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Tuesday, July 26, 2011

The pernicious impact of third-party payers

Check out this chart detailing how much college costs have risen compared to all other prices. It's why people from Glenn Reynolds to Michael Barone have been speaking about the higher education bubble.
With college grads having so much trouble finding jobs, it's no wonder that more and more people are predicting the bursting of that bubble. And we will find the same culprit behind much of that bubble as we did with the housing crisis and the inflation in health-care costs - the pernicious effects of having a third party, meaning the government, subsidize what people buy. People are happy to waste someone else's money and that drives up costs. Those of us who don't have that third party aid are the ones who are really caught. And so the cry will go out constantly for more aid. When does it stop?

1 comment:

lorraine_lanning said...

The answer: Don't go to college. There are plenty of high-paying fields that don't require a college education, plus community colleges and trade schools.

None of my 3 children have chosen college. My eldest has created a successful career working in warehouses, a job that includes full benefits. He makes at least $30,000/year, plus overtime and bonuses.

My youngest, who just graduated from high school, is working as a merchandiser for a soft drink company. It's his first job and he's making almost as much as his older brother and also has full benefits. He will be joining the Air Guard later for training in mechanics.

My daughter, the middle child, is creating a career for herself as a dance teacher. She wasn't able to make it into a ballet company, but is cobbling together several teaching jobs at $15-$30/hour. She may also choose community college for a certificate in something like medical technology, but for now, this is working well for her.

My husband is a local truck driver and, with overtime, makes almost as much as I do in software development.

I do not have a degree and am mostly self-taught. There are many online tutorials for web development, many for free. Anyone can create their own site as a portfolio. We have a developer working for us who did just that during high school. He hasn't had a single class but is one of the best developers I've ever worked with, and now only 24 years old.

Most of the people I've worked with in IT do not have college degrees in the field. They are either self-taught or moved into it from finance or engineering or something else.

My brother has never used his college degree. He started working for UPS right after high school and working his way into management. He then started his own, very successful warehouse company. He's our family millionaire.

Don't pay for your child to get an expensive degree in hooking up and partying. There are many other paths into a successful career.