For Profit Colleges
- Thread starter xandman
- Start date
Thanks for the reply. That was that overhang that kept me from investing. No doubt, there is a student lending crisis, overly inflated promises and expectations in the educational system. It really doesn't make sense why people go for these schools instead of the State system other than great commercials.
But without actual regulation, I will be a big buyer in the next recession.
The ability of students to get jobs drastically depends on what they're studying. In my years as an engineer I worked with a lot of technicians and a lot of them were trained at "for profit" 2-year colleges. But even the 2-year colleges that have a long history of feeding industry (like ITT which started out as the training division of International Telephone and Telegraph) have tended to add fluff degrees.
The reason students go to these schools is partly that some of them have very good records for placing students in industry. A typical student is already employed and needs the flexibility. And the for profit schools are generally better at keeping students enrolled. For example, some of them expect their instructors to call up students who do not show up for class. This doesn't happen in the government schools. And the for profits usually have better facilities, at least according to my observation.
But I wouldn't touch any educational industry investments right now. We're in a massive education bubble with the public getting way too much education at way too high a price. To fix that, two things have to happen. Fewer people need to go to school, and the amount they pay for school has to drop. That's not the recipe for an expanding industry.
Hey, things like "nursing homes" are a good growth area.
The reason students go to these schools is partly that some of them have very good records for placing students in industry. A typical student is already employed and needs the flexibility. And the for profit schools are generally better at keeping students enrolled. For example, some of them expect their instructors to call up students who do not show up for class. This doesn't happen in the government schools. And the for profits usually have better facilities, at least according to my observation.
But I wouldn't touch any educational industry investments right now. We're in a massive education bubble with the public getting way too much education at way too high a price. To fix that, two things have to happen. Fewer people need to go to school, and the amount they pay for school has to drop. That's not the recipe for an expanding industry.
Hey, things like "nursing homes" are a good growth area.
I agree. I used to be an instructor for one of these technical diploma mills. They produce very specific skills for a very specific need in industry.
This bubble is analogous to the housing bubble. If a house was the American Dream, then education is the promise of upward mobility. And if you originally had a fluff degree, continuing education might be a matter of survival.
The "pig-in-the python" Gen Y has already gone thru the system and no bubble burst or reform took place. I think that we are far from dizzying heights that this bubble can take us.
This bubble is analogous to the housing bubble. If a house was the American Dream, then education is the promise of upward mobility. And if you originally had a fluff degree, continuing education might be a matter of survival.
The "pig-in-the python" Gen Y has already gone thru the system and no bubble burst or reform took place. I think that we are far from dizzying heights that this bubble can take us.
xandman, I'm in (public) academia now. That it's a bubble is well known to some of the people in it. I was loaned this book a few months ago:
The Higher Education Bubble
Glenn Harlan Reynolds
In this Broadside, Glenn Harlan Reynolds explains the causes and effects of this bubble and the steps colleges and universities must take to ensure their survival. Many graduates are unable to secure employment sufficient to pay off their loans, which are usually not dischargeable in bankruptcy. As students become less willing to incur debt for education, colleges and universities will have to adapt to a new world of cost pressures and declining public support.
http://www.amazon.com/Higher-Education-Bubble-Encounter-Broadside/dp/1594036659
As to when it pops, it's a matter of how much cash can be cycled through the industry without actually destroying the economy. I think we have to be getting close.
One of the things that I find amusing is that one moment the leftists are complaining that the elites have so many advantages and then they want education to be free (which really means that the education of the elites will be paid by the taxes collected from their inferiors).
The Higher Education Bubble
Glenn Harlan Reynolds
In this Broadside, Glenn Harlan Reynolds explains the causes and effects of this bubble and the steps colleges and universities must take to ensure their survival. Many graduates are unable to secure employment sufficient to pay off their loans, which are usually not dischargeable in bankruptcy. As students become less willing to incur debt for education, colleges and universities will have to adapt to a new world of cost pressures and declining public support.
http://www.amazon.com/Higher-Education-Bubble-Encounter-Broadside/dp/1594036659
As to when it pops, it's a matter of how much cash can be cycled through the industry without actually destroying the economy. I think we have to be getting close.
One of the things that I find amusing is that one moment the leftists are complaining that the elites have so many advantages and then they want education to be free (which really means that the education of the elites will be paid by the taxes collected from their inferiors).