Tracy Kratzer, 27, enrolled in the International Academy of Design & Technology in Orlando, Fla. in 2003. With visions of making big bucks as a Web designer, she didn't give much thought to the interest rate on her loan from Sallie Mae
(nyse: SLM - news - people ), the Fannie Mae (nyse: FNM - news - people ) of student lending. Kratzer didn't know it at the time, but she was part of an experiment that has proved disastrous for borrowers and shareholders of Sallie's parent, SLM Corp. It's called "nontraditional" lending. "That's not a sociological term," Albert Lord, chief executive of SLM Corp., told an audience of financial analysts last fall. "It's basically kids and parents with poor credit who are at the wrong schools."
Sallie Mae was set up by the government in 1972 and began privatizing its ownership in 1997. It began nontraditional lending in the easy-money heyday of 2002, when it cut deals with dozens of trade schools to become their preferred subprime student lender. Over the next four years Sallie doled out about $5 billion to people like Kratzer, waiving the credit scores and cosigners formerly required for its loans.
The bill arrived last year after nontraditional borrowers began entering the workforce. Of the half no longer studying, Sallie had written off 15% of loans by last June, the most recent period for which it has released figures; another 24% were delinquent. Among traditional loans for four-year universities, writeoffs ran 2% and delinquencies 4.9%.
SLM set aside $884 million to cover these bad loans in 2007 and posted its first loss. It expects nontraditional-loan writeoffs to peak this year. SLM's stock has lost 80% since the beginning of 2007, wiping out $15 billion in value. Lord, who was unavailable for comment, is a 28-year company veteran. He made $72 million as chief executive in 2007 by unloading SLM stock before it tanked. Sallie largely abandoned nontraditional lending last January.
That's little consolation to Kratzer. Shortly after graduating with an associate of arts degree, she discovered that the high-paying jobs she'd hoped to qualify for go to people with bachelor's degrees and years of experience. After a bout of unemployment, when she lived off credit cards, Kratzer recently found an hourly job as a clerk at a magazine, where she earns less than the average high school grad. In the meantime her $14,000 student loan has mushroomed to $27,000--more than she makes in a year--and continues to accrue interest at 18% a year. She says collection agents for Sallie and others hound her to hit up relatives for the money she owes.
"My mom works in a restaurant. My stepdad is in prison," says Kratzer. "There are so many people like me out there. They don't get seen. They don't get heard."
The question to contemplate is who benefitted from making it easier to pursue degrees that don't get you very far? Not Ms. Kratzer, obviously, but not the "greedy" loan company, either. No, the beneficiaries are the schools that take peoples' money in exchange for worthless degrees.
Back in my day, Sallie Mae wasn't so free with her money, but I nonetheless had a substantial brush with the seamy world of gray market education. Having been laid off from two jobs (in my twenties I had a pretty remarkable gift for picking companies that were just about to go out of business), I ended up, miserably, as a secretary at a nonprofit. Shortly thereafter, I decided to learn to be a network administrator, which I'd enjoyed doing briefly at my previous firm, before the venture capitalists had shut off the money spigot.
I don't know how I ended up at Career Blazers (yes, I cringe myself at the name). It was like one of those plucky, poor-but-honest people you read about in Victorian novels--everything clean, freshly painted, and nonetheless falling apart. But I was too desperate to get out of that secretary's chair to be picky. I gave them something like $5,000, in 1995, to teach me to be a Certified Netware Engineer--an administrator of Novell's corporate networking software.
The technies in the audience are wincing, and believe me, I am too. As I found out after I'd wasted thousands of dollars and three months, a CNE was a necessary, but not sufficient, credential to get a job in IT. The minute anyone tells you that he has one (or an MCSE, the Microsoft equivalent), any seasoned professional will bar that person from touching his equipment. Anyone who would actually mention his CNE is definitionally too ignorant to be useful, and just knowledgeable enough to be dangerous. Of course anyone competent usually had the credentials--but all the credentials proved, by themselves, was that you could breathe and answer a multiple choice test.
