US student Loan Crisis, an Education Bubble?

I started following the student loan crisis when I noted that student loans seemed to be neck and neck with health care as the primary grievances on the We Are The 99% site.  I was very lucky to get two pretty regular guest posters Alan Collinge and Tim Smith, who have written on the issue from different angles.  I was astonished to get a call from Sallie Mae asking me how they could get their side of the story onto Forbes.com.  At the risk of being prosecuted for impersonating a journalist, I did a brief interview with John Remondi, President and COO of Sallie Mae.  I’m still hoping for some guest posts from Sallie Mae, but nothing has come through yet.  Sunday, I heard from Tim Smith, who let me know that the New York Times was picking up on the issue with this piece.  I invited him to share his reaction.  Here it is.

The Education Bubble Won’t Create A Disaster, Right?

“Looking back, anyone could have predicted the housing bubble.”  This sentiment has been echoed many times, and graphs of the past housing bubble almost make it seem obvious before the bubble burst.  The education bubble?  While many acknowledge the soaring cost – especially those in the education fields – fewer agree that we’re about to see the education bubble pop and create a bigger mess than the housing bubble.  Education may have its critics, but it also has major defenders.

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However, the chorus seems to be changing.  Even the New York Times recently joined with an article that compared the education bubble to the housing bubble (this analogy has been used multiple times, but like the above graph shows, under predicts the mess that the education bubble will cause).  Even while other media players have finally seen this bubble, the warning signs were spelled out on this blog :

These warning signs would be favorable laws toward discharging student loans in bankruptcy (making it more challenging for students to receive money for education); a societal zeitgeist toward education changing (for instance, businesses preferring certification or a degree from something similar to the Khan Academy over traditional colleges); a major recession coming back to the United States, taking away more employment (making it more difficult for student with loans to pay back their loans); students becoming discouraged by negative news toward education (causing many to drop out or to avoid college).
Of course, some readers might wonder if all four signs must appear for the education bubble to pop, and the answer is “No”.

Even though the education bubble has received attention, few expect the consequences to be bad.  In fact, the Times’ article mentions that economists don’t see the consequences being similar to the housing bubble – in other words, the education bubble pops, and everything is fine.  Consider the potential reality:

1.      High student loan balances discourage future and current demand for other products and services (consider the attitude, for instance, of Natalia Antonova, who faced a debt crisis with her student loans).  This subtracts money flow from the economy to provide jobs in other areas.  Even without the bubble popping, this is the current situation.
2.      If the demand for education drops, the consequences will affect those in the education system – schools will need fewer professors, advisors and others in the education field.  This will create a terrible job hunting situation, where graduates will be placed against high-credentialed people (some of whom may have been their professors).  Remember that in order to keep these people employed, the demand for education must remain the same or rise.
3.      If the demand for education declines, the demand for educational products will decline also – textbooks, construction, and many of the expenditures that some colleges think are necessary to provide a good education.  This drop in demand will cause business, which sell products and services to educational institutions, to cut back on their staff to offset their losses.
There is one way in which economists might be right – if wages began to soar.  Like the housing bubble, Americans felt the mess because the decline in housing prices meant that debt was owed on something that had little value.  If education continues to rise, while wages stagnate or slowly rise, a college degree will be like a home, which has lost its value.  If wages soar, however, a college degree will still mean the path to prosperity.

Tim Smith blogs on the “Echo Boom”, also known as Generation Y (Americans born between 1980 – 1995). Tim has previously appeared here discussing his generation’s attitude towards homeownership and education.

I’m beginning to think that the “bubble” metaphor may not work that well for education.  In the case of the stock market and real estate people own assets that they think they can sell at any time for some minimum price.  Then something happens and everybody heads for the door at once.  At that point the seeds of the next bubble are sown, because the assets have some level of intrinsic value and somebody will buy them for something and may get rich on the next turn of the wheel.  Educational credentials, on the other hand, are not at all fungible.  They can only be cash flowed, not liquidated.  If they are not used when fairly fresh, their value erodes rather quickly.  The actual economic value of the credential will often be quickly replaced by the experience which the credential enables.  

