Opinion
Education Opinion

Such a Deal for You!

By Susan Graham — June 07, 2010 3 min read
  • Save to favorites
  • Print

Yesterday all the education news in The Washington Post was in the business section. I read about enrollment management which explains how colleges rate students and determine financial aid packages. It seems the noble idea of merit alone must be balanced with the ability to pay. One admissions director at a small private university acknowledged

The college was enrolling a lower percentage of low-need students and a high percentage of high-need students. It was laudable, but not sustainable over the long haul. We were making the college commitment really lopsided.

“Well,” you may be thinking, “that sort of thing happens with privates. They have to control their college commitment based on their endowments. That’s why we have state schools.” Don’t bet your cap and gown on it. At the University of Virginia, out-of-state students pay double what in-state students pay. Admissions management logic results in one third of UVA acceptance letters going to out of state students. A Nebraskan may have better odds of getting into UVA than a Virginian. To Virginia taxpayers, the Dean of Admissions explains it this way

We love the in-state students, don't get me wrong, they are the heart of this school. Economically the in-state students are really subsidized by the out-of-state students. If you look at our out of state numbers, about 69-70% overall are Virginians.

“Well,” you’re probably thinking, “Those Virginians should have been willing to pay more taxes so that higher ed didn’t have to keep getting more ‘creative’ with their funding.” And that’s true, but whether private, public, out of state, in state, or downright for-profit, post secondary education is not cheap. And that’s why there was also a business/economic article on “no-loan pledges ” cost containment. Student loans are a huge industry, and a huge problem. It’s an issue that is being looked at closely by the federal government (the primary lender). As public opinion and supply and demand are beginning to fray enrollment figures, more schools are using no-loan pledges (promises of aid from other sources) as a marketing tool. But a financial aid observer told the Post the practice isn’t keeping students out of future hock:

The wave of no-loan pledges hasn't halted the steady rise in student loan debt nationally. Mark Kantrowitz [financial aid expert] estimated that the share of four-year students graduating with debt rose to 66 percent in 2008 from 46 percent in 1993, and that average debt rose in that span to $23,186 from $9,297, based on an analysis of federal data. He recommends a one-third rule, where one-third of projected costs will be paid from past income [savings], one-third from current income and financial aid and one-third from future income [loans]

.

Unfortunately, the estimated family contribution is often equal to a fourth of that family’s total income; so they borrow the money. It’s easy---some would say too easy. And that leads to the third business section article on student loan debt management, which includes a review of a new CliffsNotes book -- Graduation Debt: How to Manage Student Loans and Live Your Life,. Author Reyna Gobel reports

More than 1 million people have at least $40,000 in student loan debt, according to data from the National Center for Education Statistics. "In order to work toward paying off your student loan debt, you need to be aware of the existence and the amounts of each loan," writes Gobel, a freelance financial journalist who amassed $63,000 in student loans obtaining her bachelor's and then two master's degrees.

“Well,” you may be thinking, “Maybe the answer is to find a job that will help pay for higher education.” Sometimes that does happen in the workplace, in the form of subsidized tuition or loan forgiveness. Sometimes employers see partnering with employees to work toward high education as a win-win.This strategy sounds good when referred to as associate opportunity :

Wal-Mart announced a program Thursday. Workers can receive college credit from the online American Public University [a for profit university] and receive a tuition discount from the school. The company also said it will commit $50 million over three years to help workers pay for books and tuition above the reduced tuition rate...Wal-Mart workers receive job training in areas ranging from ethics to retail inventory management, for which they can receive credit......Students won't have to pay for credits awarded based on their training.....The credit for training can be applied mainly to business- and retail-related courses...Wal-Mart executives said the link with the school will help workers attain better jobs both inside and outside the company.....if 10 percent of Wal-Mart's U.S. workers get degrees, "that would be like adding three Ohio State's worth of graduates."

Would an APU degree really improve those employees’ chances for upward mobility? We are living through an economic cycle where two incomes will barely keep a family afloat, where recent college graduates are living in their parents’ basements and waiting tables, where wages are stagnant, and where too often people are told, “Be grateful you have a job.”

With the backing of Wal-Mart and at $255 per credit hour, a masters degree of 30 hours would cost close to $10,000 through APU. But the first rule of economics is that of supply and demand. If thousands of employees earn an MBA on-line, then the job market will be flooded with highly educated workers. When the supply of highly educated employees meets and exceeds the demand for management positions, the value of that advanced education goes down.

And that’s why it’s important to read the Post’s front page article about some other opportunities that didn’t work out quite like a storybook.

Chris Cummings knew a "reduction in force" was coming at Walgreens. But with a marketing degree from a prestigious university, he thought he was insulated. But instead of a promotion, the company for which Cummings had been an assistant manager three and a half years cut his hours so drastically that he had to take a second job. In March, he was laid off, and his part-time second job became full-time. And so that is how a 40-year-old father of four with a master's in business administration from the University of Notre Dame finds himself bagging groceries at Sprouts, a local health-food store. "I never thought I'd be here with the education that I have and that I'd worked hard on," Cummings said before a recent shift in the checkout lane at the Sprouts in nearby Frisco.

We say, as a society, that we value education. But too often its value is misunderstood. Education is not a magic ticket to a higher income or an insurance policy in a tough job market. Quality post-secondary education can be obtained at a prestigious private school, a state university, at community college, a trade school or through an on-line program or at the workplace. We need to be open to innovation. But a recent PBS Frontline report warns that when education becomes a commodity, the buyer must beware. Last month Steven Eisman, the Wall Street trader who predicted the subprime mortgage meltdown, had this to say about the commercialization of higher education

Until recently, I thought that there would never again be an opportunity to be involved with an industry as socially destructive and morally bankrupt as the subprime mortgage industry. I was wrong. The For-Profit Education Industry has proven equal to the task.