As far as I know, out of my class of fifteen people, a lot of whom were harder up than me and using the last of their severance to "retrain", two ended up with jobs after "graduation". I was one of them, lucking into a half-administrative, half-technical position. When that company too, was shut down four months later, I was now blessed with just enough experience, in the booming mid-1990s, to get a job and a 30% pay rise.
At any given time, that company was running two or more of these classes. And we were the ones at least arguably learning marketable skills. Downstairs, day and night other less fortunate people labored over Microsoft Word, Microsoft Excel, "computer" classes, typing--all financed by a combination of credit cards, much-needed personal savings, and government subsidies. The best off of them were having their useless lessons paid for by the taxpayer, merely wasting valuable time they might have spent finding a real job. I have no reason to believe that their placement rates were any better than those of my class.
It's easy to be horrified by these fly by nights--but what's the difference between these classes and half of what goes on at many campuses with libraries and gyms? It is perhaps not quite so blatant, and some of the kids do all right. More of them, however, waste a few years and then end up doing something that doesn't require a college degree. They are, of course, better off if the taxpayer picks up the tab. But then the taxpayer isn't. Tuition has still been wasted. And no one ever yells at the schools--or the presumption that we should shoehorn every eighteen year old into college, rather than structuring an economy that comfortably accomodates those who are not academic.
The schools -- elementary, middle, high, and college -- long ago stopped providing services to what should be their real customers (the parents of the students) in favor of providing security -- income, benefits, and retirement prospects -- to their administration and faculty. It doesn't matter if students actually benefit; they are just an unfortunately unavoidable nuisance that must be tolerated in order to continue the ride.
Interesting post.
I'm curious, though, as to how workable this would be if it turned out that "those who are not academic" fell disporportionately into differing ethinic groups?
Say, for example, that white people are not as "academic" (excellent euphemism, btw -- you did mean it as a euphemism for IQ, right?) as Asian folk are. Wouldn't it be considered awfully racist if more white people were hustled off to jobs that only require a basic high-school education while the Asians fully stock our highest research universities?
And god help us all if African Americans or Hispanic Americans should prove to be less "academic". It would only serve to prove to every right thinking person that we have made no progress since slavery and, indeed, may be sliding backwards on the index of glorious progressivism.
I agree completely. Much better to merely fall out of the right womb Megan.
Thank you for this post. I have been banging on about this for years.
The second comment is a valid one: the good news is that the same solution which is needed to stop the problem Miss McArdle describes -- a society which honors non-college-educated but productive workers -- is also a solution to the problem of perceived racism.
I cringe at any reference to Sallie Mae. Those people are bastards. I was lucky enough to be done with my student loans at the time, but they went on a buying binge of existing student loans.
Many of my friends who had loans purchased by Sallie Mae had nothing but nightmare stories about the calls. Your check is one day late, they start calling and calling and calling. It sounds like the experience I had with Bally's Health Club.
There's a bigger issue here: the fact that so many jobs today require college degrees which, in fact, have no bearing whatsoever on one's ability to perform the job.
It's essentially a class barrier - not because tuition is unaffordable (between need-based grants and community college, cost is often not the deciding factor), but because people who do not start from a middle-class background can't afford the time it takes to earn a degree.
Megan: presently, student loans cannot be discharged in bankruptcy. What would you think about a requirement that, in order to accept tuition financed by such a loan, the academic institution itself must co-sign it.
What I envision is something like this: the no-discharge provision of the loan would expire after some number or years, let's say ten years. After that, if the graduate is still not financially solvent, the education can be fairly said to have been wasted. If the graduate does declare bankruptcy, then then school itself becomes liable for the unpaid balance.
This would provide a powerful incentive for schools to underwrite the educations of only those students they believe to have long-run potential. It would be hard for students to game since most expect to have attachable assets by ten years.
It likely does nothing to address the "gray market" operators who won't be around for the lender to collect from. But it's a start, right?
I concur that a CNE or MCSE is not a ticket to a high paying job, and I see ads all the time for schools offering (probably unaccredited) degrees and certificates in medical office assistant, etc. that may turn out to be worthless. However, there are companies that won't interview someone without those magic letters.
