How student debt will cripple the American dream. | Dusty Wunderlich | TEDxUniversityofNevada

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The military would not be able to recruit if college was free

๐Ÿ‘๏ธŽ︎ 23 ๐Ÿ‘ค๏ธŽ︎ u/NotNormal2 ๐Ÿ“…๏ธŽ︎ Aug 14 2016 ๐Ÿ—ซ︎ replies

Honestly, I think one thing not mentioned is make student loans dischargable like any other debt. Banks wouldn't hand a young person with no credit history and a pipe dream gobs of cash if there was any risk for them that their "investment" would turn to shit. Without that stick, there is zero reason why this system won't continue as it is. It's more profitable in the short term then any other option. There are many people, in banks, and else where, who think they'll know when to flee the sinking ship of the student loan system at the exact moment of maximum payout. You see this mentality throughout history. This go around isn't any different.

๐Ÿ‘๏ธŽ︎ 8 ๐Ÿ‘ค๏ธŽ︎ u/Gotticka ๐Ÿ“…๏ธŽ︎ Aug 14 2016 ๐Ÿ—ซ︎ replies

The 7 million jobs for 20 million graduates by 2020 is the figure folks need to lay attention to.

๐Ÿ‘๏ธŽ︎ 7 ๐Ÿ‘ค๏ธŽ︎ u/applebottomdude ๐Ÿ“…๏ธŽ︎ Aug 15 2016 ๐Ÿ—ซ︎ replies

College and trade schools should be free.

๐Ÿ‘๏ธŽ︎ 5 ๐Ÿ‘ค๏ธŽ︎ u/NotNormal2 ๐Ÿ“…๏ธŽ︎ Aug 14 2016 ๐Ÿ—ซ︎ replies

Will? try Has.

