Education as a Commodity

Remember when a 54 inch Plasma TV cost $10,000? Very few could pay for a new set so they waited. The price fell every year on plasma TVs of all sizes since they were introduced. The manufacturing process got cheap, other plasma screen makers jumped into the market and consumers benefited from the increasingly low priced sets. I noticed a 50 inch at Target for $299.99 over last Christmas.

Value (price) falls in relation to scarcity, the more televisions than get produced the cheaper they become. Education works the same way except only one part of the equation is true. The total number of schools is higher than ever so why hasn’t the price come down? In fact, the price of the top tier schools is higher than ever. Because culturally Americans imagine a link between schooling and advancement going back to at least post WWII thinking; second, the student loan program continues to be a boom for institutions and a bust for kids.

For large chunks of the middle class a college degree equals years of student loan payments and no discernible difference between their own career and their non-degree friends. Kids about to enter classrooms beyond high school should consider the question--is college worth it?

Some college degrees are more in line with the nature of the work being sought and therefore a great option. Students who study medicine, engineering and technology (STEM professionals) find lucrative careers and job opportunities all over the world. Those of us in the Liberal Arts (beer pong experts) find diminished opportunities and depressed wages as we shuffle from interview to internship. Most of us don’t have the mathematical brain for engineering or the patience for new medical terms. Those careers wouldn’t have suited us anyway so giving us a mulligan on ‘chosen career path’ isn’t practical. We’d probably just take the ‘do over’ money and buy a campus apartment with a hot-tub---the extra stress and all.

Kids today struggle to find even low paying gigs in a market where wages have been flat since 2008. College degree costs’ continue to rise though, as do food, housing, electric, insurance, child care and everything necessary for living. The hard workers will juggle multiple jobs and eke out a living while working more hours than intended. Welcome to the middle class.

The ones on top, the rich, can afford the living increases and still live well off compounding interest. The ones on the bottom, the poor, don’t pay many of the increased living expenses like housing, medical bills and food. Those items get subsidized through various federal and state programs originally used sparingly, now abused consistently.

So now that Medieval Literature degree you spent six and half years on is crushing you in loan payments. Your interest is needed. Interest on student debt, credit card debt, mortgage debt, sovereign debt and local debt is vital. Sell something or get another job if you want to stay in the middle. You are in danger of sliding down the ladder and joining the ranks of the poor, better known as ‘completely dependent’.

All of us make choices in life whether financial or social. We are responsible for those choices no matter how ignorant we were of consequences at the time. Some of us had destructive advice on debt and relationships that set us back a few years. Many were just selfish and immature ignoring good advice from people trying to save them from a bull-headed nature. Blaming others for your mistakes, financial or relational, is a recipe for sliding toward the bottom.

The American middle class family requires diversification in income and low levels of debt in order to survive. The quickest way out of the debt-poverty cycle is to find additional ways to make money. Sell those mint condition KISS Army dolls you brag about to relatives and co-workers. Start a car-washing and detailing business that dumps into a college fund for the kids. Even if the kids turn out to have your smarts at least they won’t be in debt when they graduate.  

Second, get the debt levels as close to zero as possible and DON’T take on more. This is boilerplate budgeting and financial planning stuff that our grandparents understood better than we did. Somewhere along the way we got greedy, dreamed of a better life NOW and charged it all to the future. Suddenly debt was cool, credit cards were king and an easy money ethos fed Wall Street. We rode the ‘rising tide’ until our ship ran aground. We’ve spent much of our adult life repairing the hull and trying to get back to sea.

‘Getting back’ requires making tough decisions about college and how to pay for it. The explosion in the total number of schools means options for financing that aren’t necessarily debt. Scholarship programs exist if you know where to look. Until the price of school falls to a level that matches middle class living, save the tuition money. You could always by an extra TV.