How is this any different than a degree in Philosophy, Sociology, English Literature, French Literature, etc? AFAIK, the demand for a BA in any of those areas is really, really low. Yet almost every major university offers degrees in them, financed by the same types of loans.
BTW, advertising having a CNE or MCSE professionally in some states is illegal, since they have nothing to do with engineering, which is regulated.
The lack of real vocational programs is one of my biggest beefs with the US educational system--and the one area where I think many European countries do a lot better than we do.
Most jobs do not require four year degrees. Given the choice between someone with a relevant associate's degree and 2 years of experience or someone with a bachelor's degree, I hire the experience person every time. This is particularly true in technology-oriented fields.
However, as Megan notes, most vocational programs are crap, and I suspect that's because there is no outside support for or scrutiny of these programs--from parents, guidance councilors or anywhere else. Any information about these programs tends to be from the non-traditional education industry itself.
This is particularly true in technology-oriented fields.
I guess I should specify that by technology-oriented I mean things like the network administration that Megan mentioned, or software development, or web design, rather than things like engineering or pharmaceutical research which obviously require fairly rigorous degrees, often beyond a bachelor's.
Nothing will improve until people stop evaluating proposed legislation by looking at the good things its backers claim for it instead of what it is likely to do. Things will have to get a lot worse before people start doing that.
"I'm curious, though, as to how workable this would be if it turned out that 'those who are not academic' fell disporportionately into differing ethinic groups?"
"Say, for example, that white people are not as 'academic' (excellent euphemism, btw -- you did mean it as a euphemism for IQ, right?) as Asian folk are. "
I took it as simply meaning a mindset, not intelligence. One of my sometime college roommates was a photographer. He wasn't particularly interested in classroom learning - what he wanted to do was work at his chosen craft. He clearly had the IQ, since he had been accepted at an Ivy League school. But he didn't have the mindset that would lead him to enjoy sitting in classrooms, doing library research, and so on. Why should we turn good craftsmen like him into corporate drones in the interest of cookie-cutter education? He was only in college because his parents insisted - and he left the minute he persuaded them that it was OK.
I've had the privilege of working with top-notch carpenters, plumbers, electricians, and painters. I've also heard horror stories of bad ones. We have a real problem that people think that craftsmanship is somehow less valuable than what is taught in universities.
Inquiring Mind:
Wouldn't it be considered awfully racist if more white people were hustled off to jobs that only require a basic high-school education while the Asians fully stock our highest research universities?
Of course not. The kind of people who consider legitimate policies racist just because they have racially disparate effects are also the kind of people who consider anti-white racism to be a contradiction in terms.
Independent George -- A bit of history, perhaps. The reason so many jobs that should not require a college degree now require one is because employers are forbidden from using testing to determine if you have the basic minumum intelligence to perform the work.
You see, intelligence tests are racist so they are forbidden. But intelligence is still required for many jobs so you need to come up with some proxy; ability to acquire a 4 year degree becomes the proxy for some minimal amount of intelligence.
Of course, disparate graduation rates and "access" to college is also racist, thus the calls for universal higher education.
And, of course, as higher education expands to provide degrees to people not intelligent enough to get them under the old system, its usefulness as an intelligence proxy diminishes and we see a dramatic increase in the number of jobs that require an advanced degree.
No matter, all that's needed to correct that situation is greater access to advanced degrees...
AIM, on what planet are U.S. employers unable to administer intelligence and aptitude tests to job candidates? The fact that the U.S. Supreme Court's said that these tests actually have to be job related tests (and not excuses for discrimination) doesn't mean that employers can't use tests that are actually related to the job.
Isn't the market here working like it is supposed to? The schools get bad reviews from past students so they lose business and eventually go under....
Or is their a failure of the market that needs to be addressed by regulation or changing the rules of accreditation?
And no one ever yells at the schools
Well, there's George Leef, and Charles Murray, and the Manhattan Institute, and on, and on... on the conservative side.
Don't education problems sound a lot like the healthcare and housing problems?
