College degrees have become a status symbol of sorts in many of the wealthiest areas of the US -- not for the kids, but the parents. Gotta go to an Ivy! Prep, prep, prep -- no expense spared.
There is a scandal on Long Island NY right now involving multiple students who took SAT tests for dumber classmates -- all in the hope of helping them gain admission to a Top School. To hell with the ethics. And consider this: The student cheats were paid $3,000 or more to take these SAT tests -- allegedly by other students. Really? What kid is willing to take $3,000 from his own bank account (first, without the knowledge of his parents) for something like a college admission test?
Nope--you and I know the parents financed this scam. But now, the kids are under arrest for the scheme, and so far, no parents have stepped up to clear their kids names. Guess that won't improve their status in their fancy neighborhoods -- because why admit the truth when the kids will end up with a Youthful Offender status that will be sealed after five years? (Too bad if those kids dreamed of careers needing a security clearance, though.)
Re: Never understood MSN
back2basicz
5/10/2012 10:32:40 AM
Noreen,
Are you serious???
100 Bucks per Hour just to coach the SATs???
Maybe I am in the wrong profession....
On the serious side ;I came across some very interesting Data I should share with you guys here.
After more than a Decade of Steadily Increasing;this is the First Year that the Number of Indian Students attending US Universities is down.
As a matter of fact they are no longer No.1(amongst the number of Foriegn Students).
Why is that?
Its primarily because the Indian Rupee has fallen by over 22% vs the US Dollar in the last one year or so.This has made it prohibitively expensive for most Indians (who take Bank Loans against collateral in India).
The collateral is their Parents Property and Savings.These loans are'nt cheap either(since Banks have to take into account Currency fluctuations too) and they can charge anywhere between 12%-20% Annually depending on the Quality of Collateral put up by the parents.
[This data is from the US Department of Education and US Universities ]
On the other hand,I also have some data from the Indian Govt clearly saying that more and more numbers of Indian Students are going overseas for Education.
What's Going on here?
Indians are by-passing their preferred Destination of the US for Higher Education in favor of other Countries like the UK,Switzerland,Australia,New Zealand,Hong Kong,Singapore,Dubai,Continental Europe,Scandinavia and Canada where education costs much-much less (sometimes even half as much) as in America.
Primary reason is that American Education has become unaffordable for them[Their wealth & savings have'nt risen by 22% in a year;neither do most Indians feel extremely positive about their economic prospects today].
You won't see a reduction in students coming in from countries where the currency is pegged to the US Dollar(like China,Hong Kong,Middle Eastern countries) because they don't feel the sharp rise of the US Dollar.
So think about it;if Indians can do this;Why can't Americans do the same?
High Quality Education overseas costs but a fraction of what it costs in America today.So if you feel the Debt burden you will face in America is too high;Go overseas.
After all,lets get down to some basics here.
Why do most parents want their kids to go to University?
To get a world-view and see what the real world is like.
So why not send your kids half way around the world to Booming countries like Singapore,Hong Kong or just across the Border to Canada where you will learn much-much more(with a great cross-cultural experience thrown in for the bargain too) and also on the Plus,side as well your Debt burden would be a fraction of what it would be like for a US Education???
I strongly believe this is where the Real Pressure on US Universities to cut costs is going to come from.
Expecting the US Govt to do something is foolhardy here.
You make your own Decisions according to your Personal Finances and be responsible for them.
That's the Best way.
Regards
Ashish.
Re: Never understood MSN
back2basicz
5/10/2012 4:36:00 AM
Scott,
I had looked at the key reasons for this Education Scam earlier here
http://www.investoruprising.com/messages.asp?piddl_msgthreadid=247623&piddl_msgid=600315#msg_600315
It has everything to do with the fact that Students can get Cheap Student Loans from the Federal Govt ,plus Universities get Cheap Funding from the Govt for Unneccesary Infrastructure and Finally the Fact that Student Debt cannot be discharged in a normal Bankruptcy.
Think about it,if the Federal Govt did not provide those Cheap Loans to Students in the first place;How many Kids would be able to afford going to expensive Universities? Consequently,Universities would have to cut prices to compete with each other for Student spending.
This is very similar to the Bubble we saw in Housing here in America(where the Biggest player was surprise,surprise the Govt).The difference being that Bubble has already burst while this one is on the verge of a Total Collapse.
The lack of rational Thought which operated for so long in the University space is now coming to a close.
Normally I take everything the GOP says with a massive-massive pinch of salt;but the foundation who have stalled the extension of Federal Loans in Congress and the House here has a big point.
The Govt should not be in the business of Education-Period.
The current system is just turning our Young into Debt Slaves.And if you read History,the Serfs labour under Debt only so long-Before they Rebel.
That Rebellion is coming.
Regards
Ashish.
I believe you, Ashish. I just wonder how long it will take all these helicopter parents -- who shell out $100 an hour for SAT tutors week after week -- to catch on.
