The National Inflation Association has just released The College Conspiracy. The documentary discusses what most of us already know how college has basically become one big rotten scam and waste of time but with great facts ands details. It also mentions the law school scam at 43 minutes lol. Of course, the producers of the video have a precious metals bias (it is a NIA release) and you will hear references to a dollar crash from time to time but by and large it is a great film for those currently attending or thinking of going to college need to see.
Enjoy.
Subprime JD: A blog dedicated to exposing the law school and higher education scam.
The video makes some valid points which are supported by facts. The problem with the video is that it is produced by the NIA, which I believe is trying to manipulate the demand for silver and gold by perpetuating the idea that the dollar will collapse. The dollar has definitely lost value and NIA's prediction may very well come true but the video definitely had an overt message to invest in precious metals. Also, I found that the video was endorsing online colleges over traditional universities. I don't think this is a valid point. I agree with much that Gerald Celente had to say about the value of a college degree, which compared to the cost, is not a worthwhile endeavor. College nowadays is a stale curriculum that teaches students how to regurgitate tired old principles, philosophy and theory. What good is an economics degree from Wharton when all you learn is retreaded and outdated Keynesian dogma. The portion about law schools is nothing new (i.e., law schools manipulate stats to entice suckers into enrolling). The video is worth watching but spare yourself of the last 5 minutes, which is nothing more than an Obama Jr. clone trying to convince you to buy gold and silver.
ReplyDeleteAgree with your sentiments, as do many zerohedge readers. They should have kept the focus on the falling value of a degree and left the silver/gold references out.
ReplyDeleteOverall, the video was pretty good. However, when NIA cues the scary background music, they will lose people.
ReplyDeleteThe cost of education and student debt are real issues, but I gave up on this obviously ill-informed, agenda-driven piece after 20 minutes, because it was obvious this is, at best, ignorant ranting, and, at worst, dishonest propaganda.
ReplyDeleteExamples of inaccurate, misleading information:
- The comment about universities existing to enrich administrators is silly. Universities are non-profit institutions; there are no business “owners” or “shareholders” taking home “profits”. Everyone in a non-profit university is on salary, and very, very few college administrators make exorbitant salaries (the high-profile, high-paid presidents and big-name profs at prestigious schools are the exception, not the rule). There ARE reasons for administrators to be disingenuous, but “lining their pockets” is not one of them. Universities are economic engines for the towns in which they are located - they directly create middle and working-class jobs (not just for academics and administrators, but also for janitors, kitchen staff, groundskeepers, security guards, HVAC, etc.) and also create jobs indirectly, by supporting businesses that cater to students and visiting parents (restaurants, hotels, entertainment). Yes, universities are partially about jobs - but it’s about middle and working classes jobs and towns’ economic viability, not about people “getting rich” off universities. Now, we could have a serious discussion about the problems with what I’ve just described - but some misleading BS about “enriching administrators” precludes that discussion.
- So, back in the 1970s, somebody could pay for college and support themselves on part-time and summer work, but that was “destroyed” by federal loan programs that led to rising tuition costs? This is a partial truth with significant omissions. True, rising tuition costs impact the ability to pay TUITION, but even if you take tuition out of the equation, simply supporting oneself on a part-time or summer job is no longer possible. The film undermines its own argument by ignoring the elephant in the room - declining real wages and job losses that have nothing to do with tuition or loans. Can you seriously talk about debt without addressing lack of jobs and declining real wages?
- The “many students abuse loans” argument is based on a few unverified anecdotes, and the anecdotes are dubious. Students bought food and clothes with their student loans? What do you expect them to do - eat from dumpsters and walk around naked? Some woman bought a used car with her student loan? Gee, maybe she had no other way to get to school! Maybe student loans weren’t intended to feed and clothes people or provide them with transportation to school - but again, this raises the question of exactly HOW people are supposed to live while they’re in school. The last time I checked, food, clothes, transportation, and shelter were necessities, not luxuries. Which brings us back to a host of other issues - namely, how students are supposed to support themselves in school (particularly in high-cost college towns) in the current low-wage, high-cost economy. Again, there is simply a huge, extremely important issue here beyond just tuition inflation, and ignoring it undermines the point.