1) The people involved aren't spending their own money, either because somebody else pays the bill or they'll think about paying back the loans "tomorrow".
2) Prices go up, because when you don't spend your own money you aren't as careful about what you pay.
3) Quality suffers, because the average person can't judge the quality until after the fact. Those paid to rate quality have huge incentives against doing their jobs properly.
4) A whole slew of people get financially in way over their heads.
"Jane! Stop this crazy thing!"
nolo - Have you actually heard of an employer using a general intelligence test anytime in the past few decades? Of course not, because using such a test would be defacto evidence that they were just using them as an -- to borrow your phrase -- "excuse for discrimination".
But they do still need to find people with the intelligence to fill their needs. So they use proxies that haven't yet been ruled irredeemably racist for their disparate results.
Let me ask you this, can you point me to a single example of a test given for employment in the U.S. that had a disparate racial impact and yet was okay because it was "job-related"? Or are you of the belief that any disparity automatically proves that the test wasn't job-related?
To the contrary, I blame the loan companies. The prospective students have no way to evaluate the programs they are enrolled in, nor do they have any say in whether or not the loan is granted. The loan companies do. And should. In fact, I can't think of a single good reason why they wouldn't review different degree programs from different schools, any more than I can think of a single good reason why loaning institutions wouldn't verify the income of a customer.
nolo,
As a former employee of the EEOC, lemme tell you: any kind of test given to a candidate is subject to litigation. ACLU-type groups love trying to argue that a disproportionate effect in racial terms is proof of discriminatory animus or cause.
Yes, the argument is largely discredited and the Supreme Court (in the DC police case and others) has ruled against it, but the William Ayers types of the hardcore left still argue it, and scream loudly about it. And people who are disporportionately affected (e.g. largely African American populations) still buy the argument, if only because it takes their personal failings out of the picture and puts the blame on vague "racist" or "sexist" terms.
And the people buying the argument have leaders who can make a huge public fuss, organize marches, and compare you to the Klan. And news media types blare headlines like "X company declared racist by civil rights leaders." It's a massive headache, and onus is shifted on you, the employer, to defend what has never been proven to be racially motivated.
As an employer, you're basically guaranteeing a problem if you have any kind of test outside of basic required state certification tests--mostly because in that case, the state, not you, will get sued.
The employer who removes the test has no paper trail that an Ayers academic can seize on and spend 15 pages of a legal brief dissecting to prove...nothing at all, but hey, it sounds all academic. The employer is therefore incentivized not to offer the test at all.
Ironically, this probably leads to more cases of discrimination; whereas with a test, biased motives are removed in favor of quantitative comparison, now personal judgment reigns supreme. In cases where a test would be helpful--e.g. in determining whether a person has the adequate personality to fit into your department, or whether the person's IQ isn't too high or too low to render the job boring or impossible---now we have nothing. And, for civil rights leaders, unless one of the interviewers has a picture of Goering in his office, you've got little to hang your hat on in terms of proving him a racist in court (whether you can prove him a racist in the New York Times, is, of course, a much easier question to answer).
Academics in ivory towers have always caused more problems than they have solved.
About one year ago I took an intelligence test for a position as a product manager for a large insurance company. It had sections on reading comprehension, math, and logic (much like those online IQ tests).
i'm a undergrad job hunting right now, and probably four out of every five jobs I have interviewed with so far have required some test whose content was tangential to the job's day-to-day duties at best. They are either simple timed math tests for the i banking and consulting which are used to quickly screen out most applicants, or 'personality tests' which have analogy and quantitative IQ-like questions mixed in are common for management positions. One job asked me what my SAT scores were.
SoV:"To the contrary, I blame the loan companies. The prospective students have no way to evaluate the programs they are enrolled in, nor do they have any say in whether or not the loan is granted. The loan companies do. And should. In fact, I can't think of a single good reason why they wouldn't review different degree programs from different schools, any more than I can think of a single good reason why loaning institutions wouldn't verify the income of a customer."
---SoV, at the risk of talking to a wall here, modern loan companies aren't in the business of evaluating anything but whether X person really likes paying off their loans.
