For some of you, this report will put more after-tax dollarsin your bank account than anything you have ever read. But forothers, this information will have come too late – possiblydecades too late.
Thestrategy that I discuss here can work for a few people onlybecause almost no one knows about it, and among those fewwho do know about it, or at least some of it, almost none ofthem will take advantage of what they know. This presents a unique,low-risk opportunity for the Remnant.
Ihave already discussed the general problem in a previousreport. If you have a child headed for college, you hadbetter read it.
Overa decade ago, I gave a presentation to a conference of conservativecollege students. I told them this:
“Whenthe person at the front desk of a college dormitory buildinghandsan incoming freshman the dorm room key, the parents’authority over the student symbolically and operationallyends.”
There are three important symbolic events in this life: birth,marriage, and death. There are three rituals that match theseevents in Christianity: baptism, wedding, and funeral. In someChristian traditions, confirmation is a fourth. Jews have circumcision,bar mitzvah, wedding, and funeral.
All groups today face a new ritual: the ritual of the dormkey.
THE RITUAL OF THE DORM KEY
For a majority of educated American Christians, the ritualof the dorm key has replaced confirmation as the more significantrite of passage. It takes place definitively only once, and everyparent of a college freshman senses the finality of this ritewhen it takes place, or soon after. With the steady increasein the divorce rate, the ritual of the dorm key, which happensas a rite of passage only once, has replaced the ritual of thewedding, which may happen more than once.
A parent may go through a few additional motions, such as helpingthe student with luggage, a computer, and the stereo, but thenthe final moment of passage takes place. The student, key inhand or pocket, says goodbye, and the parent walks down the halltoward the parking lot.
The parent may briefly notice that the person in the room rightacross the hall is not of the same sex as the child who has justbeen left behind. But he shrugs, swallows hard, and keeps moving,eyes straight ahead.
Mixed dorm halls had not appeared in my antediluvian era. Butin the college days of today’s parents, this arrangement hadbegun. What goes around comes around. The ritual that not solong ago provided a sense of liberation in the departing parentnow provides a sense of foreboding.
From this event on, a parent has virtually nothing to say aboutthe student’s collegiate experience, other than writing the checks.
There will be many, many checks to write, all large. If youare like the vast majority of American parents of college-eligiblechildren, you’re going to write them.
We hear about peer pressure on teenagers. Kids’ stuff! Suchpressure doesn’t rival the pressure of this comment:
“Ihear that your kid got accepted at [XYZ] University. That’sgreat.”
How many parents reply along these lines?
“I’mnot going to contribute one dime to send my child intothat moralcesspool. That place is a recruiting ground foratheists, feminists, Marxists, and envy-driven anti-capitalists.I refuse to put my child under their authority. That placeis a meat-grinder.”
The number of these parents is not legion. They constitute aremnant.
If you,as a parent, do not see this coming at least a decade beforethe day ofreckoning arrives, then you have been livingin fantasyland. You may be suffering from SAD: “Selective Alzheimer’sDisease.”
If you know this day will come sometime in the next two years,you had better develop a plan of action to delay it or even avoidit altogether.
There are a lot of things you can do. The problem is, mostparents don’t perceive the existence of these highly practicaloptions, and among the few parents who do, most do not have thestrength to persuade their college-bound children to implementany of them. The peer pressure is just too great. I don’t meanpeer pressure on the students. I mean the peer pressure on theparents.
[Ifyou’re a grandparent, you have watched your children go throughthis rite of passage. Your children haven’t overseenit. They deserve to be reminded. Remind them. Forward thisreport.]
A $140,000 CRAP-SHOOT
Let’s talk about the risk-reward ratio of an investment inyour child’s college education. The risk is high. You have noassurance that your child will graduate. Half of those who begincollege don’t finish.
Not-quite-a-bachelor’s degree is worth approximately zero.A student’s time would far better have been spent as an apprenticeto a plumber, or as a heating-cooling system technician. Failingto finish college is an economic risk.
Let’s gothrough the numbers. Here is the worst-case scenario from aparent’spoint of view. You probably won’t have to gothrough these particular numbers. Let’s call these numbers “IvyLeague numbers.” Tuition: $25,000 this year, which will probablyrise 5% to 7% per year. Room and board: another $8,000 a yearand rising. Books: $1,500 a year. Transportation? Your guess.New clothes for your daughter: your guess. You will be on thehook for at least $35,000 a year, except that costs will riseat least 5% every year. Count on it.
You can easily spend $140,000 after taxes in tuition, room,board, and books (TRBB). Your child can give up four years ofhis life to earn a degree at an Ivy League university, assumingthat his college board scores are high enough and his high schoolgrades were all A’s, and he speaks Mandarin Chinese. You maythink I’m joking. I’m not. Straight A’s and a 1600 score on theSAT’s won’t necessarily get a student into Harvard. He or shealso needs extracurricular activities or the correct geneticbackground (which includes being the white son of a Harvard multimillionairealumnus).