-I would think that a responsible filmmaker would provide inflation-adjusted information on college costs - would it really be too much to ask that when someone says they paid $2,000 a year for college, you actually find out what year they are talking about, and give us the inflation-adjusted numbers? I’m aware that tuition has risen out of proportion with inflation, but some accurate figures that I don’t have to plug into an inflation calculator myself would sure be nice - and make your argument more credible.
I imagine if I’d watched more of this propaganda piece, I’d have more to have a problem with, but, like I said, I quit 20 minutes in.
Of course we all know there is a REAL ISSUE here....it’s a pity this film totally undermines its own credibility.
Anon (3:59 pm),
ReplyDelete1. If university admins are not lining up their pockets, then why are so many of them making 200k+ with college tuition costs still skyrocketing?
2. If wages are declining, then a college student should take a lower paying part-time job and tuition costs should go down, right? Instead, many students are perfectly comfortable with racking up debt, using student loans to buy Macs, iPhones, cars, etc., while not working at all.
3. Food is a necessity, but so many college students are using loans to buy pre-packaged foods rather than buying good quality food for 1/10th the cost and cooking themselves. Clothes are a necessity too; go shop at Wal-mart or on Ebay/Amazon. Funny, not too many students are doing that, right? I ate canned tuna and cooked everyday in college, and I had a full ride scholarship while I witnessed my peers racking up mountains of debt eating sushi at least once a week. My brother is going to college right now and he tells me half of the guys in his fraternity buys iPhones, electronics and restaurant food with student loans. He cooks and eats Mexican tacos like I did and he doesn't own a pair of jeans that costs more than $20.
4. We actually experienced sharp deflation after the 2008 crash. You can compare tuition costs to food and other commodities such as gold and silver. In 1980, a median California house could get you 83 UC bachelor degrees (331 years of tuition). Now in 2011, a median California home will buy you 7 UC bachelor degrees. So much for your argument on adjusting for inflation.
Cheers,
Haigui Bioenterpreneur
This conversation is pointless because - like subprime states - it fails to grasp the fundamental issues behind the increases. Namely, the stagnation of real wages.
ReplyDeleteI also want to comment on the inflation agenda. We hardly have the political and social instability required to create a hyperinflation scenario. Unfortunately, there are few modern examples upon which to draw parallels. The first one everyone jumps to is Wienmar Germany post WWI. If you carefully examine the factors that lead to the hyperinflation in the Republic (many scholars have) there are not many solid conclusions one can draw relating to the modern US. There are others like Congo, and further back examples in France in the 1800s, etc. They equally have little relevance. Yes, there are broad sweeping principles of good monetary policy one can draw but that isn't a surprise.
I'm not exactly sure what can be done about this issue. I think the video is clearly correct that college is an investment that should NOT be taken lightly. If a person does choose to go to school, they should make sure they have made decisions that will lead them to a sustainable career path.
1. First off all, not all administrators make $200,000k - most make far less. Second of all, while studies have shown that administrative costs have gone up in the last 15 years, increased administrative costs are only a small FRACTION of increased costs.
ReplyDeleteTuition has increased for NUMEROUS reasons, among them: cuts in state and federal subsidies to public universities (that’s one of the ways we pay for tax cuts); more poor students attending schools and needing more financial aid (which is subsidized by paying students and/or covered by more loans) even as grant-based financial aid has declined; increased need for specialized services, such as remedial classes, counseling services, and service for students with disabilities and other “special needs” and “non-traditional” students; and increases in spending on career services and physical plants. Furthermore, the fraction of the tuition increase that is due to rising administrative costs is due at least in part to MORE administrators (for all of the new services, see above), not simply to a few people making $200k.
Now, we can certainly argue about the wisdom of how colleges spend their money, and question if some small number of administrators in some schools are overpaid. But blaming it on some administrative “scam” to “line their pockets” is silly conspiracy theory. (And spending on professors salaries has actually gone DOWN.) There are a LOT of cultural, political, and economic factors that have contributed to the rise in tuition; reducing it to an administrative conspiracy is ridiculous.
(Also, FYI: Colleges and universities are actually governed by volunteer Boards of Directors who hire the top administrator(s); the former have the ultimate power and decide the direction and future of the university, and control its finances. But almost nobody talks about Boards of Directors - probably because almost no one actually understand how nonprofits work. Ditto for understanding non-profit financial structures.)
