University of Phoenix to Close 115 Campuses

image: no they can't

One of the reasons I cut back my posting here at TDS is that I got so tired of wallowing in such a relentless heap of bad news. Everywhere I looked, the good guys and little folk were getting their asses kicked while the big boys and the greedy scumbags were continuing to prosper. So it is with very great pleasure that I link to following Bloomberg story about the notorious federal student loan-subsidized scam artists, The University Phoenix, finding themselves in deep financial trouble:

Apollo Group Inc. said Tuesday that its fiscal fourth-quarter net income tumbled 60 percent, hurt by higher costs and declining enrollment at the University of Phoenix. To cope, the for-profit education company plans to close 115 of the university's mostly smaller locations, a move that will affect 13,000 students.

Shares in the Phoenix-based company tumbled nearly 9 percent in after-hours trading.

The closings include 25 main campuses and 90 smaller satellite learning centers. At least one location in 30 states is slated to be shuttered.

The roughly 4 percent of Apollo students affected by the closures will be given the option of transferring to online programs or moving their course work to other sites, said University of Phoenix President Bill Pepicello.

If no other center is nearby, the company will continue courses at other space near the closed facility until students complete their degrees, he added.

The university is in the process of notifying students.

University of Phoenix currently has about 328,000 students, down from a peak of more than 400,000. Following the closures, it will be left with 112 locations in 36 states, the District of Columbia and Puerto Rico.

The announcement comes as enrollments overall in the for-profit sector are declining after years of rapid growth, even as enrollment in other sectors of higher education rises. Recent federal figures showed enrollment in for-profits fell 2.9 percent in 2011. The sector has faced tighter regulations and more pressure to enroll students who have a better chance of graduating.

Not to mention the possibility that maybe, just maybe, the students are finally catching on that the diplomas they have been saddling themselves with massive amounts of non-dischargeable student loan debt to obtain aren't fit to use as toilet paper. In this economy, with even law school graduates from reputable universities having a very difficult time securing decent employment, what chance does someone with a sheepskin from one of these scummy diploma mills going to have?

So yes, finally one of my many prayers have been answered and the big hand of fate has clenched into a fist to smite one of the countless predators preying upon the downtrodden and the desperate. Heck, if this keeps up I might just have to reevaluate this whole atheist thing I've had going.


Bonus: "By the time my head gets to Phoenix, you'll be on your way to school"

Assholocracy Porn: "I Have Very Little Tolerance For People With Student Loan Debt"

Awhile back, I adopted the phrase "assholocracy" for use as a tag here at TDS, and since then I have already used it on an incredible 52 different posts. Back in the 1970s glory days of Larry Flynt and Hustler Magazine, he used to have a regular feature called "Asshole of the Month" (and yes, I only read that particular publication for the articles....really). Not having picked up an issue in more than 20 years, I don't know if Flynt is still running that always amusing feature, but if he is I would humbly suggest that for April 2012, he consider making it cretinous North Carolina Representative Virginia Foxx. Here is the Raw Story with the details:

If someone is looking for sympathy for their high student loans, Rep. Virginia Foxx (R-NC) would not be among those providing any support.

According to audio obtained by Think Progress, the congresswoman appeared on G. Gordon Libby show Friday afternoon, saying she “never borrowed a dime of money” during her time in college before lashing out at those burdened with heavy loans.

“I have very little tolerance for people who tell me that they graduate with $200,000 of debt or even $80,000 of debt because there’s no reason for that,” Foxx said. “We live in an opportunity society and people are forgetting that.”

Despite her disgust for high student loans, Foxx is somehow content with high mortgage notes. Think Progress reported that Foxx owed two individual notes up to $250,000.

Here are a few fun facts that Representative Foxx might want to consider before ever again opening her big fat fucking yap about student loans. According to her Wikipedia page, old battle axe Foxx was born in 1943, which means she would have graduated college around 1965 or so. According to the National Center for Education Statistics, the average cost for one year of undergraduate tuition, room and board at a public university in 1965 was: $950. By 2007 (the last year for which statistics were available from the NCES), tuition, room and board had risen to a whopping $11,034. At private schools, tuition had risen from $1,907 to $28,384. What's even worse is that since 2007 many public universities have have imposed large tuition hikes on students as cash-strapped state governments have cut back funding.

So it doesn't take a whole lot of fucking imagination to understand how graduates are being burdened with such impossibly huge student loan debts and at a time when there are few good paying jobs with decent benefits waiting for them when they graduate. Unless you are addle-brained asshole North Carolina Representative Virginia Foxx that is.

Addendum: But wait, it gets worse. Right after I wrote this post, I came across another article in Salon about Virginia Foxx, who is not only an asshole, but a fucking hypocrite as well:

Earlier this year, the U.S. House of Representatives voted to pass a bill with the impressive, everybody-can-get-behind-this title “Protecting Academic Freedom in Higher Education Act.” Sponsored by the ultra-conservative North Carolina Republican Virginia Foxx, the bill ostensibly took aim at an issue close to small-government-loving hearts: intrusive federal regulation of for-profit colleges — fast growing, highly profitable outfits like DeVry University or the online-only University of Phoenix.