At one time, when manual underwriting was the norm, banks/loaners did check a person's career prospects, their reputation, etc. Of course, back then you were likely to get a loan from a guy in your hometown who knew your family history personally, but still, the verification process was subtle.
However, for whatever reason, the FICO score has replaced this process. The FICO score is simply this: have you ever taken out money before, and how well have you paid it back?
In one sense, the FICO score is actually superior than the old method: the bank is checking to see if you'll pay back a loan, no matter what. The manual method checks if you have the ability to do so. The FICO method screws your ends and means and places the bank at the top of your priority list.
Most banks have switched to the FICO method because they only want to get paid. If you're living on $27,000 but they can hound you into making payments even though you can't eat--as is happening to the lady in the article--then that's better for them than if you have a great 20 year career path but are smart enough to skip student loan payments so you can get your kids to the doctor's office when their sick.
Evaluating a school's ability to get you a good career takes 1) a lot more effort for the bank; 2) doesn't really answer the pertinent question for them, which is: will you pay up?
In a parallel view (grossly oversimplified), imagine taking a mortgage out on a house. In an old-fashioned George Bailey bank, if your house were to suddenly drop in value and you lost your job, you'd get a break, because they key for them was seeing if you could afford to pay and making you a lifelong customer. In the FICO world, they don't care whether you made a bad real estate investment or that your job is on the fritz. They want their money now or take the house---and get rid of it quickly.
As the saying goes, banks aren't in the real estate business. Nor are they in the college evaluation business. Their in the pay me now business. Expecting a FICO-centered bank to care about your future job prospects is a nice idea on burden-shifting, but it ain't gonna happen anytime soon. Caveat Emptor.
On a side note, the emphasis on college being an answer for everyone has caused the problems with the very bad state of colleges, as is the weird anti-three r's mindset. As a person with more than one degree, I can tell you: outside the hard sciences and language study (in some departments), college and grad school teach you nothing. It's not about training, it's about bilking you dry and having the most famous professor they can hire pontificate. Teaching a skill is not the same as being famous for doing the skill; otherwise, Muhammed Ali would be the greatest boxing coach of all time. Colleges don't get that, or don't care, and you spend 4 or more years doing nothing that a library card and a loquacious verbal sparring partner couldn't do better, more cheaply, and in a more fun manner.
mexican american and alan,
And you don't think those employers are playing with fire?
Just wait until some person from a group under-represented at the firm doesn't get hired and gets a bug up their butt.
Those tests will be gone soon enough.
Ooooh, I can think of an employment test that results in disparate racial impact: Professional football uses 40-yard dash times as an "employment test." This results in a disproportionate number of black running backs, yet somehow, the NFL manages to avoid lawsuits.
Yes, JCK, because people really take seriously claims of discrimination that go in favor of blacks.
Don't you know the rules? Black-preference is good. Lack of black people=racist, most evil thing in the universe.
oh, and kill whitey.
Funny thing.
I got an Associates' degree in Graphic Design, in the late 90s. (Mostly as a pre-Baccalaureate.)
But I got it at a Community College, and the total cost was, if I recall correctly, something like $3,000, not $18,000.
Even adjusting for tuition increases and inflation, it seems she chose schools poorly - at least for an AA.
(And Jesus - thinking she could make "big bucks" as a web designer in 2003? With no experience? In a market already saturated with people on the cutting edge of both the web tech and graphics side?
Graphic design is a less-than-stellar career, unless you're really, really good or find some useful niche (like permanent design staff at a really big company).)
To the contrary, I blame the loan companies. The prospective students have no way to evaluate the programs they are enrolled in, nor do they have any say in whether or not the loan is granted.
... what? You are aware that these loans don't come from nowhere, right? The student does have a say in whether they take the loan-- they can choose not to apply! In fact, if they don't sign the master promisory note, they'll never receive a dime in loan money and therefore will never have to repay anything. Your complete elimination of the responsibility of students is shocking. I also like how you want the loan companies to evaluate the program, but apparently it would be too hard for students to do a bit of research of the school where they'll be spending the next 2-4 years of their life.