2. ”If wages are declining, then a college student should take a lower paying part-time job and tuition costs should go down, right?” Uh, no. One, tuition is going up for other reasons that have nothing to do with the maximum that students can afford to pay (which seem to be what your statement is based on) - see above. Second, to reiterate: Higher education is part of the nonprofit sector. Nonprofits are dominant in industries that BY DEFINITION tend not work well as for-profit enterprises (otherwise they’d be dominated by for-profits), and which do not follow the “rules” of the for-profit economy. Explaining why part of the economic sector has historically been nonprofit, why universiteis have traditinally been part of the "third sector", and why the third sector operates differently than the for-profit or government sector, would take several books to explain. I can recommend some, if you’d like.
3. How do you know what kind of food and clothes students are spending their money on? Almost all the students I know/have known live a pretty minimalist existence. So whose anecdotes are right?
4. Wow, what nonsense! Let’s arbitrarily compare tuition costs to house costs in California, to obscure the fact that overall, real wages have gone down!
Coming from an earlier mindset of an earlier time, I am lost now.
ReplyDeleteHigher Ed has failed the populace.
dude this video is a farce produced by the student lending middlemen. Everything they say is true- but the big missing piece is that private lenders also have all the incentive to lend to anyone who asks.
ReplyDeleteI have to back Anon. 3:59 5-16-11; this movie is a sham to scare young people with money into buying gold or silver; Anon. it's a shame you missed the last ten minutes of the "film" where the interviewer talks directly into the camera, imploring the audience to buy precious metals NOW, like a Glenn Beck Goldline commercial.
ReplyDeleteI emailed StudentLoanJustice and they agree with me that this is a scam and an insult to the people who are living under the load of student loan debt.
I agree this video was terrible. And ignorantly critical at times.
ReplyDeleteFor example, they made it seem like direct loan payments to schools is a GOOD thing as opposed to incentivizing predatory business behavior by a university.
It's shills like the NIA that pollute the message. Darn
Thank god I wasn't the only one watching this going "what."
ReplyDeleteStudent loans are no more dangerous to the economy when they're issued by the government than when they're issued by private companies. When the bubble bursts, there's going to be a bailout, and this would occur regardless of who was actually holding the loans.
The biggest problem with student loans is that they're non-dischargeable in bankruptcy. If they were, both the government and private lenders would be much more hesitant to give 18 year old kids with no plan $100,000 to attend a random liberal arts college. If this were true, and if the government continued to give out the loans irregardless, then the directors would have a point. As is, private loan companies probably have even less incentive than the government to restrict access to student loans because they won't fall under IBR/Public Interest Loan Forgiveness.
Honestly, I think this is a situation where everyone is at fault. While this documentary provides one nice, simple answer (the government is evil, buy gold!!1), but reality is complex, and coming at an issue like this from any single ideological viewpoint will not provide suitable answers.
The video seems to contradict itself.
ReplyDeleteIt states hyperinflation is coming soon (millionaires will be broke it says, so why is racking up a huge student debt so bad? Will it not also be wiped out in hyperinflation?
I'm with anonymous @ 3:59 and the other critics. Some important facts in the film, but it's a terrible documentary that ignores many of the issues 3:59 pointed to. I would run far, far away from it, as a blogger.
ReplyDeleteOur government leaders proclaim that a bachelor's degree is needed for individuals to thrive in the future. Furthermore, they stress that it's important for the US to have more people go to college so that our economy continues to grow. If 4 years of college really is important for us as a nation, why don't we fund schools as other nations do? In France, Korea ,China, Sweden, and many other countries it isn't that costly to go to college. Seems college or some sort of tertiary education is as essential to success as a high school diploma was to my grandparents' generation.
ReplyDeleteHey - if you watch Peter Schiff's video (about this video) you will realize that the NIA is just a front for Jon Lebed, who settled with the SEC at age 15 for pump and dumping penny stocks.
ReplyDeleteThe so-called "NIA" only put out this video to rip people off on the "gold company" penny stock they recommend in this video. I know, it seems real but this video is a trojan horse.
Yes, America is going to experience inflation, perhaps even hyper-inflation. But to suggest a total collapse of the dollar is outrageous. This is nothing more than propagandist fear mongering.
ReplyDeleteI personally give the US dollar a good 10% chance of turning into confetti. Small possibility, but devastating consequences if the event were to take place.
ReplyDelete