Debt Ceiling Bill Adds to Student Loan Burden for Grad Students

Thanks to the new debt ceiling deal, grad students will end up paying thousands of dollars more on their student loans in order to finance Pell Grants for low-income undergrad students.

Why does the federal government want to charge grad students for the tuition of undergrads? According to the article:

"Full funding for Pell Grants is absolutely essential to fulfilling the president's goal of the U.S. once again having the highest proportion of college graduates in the world by 2020," said Pauline Abernathy, vice president of the Institute for College Access & Success.

Why is it so important to have the most college grads in the world when the U.S. government has already predicted that over 80% of the fastest-growing and most-common occupations of the future will not require a bachelor's degree or higher?

Across the Pond, Trades vs. McJobs vs. College is Discussed

Just as in America, more British people are wondering how to prepare their kids for the future and where the best prospects for the future are likely to be found. This article describing how the CEO of McDonald's has suggested many kids should work at her company instead of going to college is interesting, but it's the discussion in the comments section that's really illuminating. It shows that the debate we need to have in this country is already going on in Great Britain.

Is College a Scam?

The media has been slowly drawing attention to the problems with our system of colleges and universities, and the question of whether students are being educated or scammed. Here's a video from the National Inflation Association that does a good job of spelling out just what's going on in both higher education and our government. You might not agree with all of it but it will give you a lot of food for thought.

Resources for Questions About College in the 21st Century

If you have children who want to attend college, or children whom you want to attend college (there is a difference), you'll need to be as prepared as possible to navigate the increasingly complicated process of making the college decision. Economist Gary North has prepared a webpage with an assortment of very helpful and thought-provoking links. Check it out HERE.

The Evidence Piles Up Against Attending College

I'm not saying no one should go to college. Here's what I say in Thriving in the 21st Century:

You now know that the greatest amount of job growth is predicted in areas that don’t require college, that most kids who attend college don’t graduate in four years and many don’t graduate at all, that college is getting more expensive by the minute and that borrowing to pay those high college costs can have lifelong consequences. You also know now that having a college degree does not guarantee a high income…or any income at all.


Knowing these things, if you still think your child should go to college, please think hard about the following questions and whether you can answer “yes” to most of them:



• Is your child very intelligent and hardworking?

• Does your child have his/her heart set on a career that can only be accessed with a college diploma in hand?

• Of the careers that require at least some college education, is your child interested in one that offers the best return on the considerable college investment?

• Has your child thoroughly researched the chosen career, including talking to employers in the field to see what kind of education they require, and graduates in the chosen program to see if they’re a) employed and b) satisfied?

• Is your child’s choice of major/career one that’s likely to be in demand by employers? (Just because a college offers a major doesn’t necessarily mean that major is in demand by employers. There’s no correlation between number of majors and number of available jobs.)

• Is your child’s choice of major/career one that can be used in more than one industry? (Example: business administration)

• Is your child’s choice of major/career one that will be difficult or impossible to off-shore (as opposed to an area of study that’s currently being chosen by millions of smart young people from China and India)?

• Does your child’s chosen college or university have a reputation for academic excellence?

• Will your child be able to graduate debt-free? In an economy where wages are stagnating and periods of unemployment or time between careers is common, living debt-free will be a major asset as well as a source of emotional peace.

• If your child will need some student loan funding, does he or she plan to earn a degree that is likely to help them earn enough to pay back their debt within a few years (there are no guarantees)?



Regarding the last question, keep in mind that the debt will have to be paid back during a time when wages most likely will continue to stagnate. As a result, college loan repayments could eat up the lion’s share of your child’s future paychecks.

“Yes” answers to most of these questions indicate that you have a child who is motivated to go to college and willing to do what it takes to earn a degree in a field with good prospects for personal satisfaction as well as employment. If you don’t have enough money saved up for the entire four (or more) years, consider sending your child for two years of general education courses at a community college, after which your child can transfer to a four-year college. This is a time-honored plan, and for good reason: it saves a lot of money on tuition and room and board, plus you’ll send a more mature person off to college. Also, if your child’s chosen field of study will require graduate courses, the money you save by sending him/her to community college the first two years can help defray the cost of graduate studies later on.

If you can’t answer “yes” to most of the questions listed above, consider whether college is really the answer for your child. Try to ignore the common wisdom of the 20th century that was drummed into your head, the refrain that insisted that the only sure route to success requires a college diploma, because times have changed.

So I'm not against college, but I think it's clear that college is not for everyone or even for most people. Between its high cost and the questionable need for a degree for employment in areas of job growth, there's a lot of evidence on my side, and it's piling up:

More college grads are settling for low-wage jobs

More college grads are having trouble paying back their student loans

An economist argues that college is not a bubble, it's a "tax-subsidized failure"

See what I mean?