๐Ÿ‘๏ธŽ︎ 5 ๐Ÿ‘ค๏ธŽ︎ u/StrangeGibberish ๐Ÿ“…๏ธŽ︎ Aug 14 2016 ๐Ÿ—ซ︎ replies
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a higher education system is broken a non path for catastrophic collision with the labor markets potentially causing unrepairable damages to the economy and future generations I'm not a college professor I don't work in higher education I'm an entrepreneur I'm an economist I'm here to tell you a story today this story starts with cab drivers and firefighters in 1970 roughly 1 percent of cab drivers and firefighters had a college education fast-forward to today and over 15 percent do with no major change in skill set over that period of time this is education arbitrage education arbitrage means different things to different groups and people for the employer it's the inefficiency in value between a college education and productivity in the workplace for the student it's the disparity in value between a college education and future earnings most recently education arbitrage has been used to describe the imbalance in the labor markets specifically the oversupply of college education it's why we have more college graduates working in retail than we do soldiers in the US Army I mean roughly half of college graduates aren't jobs that don't even require a college degree yet colleges and universities continue to talk about their record enrollment and graduation rates even though we're not Purdue we're not producing jobs in the economy to keep up with the supply it is projected between 2010 and 2020 will create 19 million more college graduates yet the economy will letting produce 7 million more jobs that require a college degree the numbers just don't make sense to say we have a supply and demand issue is an understatement so the question is how did we get here well I believe all great economic bubbles typically start with good intentions in the government government-sponsored fixed-rate student loans although well-intentioned do not allow for risk based pricing which would help correct the fluctuating markets now as as result you know student loans are sending more students to college and ever before but it's just exacerbating the problem it's why a college graduate makes the same now as it did 1979 yet tuition is quadrupled over the past 35 years it's the equivalent of buying a new car watching the value of that car depreciate but the price continued to rise that's great if you're selling that used car not so good if you're trying to buy a used car we're breaking the laws of economics specifically the elasticity of demand and without risk based pricing all colleges and universities and their offerings look the same to student lenders but we know that's just not true if we're to go let's say get an engineering degree at UC Berkeley right we'd make about 1.1 million dollars more than our friend with a high school diploma over 20 years not bad right but if we went let's say we got creative we went down south to Kentucky to Murray State got an arts degree now we would make roughly about 147 thousand dollars less than our friend with a high school diploma over 20 year period doesn't make sense that's not as good right and so even though the job opportunities and earning potential are wildly different depending on the institution you chose and the degree that you got all of these students will face the same student loan payments and interest rates doesn't make any sense as a result in 2013 the nation's student debt topped out at one trillion dollars think about that for just a minute and delinquencies currently 12% the highest among all forms of credit the only continuing to rise in the marketplace right now this is a sign of underemployment and unemployment again due to an oversupply of college education and as as students college graduates have a harder and harder time paying off their student loans they're not buying homes or not buying cars and ironically get pissed they're not saving for their own children's college education so those who didn't go to college or didn't do it without taking student debt on which good luck doing that these days now have higher rates of homeownership auto ownership and credit score's so that we can say those in higher education in our society aren't necessarily better off than those who didn't go to college if we don't take action to change the course of Education arbitrage we're setting up our future generations an economy for a disaster and keep in mind this is debt that can never be discharged under any circumstances we essentially have our future generations an economy held at gunpoint now I know all of us want better for our future generations we've had for ourselves this basic human nature unfortunately we push for this beyond reason in logic in the 80s and 90s we had a shift in culture and thinking we start to put preference on self-esteem over reason on a college degree over productive work career we start to believe that the American Dream was all about a white collar jaw in a college degree and this career in education arrogance said into our society we lost sight of the fact that our economy and society is like an engine that takes many different parts working together to operate yeah some parts are probably more valuable than others some probably work harder than than others but we need all of those parts for that engine to operate it's why any job done well in society should be respected that goes for the attorney and the high-rise in Manhattan it's the mechanic in Reno Nevada this shift in thinking in our culture has sent us down the wrong path and the latter generations are going to see less opportunity for achievement in advancement than we did ourselves this is a major failure on our part now I know it's easy to state the problems and throw the numbers out there and even point the finger but the real value comes in creative solutions I believe that there are four distinct solutions to correcting education arbitrage first the government needs to float the student interest rate this would automatically start to correct the supply and demand issue in the labor markets naturally capital would go to those degrees and institutions that have the highest demand in the labor markets thus increasing supply less capital would go to those degrees in institutions that have less demanded labor markets that's reducing supply and in some cases it might be eliminating a degree in institution all together and there's nothing wrong with this in a fast-paced information technology economy we have to have a mechanism in place in which to match the supply of skills and knowledge to the labor markets and the best way to do that in a capitalistic society is capital in with higher education it's the flow of student loans but let's be realistic this is the government it's not going to happen so to colleges and universities need to philosophically rethink the education product I mean why do we buy the education product I mean I bought the education product because I wanted to get skills and knowledge to be able to have greater earning potential and more job prospects you know yet colleges and universities are funded and incentivized primarily through graduation enrollment rates not placement rates earning potentials of those by their product I don't know about you but if I buy a product that doesn't do what it says it's going to do I'm able to return it I mean hell huh why not a college education right I mean he'll half the half of those that have bought the education product aren't even using it you know we colleges and universities have to step up and take responsibility for the product that they are selling and make sure it has the value they say it does now this is colleges and universities though they've seen tuition go up every year they're probably not going to change so let's get down to the realistic solutions students including myself from a young age are told follow your dreams follow your passion follow your heart right there's nothing wrong with that as long as there's good reason behind those decisions students have to step up and take responsibility for their future because they will face the consequences of it and it's fine to follow your dreams and follow your passion just make sure that there is a job in a salary attend to those decisions and there's many great tools out there like Pascal comm it will give you a return on investment for every degree from every institution at the end of that analysis someone might say hey I don't want to go to college I don't think that's right decision and there's nothing wrong with that decision this educational shaming in our culture one doesn't even mathematically makes and to is this wrong which leads to my fourth point employers might be the biggest culprit out of everybody in this problem they've allowed supply to create the man think about it think about twenty years ago how many jobs did not require a college degree and they do now and nothing's changed this is supply creating demand it's employers being lazy and using a college education as a precursor for employment but we have about 90 years of data it says that's just not true qualities like conscientiousness motivation integrity mental ability are far more predictive of work productivity than education and job experience I mean take my own mother for example who didn't have the opportunity to finish her college education there's nothing wrong with that she's gone on to be a top leader in a 50,000 employee plus company yet she couldn't even apply for a lot of jobs today makes no sense employers have to step up and quit letting supply create demand and start rethinking how they're going to evaluate human capital in the new economy now as you can see here from the data we've lived out and the examples we given we're creating a massive economic bubble in the higher education system is broken an in dire need for disruption and innovation let's imagine a new future a future where the government floats a student interest rate we get socially conscious student lenders to where they're looking at and sitting down with students of helping them with the labor markets understand the labor markets and the return on investment trying to match student loan payments in the future so the cash flows are likely to get based on the degrees and salaries from those jobs will likely get second colleges and universities start to redesign the education product focusing more on placement rates in earning potential and return on investment for the product they sell not graduation enrollment rates and start pushing back does a four-year degree if it makes sense in the modern day economy I mean we're seeing six and 12-month boot camps and certification for programmers and data scientists it's time to redesign the education product to fit the 21st century economy and employers employers stop letting supply create demand they start using the technology and data to truly understand their applicants and their employees and take some responsibility for training as well don't put it all into the higher education system and create world-class training within their organizations for the new workforce in this new century now all of us here are responsible for education arbitrage and all of us are responsible to look at this with eyes wide open and make the necessary decisions and choices to change and correct and eliminate education arbitrage so that we can leave future generations better off than ourselves thank you
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Channel: TEDx Talks
Views: 148,091
Rating: 4.7733178 out of 5
Keywords: TEDxTalks, English, United States, Education
Id: kZJCrxQrslA
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Length: 12min 6sec (726 seconds)
Published: Tue Feb 09 2016
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