The Bond Market on Education

by on November 14, 2011 at 12:25 pm in Data Source, Economics, Education | Permalink

…Stark Investments is staying away from all student loan bonds right now. It is instead focusing on mortgage-backed debt with comparable yields and less risk…

You know it’s a bad job market when bond investors would rather invest in mortgages than students. As the article in the WSJ notes, investors in student loans have an incentive to be realistic about the value of education and the job market.

Investors like Mr. Ades have a unique view on the future for America’s job-seekers. Their investments depend on accurately predicting young people’s ability to repay their loans, which means they obsess about everything from employment rates by profession to the long-term earning potential of young graduates.

Historically, investors have assumed 25% to 30% of student loans bundled into their bonds will default. But today they are baking in between 30% and 40% default rates among the current crop of graduates…

Not every investment in education is a poor bet:

…This analysis translates into some surprising insights for students and policy makers. For example, in the current economy, it may make more sense to enter a technical college than to go to law school.

…”It’s not just about where you can get the best education,” he said during an interview in the Miami Beach office of his hedge fund, Kawa Capital Management. Students should pick schools where the payoff from higher salaries upon graduation exceeds the cost of the education by the widest margin, he contends, especially when the job market contracts.

By that arithmetic, technical colleges come out on top, Mr. Ades said. “We’re in a skills based economy and what we need is more computer programmers, more [nurses],” he said. “It’s less glamorous but it’s what we need.”

1 somaguy November 14, 2011 at 12:55 pm

“Students should pick schools where the payoff from higher salaries upon graduation exceeds the cost of the education by the widest margin, he contends”

I’m not sure what to say.

2 Andrew' November 14, 2011 at 1:01 pm

In other words, if you want to be a starving artist, don’t complain about the starving part.

3 Bernard Guerrero November 14, 2011 at 1:04 pm

OTOH, in the long-run students flocking to high-return schools & majors will reduce the returns to those schools & majors, negating the outsized returns Mr. Ades wishes them to seek. On the third hand, in the long-run all the undergrads will be dead….

4 Silas Barta November 14, 2011 at 1:08 pm

If a specific major gives you the ability to identify productive organization of capital with available labor, then this job-creating ability can offset the addition of new entrants.

5 Bernard Guerrero November 14, 2011 at 1:33 pm

MBAs for all! :^)

6 Conan the Contrarian November 14, 2011 at 1:35 pm

1) I wouldn’t hold my breath. I have serious doubts about the economic rationality of university students with minimal life experience and who are bombarded with criminally bad advice from academic counselors/professors.

2) It’s not just about negating outsized returns in some majors. That would be a fairly high quality problem. Right now, it’s about dissuading students from studying majors that shouldn’t even be majors to being with. Many of these majors are basically 5-year holding tanks that teach students nothing

7 Bernard Guerrero November 14, 2011 at 1:45 pm

I was only half serious about that. I, too, would see it as a high quality problem. (I’d like to start importing cheap subsidized doctors from our newly capitalist-oriented friends in Cuba, f’rex.) However, it’s the one problem I can think of, given that the undergrads can, if they wish, swamp short-term demand for any given field or specialty.

8 msgkings November 14, 2011 at 5:15 pm

@ Bernard

+1 on the Cuban doctor boatlift. Seriously, the amount doctors make here vs other nations has to be one of the main contributors to the high health care spending in this country.

Not that they don’t work hard, deserve it, etc etc. But the fact remains they make more here, hence their services cost more. The AMA doesn’t like this fact to be discussed.

9 Mike Hunter November 14, 2011 at 2:42 pm

Awesome! lol

10 Silas Barta November 14, 2011 at 1:06 pm

Historically, investors have assumed 25% to 30% of student loans bundled into their bonds will default. But today they are baking in between 30% and 40% default rates among the current crop of graduates…

Huh? Whatever happened to “you can’t default on student loans” and “student loans are backed by federal guarantees”? How do you get to 25% default rate after all the stuff they can do to you to recover loan payments, and the fact that there’s no bankruptcy protection except in the most extreme cases?