“College for All” sometimes sounds more like marketing than guidance. Before committing time, energy, and money, here’s a free lesson in economics. Ask what any money manager would ask, “What is the return on my investment?”

The opinions expressed in A Place at the Table are strictly those of the author(s) and do not reflect the opinions or endorsement of Editorial Projects in Education, or any of its publications.


Commenting has been disabled on edweek.org effective Sept. 8. Please visit our FAQ section for more details. To get in touch with us visit our contact page, follow us on social media, or submit a Letter to the Editor.


Events

This content is provided by our sponsor. It is not written by and does not necessarily reflect the views of Education Week's editorial staff.
Sponsor
Teaching Webinar
What’s Next for Teaching and Learning? Key Trends for the New School Year
The past 18 months changed the face of education forever, leaving teachers, students, and families to adapt to unprecedented challenges in teaching and learning. As we enter the third school year affected by the pandemic—and
Content provided by Instructure
This content is provided by our sponsor. It is not written by and does not necessarily reflect the views of Education Week's editorial staff.
Sponsor
Curriculum Webinar
How Data and Digital Curriculum Can Drive Personalized Instruction
As we return from an abnormal year, it’s an educator’s top priority to make sure the lessons learned under adversity positively impact students during the new school year. Digital curriculum has emerged from the pandemic
Content provided by Kiddom
This content is provided by our sponsor. It is not written by and does not necessarily reflect the views of Education Week's editorial staff.
Sponsor
Equity & Diversity Webinar
Leadership for Racial Equity in Schools and Beyond
While the COVID-19 pandemic continues to reveal systemic racial disparities in educational opportunity, there are revelations to which we can and must respond. Through conscientious efforts, using an intentional focus on race, school leaders can
Content provided by Corwin

EdWeek Top School Jobs

Teacher Jobs
Search over ten thousand teaching jobs nationwide — elementary, middle, high school and more.
View Jobs
Principal Jobs
Find hundreds of jobs for principals, assistant principals, and other school leadership roles.
View Jobs
Administrator Jobs
Over a thousand district-level jobs: superintendents, directors, more.
View Jobs
Support Staff Jobs
Search thousands of jobs, from paraprofessionals to counselors and more.
View Jobs

Read Next

Education Judge's Temporary Order Allows Iowa Schools to Mandate Masks
A federal judge ordered the state to immediately halt enforcement of a law that prevents school boards from ordering masks to be worn.
4 min read
Iowa Gov. Kim Reynolds speaks to reporters following a news conference, Thursday, Aug. 19, 2021, in West Des Moines, Iowa. Reynolds lashed out at President Joe Biden Thursday after he ordered his education secretary to explore possible legal action against states that have blocked school mask mandates and other public health measures meant to protect students against COVID-19. Reynolds, a Republican, has signed a bill into law that prohibits school officials from requiring masks, raising concerns as delta variant virus cases climb across the state and schools resume classes soon. (AP Photo/Charlie Neibergall)
Education Hurricane Ida Deals New Blow to Louisiana Schools Struggling to Reopen
The opening of the school year offered teachers a chance to fully assess the pandemic's effects, only to have students forced out again.
8 min read
Six-year-old Mary-Louise Lacobon sits on a fallen tree beside the remnants of her family's home destroyed by Hurricane Ida, in Dulac, La., on Sept. 4, 2021. Louisiana students, who were back in class after a year and a half of COVID-19 disruptions kept many of them at home, are now missing school again after Hurricane Ida. A quarter-million public school students statewide have no school to report to, though top educators are promising a return is, at most, weeks away, not months.
Six-year-old Mary-Louise Lacobon sits on a fallen tree beside the remnants of her family's home destroyed by Hurricane Ida, in Dulac, La., on Sept. 4, 2021.
John Locher/AP
Education Massachusetts National Guard to Help With Busing Students to School
250 guard personnel will be available to serve as drivers of school transport vans, as districts nationwide struggle to hire enough drivers.
1 min read
Massachusetts National Guard soldiers help with logistics in this Friday, April 17, 2020 file photo, at a food distribution site outside City Hall, in Chelsea, Mass. Mass. Gov. Charlie Baker on Monday, Sept. 13, 2021, activated the state's National Guard to help with busing students to school as districts across the country struggle to hire enough drivers.
Massachusetts National Guard soldiers help with logistics in this Friday, April 17, 2020 file photo, at a food distribution site outside City Hall, in Chelsea, Mass.
Michael Dwyer/AP
Education FDA: ‘Very, Very Hopeful’ COVID Shots Will Be Ready for Younger Kids This Year
Dr. Peter Marks said he is hopeful that COVID-19 vaccinations for 5- to 11-year-olds will be underway by year’s end. Maybe sooner.
4 min read
Dr. Peter Marks, director of the Center for Biologics Evaluation and Research in the Food and Drug Administration, testifies during a Senate health, education, labor, and pensions hearing to examine an update from federal officials on efforts to combat COVID-19 on Capitol Hill in Washington on May 11, 2021. On Friday, Sept. 10, 2021, Marks urged parents to be patient, saying the agency will rapidly evaluate vaccines for 5- to 11-year-olds as soon as it gets the needed data.
Dr. Peter Marks, director of the Center for Biologics Evaluation and Research in the Food and Drug Administration, testifies during a Senate health, education, labor, and pensions hearing to examine an update from federal officials on efforts to combat COVID-19 on Capitol Hill in Washington on May 11, 2021.
Jim Lo Scalzo/AP