College Debt, False Advertising and the Critical 12 Years

Yet another tobacco lawsuit settlement resulted in a recent court order requiring the three largest cigarette manufacturers to pay $100 million in damages in the state of Florida. The reason, their marketing misled consumers. Sound familiar? Remember the $206 Billion Master Tobacco Settlement of 1998? So much for Caveat Emptor.

My thought process is admittedly strange, but reading about that case got me thinking that there were similarities between the multitude of tobacco lawsuits and the trillion dollars of college loan debt, namely false advertising. Here in the U.S. says that the average college graduate takes on $29,400 of debt while obtaining a degree. I wonder how many of our indebted and/or underemployed population were influenced by the claim colleges have been making for years – that a college graduate will make $1 million-dollars more than a non-graduate over a working lifetime (40 years)? Mike Schneider, vice president of the American Institute for Research politely calls it, “The million-dollar misunderstanding.” Misunderstanding!? I don’t think tobacco companies could use such a defense.

One would think that the boldly touted marketing statement made by so many academic institutions would have statistically sophisticated research behind that number. In reality it is deceptively simplistic – according to US Census data, college grads earn on average $57,500 per year compared to non-grads’ average of $31,600. When multiplied over a 40 year work lifetime then voila’, the total difference equals $1,036,000.

What the $1 million-dollar doesn’t factor in is the major course of study (technical vs. liberal arts, etc.) nor the cost of tuition, fees, books, room and board at a public school and $99,900 at a private one – even after financial aid, scholarships and grants. Throw in lost wages during the four years of schooling, an average college graduate will not catch up with their non-grad counterpart until age 33 (College Board), which is a huge concern since many of life’s critical decisions are made between ages 21 and 33.

Like tobacco companies, college recruiters should be made to tell the truth – since 2000 the wages of college educated workers have stagnated—and even declined in the years since the Great Recession, but the wages of high school graduates have fallen even more.* How’s that for positive motivation?

*Federal Reserve Bank of New York’s Research and Statistics Group


Strange Times, Strange Thoughts – A Kid in the 60s

I’m not sure why I wrote this because I sat down at the keyboard with an altogether different subject in mind. What I wrote instead were recollections of how as a child I viewed the Vietnam War. Strange.

I was born the year the Vietnam War began. Like many I grew up with it. Hardly a day went by that I wasn’t watching Walter Cronkite give his daily death tallies for both sides of the fight. It seemed to me it was a simple game of attrition. The U.S. Army was killing way more North Vietnamese than it was losing so obviously it was just a matter of time, right?  I was only nine years old at the time but already had a firm belief that my end would come in Vietnam. Why, I don’t know. Two of my older brothers were serving in the Air Force, having joined before their draft numbers came up. Neither was on the front lines, so I’m not sure why I thought I’d end up carrying a rifle.

Like me, my best friend was also attuned to the war, but we came at it from different angles.  He was a military brat who had been born on a US military base in Morocco and he was also an avid deer hunter like his dad. I still have never shot a living thing, don’t want to. Any way, he and I had many conversations about the war. He told his dad about my morbid ideations about death in combat and his hardened army sergeant dad said of me,”He must be a tough guy,” whatever that meant.

Anyway my friend  knew what his future was going to be from the fifth grade on, a fighter pilot.  It was a dream I once had, mostly because my dad had flown B-17s in Europe. However, the many virtual missions I flew with my dad through the vividness of his stories removed that desire from my mind. My friend did eventually achieve his goal and became an A-10 jet pilot and flew many missions in the first Gulf War.

I found myself in high school in 1974 and fortunately didn’t think about the war much at all despite the fact that I was bearing down on Draft age. The teenage life was full of diversions, like sports, upping my reputation and thinking about girls.  So it was hardly a surprise that on the occasions that I did find myself thinking about ultimate demise in Southeast Asia there was a whole new spin on it. The specter of death in battle was not my biggest fear, rather the possibility of taking that bullet before having ever been laid.