11 Sebastian H November 14, 2011 at 1:30 pm

It still counts as a default because the fact that they can squeeze money from you out of your social security in the long run doesn’t mean they are getting paid back on schedule.

12 Silas Barta November 14, 2011 at 1:36 pm

The interest still accrues, though, and they can garnish your wages in the meantime.

13 David Wright November 14, 2011 at 4:22 pm

“Default” is a more squishy word than you might imagine. Technically, you are “in default” if you are one day late on a payment. I suspect that in this case “deault” means that the issuer writes down the value of the loan.

14 Silas Barta November 14, 2011 at 6:08 pm

But I assumed lenders only care about whether they’re getting paid back, and they don’t expect student loans to pay back on the fastest schedule in the first place.

15 David Wright November 14, 2011 at 7:05 pm

Lenders care about the present value of their loan portfolio, at very least for accounting purposes. A loan that will pay back over a longer-than-expected period has a lower bookable value than a loan that will pay back on the originally expected terms.

16 Silas Barta November 14, 2011 at 9:32 pm

So why are their expectations about how quickly students will pay by the loan so unrealistic? Even people who *can* pay back their loans make it a low priority because of the low interest rates.

17 Ben Schenker November 14, 2011 at 1:06 pm

Is there no way to make tranches of loans separated by particular schools? I would have no qualms lending Harvard Law students’ some money for their law degrees as they will probably have a lower rate of default than some other schools.

18 Silas Barta November 14, 2011 at 1:09 pm

Actually, right now you’d probably be better off avoiding law students altogether, even if they are at Harvard…

19 Ben Schenker November 14, 2011 at 1:14 pm

Okay, but the idea still holds, risk of default is probably very similar within schools and there could be gradations of loans from safer to more risky schools.

20 whowhawhen November 15, 2011 at 11:12 am

They already do this in the muni market. So yes, Harvard trades much better than SUNY New Paltz

21 Tim November 14, 2011 at 1:08 pm

Actually you’re still best avoiding vocational degrees and going for a (cheap) generalist degree and getting vocational skills. So for instance an English degree with some course-work in programming would still be the most recession proof job, because you can sell yourself as being able to write reports, documentation, and code. Vocational degrees tend to become obsolete quickly and leave little room for advancement.
The concept of a job field or a degree that leads to a specific job has always been antiquated and is made more so in the global economy. You need multiple skill sets and the ability to synthesize them.

22 Andrew' November 14, 2011 at 1:16 pm

If we move towards life-long learning that probably means moving away from traditional college.

23 Tim November 14, 2011 at 1:36 pm

I don’t see why that follows. Universities are still very good at teaching highly specialized information. It’s that differentiation whether it be the history of type, women studies, or non-euclidean geometries that separate us from other nation’s schools of higher education, and that differentiation that ultimately leads to the creative thinking that is most in demand in the new economy.

24 Frederick November 22, 2011 at 11:49 am

What you say is contraindicated by reality. There are plenty of non-productive free-form thinkers out there, and the degrees you listed cater to them. However, non-productive people are in little demand in any economy, “new” or otherwise.

I say “free-form” rather than “creative” thinking, because “creative” connotes creating something, which requires work.

25 CBBB November 14, 2011 at 4:14 pm

Unless that person ALSO has a solid 3-5 years of professional programming experience those courses in programming are going to be absolutely nothing to the hiring manager.

26 Nathaniel November 14, 2011 at 6:06 pm

That’s because those courses in programming ARE worthless, by and large. You can take a bunch and not really know how to program at all; a hiring manager has no way of knowing whether or not this describes you if all you have on your resume are academic courses. But there are ample opportunities to demonstrate your experience even if you don’t have any formal employment; open-source projects, for instance. I was recently blown away when I discovered that someone who fixed a firmware bug in an OSS program I’m working on was 14 years old. 14! This is a kid who’s going to have a programming portfolio that hiring managers would drool at even before he goes to college (if he even does). Find an OSS project and start contributing. If you can, you’ll improve your employment changes and learn a lot in the process. If you find that you can’t, well then you proved those hiring managers’ point about purely academic experience.