Like so many of the bills passed by the House since Republicans gained the majority in the 2010 midterm elections, the bill was designed to repeal specific actions taken by the Obama administration. In this case, the issue at hand was the Obama administration’s efforts to ensure greater “program integrity” in the for-profit educational sector. Specifically, a new federal definition of what constitutes a legitimate academic “credit hour” and a new requirement that all online providers of post-secondary education be accredited in each and every state in which they do business.

Foxx’s bill repealed both measures. (The Senate has yet to address the measure.) According to Foxx, the new federal regulations threatened “innovation” in the educational sector. As reported by InsideHigherEducation, Foxx is on record as declaring that for-profit colleges do a “a better job of being mindful about efficiency and effectiveness than their nonprofit peers.” By, for example, flexibly providing online education when and where low-income working Americans want it, the for-profit free market delivers the kind of quality higher education that Americans so desperately need. The government should just stay out of their business.

I stumbled upon this story while researching the student loan crisis and at first I was perplexed. I didn’t understand why Republicans were opposed to higher academic standards for the for-profit sector, and I didn’t get the connection to student loans. But it didn’t take much research to discover what was really going on: an example of blatant hypocrisy sufficient to outrage even the most jaded observer of American politics.

The for-profit educational sector is an industry almost entirely subsidized by the federal government. Around 70-80 percent of for-profit revenues are generated by federal student loans. At the same time, judging by sky-high dropout rates, the for-profit schools do a terrible job of educating students. The Obama administration’s efforts to define a credit hour and require state accreditation were motivated by a very understandable desire: to ensure that taxpayers are getting their money’s worth when federal cash pays for a student’s education. In contrast, Foxx’s legislation is designed to remove that taxpayer protection. So here’s a more accurate title for her bill: “The Protecting the Freedom of For-Profit Schools to Suck off the Government Teat Without Any Accountability Whatsoever Act.”

The for-profit educational sector has been growing extraordinarily rapidly for the past decade: 12 percent of all post-secondary students are now enrolled in for-profit schools, up from 3 percent 10 years ago. But the main beneficiaries of the growth appear to be the shareholders and executives of the largest publicly traded for-profit schools, not the students.

In 2008, for-profit schools registered a a graduation rate of 22 percent. (Public and private non-profits registered 55 percent and 65 percent respectively.)

54 percent of the students who enrolled in 2008-2009 in 14 publicly traded for-profit schools had withdrawn without a degree by 2010.

The biggest player in the for-profit sector, the University of Phoenix, graduated only 9 percent of its B.A. candidates within six years.

The pathetic performance of the for-profit sector in delivering actual degrees becomes all the more alarming when you realize that most of the students who are dropping out paid for their educations with student loans that have to be paid back: According to a report released in the summer of 2010 by Sen. Tom Harkin, D-Iowa, “Emerging Risk?: An Overview of Growth, Spending, Student Debt and Unanswered Questions in For-Profit Higher Education,” in 2009, the five largest for-profit schools reported that government grants and loans accounted for 77.4 percent of their revenue.

Really, North Carolina, on this blog I have facetiously asked, what's the matter with a lot of different states, but you really have some 'splaining to do as to how you managed to elect someone as purely odious as Representative Virginia Foxx.


Bonus: "But you say that we're the assholes...because we bitched about the hassles...while you're sleeping in your castle"

ACT College (Virginia) Abruptly Closes, Leaving Students Hanging

What's worse than graduating college with a beaucoup load of student loans? Having your college close abruptly leaving you with nothing to show for a beaucoup load of student loans. Here is InsideNOVA.com with the details:

Dreams were broken and students were left with crushing debt and nothing to show for it after ACT College abruptly closed its doors Tuesday.

In a letter to students and faculty, Jeff Moore, the president of the school that offered courses in medical assisting, health sciences and medical radiography at campuses in Alexandria, Arlington and Manassas, said the school was forced to close its doors after being denied recertification for federal financial assistance programs by the U.S. Department of Education.

Kaitlyn Zadroga moved from Millville, N.J., to learn to be a medical assistant, or MA, at the school’s Manassas campus and said she was looking to eventually make a life for herself as a nurse.

“I was going to be an MA and get my foot in the door and then be an RN. Apparently that’s not going to happen now,” said the 19-year-old Zadroga who joined 50 to 60 other students to protest at the school’s Manassas campus Wednesday.

Zadroga wasn’t the only student feeling there was nowhere to turn.

Lashanee Gaskins, had been at the school for five months and is on the hook for a $21,000 in student loans.

She said she got a text message Tuesday telling her that the school was closed indefinitely and that it was no longer certified.

“We’re out of our financial aid. People who have graduated have not received diplomas,” the 30-year-old mother of three said. “We’re stranded. We have nowhere to go. People are not accepting our credits from here to transfer, so we have to start all over.”

Gaskins said she gave up her home day-care business to attend ACT College and was looking to better her life.

“I just wanted something that was stable,” the Bristow woman said.