Then the miraculous year of 1975 came and with it the end of the war and my driver’s license.

The Rich Getting Richer

From 1978 to 2013, CEO compensation, inflation-adjusted, has increased 937 percent compared to the 10.2 percent growth in a typical worker’s compensation over the same period. In the top 350 American firms the average CEO compensation was $15.2 million in 2013.

The average worker’s fantasy of one day acheiving the American dream is probably the reason that most do not begrudge CEOs their astronomical salaries. They hope that one day they too can be in that position. I can not think of no other reason why our middle class has allowed itself to be so abused over the last 20 years.

The Crime: Mental Illness

but Can you imagine being arrested (or worse) for being sick? Of course not, but if you suffer from a debilitating mental disorder (i.e. brain disease) incarceration is a distinct possibility. Severe mental illnesses, like schizophrenia and bipolar disorder, are brain diseases—biological conditions like heart disease or epilepsy, yet our county’s predominant treatment facility is a prison not a hospital. According to a new report from the Treatment Advocacy Center (TAC), a nonprofit advocacy organization, in 2012 there were 10 times as many mentally ill people in jails in this country as in hospitals (356,000 vs. 35,000). A 1992 study of American jails reported that 29 percent of the jails acknowledged holding ill individuals with no charges against them. The ones that do, usually have been charged with minor offenses like trespassing. Yet on average, a mentally ill inmate’s incarceration is almost twice as long as other inmates charged similarly. And, that doesn’t even begin to account for a greater likelihood that they will end up being victims of abuse and violence in Prison.

The study goes on to report the financial ramifications of our failed mental health system. A mentally ill inmate costs the state approximately $100,000 a year compared to $30,000 for other inmates. So, not only is our non-treatment system illegal and inhumane, it is also a fiscal disaster.

It’s easy and convenient to think of these people simply in terms of numbers, and if thought about as people at all, the dregs of society. I personally know better. Living and working where I do allows me to have direct contact with many of the victims of our unconcern on a daily basis. I know schizophrenics who in earlier years functioned well in our society. One was a millionaire who owned his own engineering firm before his life spiraled out of control. Another used to teach photography at a college. Yet another, a 30-something individual who now lives on the streets of Grensboro and is a regular visitor to our store was once a Hollywood Director. Now his partner on his latest film is “Mother Mary” and he  is shooting it with his cell phone. He wants me to be in it.

Unfortunately, mental illness, doesn’t lend itself to catchy money raising gimmicks with colored ribbons or cute phrases like, “Save the Ta Tas, and as a result doesn’t raise nearly the amount of private donations the need requires. And, until Obamacare forced their hand, insurance companies treated it as a character defect. Sadly, most people who have never experienced it either in someone close to them, or personally, think that way also. Suicides are viewed by many as a person taking a coward’s way out of life. I don’t think Robin Williams was a coward.  Nor do the many doctors who claim that if suicides were accurately documented as deaths from mental illness it would be second largest cause of death from disease. It has always been with us and there are people around us everyday who suffer, many in silence. They deserve better than what we now offer them.

The Value of Higher Education in the 21st Century

Today I read a letter that was written to the US Department of Education by recent graduates of one of those corporate colleges, Corinthian College which was closed down by the government this past July. In the letter the “Corinthian 15” state flat out that they will not pay back their student loans claiming that they had been misled, “We trusted that education would lead to a better life. And we trusted you to ensure that the education system in this country would do so.”

I agree with them insofar as institutions of higher learning are still making the old claim that college graduates make on average $1 million more than non-graduates. That may have been true a couple of decades ago but no more. However, that doesn’t excuse these people’s decision to borrow the money. Assuming their intellect is of a college graduate level they should have been smart enough to grasp the reality of today’s marketplace, where education costs continue to climb and career opportunities are stagnant at best.

I am not saying that a college degree is useless, but if the goal of getting one is simply a means to an end (Job) then those pursuing that course of action need to take heed and refrain from buying into yesterday’s wisdom.
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