27 CBBB November 14, 2011 at 6:44 pm

Right, and this is why I say a STEM education is basically a waste of time for most people. I mean it might help you out if you want to spend your life sitting on a computer coding and this is really fun and interesting for you. If not then you have no chance.

28 Nathaniel November 14, 2011 at 8:22 pm

Well there you go, that’s why you can’t get programming jobs: hiring managers can sense your disinterest, and your light portfolio confirms it. Sounds like the tech field isn’t for you since “spend[ing] your life sitting on a computer coding” is plainly something you have no interest in. Sounds like you should switch career paths. What is it that you’re passionate about?

29 CBBB November 14, 2011 at 8:37 pm

But isn’t it funny – people on this blog ENDLESSLY mock the guy who went into puppetry because performance art is what he loved to do – and you have the commentors and Tyler Cowen going on and on about “we need STEM bootcamps” and people need to stop be starry eyed – no one has the right to do something they love, and I largely agree with that sentiment. But then in the end if you follow this advice and don’t get a job well it’s your fault yet again because “oh you went into a field you weren’t passionate about – you can’t expect to get a software developer job if you’re not passionate!”. It’s a ridiculous game.

30 Nathaniel November 14, 2011 at 9:01 pm

It’s not ridiculous at all; these extremes of puppetry and STEM bootcamps miss the point that if you want to leave college with job prospects, you need to find a subject at the intersection of what you’re passionate about and what will make you money. Passion without financial smarts leads to degrees in things like puppetry and comparative world religions, but pursuit of hard subjects absent passion can lead to similar problems. When we speak about people who studied puppetry for four years a private liberal arts school and are now dodging rapists in Zucotti park, it’s not because we disdain puppetry, but because these people failed to find that intersection of passion and practicality. They absolutely picked the wrong major—whatever it is—because it failed them in their pursuit of the “next steps”of life. This can be as true true for passionate puppetry majors as for bored CS majors, but notice that you don’t hear much about the puppetry majors who go on to be happily employed puppeteers or passionate CS majors who write iPhone apps or work for Facebook.

31 CBBB November 14, 2011 at 9:05 pm

That’s not what Tyler Cowen is talking about at all. Maybe that is what you need to do but that’s not what Tyler Cowen is talking about. Cowen is putting up post after post arguing that the reasons young people don’t have jobs is because they didn’t study science, engineering or math subjects – his argument is literally ‘Oh if only these young folk had good values they’d buckle down into nice STEM degree programs and when they came out they could reap the rewards of delaying gratification, hardwork, and effort” and that entire line is bullshit and Tyler just doesn’t know what he’s talking about.

32 maguro November 14, 2011 at 9:16 pm

Literally, really?

33 CBBB November 14, 2011 at 9:18 pm

Well what was that whole absurd column he wrote the other day about values and work ethic?

34 jwatts November 14, 2011 at 11:54 pm

A bored STEM major making decent money is still contributing to a society in a productive manner and has the resources to support a family. A bored puppeteer major is a future bored fast food worker. The two are not equal in economic terms. Society cares about your utility. It’s up to you to provide the happiness, no one else really cares much. Well, maybe your mom cares. Or at least she’ll fake it.

35 CBBB November 15, 2011 at 10:47 am

Jwatts,

Do you have a reading comprehension problem? Nathaniel is saying a bored STEM worker isn’t going to find a job because companies only want to hire passionate people. And he’s largely right about this from my own experience. So the bored STEM worker isn’t going to be making any money. I agree largely with you last sentiments however we’ve gotten to point where employers now demand not only skills but passion and intense interest from their employees.

36 Nate November 15, 2011 at 11:01 am

Well, there are plenty of opportunities for bored STEM people to make money even if nobody will hire them. Ever heard of the App Store? There are people getting rich writing pet flea apps who would be laughed out of an interview room. Let yourself escape from the “somebody needs to employ me for a wage in the field I studied in college!” trap and you’ll see opportunity everywhere.

