Links for 6/9/10

Edububble

shadow debt or iceberg debt…

Here are four sources I’ve identified:

1. When students exhaust the federal money for debt, some schools roll out the so-called PLUS loans (parental loans for undergraduate studies). How big are these? According to the college board, the average size of a PLUS loan for parents making more than $100k/year is $41k. That’s in addition to the $30k that the student takes on. The total is more than $70k and that’s an average.

2. But that’s just the tip of the iceberg. Many smart parents take out home equity loans because the interest rates are lower and the interest itself can be deducted on the tax forms. It’s a smart trick, but it doesn’t show up in the statistics at all.

3. But there’s more. Many parents also cut their contributions to their retirement savings during this time…

4. And there’s still more. Many parents cut other expenditures during the years when their kids are in the debt-accumulation years...

Kevin Carey

applying the "tuning" methods…aculty members developed a comprehensive account of what physics students need to know and be able to do at the associate, bachelor's, and master's degree levels…

"Once you've defined the outcomes, you can ask, 'Are the programs really doing that?...

The openness inherent to tuning and other, similar processes will make plain that college courses do not vary in quality in anything like the way that archaic, prestige- and money-driven brands imply. Once you've defined the goals, you can prove what everyone knows but few want to admit: From an educational standpoint, institutional brands are largely an illusion for which students routinely overpay…

Glenn Harlan Reynolds [I stole these quotes from Joanne Jacobs]

College has gotten a lot more expensive. A recent Money magazine report notes: "After adjusting for financial aid, the amount families pay for college has skyrocketed 439 percent since 1982. ... Normal supply and demand can't begin to explain cost increases of this magnitude."

Consumers would balk, except for two things.

First -- as with the housing bubble -- cheap and readily available credit has let people borrow to finance education. They're willing to do so because of (1) consumer ignorance, as students (and, often, their parents) don't fully grasp just how harsh the impact of student loan payments will be after graduation; and (2) a belief that, whatever the cost, a college education is a necessary ticket to future prosperity.

Bubbles burst when there are no longer enough excessively optimistic and ignorant folks to fuel them. And there are signs that this is beginning to happen already.

Jeffrey R. Young

Salman Khan, a 33-year-old who quit his job as a financial analyst to spend more time making homemade lecture videos in his home studio. His unusual teaching materials started as a way to tutor his faraway cousins, but his lectures have grown into an online phenomenon—and a kind of protest against what he sees as a flawed educational system.

"My single biggest goal is to try to deliver things the way I wish they were delivered to me," he told me recently…

The Khan Academy explicitly challenges many of higher-education's most sacred assumptions: that professional academics make the best teachers; that hourlong lectures are the best way to relate material; and that in-person teaching is better than videos. Mr. Khan argues that his little lectures disprove all of that…

one of the donors, Jason Fried, chief executive of 37signals, a hip business-services company, who recently gave an undisclosed amount to Khan Academy, to find out what the attraction was.
"The next bubble to burst is higher education," he said. "It's too expensive for people—there's no reason why parents should have to save up a hundred grand to send their kids to college. I like that there are alternative ways of thinking about teaching."…