While some students got the letter from Moore saying that the college had worked with the federal Department of Education after a 2010-2011 audit left the school without financial assistance certification, others got phone calls telling them the school was closing. Still others learned of the closing through social networking sites.

Some didn’t find out until they showed up for classes Wednesday.

Sean Doheney, 29, a U.S. Army Reserves pharmacy technician studying radiology at the school, said the administration was heartless in not letting students know that it was having certification and financing problems.

“What they did to us is cruel to say the least,” said the 29-year-old Doheney, who spent $30,000 in grants and loans at the school and was only a few months away from graduating.

Moore’s letter also indicated that the family-owned business had been in negotiations to sell, but that the deal had fallen through when the department refused to release funds that Moore said were due the school.

In the letter, Moore said the department “threw up one last roadblock which caused the deal to fall apart.”

Right here you see yet another problem with private, for profit colleges that prey upon lower income students, loading them up with debt to obtain degrees of often dubious value. The article doesn't state why the Department of Education chose to pull the school's certification, but we can only assume given that shady outfits like the University of Phoenix and Kaplan University are still allowed to operate, there must have been some pretty bad management going on at the very least.

Senior Citizens Have $36 Billion In Outstanding Student Loans

This is a good companion piece to the post I made yesterday about CNN being in denial that there may be a crisis in the student loan industry. It's bad enough that many young adults are carry huge education-related debt burdens, but now it also appears that student loans are going to follow some people right into the grave. Here is Yahoo News with the story:

New research from the New York Fed shows Americans 60 years and older owe a collective $36.5 billion in outstanding student loans. More than 10 percent of these indebted seniors are delinquent on their loans, which means they may field calls from persistent debt collectors and be forced to offer up parts of their Social Security checks to satisfy their decades-old debts, the Washington Post reports.

Most people with student loans are under 40, but because this type of loan cannot be discharged in bankruptcy, the debt can follow a person around for life. The average amount due from all student loan borrowers is $23,300, according to the New York Fed's data, while the median amount is $12,800. On average, college graduates make significantly more over their lifetimes than high school graduates and face a lower unemployment rate. But college costs have skyrocketed over the past 30 years, and the potential payoff of a college education varies widely, depending on which subject a person majors in and the value and reputation of the college.

Notice how that last bit almost perfectly mirrors the propaganda put forth in the CNN story? It almost like the media collaborates in the lies it tells the public. Who would have ever thought?


Bonus: "Old man, look at my life...I'm a lot like you were (or maybe are now)"

Media Denial Porn: CNN Says "There Is No Student Loan Crisis"

Great news, America! Just because the total value of student loans recently topped (cue Dr. Evil) One TREEEEELION Dollars, and the rate of student loan defaults has been skyrocketing, there is no student loan "crisis." So says CNN, the so-called, "Worldwide Leader in News," which back around 2005 or so was, like the rest of the mainstream media, just as confident that there was no so-called "housing bubble." Here is the story in all of its denialist glory:

Total student loan debt has topped $1 trillion ... but there's no need to panic.

Most borrowers have a reasonable amount of debt, and the total balance is not likely to cause major damage to the economy like the mortgage crisis did, experts say.

Wow, I am so relieved that the "experts" have chimed in. Because the "experts" the mainstream media consults about the issues it chooses to report are ALWAYS right. It is perfectly evident by just how fantastic the economy has been preforming in recent years, how cheap energy prices have remained and also how swimmingly that whole Iraq War thing they were cheerleading for turned out. Damn, I might as well just end this article right here.

"I don't think it's a bubble," said Mark Kantrowitz, publisher of Finaid.org, a financial aid website. "Most students who graduate college are able to repay their loans."

So exactly which orifice did you pull THAT factoid from, Mr. Kantrowitz? Yes, it is technically true that the vast majority of student loans are not in default. But it is also true that the majority of student loans were issued to those who completed their educations before the financial crisis hit and got into the job market before the doors slammed shut. In fact, your idiotic statement is directly contradicted by the very next paragraph in the article:

This is not to say that there aren't problems with student loans, which now exceed the amount of credit card debt and auto loans. Students are taking on more debt, on average, and more than a quarter of borrowers are behind on their payments. And a hefty debt load could delay recent graduates' purchase of a home or starting a business.

Given how few high paying jobs are now being created during the "recovery," that sure sounds like a building crisis to me. Kind of like the housing bubble circa 2006 when the first signs of distress started to appear.

But all the talk of a crisis or bubble in the student loan industry is exaggerated, experts say.

Damn, there they are again. Those nebulous "experts." Gotta love those guys.

Nevertheless:

What's raising red flags is that the default rates on federal loans are climbing. They hit 8.8% in 2009, nearly double the rate five years earlier, according to the most recent Department of Education figures.

This jump is being fueled in particular by for-profit colleges, which have default rates of 15%, prompting federal officials to put in new rules. Now, schools with excessive default rates can lose their eligibility for the federal loan program.

Still, heavy debt loads can make it tough for young adults to establish themselves, especially these days. The Great Recession has made it tougher for young adults to find a job.

