………….Looking closer at the complaints
against Trump University, the primary allegation is fraud. According to
students and instructors, “Some of whom described the program as a scheme to
cheat customers out of thousands of dollars.” Also high pressure tactics,
“Tapping into the roller coaster of emotions to get students to sign up.”
Let’s compare all of this to “real
universities” and colleges and other institutions of higher learning across the
US. Counting both
two and four year institutions, public and private, just over 4700 such
institutions dot the US landscape.
Why attend college? Several reasons.
Job opportunities, security in a changing economy, higher income, and family
stability. Similar to the promises of Trump University?
This current academic year, nearly 4
million will graduate with
degrees ranging from associate to doctor. What are their prospects in an anemic
economy with a record low labor participation rate of under 63
percent? Never mind the media-touted unemployment rate which only counts those
actively looking for a job. The market that college graduates find themselves
in is one where a third of those who could be working are not. The new grads
join 94 million Americans currently outside
the labor force.
How are the millennial grads faring in the
workplace? They make
up 40 percent of the unemployed, about 14 percent of them without a job.
Of those employed, how many are on a career path versus just working a job to
pay the bills? Was this their expectation when signing up for
college?
Waiting tables, brewing lattes, or driving
an Uber are jobs but not careers. Not providing the higher income, job
opportunities, and family security we are repeatedly told only a college degree
can provide.
College tuition is not cheap. Everyone
complains about rising healthcare costs but the reality is that college tuition
is increasing at
twice the rate of healthcare costs. 44 million Americans have student
loan debt,
$37,000 on average with a total of $1.26 trillion in outstanding loan debt. The
average loan payment per graduate is $351 per month.
Assume a starting salary, for those lucky
enough to land a real job after graduation, of $40,000 a year. After tax
this translates to
about $2600 a month. That student loan payment will take a sizable chunk of
that paycheck. Don’t forget rent, food, transportation and some entertainment.
And good luck if your first job is an unpaid internship. What about supporting
a family, buying a house? Tough to do along with those loan payments..
How many college grads are working a job
where a college diploma was not needed? According to
Forbes, half of college graduates are working jobs that don’t require a degree.
Meaning those four plus years at school, tuition, and loan debt provided little
more than a fun social experience and a chance to suffer micro-aggressions over
the latest social justice outrage.
Even the Washington Post acknowledges,
“More than 4 of 5 new grads leaving college without a job.” They correctly
observe, “that the entry-level job market has changed, but colleges have not
adapted.”
In other words, the vaunted American
institutions of higher learning are failing their students, those paying hefty
tuition based on promises of jobs, income and security. Sound familiar? Aren’t
these the same allegations made against Trump University?
Two solutions. For Trump U and the rest of
US universities. Let the market work. Caveat emptor. Let the buyer beware.
Students can do their own research and due diligence before spending money on
any university, whether Trump or Cornell. What will their return on investment
be? Could their money be better spent on other forms of education?
If potential college students decide trade
school is a better deal, then colleges can adjust to the reduced demand.
A plumber can
earn $50,000 a year without the time and expense of a college degree.
The other option is the Trump University
lawsuit approach, a class action lawsuit against American universities. Same
tactics used against Trump U, false claims and fraud. Classes taught not by the
Nobel laureate on campus but instead by some grad student. Classes of several
hundred in a lecture hall, not the group of ten students sitting around the
table with the professor. Online classes with students interacting with their
laptop rather than a professor and fellow students.
A potential fortune to be earned by the
class action lawyers chasing a piece of the $400 billion spent annually
on tuition in
the US.
The worst outcome would be for the
government to take over higher education as they have done in other countries.
We know how that works. Government regulates and controls healthcare here in
the US. If you like your professor you can keep your professor. How has that
worked out?
Trump University is simply a microcosm of
a much larger problem with American higher education. A low value proposition,
luring students via fear and unrealistic expectations, followed by a failure to
deliver on promises, leaving students holding an expensive bag of loans with
low prospects of paying them off.
Any hungry lawyers out there?