37 Frederick November 22, 2011 at 11:43 am

This may be a fallacy of emphasizing STEM. Quality STEM programs are rigorous, and require critical thinking skills and high work ethic to complete. If a generation does not produce enough people either having those qualities or the potential to develop them, emphasizing STEM won’t do any good, because lazy dolts will be unable to matriculate unless the degrees are watered down. Once that happens, then the STEM degrees will be as worthless as the transgender womyn’s critical theory degrees.

It is the work ethic and thinking skills that employers want more than they want the ability to write code or crunch numbers. Good performance in technical degree programs is a signal employers use to determine which applicants might have those traits. If fewer and fewer young Americans each generation can think clearly and will work hard, then the society will lose its prosperity unless and until those qualities once again are inculcated in their rearing. There is no substitute for adding value.

38 ertdfg November 22, 2011 at 12:28 pm

“But isn’t it funny – people on this blog ENDLESSLY mock the guy who went into puppetry because performance art is what he loved to do ”

Well, you’ve got a choice… and I don’t think the choice is that complicated.

1) Figure out what you’re good at. Getting training in something you’re not good at and can’t do won’t help.
2) Figure out what jobs are available for what sections of training. Maybe find a couple majors/minors so you’re not stuck if the market changes.
3) Figure out which of these you’re willing to do.

Oh and … 4) Hope you’ve got some crossover there so you can get a job you’re capable of doing for decent money, that has openings so you can get a job, and that you’re willing to do.

If you can’t find an intersection there? Well sometimes life sucks, life isn’t fair, not everyone gets to win… sorry. Finding that out before you get $20K-$250K in debt that you can’t pay back that will haunt you forever… maybe better than finding out after you load up massive debt with no job prospects.

STEM? Not a bad choice, due to rarity value as much as anything else. But it needs to fit the rest of the first 3 criteria. If you really suck at it, or aren’t willing to do it… having a degree there won’t help. I swapped one of my majors my Freshman year from Chemistry to Computer Science (many years ago) because Chemistry wasn’t something I wanted to do for the rest of my life.

But I didn’t swap Math and Chemistry for Philosophy and Art History. And I didn’t rely on a Math degree to get me a job (I like math, but not a lot of call for math-only BS degrees outside of teaching).

Basically plan like the world isn’t going to play nice, it isn’t fair, it isn’t going to give you a handout or an even break, and you’re going to need an edge to make it. Have a backup plan, look at a second major if you can fit it into your schedule, and make sure your plan is workable and not just something you’d like to work.

39 Anne November 14, 2011 at 1:09 pm

Silas and Ben beat me to it. Someone please attempt to answer their questions.

40 Silas Barta November 14, 2011 at 3:13 pm

Did Sebastian_H’s answer help you at all?

Yeah, me neither.

41 Conan the Contrarian November 14, 2011 at 1:10 pm

It amazes me that students still have to cajoled into programming. Here you have one of most lucrative, innovative industries in the last 50 years that requires little formal education beyond 2 years of college (most of which you can get for free online) , and kids still avoid it. Also consider that it’s also one of the most egalitarian industries and offers unrivaled opportunities for an entrepreneur.

Yet we still end up with more lawyers and more kids with overpriced Luddite degrees. Even more ironic that the US tech industry is dominated by kids from the developing world, which isn’t exactly known for its education system. And even more ironic that the part of US which is the most affluent and has the most prestigious universities –the Eastern Seaboard–has produced remarkably few innovative companies.

At the end of the day, some things can’t be taught.

42 Silas Barta November 14, 2011 at 1:19 pm

The jump from “knowing how to program” to “getting a job in programming” is not trivial.

43 Tim November 14, 2011 at 1:38 pm

It is trivial. In what other field can you create actual applications of your skill accessible to the world and potential employers that demonstrate your skill?
Now you can’t get a job in programming without doing some work on your own. That’s true.

44 Wes Winham November 14, 2011 at 1:39 pm

I’d argue that it’s increasingly trivial. With the market for software engineers so tight, there are lots of economic incentives to improve the process of finding and vetting talent. It’s an industry where signalling via education matters less and less because the actual product of your work is becoming easier to observe.