The unemployment rate for those age 16 to 24 with bachelor's degrees stood at 8.1% in February, up from 4.6% four years earlier. Many others find themselves underemployed.

"Having a lot of student debt can make a person's life very difficult," said Lauren Asher, president of the Project on Student Debt.

It is really hard not to get the feeling that CNN decided what the editorial slant on this article was going to be before they even conducted any interviews. So ultimately, what is the reasoning for claiming that that there is not student loan crisis?

But workers with bachelor's degrees earn about $650,000 more over their lifetime than their peers who only have high school diplomas, a recent Pew Research Center analysis found.

"It's an economic investment," said Sarah Turner, professor of economic and education at the University of Virginia, Charlottesville. "It's not going to work for everyone, but on average, it has a high return."

Kantrowitz expects defaults to climb for another year, before starting to decline. That's because the economy is slowly strengthening and unemployment rates are coming down.

"The defaults are not unexpected, considering the aftermath of the downturn," he said.

Ah-ha! There it is! The tired old "business-as-usual" argument that says things will get better just because they have always gotten better before, spewed forth by a university professor who has every economic incentive in the world to deny that there is a student loan crisis. There is also no consideration given to the fact that the era of cheap oil-fueled economic growth is over and that we have entered a new paradigm of permanent economic contraction.

It's incredible how CNN allows blind faith to override all of the various facts presented right in in their own article. Since this is what passes for "journalism" in America these days, no wonder so few people out there truly understand our real predicament.


Bonus: "Everybody knows these are rock hard times...I gotta make it through...these are rock hard times"

Student Loan Delinquency Hits $85 Billion

As I've said before on this blog, sometimes I hate being right. I've asserted a number of times that predatory student loans are another massive financial bubble just waiting to pop, and now here comes the confirmation from Bloomberg:

About $85 billion in U.S. student loan debt, or 10 percent of the outstanding balance, was delinquent in the third quarter of 2011.

Of the 37 million borrowers who have student-loan balances, 14 percent, or about 5.4 million people, have at least one past due student-loan account, according to a report posted today on the Federal Reserve Bank of New York’s website.

As many as 47 percent of student-loan borrowers “appear to be in deferral or forbearance,” and didn’t have to make payments as of the third quarter, according to the report. The district bank reported last week that debt from educational loans in the fourth quarter was $867 billion, higher than credit-card debt, according to a survey of consumer credit. Special attention should be paid to these student-loan delinquencies compared with other household debt, the authors wrote.

“Some special accounting used for student loans, not applicable to other types of consumer debt, makes it likely that the delinquency rates for student loans are understated,” wrote the economists, Meta Brown, Andrew Haughwout, Donghoon Lee, Maricar Mabutas and Wilbert van der Klaauw.

Note the two portions of this report I highlighted in bold, both of which indicate that the problem is far worse than the headline figure. Nearly half of the loans are held by people who are going to college right now or have just graduated, who have not yet discovered or are just now discovering how bleak their prospects of finding a good job are even with that degree the placed themselves deeply in debt to obtain. Secondly, accounting gimmicks are also likely helping to hide the extent of the problem, just like in the mortgage industry.

The big question is just how long it will take before students and their parents finally begin to realize that there has been a sea change in the economy and that a college degree is no longer a ticket to the American dream of middle class respectability. Blind faith is ll that is holding up this whole creaking edifice, but then again you could also say that about the economy at large.


Bonus: They say you gotta have faith...but you should never have Blind Faith

Student Loan Debt Is Stifling Home Sales

Today must be the day for posting news articles that confirm previous assertions I have made here before on TDS. Dove tailing with this morning's post about how the jobs now being added to the economy are lower paying and have fewer benefits than those destroyed during the financial crash, here comes a story from Bloomberg Businessweek about how student loan debt is helping to stifle a recovery in the housing market:

Last year outstanding education debt passed credit-card debt for the first time, according to Mark Kantrowitz, publisher of FinAid.org, a student loan website. Totaling close to $1 trillion, America’s mounting pile of outstanding student debt is a growing drag on the housing recovery, keeping first-time home buyers on the sidelines and limiting the effectiveness of record-low interest rates.

According to a recent Federal Reserve study, only 9 percent of 29- to 34-year-olds got a first-time mortgage from 2009 to 2011, compared with 17 percent 10 years earlier. “First-time home buyers are typically an important source of incremental housing demand, so their smaller presence in the market affects house prices and construction quite broadly,” Fed Chairman Ben Bernanke said at a homebuilders’ conference in Orlando on Feb. 10.

Recent college graduates carry an average debt load of more than $25,000, limiting their ability to qualify for mortgages even if they’re able to land a job in a market with an unemployment rate of 9 percent for 25- to 34-year-olds. Dubbing it a “student loan debt bomb,” the National Association of Consumer Bankruptcy Attorneys (NACBA) warned on Feb. 7 about the effects of rising student debt on recent graduates, parents who co-signed their loans, and older Americans who’ve gone back to school for job training.

“Just as the housing bubble created a mortgage debt overhang that absorbs the income of consumers and renders them unable to engage in consumer spending that sustains the economy, so too are student loans beginning to have the same effect, which will be a drag on the economy for the foreseeable future,” John Rao, vice president of the NACBA, said on a conference call.