Lance, hence my comment about how talking to SoV is perhaps akin to talking to a wall.
AIM, on what planet are U.S. employers unable to administer intelligence and aptitude tests to job candidates?
nolo, the court case you're looking for is Griggs vs Duke Power. Essentially an employer has to be able to demonstrate a "business necessity" for any test that may have disparate racial impact on applicants. In practice what this means administering to applicants virtually any kind of standardized test is legal Russian roulette. The downside risks far outweigh any benefit the company could hope to derive from the test.
Before Griggs it was common for large companies to administer IQ tests to all incoming applicants. Now companies use acceptance into college as a proxy for IQ - the idea is if you were smart enough to get into Harvard you probably have a reasonably high IQ. This is the basis of the college "arms race" we've seen since the early 1970s.
I agree completely. Much better to merely fall out of the right womb Megan.
Obviously being born to the right parents is the best way to get a good start in life. The question is how best to improve the lives of people who didn't.
Paying for (for example) a degree in Critical Art Theory is not a way to raise a poor person into the middle class. An art degree isn't worth shit to an employer; the person will have to rely on contacts in the art or advertising world that a poor person isn't going to have.
Even in the proposed best-case scenario, where the degree is "free" (i.e. paid for by taxpayers) it is still a rotten deal. Rather than trying to land a job as an 18-year-old with an 18-year-old's skills, they're trying to land a job as a 22-year-old with an 18-year-old's skills. They've wasted four years of potential work experience.
Re: Even in the proposed best-case scenario, where the degree is "free" (i.e. paid for by taxpayers) it is still a rotten deal. Rather than trying to land a job as an 18-year-old with an 18-year-old's skills, they're trying to land a job as a 22-year-old with an 18-year-old's skills. They've wasted four years of potential work experience.
According to that standard no one should go to college ever-- which seems to go against the fact that college grads, on the average, do have higher incomes than non-college grads.
On the matter of IQ tests, I have a distinct feeling that the people whining about employers not using them are a collection of unemployable nerds with nothing else except a high IQ to recommend them for employment-- no real skills or experience. If I were an employer I would not give a rat's patoot about an applicant's IQ (note: I have a fairly high IQ myself). What I would care about is the applicant's job skills (and in many cases I might use a test to verify those), and about the applicant's social skills since in most jobs you need to work with (or at least get alone with) other employers and perhaps clients/customers. And yes, of course: the applicant's ethics. There is no test for either sociability or ethics of course though both are at least as important as job skills, and far more so than IQ (which is nothing more than the ability to do well on certain types of tests).
According to that standard no one should go to college ever-- which seems to go against the fact that college grads, on the average, do have higher incomes than non-college grads.
Apparently you missed his point. He's talking about art degrees (and presumably other unmarketable degrees). Yes, college graduates do make more, on average. But I'd be surprised if Art history graduates make appreciably more than HS grads. There are some degrees you simply can't justify on an economic basis, and it's disingenuous to lump them in with medical, law, and engineering degrees.
And with all due respect to your "distinct feelings", it doesn't matter what you would do as a prospective employer. What matters is what employers do in the aggregate. Lots of large employers used to give IQ tests for jobs that don't require a college education. Presumably they would go back to doing that if they could.
Certainly companies could retain the current system of requiring everyone to have a degree. I'd be surprised if they were competitive, though. There's a reason the first thing the military does with new recruits is give them an IQ test - it's a very good indication of the tasks that recruit is capable of performing.
As a society we have replaced a system that required the prospective employee to spend a few hours taking a test with one that requires the prospective employee to go heavily in debt. Who, really, does this benefit?
There is another educational route that has solved many of these problems in some fields of study...the coop education programs pioneered by Northeastern University in Boston. The coop engineering program had a great reputation for producing graduates with three great virtues. They had actual experience in the field and could make an early decision that the field was right for them. They graduated with both a degree and a resume of actual work experience. And they had held paying jobs during their coop field periods that actually contributed to their cost of living and education.