Just off the top of my head, here are two startups aiming to combine your open source contributions (ie. actually programming) and internet commentary (communication ability around technical topics) in to a strong supplement/replacement for the traditional resume:

http://coderwall.com/
http://workforpie.com/

Finding smart people who have built real things (even as hobby projects) is difficult. Finding people who have graduated from college is less difficult. When it comes to small business and startups at least, formal education is nothing but a weak signal for ability. This is coming from someone who does hiring, is currently trying to find a software engineer and who actually went to a fairly-prestigious school.

My wild guess for the future is that we’ll see the percentage of software engineering hires without a college degree rise faster than the percentage enrollment in computer science.

45 Alex Godofsky November 14, 2011 at 2:16 pm

That’s because the jump from “knowing how to program” and “doing less harm than good when added to a development team” isn’t trivial either.

46 jwatts November 15, 2011 at 12:00 am

+1

There are plenty of ‘talented’ programmers that are socially introverted/hostile enough to be a net negative in almost any team environment. So, unless you can provide them profitable work that they can do in the corner with minimal social interaction, they aren’t productive employees. Usually those same people aren’t self motivated enough to work unsupervised either, so they make for challenging employees.

Finding talented programmers that are also good in a team environment is always the challenge.

47 Millian November 14, 2011 at 2:43 pm

At the end of the day, programming is a bad career that involves long, variable hours, low job security and colleagues who would be on the left-hand side of the social skills distribution.

48 somaguy November 14, 2011 at 3:02 pm

1. long, variable hours

I had a hard time finding the numbers. But compared to doctors or lawyers? Really?

2. low job security

Depends. Layoffs are common. But all of my colleagues that were laid off had no trouble getting placement within a month at a competing organization, even back in 2009.

3. colleagues who would be on the left-hand side of the social skills distribution

Something about pots and kettles…

49 Tim November 14, 2011 at 3:22 pm

With a modicum of social skills it’s not hard to get a programming job with fantastic hours and nice windows. But of course there’s no job security. It’s a job about automation, so unless you can outpace the automation…

50 somaguy November 14, 2011 at 4:20 pm

Every engineering job created since the start of the industrial revolution is about automation!

51 CBBB November 14, 2011 at 4:16 pm

What are you talking about? You can’t get anywhere near a software development job without YEARS of formal experience. There are tonnes of decent programmers out there without a chance at a job. There’s a reason why people go into the “luddite degrees” in the long run those kids will have way better careers then your typical programmer.

52 Nathaniel November 14, 2011 at 6:10 pm

You’re generalizing. I’m a software engineer and nearly the entire team is composed of recent college grads for whom this is their first or second *real* job. But I have to ask, if you managed to graduate from college without having a low-level programming job or internship or two, or working on projects you can count as “experience”, what were you doing for those four+ years? If you truly just go to class and do the homework and don’t take a real interest in software, then yeah, your resume is going to be pretty hollow, but that pretty much holds for any demanding technical subject.

53 CBBB November 14, 2011 at 6:32 pm

I’ve done internships but it’s not the minimum 3 years required to really get a job and in my internship role it was mostly testing, bug fixing not working on anything serious so that’s not going to get you anywhere. And I think you’re talking about CS majors and not the English major who took a few programming courses (or in my case a math major).

54 Nate November 14, 2011 at 1:29 pm

“It is instead focusing on mortgage-backed debt with comparable yields and less risk” Um, if the yields are comparable I guess the assumption of less risk is solely the market view of this one company. Could have written another article about another company that is investing heavily in student loans vis-a-vis mortgage securities…

55 Mike Hunter November 14, 2011 at 2:47 pm

Excellent point. If the yields are the same, then the level of risk should be the same. I don’t know why I didn’t catch that.

56 Sebastian H November 14, 2011 at 1:34 pm

I answered it above but I suspect it will get lost in threading.

Student loan defaults are still defaults becuase the bank isn’t getting paid on the normal schedule. The fact that they can squeeze money out of you forever (including garnishing social security 45 years later) doesn’t mean they are getting repaid on the payment schedule. Therefore it is a default.