Let’s saythat the total bill is $140,000. I come along and say, “I can get you almost the same product for about $7,000,but not from an Ivy League school.” You turn me down. Your JennySue has just been accepted at Princeton, and you’re going topay the tab. I ask, “Will Jenny Sue earn 20 times more moneyjust because she is a Princeton graduate?” “This isn’t aboutmoney!” you insist.
The daya parent says, “This isn’t about money,” the family’snet worth is about to suffer a substantial decline.
Thisleads me to North’s law of collegiate financing: “A proudparent and his money are soon parted.”
That’swhy, when I speak of “your child,” this applies equallywell to your grandchild. Every dime that your children spendon their children’s college educations is a drain on your family’sinter-generational capital.
COLLEGE SCHOLARSHIP GRANT
Parentsand students go on a college scholarship search. They think thatout there somewhere is a free college grant or a college governmentgrant. It’s true; there are a few. But to get a college educationgrant from any source other than the college the student appliesto is very difficult.
Collegerecruiters know this. They know that parents and students areout there on Google, franticallysearchingfor “free college grant” and “college government grant” and other search phrases.For decades, they have taken advantage of this universal desire to get a collegeeducation grant. They have adopted a clever policy of deception. The targetsare the parents, who will be writing the checks.
Parentsthink, “Maybe there willbe a scholarship.” No, there won’t be. Thereare few scholarships, except for super-brilliant students and gifted athletes.The collegiate marketing tools that are called “scholarships” are in fact alegal form of what economists call price discrimination. The “scholarship” committeeestimates how much money the school can probably get you to fork over, givenyour level of income, and then it lowers the fee schedule to whatever levelthat the committee thinks you will be willing to pay. If you’re rich, you willpay100%. Sucker!
This form of discriminatory pricing is a highlysophisticated competition among Ivy League schools to recruitvery bright students who willbecome eitherfamous (the production of prestigious alumni, which is a marketing strategy)or rich (the market for future donations). It’s an investment in the future:the college’s future, not yours.
MARKETING STRATEGY #2
An acquaintance of mine is a direct-mail marketing genius.I know maybe six people who may be as good as he is in sellingthings through direct mail. One of them is his wife.
Iwas at a Jay Abraham conference a few years ago. I was sittingalone with Mr. X, and off the top of his head, he gave me oneof the most profound insights into marketing strategies thatI have ever heard. I’ll share it with you.
Thereare two ways to sell things. The first is well known. “At this rock-bottom price, supplies are running low!Act now!” But there is a less well-known approach. It’s the IvyLeague’s strategy. “We really don’t want you. We really don’tneed you. But, under certain limited circumstances, we mightjust let your child attend here. But don’t count on it.” Parentscan’t get their checkbooks out fast enough. They beg to havethe opportunity to write large checks.
The Ivy League universities’ approach rests on the public’sperception of high walls to match their ivy-covered halls. Theyare selling exclusivity. Their marketing strategy has been perfectedever since Harvard opened in 1636. They have fine-tuned it. Theirfreshman classes are oversubscribed by ten to one, yet most highschool seniors don’t even bother to apply. They know they can’tget in.
Most collegescannot pull off marketing strategy #2. They don’t have theaura ofexclusivity. They will enroll any student witha warm body and a blank check. But they also can’t use the “Actnow!” strategy. This is because of the oligopolistic system knownas academic accreditation. Later in this report, I will be morespecific about how this system works, but trust me: accreditationis the key to high costs, the restricted entry of new competitors,and low value for parents’ money.
Ifyou play the collegiate game by the official rules, you andyour money will soon be parted.
The good news is this: there are unofficial rules. If you knowwhat they are, and if you can persuade your child to follow them,your child’s college education won’t cost you an arm and a leg.It will cost you only a rib or two.
A SUCKER’S GAME
Here is the dirty little secret of the academic degree-awardingindustry known as higher education:
A college degree is way overpriced. Students (parents)pay way too much money. Students spend way too much time in class– time that is far better spent in reading and writing. Thenthey pay room and board on top of it.
Paying for a child’s college education is the largest singleexpense that parents face, other than buying a house. But buyinga house is done over decades. A college education must be paidfor in four or five years. Loans are available, but they mustbe paid off even if the student quits or flunks out, unlike buyinga house. Also, a house may appreciate in value. It rarely fallsin value. In contrast, there is no re-sale market for receiptsfor college expenses.
What I’m going to discuss here, very few people know about.If I had not spent so much time inside academia, I probably wouldnot have found out, either.
I know how the American academic system works. I was trainedas a scholar. In 1972, I was awarded a doctoral degree by oneof America’s better universities. I have written 43 books. Ihave taught at the college level.
I’m outside the academic system, and I have been for most ofmy post-doctoral career. I know enough about how the system worksnot to be overly impressed with it. I also know how to beat thesystem. The system is rigged against upper-middle-class parents.
