Higher Education: The Fleecing of a Generation

Higher Education: The Fleecing of a Generation

By:  Jason L. Van Dyke, Esq.

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I will never forget how my mother used to punish me for not paying attention in school or not doing my homework when I was in elementary school.  After receiving an exceptionally poor grade on a math test or a note home stating that I was daydreaming or not paying attention (mind you, this was before the days of kids being forcibly medicated with amphetamines to treat ADHD), I would be forced to stand in a corner with a spatula and practice flipping imaginary hamburgers.  Why?  Because, according to my mother, flipping hamburgers at McDonalds if I didn’t shape up and do well in school.  It was drilled into me from an early age that, if I did not do well in school and get into a good college, that my life would be miserable and I would amount to absolutely nothing.  This was untrue, of course, but the punishment had the effect that my mother desired: both my brother and I now have advanced collegiate degrees.  However, the implied notion that college would cause either of us to amount to a whole lot – or at least allow us to have lives of relative comfort – was completely untrue.

I do not blame either of my parents for imposing systems of both incentives and punishments on my brother and I throughout our childhood that were intended to compel us to do well in school so that we could attend a good college.  In the Detroit suburb of Troy where I grew up, this was common practice.  We lived in a nice yuppie subdivision where every parent thought their kid was a special snowflake that would grow up to cure cancer, become a musical prodigy, or be the next soccer star (it was amazing how seriously parents took soccer and music in this town).  Practically the entire community was raised the same way:  taught from a young age that college was the life path that led to success and that the only other path would lead you off the edge of a cliff.  What I, a child of 1980, didn’t know was that I was to be among the first of a generation of guinea pigs in a social experiment that has gone horribly wrong. 

I was excited for college when I graduated from high school in 1998 because I knew I was headed to college – as were we all.  In fact, we were all so excited that we didn’t notice a bill passed by a Republican congress and signed into law by a Democrat President:  The Higher Education Amendments of 1998, which stuck provisions that allowed student loans to be discharged in bankruptcy after seven years of repayment.  What both we and our parents should have considered was why there was a need for such a law.  Were student loans really making people that destitute?  Of course, nobody at that age really thinks that far ahead.  We had been accepted to college and could already see ourselves living in McMansions and driving BMWs. Was that not, after all, the dream we had come to expect after years of discipline by our parents to do well in school?  Of course that is what we wanted and what we thought we would get.

We didn’t know that everyone else’s parents had been telling them the exact same thing and that we were entering college while these schools were seeing an unprecedented rise in applications.  The Higher Education Amendments of 1998 eliminated the greatest risk associated with higher education loans.  This permitted the government to loan more money to more people.  As demand for a college education increased, tuition naturally followed the basic laws of economics and began skyrocketing.  Schools, being in the business of selling diplomas, naturally saw a great opportunity as well.  It wasn’t long before they learned that there was no limit to how much they could raise tuition and fees.  The government kept writing checks and the money was used to expand the campus and higher more faculty so that even more students could be admitted.  Government-backed money flowed to almost anybody with a pulse: the student’s choice of school, major, grade point average, and progress toward a degree were all included on the list of things that have never been part of the student loan underwriting process. 

As the number of people with bachelor’s degrees increased, so did the number of jobs for which bachelor’s degrees became a pre-requisite.  The market forces again did their thing and college graduates learned that they were not making anything close to what they had been promised out of college.  They were waiting tables, working in mailrooms, and most of all, working as unpaid interns competing with thirty other people for a single job.  Life became a really bad season of The Real World, so people went back to school with even more government money.  The colleges were ready to take it as admissions officials boasted about 80 – 85% of their graduates becoming employed within nine months of graduation.  As questions about starting salaries increased, many would boast an average starting salary of $58,000.00 or more.  Those who were already four years into the system lined up for another 1 – 3 years for an advanced degree and, finally, their piece of the pie.  What most of them ended up with instead was a bite from a shit sandwich. 