(I.e. the fact that the bank can grab your home when your mortgage is in default, and then sell it, doesn’t mean there wasn’t a default).

If too many student loans are in default, it hits your cash flow, *even if they can suck the students dry of their Social Security* in 30 or 40 years.

57 KLO November 14, 2011 at 1:55 pm

Someone help me out here. If you were going to design a system to fund education that had appealing aspects of free market and redistributionist schemes, you would probably create a student loan program somewhat like the one we have. It provides students without means an opportunity to receive an education. That the student has to pay for that education later provides a large incentive for the student to choose as wisely as possible in selecting the type and cost of education received.

Many of the commenters on this blog who favor adjusting the price of loans based upon the individualized risk profile of the borrower have not sufficiently addressed why students have been consistently willing to go deeply into debt for degrees that are not paying off. Were education mostly consumption, I could understand this. For the most part, however, most students treat education as a means to a better job. In other words, it is largely a financial calculation, albeit one that many are terrible at performing. Why are they so bad at performing this calculation and what does it say about the rationality of individuals?

Once you have answered this mystery, then you might go on to explain why private health insurers have failed to restrain provider costs. Why do they still pay for treatments that do not work and marginal treatments that are expensive but little better than much cheaper ones? Why have they permitted costs to increase at such a rate that fewer and fewer people can afford to buy their product?

58 Nicoli November 14, 2011 at 2:23 pm

At least part of the problem, as Conan noted above, is with the criminally bad advice students receive when they have very little life experience. So while your system works fine if people were behaving rationally, many students end up making an emotional decision reinforced by their counselor and school.

59 Nathaniel November 14, 2011 at 2:39 pm

I think a lot of the problem is bad parental advice, too. Current grads’ boomer parents grew up during a time of plenty when college was a cheap gateway to a comfortable life no matter what you studied, and the experience of working a crap job to pay for college and graduate debt-free was still possible. They’ve had a great deal of difficulty adjusting to absurdly high tuition, bottomless student loans, useless majors, and diminished educational standards that have to cater to the marginal students they pushed into college.

There’s this notion—widely shared—that everyone ought to go to college. No, there are quite a lot of people who really shouldn’t go to college, because they’re not academically ready yet, or lack the necessary attitude to benefit from it. So many kids are pushed into college by their starry-eyed parents and either treat it as a big party or float aimlessly through it because they have no idea what they’re really doing there. They they graduate with no job prospects, feel bitter because they were sold a lie and are saddled with tens of thousands of dollars of un-dischargeable debt that will take decades to pay off, and go camp out in Zucotti park.

60 KLO November 14, 2011 at 3:28 pm

Fair enough. I am sure this is true. But remember the vast majority of students defaulting on these loans are not traditional students who enrolled in a 4-year program straight out of high school. Presumably, these people should be more mature and little less starry-eyed and yet they are making huge miscalculations, and, based on the pre-recession default rates, always have been. There is more to this story than bad advice. Students of all sorts have been mass defaulting on their loans for years. We are only now starting to think hard about it.

61 Andrew' November 14, 2011 at 3:45 pm

I’d cut it down in time so they don’t have to make a $100,000(+++, considering lost wages) investment before figuring out if it was good or bad.

62 Dan Weber November 14, 2011 at 4:24 pm

you would probably create a student loan program somewhat like the one we have. It provides students without means an opportunity to receive an education

Look at how schools price tuition: as much as the student (family) can afford to pay.

Salesmen in private industry dream of having this kind of pricing control. Looking through someone’s entire financial life and then deciding how much they can afford to pay you is the ultimate goal of price discrimination.

Giving more credit to students merely results in prices going up.

63 Silas Barta November 14, 2011 at 4:31 pm

This is why I’ll be so happy when the education bubble pops.

64 Benny Lava November 14, 2011 at 9:34 pm

I blame Steve Jobs:

http://youtu.be/UF8uR6Z6KLc

He told a whole generation of kids to just do what they love and success will follow. Ooops!

