The college bubble

Andy is right to highlight the issue of family support.
A fact that seems invariant across cultures, countries or most segments of humanity that you care to pick is that the educational level of the mother is the best predictor of educational outcome for the child.
Note that I say "predictor" not "cause". It's obviously partly a cause, but also there are the sort of people who have educated women and the sort of people who do not, and that correlates with outcomes.
This neatly helps explainswhy America does so well, in spite of a dysfunctional education system, since although there are marked differences between male and female education it is not so great as many other country.
Another important predictor is having a desk in the child's bedroom. Again this is both cause and correlation.

As BBW says money opens doors, but there's more to it than that. Recently I had reason to ask the head of a well known MFE if he might consider admitting a student under non-standard circumstances because stuff had happened in his life.
I could do this because I'm on first name terms with a bunch of people like that, not all of course, but enough to be useful.
The MFE head would have been horrified and incredibly offended if I'd offered him money, almost certainly enough to kill the relationship, so it's not enough to be rich, you have to know the right people to offer it to, as well as the way it is offered. Of course in this case I was trying to help someone who'd been out of luck not my kids, or the kids of a friend, but contacts and knowing the system can help a lot.

In the LSE case, they knew the system: a "donation" to the LSE, plus a contract to train Libyan civil servants went down well.

The UK press has been justifiably vicious over this, but there is a vast grey area.

My own school, part of the same university took a lot of students from shit countries.
I found this out when I enquired why the largest student housing had alternate male and female floors, which cause a problem since a good % were double rooms and few people wanted to share with someone of their own sex.

Turned out the school had to do this else girls from shit countries (mostly Moslem) wouldn't be allowed to come.

Obviously, any civilised person would want to undermine the culture in such countries, so the decision was made to pretend that there was a degree of separation, so the girls could experience life in a place where they weren't seen as possessions of the nearest male with impotence issues.

But on paper it looked like we were pandering to religious nutters.

The LSE faced a similar dilemma, Libya is a Moslem country so it's government is an enemy of it's people, indeed in almost all cases the government is the most important enemy of the people who live in Moslem states. There is a case to be made that by bringing civil servants from Libya to a civilised country, they might absorb western values. Of course by training their civil servants one is also making civil servants of a moslem country more efficient at their designated work of stealing from, torturing and murdering the citizens of their state. Not an easy call to make, especially now that Libya will probably try to form some sort of democracy. I doubt they will succeed, partly because almost no Libyans have any idea how to do it, or even what "democracy" means. If we teach them, maybe they might not screw up.
 
The LSE faced a similar dilemma, Libya is a Moslem country so it's government is an enemy of it's people, indeed in almost all cases the government is the most important enemy of the people who live in Moslem states. There is a case to be made that by bringing civil servants from Libya to a civilised country, they might absorb western values. Of course by training their civil servants one is also making civil servants of a moslem country more efficient at their designated work of stealing from, torturing and murdering the citizens of their state. Not an easy call to make, especially now that Libya will probably try to form some sort of democracy. I doubt they will succeed, partly because almost no Libyans have any idea how to do it, or even what "democracy" means. If we teach them, maybe they might not screw up.

I don't want to make it into a political discussion but the impotence of the West and first and foremost Obama will most likely end up as a failure in Libya.

You know, a lot of bad things can be said about Bush, most are probably true, but you must give him one big credit, the man was a true cowboy. There is no way in hell he would let Qaddafi and Assad slaughter people like that and not even send a carrier to give proper air support.

Sorry for the off topic spin off :)
 
At my public high school, almost everyone goes to college, with maybe one half going to our state flagship/comparable and the other half going to various top schools.

The private schools in our area don't nearly perform as well and I don't know that many people _from the area_ who actually consider private school a worthy investment. That being said, this is a nice area and schools in poorer areas don't have as many students going to college.
 
At my public high school, almost everyone goes to college, with maybe one half going to our state flagship/comparable and the other half going to various top schools.

Where do you go to school?
 
BBW touched on a good point above when he mentioned Eton etc. One debate you will see regularly in the columns of the Guardian and similar is that, basically Eton, Winchester, Oundle, Harrow, Westminster etc. train the kids to pass exams and train them to get into Oxbridge and the top of the Russell group Uni's.

That is where money helps, having somebody teach you the ropes, to give you a head start on what you need to get in, can give you a serious leg up.
Of course you can then make the argument that you end up with Nepotism, where by Eton grads get into Oxbridge and then in industry hire "their own" or in academia, politics etc. and do the same.
 