By Peter J Reilly, Forbes Contributor Newscribe : get free news in real time

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Student Employment Gap in US for the Class of 2012

My company, Millennial Branding, partnered with Experience, Inc. to release a study  of 225 US employers called the Student Employment Gap. The study reveals information about employer skill requirements and sources of hire for the class of 2012. The findings were released this morning and I spoke to Jennifer Floren, the founder and CEO of Experience, Inc., about her impressions of them. Jennifer is also the author of The Innovation Generation, a speaker, and is on the board of Jobs for the Future. Experience, Inc.’s network consists of 3,800 universities, 100,000 employers, and over 8 million students and alumni.

What is your overall impression of the internship/entry-level job market? 

Generally, I believe the internship and entry-level markets are heating up in many ways.  More and more employers are realizing that they’re about to face a labor shortage as their Baby Boomer workforce retires, and the competition for up-and-coming talent is becoming stronger.  That said, there is still a significant difference between what employers need and what college students are prepared to contribute.  For entry-level talent that can demonstrate a go-getter attitude, strong communication skills, independent thinking and teamwork, there are many exciting options out there.

Based on the study, what skills do employers look for when hiring recent graduates?

It’s clear based on the data that employers truly value the so-called “soft skills”, such as analytical thinking and communication ability.  I think this speaks to the fact that specific on-the-job skills change, and they change more quickly these days than ever before.  As a result, employers are looking for raw material — talent that they can work with and develop, people who can adapt to changes over time.

Why do you think that employers are still using job boards over social networking sites when recruiting?

Employers use what works.  Although more and more hiring is happening on social networks, employers still want to make sure they are casting a wide net to access talent everywhere possible.  As the world has become more online and social in general, the talent pool has become more fragmented — there are so many sites and channels and platforms and communities being used these days that employers need to publish their opportunities in more venues to make sure they’re seen.

What stood out to you the most in the study?

To me, the most interesting thing about the study was the apparent communication disconnect between employers and entry-level talent.  Employers say they need soft skills… yet entry-level candidates often do not understand which classes are relevant for which career paths, or how to express their soft skills in ways employers understand and appreciate.  Employers say that relevant coursework is highly valuable, yet they rarely communicate their messages to younger students — so how are students supposed to know which courses to take?  If the message of what employers need isn’t getting to a younger audience, then our talent pipeline isn’t going to be well-prepared when it comes time to enter the working world!

What are your top three pieces of advice for college seniors right now?

My top three pieces of advice are simple:  get involved, build relationships, and find inspiration.  Getting involved can include building your resume with internships are — but ANY form of experience is what employers are looking for (it doesn’t have to be an official “internship” per se).  When considering entry-level talent, employers look at your past experiences for demonstration of your ambition, your interests, your skills and aptitudes, etc.  Class projects, student government, volunteering, even being active within your church or family — any experience can showcase how you can contribute to an employer…so get out there and get involved!  Second, build relationships.

All hiring is personal — and whether you meet your future hiring manager or a mentor who can help make introductions that get you in the door, ‘who you know’ can make a big difference.  Introduce yourself and stay connected — relationships make a big difference.  And finally, find inspiration.  Loving what you do will give you the passion to be successful, resilient, persistent and optimistic — and finding what brings you true passion is a process.  So try things out, explore!  Youth is a time of discovery, and no one expects you to have all the answers yet — use your time to sample different organizations, areas of study, types of jobs or projects – you’ll hone in on what really gets you excited, and loving what you do is the ultimate success!

By Dan Schawbel, Forbes Contributor  Newscribe : get free news in real time 

Dan Schawbel is the managing partner of Millennial Branding, a Gen Y research and management consulting firm.  He is also the #1 international bestselling author of Me 2.0 and was named to the Inc. Magazine 30 Under 30 list in 2010. Subscribe to his updates at Facebook.com/DanSchawbel.
 
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Dog attacks humans, it’s the owner, not the breed!

Ferocious debates notwithstanding, there are studies to show that almost every breed has been involved in fatal dog bites, and dogs that bite humans were 2.8 times as likely to be chained as unchained.