People aged 25 to 34 made up 27 percent of all home buyers in 2011, the lowest share in the past decade and six percentage points below their 33 percent share in 2001, according to the National Association of Realtors. “Students coming out of college are burdened with more debt than traditionally they have been, and they are also coming into an economy that is underperforming previous recoveries,” says Rick Palacios, a senior research analyst at John Burns Real Estate Consulting in Irvine, Calif.

Palacios says first-time buyers are key to a housing recovery because they allow current owners to move into larger, pricier homes. “Move-up buyers need somebody to purchase their homes to move,” he says. “You need that first leg in the recovery to materialize.”

Since the overall number of first-time home buyers has fallen, people aged 25 to 34 still accounted for 52 percent of that group last year, near the average since 2005, according to the Realtors group. Still, almost 6 million Americans in that group lived with their parents in 2011, up from 4.7 million when the recession began in 2007, according to U.S. Census Bureau data.

That quote from Bernanke really makes my head hurt given that every Federal Reserve policy since the financial crash has been designed to prop up the big banks, and yet there he is admitting that the economy cannot recover unless real people have money in their pockets. The housing market remains deeply mired in the doldrums despite the Fed's Zero Interest Rate Policy driving 30-year, fixed rate mortgages below 4%. Bernanke is basically admitting that the Fed policy has been a complete failure, and yet still no one in authority has called him on it.


Bonus: If you've got the time, here is "Loan Me a Dime"

Friday Rant: Generation Screwed

In my June 21st post, “$100,000 in Student Loan Debt, Can’t Find a Job,” I wrote about Leslie, the young recent graduate of a Masters program who stayed with my wife and me for a few days this past summer during her frustrating search for a job. During our conversations about her situation, Leslie bemoaned that her financial situation and her inability to secure decent employment despite her education was endangering her life’s goals of getting married, buying a house, starting a family and planning for retirement.

As I recounted in my last update on Leslie’s situation a couple of months ago, she had landed a temp position with a charitable organization and was optimistic that it would lead to something more permanent. Not so, unfortunately. Today Leslie is unemployed again. Because she lives in New York City she’s been spending a lot of her time recently attending the Occupy Wall Street protests, and I applaud her for that. She has also decided to join military to help pay off her student loans. This was a particularly agonizing decision for her, because like me she opposes America’s war policies. Leslie’s situation is, of course, hardly unique among the people of her generation, which is no doubt why the Occupy movement has caught on so quickly and spread like wildfire all over the country.

It’s ironic that my father’s generation, those referred to as the “Lost Generation” sandwiched between the so-called “Greatest Generation” and the Baby Boomers, were the ones who actually benefitted the most from the cheap oil era. Those Americans born from the mid-1920s to the early 1940s managed to miss being caught up in the carnage of World War Two and came of age during the greatest period of economic expansion ever witnessed in human history. For these fortunate individuals, peak oil and the impending end of economic growth did not arrive until they were well into their sunset years.

The Baby Boomers were nearly as lucky. Those born from the mid-1940s to the early 1960s grew up with the abundance that resulted from America’s postwar economic boom as cheap oil allowed America to build the car centric suburbs as we know them today. The middle class expanded rapidly and a majority of Americans began living the “American Dream” of a house, two cars, regular vacations, a good retirement and the promise that their children would have it even better than they did. Not until they approached retirement age did the cheap oil party end and the hangover began.

My generation, originally aptly called the 13th Generation, but later morphing into “Generation X,” came along just as the idyllic picture of the American Dream was beginning to fray around the edges. Those born from the 1960s to the early 1980s for the most part enjoyed the same abundance growing up as did the Baby Boomers, unless we were children of blue collar workers whose jobs began being exported overseas in the quest for globalization. For the first time since World War Two, the economic divide between those with a college education and those without began to widen, and working class Gen-X’ers were the first ones to feel it. For us the full blown crisis is now hitting as we enter middle age.

And finally, we come to the Millennials, also known as Generation Y. The oldest of the children born between the mid-1980s and the early 2000s from middle class families are the ones just now graduating from college with huge student loan debts only to find that they now face a jobs crisis even worse than the one that plagued the blue collar kids the generation before them. This is the generation that never had a chance to get started with life before the financial tsunami hit them.

From the time they were little children the Millennials have been told by everyone—their parents, their teachers, the media and even the politicians—that if they studied hard, didn’t make waves and got a good education that their reward would be the ability to live the same American Dream that their parents lived. The propaganda was so strongly instilled within them that many, usually with their parents’ blessing, were willing to take on an insane amount of debt in order to get stamped their ticket to the good life.

And now they are stuck. Like those blue collar kids a generation ago, the college age Generation Y’ers are learning that the game has fundamentally changed and the doors to the life they are seeking have been permanently barred. For what America is now experiencing is NOT just a routine downturn in the business cycle, but the beginning of a long era of economic contraction. The prosperity of the previous era that ran for approximately 60 years from the late-1940s to the first decade of the 21st century was a historical aberration enabled by a brief moment in which vast amounts of cheap oil fueled a boom that will never be seen again.