In the LSE case, they knew the system: a "donation" to the LSE, plus a contract to train Libyan civil servants went down well.

Yes of course; these things have to be done the right way, with a bit of finesse. I can't just write a cheque and say, "Here, and make sure my son gets admitted." There is an exchange of "favors" taking place, some tacit understanding, some tact involved. It doesn't change the ground reality: quid pro quo.
 
BBW touched on a good point above when he mentioned Eton etc. One debate you will see regularly in the columns of the Guardian and similar is that, basically Eton, Winchester, Oundle, Harrow, Westminster etc. train the kids to pass exams and train them to get into Oxbridge and the top of the Russell group Uni's.

That is where money helps, having somebody teach you the ropes to give you a head start on what you need to get in can give you a serious leg up.
Of course you can then make the argument that you end up with Nepotism, where by Eton grads get into Oxbridge and then in industry hire "their own" or in academia, politics etc. and do the same.

Of course that's happening: the fast-track civil service jobs, the plum foreign office and MI5 jobs go to Oxbridge. So do the plum consultancy jobs. Oxbridge gives you a serious leg up. If you've gone to redbrick or plate glass, you can't compete. And of course contacts matter: if you come out with a 2:2 from Oxbridge and your dad knows someone in the City, that's your first job handed to you on a platter right there.

Other things roughly equal, Oxbridge prefers to accept Etonians, Harrovians, etc. They've got the right accent, the right breeding, they're not a bunch of yobs. If not from the public schools, they prefer students from the grammar schools. This doesn't mean a boffin from a comprehensive won't get admitted; merely that the dice are loaded against him.

The English class system -- as epitomised in the royal wedding of about 10 days back -- is all about contacts, who knows who. It runs counter to any sort of meritocracy. Try complaining and you'll be told, "Sorry, old boy, just won't wash."
 
If you know "for sure" a bubble is coming, what do you, as a financial engineer, do to make the best of the situation. We all heard about the last housing bubble, about many banks on the verge of collapse and some smart hedge fund guys make billions.

What would you do?
 
From the Yahoo link:

Medical Office Assistant: $28,300

And how much will Strayer, Capella etc. shaft you for that? In fact click on the links to one of those "Uni's" and the site is designed to guide you through a set of forms that extract as much information out of you. No doubt so several forests can be chopped down and turned into rubbish sales brochures, headed for your mail box.

Oh wait, check out Strayer and Capella and look at thew footer of both sites:

© 2011 Vantage Media, LLC

And if you check out:

http://www.vantagemedia.com/

What a serious joke these places are.
 
From the Yahoo link:

And how much will Strayer, Capella etc. shaft you for that? In fact click on the links to one of those "Uni's" and the site is designed to guide you through a set of forms that extract as much information out of you. No doubt so several forests can be chopped down and turned into rubbish sales brochures, headed for your mail box.

Oh wait, check out Strayer and Capella and look at thew footer of both sites:

© 2011 Vantage Media, LLC

And if you check out:

http://www.vantagemedia.com/

What a serious joke these places are.

From http://www.vantagemedia.com/approach.php:
We focus on transactions not awareness. We leverage behavioral targeting, contextual targeting, and remarketing to engage users who have the highest propensity to become your customers. Once we identify them, we deliver them to you.
Wow.
 
All that fancy language for spam.
 
Just outsource the universities to India, just like IT jobs were outsourced. As cost of living is drastically lower in India, the so called compensation paid to teachers would also dramatically fall. US students can come to India and study in Indian campuses of American Universities. The average tuition , as a result, would easily fall by 50-60%.

Just, an example. The tuition fee at ISB, the top 10 rated B-school by FT in the world, has tuition + living expense of mere $45k ( much cheaper than most of B-schools in US). Similarly, IITs have a tuition fees +living cost of mere $2000/annum ($8k for the entire degree), and an IIT degree would open more gates for you than almost any US tech college (with the exception of these 2-MIT/Stanford).