65 egl November 15, 2011 at 10:14 am
66 Nate November 15, 2011 at 11:04 am

Yeah, turns out that works great if what you love happens to involve selling gigantically lucrative computer products in immature markets. Puppetry, probably not so much. Or at least, you’ll have to make the pieces fall into place yourself, since there aren’t a lot of people out there actually looking to hire puppeteers.

67 Carol November 22, 2011 at 8:30 am

He just repeated what people have been saying since the 60s. Follow that dream! Like the person who writes a self-help book, holding herself out as an example of success, because she wrote a book!

Really just a way for Jobs to pat himself on the back.

68 Lord November 14, 2011 at 2:14 pm

The unemployment rate in many STEM fields is higher than the average for those with bachelor degrees, via Angry Bear. Now it may be higher because salaries are higher, but that indicates just because tech is doing better, it doesn’t mean it is doing well.

69 Andrew' November 14, 2011 at 3:46 pm

That’s a pretty bad post by Angry Bear, starting with that he combines Mechanical Engineering and Materials Engineering with other things that I’ve never heard of whereas Mechanical Engineering and Materials Engineering alone have much lower UE rates.

70 Andrew' November 15, 2011 at 9:00 am

Also, the 5.0% unemployment is the average of “Bachelor’s degree and higher” not just Bachelor’s degree. I’m not sure if that is statistically significant, but it doesn’t point in the direction that Angry Bear is trying to make. Yes, if you keep making rounding errors towards the point you are trying to make you can close a gap that can only ever be 5% at the very maximum.

71 Mike Hunter November 14, 2011 at 2:40 pm

“…what we need is more computer programmers, more [nurses],”

Really? I was in the information systems field from 1997-2003, not only did we have to contend with a giant bubble; but companies started outsourcing programmers to India left and right. Then they starting bringing in techs from India on H1a visa’s to fill network administrator slots and drive down native wages for the jobs they couldn’t outsource. When the bubble popped there were very few jobs, but still plenty of foreigners to compete against.

Who the hell wants to work in an industry in which the government screws you during the good times; and then turns their back on you during the bad times!?!?! I certainly don’t want to go back to work in a field in which your salary and job stability depends on the political climate in Washington! If businesses are having a hard time filling tech slots in the current anti-immigrantion climate I say GOOD! You reap what you sow!

72 Andrew' November 14, 2011 at 3:41 pm

It appears they are very right about Nursing:
U/E 2.2%
Avg. Salary: $60,000
Popularity of degree (rank): 4
Able to fill a lot of positions at high pay and low unemployment.

73 Dan Weber November 14, 2011 at 4:27 pm

The dot-com bubble is a poor time to use as a baseline for IT work. People who had no business being near a keyboard were getting big salaries.

74 maguro November 14, 2011 at 9:15 pm

The H1B program is rife with abuse, no doubt about that. If Obama wants to “save or create” some jobs, he might try tightening it up.

75 Matt2 November 15, 2011 at 6:23 am

I rdistinctly emember being told late in high schoool (1988 or 89) that all the big programing work was in the past. What would be needed in the future was people who could work on & with existing software, but programming would be a shrinking field. Not that I would have enjoyed programming or been any good at it, but at one point in my life it was something I had thought about doing.

76 Bill November 14, 2011 at 2:48 pm

I think people are forgetting that the student loan portfolios have a different composition than they did in the past: they contain online educational training loans, loans to for profit education institutions, and loans to for profits that teach you how to cook or design cartoons.

All education is not equal, nor do all loans to degrees from all institutions behave the same.

Nor does that mean that there will not be changed. Sen. Grassley, to his credit, has been exposing some of the educational abuses by for profits, and has worked to make institutions disclose graduation and placement rates. \\ This will change the amount of loans, will provide consumers with information, and lead to a different portfolio mix.

77 Andrew' November 14, 2011 at 3:26 pm

Grassley is probably forgetting that the student portfolio of on-line and for-profit education is probably different from the “move the freak away from home for 4 years” colleges.

78 alukado November 22, 2011 at 3:59 am
79 Jeff November 22, 2011 at 8:34 am

It’s ugly, no doubt. There is a start up company trying to bring transparency to the market. alltuition.com

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