Given the damage that fossil fuel exploitation has wrought upon the natural world, I do not mourn the passing of our modern industrial civilization. Perhaps if we had used the blessings of modern technology to create a more egalitarian and sustainable society instead of just producing massive amounts of useless fucking junk for the maximum possible profit I might feel differently. In short, I do not deplore the Millennials being robbed of their chance to become middle class consumer zombies, but instead the fact that they have been repeatedly LIED to and sold down the river by the generations before them. EAT THE RICH, says the sign in the picture above. It could just as easily have read, EAT THE OLD.

So this is one Generation X-er who would like to apologize to the Millennials like Leslie, those young men and women of great expectations who have so cruelly had their hopes and dreams wrestled away from them by their thoughtless and greedy predecessors. For they are truly, Generation Screwed.

CNN Tells the Stark Truth About Rising College Costs

I'm going to get this out of the way right up front: the time-honored American Dream of parents sending their kids off to college so they can get a higher education that will allow them to live better than they did is dead as doornail. Just how bad is it? CNN reports in an article entitled "Stop the Tuition Madness":

For parents with college-bound kids, it seems like a no-win situation. Your child is eyeing the grassy quads and Gothic dorms of Dream U., while you're staring down at a too-small 401(k), a shaky job market, and a house worth a lot less than a few years ago.

Meanwhile, colleges are bidding up tuition prices faster than a hedge fund manager at an art auction. Over the past 10 years the cost of private college has jumped more than 60%, nearly three times as much as incomes over the same period, and will now set you back $42,000 a year on average.

Prices at public colleges have shot up even more, nearly doubling to $21,000 for in-state students. Got younger kids? By 2020 you're looking at a four-year bill that's likely to top $240,000 for private schools and $155,000 at public universities. Sure there's financial aid, but scholarships aren't keeping up with tuition inflation. So long, retirement hopes; hello again, boss.

Your children will suffer, too, if they're forced to start their adult lives with onerous debt. "Student loans can affect every decision young adults make: whether they can go to graduate school, buy a house, even start a family," says Patrick Callan, president of the Higher Education Policy Institute.

I actually have one nit to pick with that excerpt from the story. There is no way college tuitions are going to rise from their already lofty heights to those insane levels by the year 2020. It should be obvious that we are already reaching the point of Peak Higher Education, in which the mounting price tag for even a Bachelor's Degree at a public university is rising beyond what's affordable for most people even with student loans. The $155,000 figure cited as the future cost for a four-year degree is about three-and-a-half times the current median annual household income (around $45,000).

At some point, the growing consciousness that a college education no longer guarantees a good salary or even any employment at all upon graduation is going to reach critical mass, and enough students (and their parents) are going to balk at taking on a six figure debt only to end up at best waiting tables at Applebees five years later. Once that happens, the higher education system in its current form is going to collapse.

Many will lament its passing, but it really is for the better. Except in rare instances, universities long ago largely stopped being places where students could learn for knowledge's sake and expand their minds to become better citizens. Instead, a university degree had become merely a ticket that needed to be punched to gain admittance into the white collar corporate world.

The rapid rise in tuition costs, which for well more than a decade have greatly exceeded the rate of inflation, very much encouraged the transformation of our universities into mere job factories. Even if obtaining a high paying job wasn't a student's first motivation for attending college, it likely moved high on the list once they started to realize how much debt they were going to have to take on to obtain that degree. As for the colleges themselves--beyond enabling big, fat pay raises for administrators, professors and football and basketball coaches--the need to keep their cash cows from dropping out no doubt also greatly contributed to the grade inflation that has turned, for example, attaining a "B" average from a genuine academic achievement into a complete joke.

The CNN article actually goes on to propose a list of potential solutions for curbing college costs, which wouldn't be half-bad if we were still living in "normal" times. I particularly like the idea of cutting way back on the expensive college football programs. Sadly, however, like most mainstream media articles this one assumes that the system can be "saved" by making a few tweaks here and there, when in truth the effects of peak oil and resource depletion and the fact that we have now entered the age of permanent contraction means that the system itself is soon going to follow the old Communist bloc into the dustbin of history.

Colleges are Charging Huge Tuition Fees—Because They Can

As you know, I am pretty rough on the mainstream media for the lies and obfuscations it perpetrates daily in support of the status quo. But once in awhile I am pleasantly surprised to see a glimmer of truth shine though the grey clouds of celebrity worship and slavish obedience to corporate America and it’s craven political hand puppets. Such an article appeared this weekend in a Gannett newspaper from Indiana called the Boiler Station, which examined the reason why college tuition costs have exploded these past 20 years. The article’s conclusion? Universities charge ever higher tuition because the can. Here’s an excerpt:

The reason tuition has been on such a steady upward march can be found in the most basic lesson of an entry-level econ class: supply and demand.

Tuition goes up because it can -- because there currently are no market forces or legislative controls to curtail it.