I think, in future, many universities, like companies will set up campuses in India. In fact many ivy league universities have either expressed interest or are planning to start up campus in India. Most notable: Duke, Georgia Tech.

http://www.business-standard.com/india/news/duke-university-plans-to-setcampus-in-india/409236/

http://trak.in/tags/business/2009/09/12/foreign-university-degree-indian-prices/
 
You will see and are already seeing schools with strong brands set up international schools. That isn't going to do anything for US costs. School in the US (as I am sure in Europe, although maybe to a lesser extent) is about a lot more than just a pure education. It is about networking, alumni, experience, activities, professors, sports, etc. To trivialize these elements is to ignore the important part they play in getting a job, creating a social network, shaping how you think, your opinions, etc.

Yes, schools are very expensive, but there is a myriad of options for financing, scholarships, grants, etc. A college education still has a very high ROI, but a lot is dependent on the career you want and how much you utilize your school. An english history major at NYU has a different ROI than someone who studies medicine, accounting, engineering, etc.

I think the issue in the USA stems from the fact that kids are told that college is the only path. This causes a huge demand (just about inelastic), which in turn drives up costs (not perfectly related, but a big element). There is also a huge emphasis on brand and school name.

So what happens is this. You have a mediocre high school student who should probably take a year working to figure out what they want to do and save some money. But because college is so important in the eyes of everyone, this mediocre student decides to go to school. Now they could go to a low cost state school or a community college. They could work part time to finance their education or go the junior college route to strengthen their application and increase their odds of getting aid, but they decide to go to the fancy, name brand university instead. Low cost loans (which have enabled 1st generation college students to afford school for the very first time) blind this student on how much things really cost. They student what they want, not what will pay off.

In the end, the bill comes in and the realization that grades and major are more important than name brand of school (except in banking) when it comes to finding a job. You end up with a waitress with 200K in debt and a top name brand UG degree.

This is the real crisis. Human ignorance, peer pressure and societal influence.

I worked full time throughout my entire education. Started at a community college, got a 3.8 and went to Syracuse almost on a full ride, entirely based off my CC grades. I worked for 3 years and then went to Villanova. Paid for my MSF and got a free MBA (and then some). Basically 3 degrees, all respectable private schools, for pretty cheap. Now, I do have student loans (nothing insane), but I have degrees, that when coupled with work experience, can provide a very nice income. The loans are not and will not be an issue. Had I gone the path I originally thought about (being a history teacher) I would have picked the school that offered the most aid (most likely a state school) and saved my money.

Then again, I worked before school and had a real understanding of how much things cost and what ROI really meant.
 
I believe I blogged about this three times (http://ilyaquant.wordpress.com), but yes, the fact is that university education prices are through the roof, and the education at the absolute top tier universities (MIT, Stanford, etc...) is probably only marginally better than at a good state school (EG Rutgers, UMich, and UC Berkeley is one of the elite schools anyway despite being a state school), if that. Add that to the fact that you probably learn far more on the job in the first two years than in your college degree and the only reason that college degrees cost as much as they do is that you wouldn't get hired otherwise.
I both agree and disagree here. When I think back to my teachers at Caltech, well let's just say I wasn't exactly the model student who attended his classes. And yes, you do learn a LOT on the job. I also missed out on a lot of social stuff that helps in the real world, something I would have gotten at a good public university.

On the other hand, I got incredible research opportunities, my peers and friends were extremely competent, and the course material was never watered down. I think this last point is something you miss from not having gone to one of these places and something many people can never fully appreciate.

We were assigned homework problems as freshmen and sophomores that other schools assign to graduates. By junior year, I was taking all my physics classes with graduate students, in fact all physics majors would take at least 1/2 their courses with graduate students by junior year.

I did not take full advantage of advanced courses. I got my fair share, but there was a lot more out there. I mention this because some these courses would most likely not even be available at a public university.

Note I went to a decent public university as a high school junior/senior. I've seen both sides, and the public university side doesn't compare. I slacked off and rocked out on the way to a 4.0 in one, busted my ass and got depressed on my way to a 3.4 in the other...
 
This is the real crisis. Human ignorance, peer pressure and societal influence.

I worked full time throughout my entire education. Started at a community college, got a 3.8 and went to Syracuse almost on a full ride, entirely based off my CC grades. I worked for 3 years and then went to Villanova. Paid for my MSF and got a free MBA (and then some). Basically 3 degrees, all respectable private schools, for pretty cheap. Now, I do have student loans (nothing insane), but I have degrees, that when coupled with work experience, can provide a very nice income. <snip>

Then again, I worked before school and had a real understanding of how much things cost and what ROI really meant.
I have mad respect for guys like you Anthony. In my opinion, this is the way most people should do it.
 
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