Grossman to enjoy in the happpy and more happy photo ops, why cant we getg her and her fellow reps to have a real discussion on what they are going to do about the funding mechanisms for our schools.
    It seems everyone but the homeowner gets a tax break
    a TIF, a reduction except the homeowner. But then the school district and its employees paint voters as selfish and not caring about kids at levy time when in fact those same individuals allowed attacks on kids
    and their parents during work to the contract !

  4. I have two Davidson grads in my family; the oldest is graduating from OSU in 3 weeks. the younger attended OSU for 2 quarters before deciding that it was not for her, and she will graduate from Nationwide Cosmetology School later in June. Nationwide is about as expensive as OSU on on quarter type basis but of course is less time. I think both of my kids made great decisions for their career path and to be honest, the younger one will probably be more gainfully employed before the older one - a degree from Fisher is going to pay off eventually, but not for a while in today's job market. High Schools SHOULD have options for kids who are going to choose something other than college, and the emphasis has for too many years been all wrong in leaving those kids out.

  5. A couple of points if I may.

    First, we must stop the nonsense that "going to college increases your earnings by about $1m in your work lifetime". That is a conclusion that is not based upon any facts. Yes, college graduates earm more, but notice that I said college graduates, not "going to college". Also, it should be pointed out that the people that have historically graduated from college are the same kinds of people that tend to be successful in life. So does college make the person, or would the person succeed anyway? As someone who has been very successful, without a degree, I would tend to support the latter observation.

    Secondly, Paul notes that "... the central idea of a liberal arts education is, I believe, to expose young adults to the collected wisdom of many many generations of thinkers, from the ancients to the contemporaries..." ... that may be the central idea, but sadly today it has been twisted into a sickening method of indoctrination. Conservatives rail at the data: 90% of professors are liberal, only 10% conservative. For anyone that thinks that is OK, please consider how you would feel if the opposite were true. Educating science, math and engineering are based on facts; educating liberal arts is based on conjecture; for the latter to be effective it must be taught in a balanced way, which is no longer the case, and is why so many graduates with liberal arts degrees fail miserably when they leave college. When you've only been exposed to one train of thought, you are ill prepared the first time that method of thinking fails.

  6. I have 3 girls, a Junior, a Freshman and a 7th grader. I worry about how they will make it through college without being permanently underwater. With the crazy cost of tuition and the fact that there is no relief mechanism under the bankrupcy laws, I'm concerned. We will not be able to help them as much as we'd like to.

    I believe that they have the dubious honor of coming to age at a crucial time in education. Online resources are coming out that will transform education, but not before tehy pay a premium, for a traditional degree. I will not be surprised to see in the next decade online training pull the rug out from under traditional colleges. Once businesses start recognizing that these new types of degrees are every bit as valuable and begin considering folks equally to those with a traditional degree, I won't be surprised to see a collapse in the education market.

    A course correction is due, unfortunately I don't think it'll come soon enough for my kids.

  7. You never know - some things happen pretty quickly. I'm one of those who believe most systems tend remain relative stable over a substantial range of inputs - until a tipping point is reached. Then it quickly transitions to a new state of stability, albeit sometimes disastrously different.

    One wonders if the cost of the current scheme of public education is pushing us near one of those tipping points, leading to a relatively rapid transition to a new way of doing things.

    Certainly comp & benefits is one of the forces at play. But so is the growing capability and accessibility of technologies like the internet and smart phones.

    Maybe not so much for your high schoolers, but the 7th grader has a pretty good shot at being a pioneer in a new way of doing post-secondary education.

  8. Anyone who thinks college isn't necessary either 1) has not had to look for a job in a while, or 2) has not hired in a while.

    It can be tough to even get an interview for a clerical position without a degree. I have some serious reservations about the value of degrees, but until hiring patterns change, college is a must...

    1. Of course, there are plenty of jobs that don't require a degree. The young man who grew up next door to us is making a fine living as an auto technician at a local dealership. There will be tons of folks hired in skilled trades and general labor in the natural gas industry as drilling gets going east of here.

      There are every week a few pages of jobs in the paper that don't require degrees, and where sometimes a degree is a detriment - because the employer is looking for someone who will stick around for a while, rather than run off at the first chance of getting a job in their degree field.

      Every year, our colleges graduate kids with degrees but slim employment opportunities in their field. Education might be the best example of that right now. Plenty of young folks with ed degrees who are doing something else right now.

  9. Fair enough, Paul. But the fact remains that my generation's auto technician will not be able to afford the same lifestyle as your generation's auto technician. My dad is a very talented mechanic. He's always been paid what I'll call a market rate. That rate has held steady at around $50k for the last 25 years. The problem is, $50k doesnt buy what it used to.

    1. I think perhaps future historians will look back at the last half of the 20th century as being a aberration for America. Through perhaps the 70s, America had the advantage of being the only economy which survived WWII with its industrial capacity intact.

      The high degree of deserved confidence which our country possessed in the 50s and 60s put lots of folks to work, and let lots of kids like me grow up able to go to college and find professional careers. We came of age when America had no economic competition, although the specter of nuclear war was very real.

      In time, those we vanquished in WWII, Germany and Japan, again became economic powerhouses, in part because they got to build new manufacturing plants while ours continued to age, but more so because their income expectations had been radically reset by the war. In time, they brought quality products to the market at a competitive price, and took significant share from domestic producers.

      Japan blew it, just as we are now. They let speculation get out of control, and suck all the gas out of their system. They haven't recovered yet.

      Germany did a much better job of managing their economy, in spite of the cost of the reunification.

      Just as they taught us in business school, one has to choose between being the low cost producer and being the high value producer.

      Japan chose the former, and Germany the latter. We got caught in the no-man's land in between: waning quality and high costs.

      So no what are we gonna do? Well, we can't allow ourselves to lose the hi-tech industry the way we lost the auto and steel industry. Thank goodness for Microsoft, Intel, Apple, Google, Facebook et al. Here's a relatively new industry that produces products that demand a premium price, employing tons and tons of workers who are paid very well. They can and do a lot of their production overseas, but they also generate tons of revenue overseas, and lots of that will make it back here if we create a tax structure that makes it worth doing so.

      I don't know what the future looks like for auto techs. As the percentage of fleet which is electric grows, one can imagine that maintenance and repair will be much different. An electric car has a small fraction of the parts of a car with an internal combustion engine. There won't be many things to fix, and minimal maintenance, such as the occasional brake job.

      So maybe auto mechanics is a diminishing field, and the ramp down might be pretty rapid if gas prices really soars and the demand for electric cars takes off. But there's new stuff coming into existence all the time - like the kids I talk about above who are making a nice living as ultrasound imaging techs.

      One thing is clear, and much harder to address - we have to get the population of the planet under control. If we don't, the likelihood of war goes up as nations compete for increasingly scarce resources.

      Or maybe Mother Nature decides that the time of human dominance is over. I'm just finishing a book called "Turing's Cathedral" by Dyson which talks about the early days of computing as pioneered by Turing and others. One of the first things they tried to do was create models that simulated the real world (mostly hydrogen bombs). One guys took a stab at modeling a simple kind of evolution, driven by Monte Carlo randomness algorithms. In every case, the mathematical world they created ended when a parasite evolved that feasted on the dominant species until there was nothing but parasites left.

      I think that's a real possibility, with something like MERSA or Ebola as the parasite and humanity as the agar in the Petri Dish.