"That is exactly how people in the major research universities behave," said Vance Fried, an Oklahoma State professor and author of "Better/Cheaper College: An Entrepreneurs Guide to Rescuing Undergraduate Education."

"Because there is a demand, you can raise tuition ... and people still come."

The article goes on to explain just how out of balance tuition cost increases are with the rest of the economy:

Since 1990, tuition has gone up an average of 6 percent each year -- from a low of 3.6 percent in 2000 to a high of 16.4 percent in 2003, a year when many campuses began to charge additional student fees as well.

From 1989 to 2011, Purdue University's main campus in West Lafayette has raised tuition 395 percent; Indiana University in Bloomington, 370 percent; and Ball State, 356 percent.

In that same time, the Consumer Price Index has increased 81.9 percent, according to a Bureau of Labor Statistics calculator. If Purdue's tuition increase had matched that Consumer Price Index increase dollar for dollar, the 1989 tuition of $1,916 would be $3,487 -- as opposed to the $9,478 Purdue students will pay during the 2011-12 school year.

That's even more staggering when you consider Indiana's median family income rose just 33 percent during that time.

As that last sentence states, those statistics really are staggering. It’s bad enough that tuition has been increasing at nearly four times the rate of inflation, but even worse is that it has been increasing at a mindboggling TEN TIMES the rate at which incomes are increasing. Granted the article only covers Indiana, but I would bet these numbers are fairly reflective of the country as a whole.

The article goes on to cite several reasons for the increases, from reduced state funding to huge salary increases for university professors and administrators. There are also plenty of anecdotes about families and students struggling to pay these huge costs.

Of course, this being a mainstream media article, there was still one big elephant in the room that they managed to ignore—the role that the student loan industry plays in helping to jack up tuition costs. Though nominally issued by private institutions, student loans are in fact guaranteed by the federal government, and as such are generally not dischargeable in bankruptcy. Because the lending institutions are thus fully insured against taking any losses, they have no hesitation about freely giving out whatever insane amount of money the student needs to cover their tuition nut.

This means that the real culprit in the out-of-control tuition increases is the federal government. Without student loan guarantees, there would be a natural, market-driven force holding tuition down—namely the actual ability of the students to pay back the loans. The sad fact is that the student loan program, however well intentioned upon its original creation, has become yet another corporate welfare program that sticks the bill on the taxpayer.

All of this would not be a complete disaster if the students taking out these ever-higher loans were still able to secure high-paying jobs upon graduation. More and more, however, recent college graduates, especially those in the fields of liberal arts and the humanities, are finding that they are graduating with a huge debt load into an economy with few good jobs available to them. I wrote about one such unfortunate young woman in my June 21st post, “$100,000 in Student Loan Debt—Can’t Find a Job.”

Though none of our political “leaders” will ever admit it, a sea change has taken place within the American economy since the market crash in 2008. The days when young people could spend four years self-actualizing while studying something "fun," and then still find a cubicle-dweller position somewhere that pays the bills after graduation are over.

Sadly, because there is still so much money to me made by everyone involved in this scam—from the professors, to the administrators, to the financial institutions—the truth is not being told to these kids. Instead, they will continue to be turned into debt slaves before they even are allowed a chance to get started in life by a thoroughly corrupt system that will not change its ways until that long overdue day when it finally and deservedly collapses.

$100,000 in Student Loan Debt, Can’t Find a Job

I’ve written on this blog time and again about the current dreadful state of the American economy, at least for many in the working and middle classes. Most of what I‘ve said here has been based upon media articles or on the parsing of economic statistics. There is plenty of evidence out there for anyone who cares to cut through all of the mainstream media obfuscation that a lot of economic pain is being inflicted upon a whole lot of people.

More rarely do I actually have a chance to see the real world effects of what I write about up close and personal. I live in the Washington, DC, metro area, which has been, largely due to the massive increase in federal government deficit spending since the beginning of the economic crisis back in 2008, a relative bubble of prosperity amidst the economic calamity going on in much of the rest of the country.

This past week, however, it all hit home unexpectedly when my wife offered up the use of our spare bedroom to a young college graduate from out-of-state whom she had met at a professional conference when the young woman was still a student. My wife arranged for the young lady, whom I will call Leslie, to meet with some of her professional contacts as part of her ongoing career search.

Leslie spent several days getting together with the people whom my wife had arranged for her to meet and spreading her resume around to anyone willing to take a copy. She had finished her Master’s Degree this past spring, graduating from a good college with a high grade point average—in other words she is the kind of person who not all that long ago would have been snapped up by an employer in relatively short order, likely after having recevied multiple job offers. Unfortunately for her she graduated into, as she herself put it, the worst job market for new college graduates since 1948.

I didn’t know Leslie before she came to stay with us, so I was completely unaware of her personal situation. On her last afternoon with us, we talked for a while about her job search and her life. Leslie is not the stereotypical middle class kid whose parents spoiled her and instilled unrealistic expectations. In fact, both of her parents died when she was still a child, her father from drug and alcohol addiction. She was raised by relatives and had to work very hard to achieve what she did academically.