IN a kopitiam in Subang Jaya, Selangor, two 30-something women were snarling at each other over dogs.

A woman, whose bark was probably (hopefully) worse than her bite, insisted that pit bulls should be banned in Malaysia while her canine-loving friend argued otherwise.

Both were in a ferocious discussion about a death in their neighbourhood.

And I thought: “Who let the dogs out?” 

On Tuesday morning, a 74-year-old man was mauled by a miniature bull terrier cross while jogging about 1km from his house in Subang Jaya.

The dog attacked Yip Sun Wah for almost four minutes, biting his neck and almost tearing of his left ear.

The Star reported that the owner, a 25-year-old accountant, bought the animal three months ago after her house was robbed.

Eavesdropping, I pretended to be fascinated with the condensation on my glass of iced white Ipoh coffee.

The woman whose bark was hopefully worse than her bite went on and on about how “fierce” dogs (i.e. Akita, Neapolitan Mastiff, American Bulldog, Dogo Argentino, Fila Brasileiro, Japanese Tosa and American Pit bull) were “killers on the loose”.

She supported the knee-jerk decision (in my opinion) by MPSJ (Subang Jaya Municipal Council) to immediately ban these dogs – classified as under the “big” category as predisposed to aggressive or dangerous behaviour.

Her friend, whose expression was that of a terrified Chihuahua, snarled back, calling the woman Mussolini for supporting a fascist move.

The dog-hating woman and MPSJ, I thought, were barking up the wrong tree.

I wanted to interject in the “dogfight”. But I didn’t as I was afriad the two rabid women would maul me.

Instead, I fired up my iPad to find an article which I read in the New Yorker, a weekly magazine, about a few years back that a violent dog was a reflection of its owner and not its breed.

It was written by the clever Malcolm Gladwell who has authored bestselling non-fiction books such as The Tipping Point: How Little Things Make a Big Difference and Blink: The Power of Thinking Without Thinking.

A quick search on www.new yorker.com produced Gladwell’s article titled Troublemakers: What Pit Bulls Can Teach Us About Profiling, published on Feb 6, 2006.

Gladwell argued that the notion of a pit-bull menace rested on unstable generalisation.

Quoting Randall Lockwood, one of the United States’ leading dog bite experts, he wrote that Lockwood had seen virtually every breed involved in fatal dog bites.

“... including Pomeranians and everything else, except a beagle or a basset hound,” Lockwood said. “And there’s always one or two deaths attributable to malamutes or huskies, although you never hear people clamouring for a ban on those breeds.”

Gladwell also quoted a study that found dogs that bite humans were 2.8 times as likely to be chained as unchained.

“About 20% of the dogs involved in fatalities were chained at the time, and had a history of long-term chaining,” said Lockwood.

“Now, are they chained because they are aggressive or aggressive because they are chained? It’s a bit of both.

“These are animals that have not had an opportunity to become socialised to people. They don’t necessarily even know that children are small human beings. They tend to see them as prey.”

Gladwell continued: “The strongest connection of all, though, is between the trait of dog viciousness and certain kinds of dog owners. In about a quarter of fatal dog-bite cases, the dog owners were previously involved in illegal fighting.

“The dogs that bite people are, in many cases, socially isolated because their owners are socially isolated, and they are vicious because they have owners who want a vicious dog.

“The junk-yard German shepherd – which looks as if it would rip your throat out – and the German shepherd guide dog are the same breed. But they are not the same dog, because they have owners with different intentions.”

Lockwood said: “A fatal dog attack is not just a dog bite by a big or aggressive dog. It is usually a perfect storm of bad human-canine interactions – the wrong dog, the wrong background, the wrong history in the hands of the wrong person in the wrong environmental situation.”

If you think I’m a die-hard dog lover, I’m not.

When I was a 12-year-old, a dog (owned by a Catholic convent running Stella Maris primary school in Tanjung Aru, Sabah) bit the back of my left knee.

It was a local breed.

ONE MAN'S MEAT By PHILIP GOLINGAI

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