The Supposed College Advantage, UK-Style

Over in Great Britain, college is pushed as the way to make more money, just as it is here in the U.S. This article is typical of the hype. What's really interesting, however, are the comments. People are finally realizing that in the new global economy, not everyone will need a college degree, and most people can't afford one.

"The Economic Folly of a College Degree"

Finally, more people are admitting that a college degree is not the guarantee for future success that so many people thought it was. Take this op-ed piece, for instance. The author explains that even citizens of other countries are seeing that a college degree does not make a person smart or hardworking. I'm glad to see that more writers are sharing this information because, as I explain in Thriving in the 21st Century, most of our children will not need a college degree in the new economy.

College Administrators Weigh In at Speech

Last week I spoke to a group of 75 parents up in Green Bay regarding Thriving in the 21st Century. My favorite part, as always, was talking with everyone afterwards.

The event was held at a tech college; one of the administrators there told me how they tailor the certificates they offer to the skills that local employers are looking for. She said she tried to get her children to look into obtaining those certificates, but they chose to go off to college instead and now she has three adult children back home with her again.

Another parent who happens to be a vice president of a nearby private college took issue with some of my comments regarding the need for college degrees in the new economy, but after a pleasant discussion we discovered that we're on the same page about many things. He even told me that he recently expelled two students for their own good, since they weren't doing well despite their best efforts. I told him I wish all college personnel had his ethics, because in researching my book I found that many college administrations pursue students without concern for whether they can do the work. It's all about the money.

BTW my book is now at the printers and should be out in early April. Look for excerpts to be posted here soon.

Book Update

Thriving in the 21st Century: Preparing Our Children For The New Economic Reality is at the printer; we're awaiting the delivery of proof copies this week. The book will be out in April!

Newbies to this site may not know that I began investigating the changes in the economy several years ago, when my husband's manufacturing-related business began slowing down due to increasing competition in his industry from China. Once I realized how much the economy was changing, I began to study how to prepare our children for a very different world of work than the one my generation had known; my study led me to write this book.

Here's the back cover copy for Thriving in the 21st Century:

Today’s children will reach adulthood in an economic environment unlike anything the world has ever seen. The 21st century global economy is powered by an increasing rate of technological change as well as growing foreign competition; both are contributing to the high U.S. unemployment rate and stagnating American wages. How can we as parents prepare our children for success in this growing maelstrom that many are now calling “the new normal”?

In Thriving in the 21st Century, Barbara Frank demonstrates that we must move beyond the common wisdom of the 20th century that emphasized a college diploma and lifelong employment with a large company as the only way to success. Instead, we need to set our children on a new path, one that will help them not just survive, but thrive in the 21st century.

In this book, you’ll learn:

• The Seven Strengths your child will need to prosper in the 21st century, why they’re needed and how you can develop them in your children
• The most efficient (and increasingly popular) way to give your child those Seven Strengths
• Why public education has failed to prepare our children for the 21st century
• How we can help our children become the lifelong learners needed in a rapidly changing global economy
• The surprising truth about today’s colleges and universities
• How economic change is affecting a variety of career areas, and which of them are projected to grow dramatically in the coming years.

This book is packed with ideas and resources for raising our children to become adults who respond proactively when faced with economic challenges, and who can prosper during times of great change. We can help our children reach young adulthood ready and able to tackle the future with all its challenges. And that, of course, is the key: we must prepare our children for the future…not the past.

I'll share more information as it becomes available. Keep an eye on this site!

More Warnings About College

Struggling with the idea of not sending your child to college? This writer makes a case for it by crunching numbers. And this writer, an economics professor, explains the current trouble with college very succinctly:

The diploma serves as a screening device that allows businesses to narrow down the applicant pool quickly and almost without cost to the employer, but with a huge financial cost to the individual earning the diploma (often at least $100,000), and to society at large in the form of public subsidies.

What to do? It's an extremely personal decision between you and your child. For starters, you can determine your child's interests and talents to see if college will even be useful to him or her. If so, you'll need to do a lot of research because there are many options. Thanks to the Internet, your child can get a college education for free through self-study, though no degree would be involved. You and your child will have to decide if a degree is worth the considerable expense of college.

Questioning the Need for a Degree

Questioning the need for everyone to earn a college degree in the new economy has hit the mainstream, with Harvard University's Graduate School of Education issuing a report stating that the push for "college for all" may actually hurt young people.

This contrasts strongly with President Barack Obama's 2009 State of the Union address, where he said:

...this country needs and values the talents of every American.  That is why we will provide the support necessary for you to complete college and meet a new goal:  by 2020, America will once again have the highest proportion of college graduates in the world.

So who's right? Parents need to do their research and also determine if their children are college material. Given the high (and rising) cost of college, the decision is more crucial than ever.

Are College Students Really Learning?

A new study indicates that college students' academic skills don't show much improvement by the end of the sophomore year. The sociologists conducting the study found that the students they studied weren't asked to do the kind of intensive work (large amounts of weekly reading and writing) that were once the hallmark of a college education. That could explain the lack of learning.