In many cases employers, who were using the coop program as a candidate screening program, would ' adopt' students after two rounds of coop field experiences,picking up some or all of their educational costs and assuring that the good students wouldn't be poached by others.
We can do career education. But we will do so only after we recognize the cultural biases that we have against working with our hands as well as our minds.
Charles Murray wrote a book about this very topic called Real Education.
Re: Lots of large employers used to give IQ tests for jobs that don't require a college education.
IQ tests were a fad once upon a time-- rather like "Scientific socialism". Then people realized they had less predictive power in the real world than a deck of tarot cards, and they were largely abandoned. Get over it.
Re: As a society we have replaced a system that required the prospective employee to spend a few hours taking a test
Once again (and others have made this point repeatedly), testing in general has not been eliminated, only useless tests whose main effect is unjust discrination. I've taken job skills tests for several jobs I've held (including my current one).
I think we flatter ourselves when we say the problem is primarily shouldered by people with "degrees" in web design or hair braiding. I would like to know the average income and student loan debt of those that graduated in the bottom third of their law schools over the past 15 years, and the bottom two thirds of schools ranked below 100 in the US News rankings. Student loan debt is the closest thing we have to indentured servitude in this country, I see it all the time when I'm counseling deadbeat dads that can't pay their child support. Did you know student loan garnishments have priority over child support obligations on tax refunds?
IQ tests were a fad once upon a time-- rather like "Scientific socialism". Then people realized they had less predictive power in the real world than a deck of tarot cards, and they were largely abandoned. Get over it.
This is simply wrong. People make these sorts of claims for political reasons, but they aren't backed up by sound research. IQ tests were "abandoned" for fear of lawsuits, not because they don't tell you who has the higher IQ. Again, the military uses IQ tests because they don't have as much patience for BS and it's harder to sue Uncle Sam.
What a person knows isn't nearly as important as what he can learn if it's not a temporary position. For jobs that don't require advanced degrees the high-IQ candidate is almost always the better choice. Your arguments make me think you've never actually hired anyone.
@SoV
Knock, knock...
Remember me?
ROFL - Considering our very short conversation about this last week, this is truly a timely story and post by Megan...
You blame the banks? Why does that not surprise me?
Do you think the banks just loan willy-nilly for anything out there? These are taxpayer-backed loans. They're not *allowed* to just loan to anyone going to Podunk U. There's a government-supplied list of approved institutions and programs. I wonder who makes that list...
As I said before - government-backed student loan programs do nothing to help education and in many cases do exactly the opposite.
The fact is simple: when you dilute something you're weakening it, not strengthing it.
Dumping millions of dollars into universities in the form of loans so that everyone who wants a degree can get it dilutes *many* things, primary among them is the value of said degree. In addition, it dilutes the quality of education not only at the college level but often at high school and below. This in turn dilutes the workforce.
This is the legacy of the government-backed student loan programs and the push to have everyone get a college degree.
This is just one (maybe two) more example of "it ain't my fault".
Then people realized they had less predictive power in the real world than a deck of tarot cards, and they were largely abandoned.
IQ is strongly correlated with many things, like obeying the law and earning a good salary. It has quite a lot of predictive power. It obviously isn't perfect, but then nothing is.
One problem with the original article:
Of the half no longer studying, Sallie had written off 15% of loans by last June, the most recent period for which it has released figures; another 24% were delinquent. Among traditional loans for four-year universities, writeoffs ran 2% and delinquencies 4.9%.
If a significant number of these nontrads are for AA and other certification programs, comparing them to a four-year is misleading.
Re: ...not because they don't tell you who has the higher IQ.
I'm not doubting that IQ tests measure IQ. That's kind of tautological. What I am doubting is that IQ is particulaly relevant to the real world. And Even if I accept the equation IQ=Intelligence (which I don't) I've been around long enough to have discovered that smart people can be real a$$holes too.
And again: the most relevant concern of employers is that potential employees have the skills to do a given job, that they can get along with others (other employees and/or customers) and that they behave ethically. No IQ test will measure those.