Unfortunately, that meant taking out student loans so she could afford to go to college—ultimately around $100,000 dollars worth. That would have been quite a nut to have to repay with interest even had she been able to immediately find a good paying job in a healthy economy. As it is, she is unemployed, desperately searching for work and her only source of income is her live-in boyfriend’s wages—about $10 dollars an hour. That and the food stamps they are eligible for and are receiving. To say she and her boyfriend are nervous about the future is a cruel understatement.

At one point during our conversation she asked me what I would do if I were in her situation. I was honest and said I really had no idea what she was going through. I graduated from college debt free more than twenty years ago thanks to the National Guard’s tuition program, and also thanks to college costs having not yet become so insanely expensive. Moreover, even though the country was just then heading into Daddy Bush's recession, I was hired less than a month after graduation.

But it was when she confided to me her future hopes and dreams that the heartbreak of her situation really became apparent. I’m not looking to be rich, she said. All I want is to be middle class, which they promised me I could be if I got a good education. I just want to be able to eventually afford to buy a home so I can raise a family. And have a secure retirement. Is that too much to ask?

There really wasn’t a whole lot I could do other than nod and agree. As I dropped her off so she could catch the bus back home she thanked me profusely for our hospitality. I told her it was no problem and lamely wished her well on her job search.

One other thing she said that really struck me was how she wished, if what her generation of college graduates is going through represents a permanent change in economic conditions rather than just a temporary downturn, someone in a position of authority would say something. She even added that President Obama has seemingly turned his back on the young people who were among his most adamant supporters. Funny, how a 23-year-old woman experiencing what is really going on in this economy makes more sense than nearly every media pundit who gets paid the big bucks to pontificate about it.

So what do we, the older generations who were lucky enough to have been born and raised in the all-too-brief era of cheap oil-fueled economic abundance, say to someone like Leslie? Sorry, kid, the future is fucked. We got ours, and best of luck to you. In the end, I couldn’t think of anything at all.

New Poll: 85% of Graduating College Seniors Plan to Move Home with Their Parents

From Time:

Surprise, surprise: Thanks to a high unemployment rate for new grads, many of those with diplomas fresh off the press are making a return to Mom and Dad's place. In fact, according to a poll conducted by consulting firm Twentysomething Inc., some 85%of graduates will soon remember what Mom's cooking tastes like.

Times are undeniably tough. Reports have placed the unemployment rate for the under-25 group as high as 54%. Many of these unemployed graduates are choosing to go into higher education in an attempt to wait out the job market, while others are going anywhere — and doing anything — for work. Meanwhile, moving back home helps with expenses and paying off student loans.

The outlook isn't sunshine and roses: Rick Raymond, of the College Parents of America, notes, "Graduates are not the first to be hired when the job markets begins to improve. We're seeing shocking numbers of people with undergraduates degrees who can't get work."

Stunning. This goes to show the sheer number of young adults who are just now finding out how little most college degrees are actually worth these days. One of the most heinous of the many Big Lies being told in America these days is that our brightest (and many not so bright) young people should saddle themselves with tens if not hundreds of thousands of dollars in student loan debt in order to earn that piece of sheepskin. The cruel reality doesn’t dawn on them until they have matriculated into a job market that has yet to absorb the vast majority of those from the three previous graduating classes. And yet the article says that many of them are doubling down on their bad bets by taking out even more loans to go to graduate school and “wait out the job market.”

This plight of our recent college grads is one of those dirty little secrets that those who spout the rhetoric of green shoots and economic recovery hope you won’t notice. And for the most part people haven’t. Except for the occasional newspaper story, this vitally important issue has gone virtually uncommented upon in the mainstream media.

Why is that? Some will tell you it’s because the media is owned by corporations who are connected to corporations who earn profits selling ever larger amounts of student loans to gullible youth and parents knowing that it is the one form of debt that virtually cannot be discharged in bankruptcy. And certainly you can’t discount that as a factor.

But I have a different theory. I think it is more the case that most people, even the students themselves who are being turned into debt donkeys, don’t want to hear truth—that a college degree is no longer an automatic ticket to the middle class in America. In fact for most it has become exactly the opposite, a gigantic financial burden that will drag them down for the rest of their lives. They don’t want to hear it because they want to believe so desperately that the American Dream has not been forever cut off from their reach.

It will be interesting in a gruesome sort of way to watch how this plays out as America continues along the path of a long slow decline towards eventual oblivion. The job market really started to turn south in 2008, which means that the seniors who graduated that year have been out of school for three years and those who were freshman then are just graduating now. How long before many of them finally start speaking honestly about what is happening to them? And what will be the response of a society whose “leaders” take payoffs, er campaign contributions from the education industry and from the banks that provide the student loans?

The saddest irony is that many of these same young people were energized and excited by the candidacy of Barack Obama during the same year that all of this started. On election day 2008 in throngs of students from nearby Georgetown and George Washington universities stood in groups on street corners in my area holding hand painted Obama signs and waving at every car that passed. Obama’s broken promises of “change we can believe in” have been a catastrophe for America, but there is no group to whom his betrayals have been more cruel than to those young adults who were among his biggest supporters.