Yet college tuition continues to rise each year. Why should parents pay more for less?

More College Grads are Looking for Work

According to the Bureau of Labor Statistics, the unemployment rate among college graduates is the highest it's been since 1970.

Traditionally, blue collar workers suffered most from layoffs and cutbacks during recessions. But this recession is different, and unemployed college grads are being blamed for driving the unemployment rate up higher than normal.

Some say our current situation is the new normal. Let's hope not. But unless you have pots of money or a highly motivated smart kid, you may want to rethink going along with the popular trend of "All kids must go to college."

College Debt Slavery in America is On the Rise

Now that the federal government is in charge of most college student loan debt, expect more of these sad stories. And don't expect the government to understand and forgive:

To collect on federal loans, the Education Department can seize borrowers’ paychecks, tax refunds and Social Security payments without a court order -- as much as 15 percent of a borrower’s disposable income.

The department is currently authorized to collect tax refunds and Social Security from 3.4 million borrowers. About 98,000 borrowers are having their wages garnisheed, the agency said.

In part because of those powers and the laws discouraging bankruptcy discharge, the department estimates it will collect 100 percent of the dollar value of all defaulted student loans.

The result? As one woman said, "I'm going to be in debt until I die."

Many college grads cannot find work. The days when a college degree guaranteed a job are over. Think hard before you send your children to college unless you can afford it without putting them in debt.

Even China Has Unemployed New College Grads

That's right; we're not the only ones churning out college grads who can't find work. China has the same problem, and these young people are caught in a bind: they can't find work in the city, but they don't want to return to the country, where there is nothing for them.

The moral of the story? A college degree is no guarantee of work. It's a new world, and there are no automatic solutions to finding work that pays enough money to live comfortably....even in the world's biggest booming economy.

Just Because a College Offers a Certain Major....

....doesn't mean the major provides a degree in an industry that offers any hope of growth, or a future job.

This article made me so sad because I was once a journalism student. While I don’t believe I was as idealistic as some of the students quoted, I enjoyed every bit of my journalism education, and looked forward to a career in journalism. A lousy economy at the time of my graduation ruined that dream for me back then.

Today, these kids are graduating into a lousy economy and a deteriorating journalism scene (the original version of this article included comments from recent journalism grads who can’t find work). The rise of the Internet and the clear bias of American media have resulted in newspapers dropping like flies. Yes, there are far more writing opportunities online than in print, but they pay less, too. It’s much harder to make a living as a journalist now than it was 30 years ago when I graduated during the Carter years.

Yet the professors quoted in the article let the students believe that “it’s all going to be ok” when they surely know better. Gotta keep those paychecks coming in, I guess. (Same reason so many colleges and universities inflate grades these days, but I digress….)

The moral of this story? Just because a college offers a specific major does not mean your child will be able to find work after obtaining that degree. Help your child make a wise career choice. Check out specific careers and their predicted futures at http://www.bls.gov/. Most of all, don’t believe the hype of colleges that need to keep a certain number of warm bodies coming through their departments in order to maintain their own employment.

College Grads and Unemployment: Will This Affect Them for Life?

The rate of unemployment among recent college grads has doubled, and many of those who have jobs are not working in their chosen field, or even in a job that requires a degree. Will this experience scar them for life or make them stronger? You decide.

Here's Your Diploma....and Your Bill for $24K

According to a recent survey, the average new college grad owes $24,000 in student loan debt at a time when the unemployment rate for college grads has set a record by jumping from 5.8% to 8.7%....in one year!

Keep in mind that the lower-than-average unemployment rate of college grads is partly due to them taking jobs that don't require a college degree because they need something to help pay back the loans that come due within a year after graduation. That explains why there are an awful lot of college-educated truck drivers and burger flippers at work these days.

Entrepreneurism vs. College

The writer of this article makes the case that increased entrepreneurism is what our country will need in the future, and that a college education is highly overrated when it comes to preparing people to fix what ails us economically.

There are many interesting points in this article, and some thought-provoking comments after it, adding up to more evidence that we need to be raising entrepreneurial kids!

Underemployed College Grads: There are LOTS of Them

It's been a long time since most people went to college solely for the purpose of expanding their minds. In recent years, it's been all about getting that degree so you can get a good job. Colleges and universities didn't disagree with this view; in fact, many emphasized it by bragging on each graduating class's employment rate.

But the stakes are higher now: students graduate with tens of thousands of dollars of debt, and they expect a way to pay it back so they can get on with their lives----and with earning a decent living.

That's why this article in The Chronicle of Higher Education, "Why Did 17 Million Students Go To College?" is so striking. The author points out that, according to the Bureau of Labor Statistics, there are 17 million college grads employed in jobs that don't require a college degree. Hmm, how are they going to pay back all that student debt on a lower salary than they'd planned to earn?