@Ashish and @ Noreen,
I don't really have insights into how much of a shot Microsoft has in this market. But I do agree with Noreen's comments that the industry is obviously a scam and is gouging students.
But doesn't it go further than that? As we have documented on this site college tuition bills are rising much faster than inflation, the student loan market has problems and for some reason the entire higher education system seems to think it can constantly overcharge students.
Clearly problems here that need to be solved!
--Scott
Re: Never understood MSN
back2basicz
5/9/2012 4:00:22 PM
Noreen,
I agree.
Which is why I said the whole model is unsustainable.If its unsustainable it will collapse no matter how hard idiotic Administrators and Officials try to prop it up-
Case in Example ,the Total dumping of the "head start Program" in Miami
http://www.miamiherald.com/2012/05/05/2785152/miami-dade-county-wants-to-unload.html
Notice the defense offered for those over-paid educators-They love their Jobs and they have loans to pay!!!How can you pay TRIPLE what the market pays and still expect the system to be sustainable????
The Game is up for Over-priced education which has no practical relevance in the real world and nobody understands it better than todays Youth.
They just hope to extend their Debt burdens for the longest possible time as they can.
Minimum Wage jobs is all that most of them can aspire to today.
Regards
Ashish.
Re: Never understood MSN
back2basicz
5/9/2012 3:48:40 PM
Scott,
I have outlined the reasons why I am not so sanguine on the Prospects of the College Textbook market earlier in this blog.
I understand what Microsoft is trying to do here(creating an ecosystem to rival the one Apple created 3 years back).
Just wondering whether its an ecosystem thats work creating today.
After all,look at the amount of trouble(Legal Hassles) that Apple has gotten itself into by virtue of the fact that they are over-charging for College textbooks;is that the right model for Microsoft??? Will it even work???
After all have'nt Consumers decided overwhelmingly they want choice and especially at the lowest price(Amazon).
Can Microsoft hope to compete and out-gun Amazon here???
Not so sanguine.
Guess you need to do something with that Gigantic Cash-pile(beyond paying Shareholders greater and greater Dividends;which by the way I like).
Regards
Ashish.
The whole textbook thing is a scam. The professors often make it impossible for kids to buy used copies by specifying the latest edition, and the costs per semester are pretty much the same -- at fancy schools, state schools and community colleges. Even worse, some schools have their own unique editions, which means you can't buy a generic copy you found somewhere other than the school bookstore.
If someone comes up with a way to put these high priced textbooks on inexpensive Nooks or similar e-readers, there is upside potential. Right now, the best options are Bookrenter.com and Chegg.com. Both "rent" books for the semester for less than the cost of buying (but it is still expensive, and, again, you have to make sure you get the right edition.)
Re: Never understood MSN
back2basicz
5/9/2012 3:36:55 PM
Noreen,
Are you sure that Business will stll exist in the same Form 2-5 years from now?
I am not so positive-Between looking at the Level of Student debt (We crossed over a Trillion a longtime back) and the huge chunks which are already Deliquent (Over 30 Billion);most Teens(and especially their parents) today are questioning the need to go college(after all Career prospects are'nt exactly awesome today).
And even those that do go to College will most probably not buy all those High-Priced Textbooks at Full price.
Why would they,when you can borrow the same from either your University or Local Library or get them for super-cheap on Amazon???
Oh,and while we are discussing the student Debt topic-Did you just see what the Republicans did to Cheap Student Loans???
http://www.reuters.com/article/2012/05/08/us-usa-congress-studentloans-idUSBRE8460VS20120508
In particular,the following comment from the White House had me laughing out loud...
We look forward to continuing to work with Congress to prevent rates from doubling and ensure that students continue to get a fair shot at an affordable education," Carney said.
If only the Govt just simply exited the whole Higher Education Business entirely,costs would automatically fall as there would be nobody to provide cheap loans to students who want to study all kinds of nonsense at University!!!
All in all,looks like a Highly unsustainable model due for inherent collapse sometime soon.
Regards
Ashish.
I'm sticking with the college textbook end of the business. That makes the most sense to me.
The blogs and comments posted on Investor Uprising do not reflect the views of Investor Uprising, PRNewswire, or its sponsors. Investor Uprising, PRNewswire, and its sponsors do not assume responsibility for any comments, claims, or opinions made by authors and bloggers. They are no substitute for your own research and should not be relied upon for trading or any other purpose.
|
 |
Latest Blogs
Telecom-equipment maker Ciena is a stock trader’s dream, as long as the timing is correct.
The FTC is offering a $50,000 cash prize to the person or group that can come up with a solution to those annoying robocalls.
Akamai is in the middle of four significant tech trends.
John Malone of Liberty Media will be taking over Sirius XM satellite radio when the existing CEO Mel Karmazin steps down. What's it mean?
Demand for students of the humanities exists, despite widespread aspersions on the discipline.
IU Education
Resources to help you become a better investor
Investor Uprising on Twitter
25 market-moving companies we're tracking
|
Tweet This