Why did this happen?  Greed.  Like whiskey, a little bit is a good thing when enjoyed in responsibly and in moderation.  Of course, greed and whiskey are powerful intoxicants that often blind us to reality when we overindulge.  When we’ve had too much whiskey, we start talking to the ugly girl that is a solid three at best.  We think she’s an eight or a nine, but never stop to consider how we failed to notice her before we started drinking.  We wake up the next morning disappointed and greed works the same we.  We see that 85% post-graduate employment statistic as very promising.  We sign on the dotted line before asking why the post-graduate unemployment rate of 15% is three times higher than the national unemployment rate.  Similarly, we look at the average salary as a number we are likely to attain.  We think of that money as something that is practically ours if we graduate.  We never bother to ask what percentage of students end up with a starting salary below that average.  If class sizes are small, one outlier and increase the average significantly.  Take a hypothetical graduating class of 50 students.  One of them makes $1 million a year.  The other 49 make $35,000.00 a year.  The average?  $54,300.00.  It really is too made that 98% of that graduating class makes almost $15,000.00 less than the average, but that’s how statistics work. 

Of course, hypotheticals are unnecessary in this situation because I can use myself and my family members as a cautionary tale.  After ten years of law practice, I have never had a job where I was paid more than the $60,000.00 a year that, in my greed, I thought was “advertised” by my law school.  My first job out of law school paid only $35,000.00 a year, which I could have easily made without a college education (let alone a law degree).  My brother, who has an MBA from Wharton, hasn’t found his college degrees much more useful than I have found mine.  He worked in Asia for years before attending Wharton and will likely be headed back there.  Why?  In his case, many of the most desirable U.S. jobs in finance have been filled by H-1B immigrants in the United States.  Never mind the fact that the reason these immigrants will work for less than their American counterparts is because they don’t have six figures of non-dischargeable student loan debt to repay. 

I am pleased to say that the friends I have made over the years that have viewed my own life as a cautionary tale have been far more successful.  A close friend of mine (one I had lunch with today) has a promising career ahead of him in his family business.  Two other very dear friends of mine, both of whom have only a few classes left before getting their undergraduate degrees, are now working for a great construction company.  Both are earning far more than I did out of law school, and their salaries will likely surpass mine in a few years.  I don’t know how much student loan debt either of them have, but it’s certainly nowhere close to the six-figure amount that I still owe.  I have clients who are plumbers, electricians, carpenters, engineers, truck drivers, and welders who are able to live happy and fulfilling lives without the never-ending nuisance of student loan payments for a worthless degree.  I am happy for all them, but I know that most of those who choose college today aren’t anywhere near as lucky. 

Naturally, I have only myself to blame for being a greedyidiot about going to college.  While I do think there needs to be some relief for those that have been rooked by the student loan debt trap, this is not a problem we can solve with a bailout or by making college education free.  As much as the socialists would like for something like that to happen, it would amount to little more than a band aid on a bullet wound.  The needed change will only come once we adjust our prevailing attitude towards higher education in general.  We must unlearn this notion that college is a path to success in life while learning instead that there are other less expensive and less risky paths to financial success.  Education is an investment no different from stocks or real estate, and any lofty notions of “the usefulness of education for its own sake” ought to be abandoned.  As an investment, the first thing anyone should carefully research is the expected return on the investment.  Unfortunately, with its focus on indoctrinating young people into the cult of cultural Marxism, higher education today is the investment equivalent to a junk bond portfolio:  It may make a few people rich, but most investors will lose everything. 

Jason L. Van Dyke is licensed to practice law in Texas, Colorado, Georgia and Washington D.C.  He has been practicing in the areas of criminal defense, debt collection, and real estate law for ten years.  He is a member of the Dallas/Fort Worth Chapter of The Proud Boys and lives in Crossroads, Texas.  The views expressed in this article are general in nature and should not be used or construed as legal advice for any specific situation