ROLLING THE DICE FOR $11,000 A YEAR
The average college bill per year at a tax-funded universityis about $11,000 a year. This is where most students attend.
About 15 million Americans are attending college today. Abouthalf pay their own way. The other half are supported by theirparents. Fewer than half of all students who enroll in collegegraduate with a bachelor’s degree.
So, it’s a very big gamble to invest time and money in tryingto earn a degree. The odds are against you. Your goal ought tobe to reduce these odds. You can do this by taking advantageof loopholes.
Every system has loopholes. Loopholes are official exceptionsthat are mandatory for any system to be consistent with its officialstandards, but which would threaten its economic survival ifmore than a small minority of users took advantage of these loopholes.Higher education is no exception.
Here is my view: there is no good reason for people not touse them when they’re available. They are made to be used. Youmight as well be the person who uses them.
Paying retail is not necessary. If a person knows where tolook, he can earn a fully accredited bachelor’s degree that isnot overpriced: not in money charged, not in time invested (ifhe can meet certain life-experience requirements), and not indistance travelled. He can earn it at his desk for under $7,000.In under three years.
Because of the World Wide Web, a student never has to leavehis desk to earn a B.A., except to take monitored exams at thelocal library.
The Web has changed just about everything. But it’s only oneoption. There are others. There are many ways to skin the academiccat.
BEATING THE SYSTEM
You can send a child to a distant campus, either tax-funded($44,000 TRBB) or private ($80,000 TRBB). Or you can let himlive at home, work part-time to fund his own education, and spendas little as $7,000 over 2.7 years.
I know of a case of a home-schooled student who earned a collegedegree in six months for $5,000. This was not some phony diplomaissued by an unaccredited diploma mill. It was a degree froma state university. He never left home to attend. He did noteven live in the same state.
How wasthis possible? Because there are a few accredited collegesthat grant peopleacademic credit for their education-relatedwork experience, and even life experience, meaning unsalariedwork. I call these “merit badge courses.” If a student can showthat he has the knowledge equivalent to a college class, he doesn’thave to take the class. He just has to pay for it – sometimesat a big discount. Some students can knock a full year off oftheir course requirements this way.
This option makes sense educationally. What we learn on thejob sticks with us. Our work teaches us in the broadest sense.Why shouldn’t adults receive formal educational credit for knowledgethey have mastered – not just learned in a classroom, but trulymastered – on the job?
Only a few accredited colleges grant academic credit for workexperience and life experience. Some that offer this don’t publicizeit. They can’t afford to. Advertising is expensive. So, the storydoesn’t get out. That’s why so few Americans know of this opportunity.
A degree from Harvard, Yale, or Princeton will have a lot moreprestige than one from any of these colleges. But will that IvyLeague degree get its holder a job that pays 20 times more (aftertaxes) than a degree from a college that costs 20 times less?Not likely.
College expenses for most students are high because collegesare inherently inefficient. That’s because the original modelwas invented eight centuries ago, when there were only six orseven colleges in Europe, and the printing press had not beeninvented. A library of a thousand hand-copied manuscripts wasworth a fortune. Young men had to journey long distances to earna college degree, back when travel was expensive. Not many peoplecould afford to do this.
Colleges adopted the lecture method because students back thencould not afford to buy books. Lectures are highly inefficientways to teach. Consider how you learn anything that’s important.You don’t do it sitting in a lecture hall, except maybe for abrief introduction, and even that could be put on videotape.You probably don’t read a textbook. You learn from a manual.Then you learn on the job, preferably under the immediate guidanceof someone who does the job already.
Why would anyone choose to sit in a classroom for 50 minutes,three times a week per course, five courses per semester, for16 weeks per semester? No business teaches its employees thisway. Yet colleges teach mainly this way. It doesn’t make sense. . . from the student’s point of view. It makes a lot of sensefrom the teachers’ point of view – teachers who may lectureonly 6 times a week, and rarely more than 12.
Today, there are local public libraries (which became widespreadless than a century ago), academic paperback books (introducedabout 50 years ago), videotapes (introduced widely only in 1978),CD-ROM’s (1991), and the Internet (which really got rolling in1995). But, despite all this technology, traditions die hardin academia. It costs college students (or their parents) a lotof money to keep these traditions alive.
A student can read a book at home or at a local city library.He can write a term paper at home or in the library. He can takean exam at the city library, with a librarian as a proctor tomake sure he doesn’t cheat. He doesn’t need to attend college.But most colleges require students to attend classes on campus.Why? Not for the students’ sake.
PAYING FOR WHAT YOU DON’T NEED
The vastmajority of colleges require students to attend classes oncampus. Thisrequirement has nothing to do with the way thatmost students learn new academic material. It has everythingto do with paying off mortgages on the college’s expensive buildings.It has everything to do with shelving $100 million worth of booksin a $50 million library building, with a full-time staff, sothat faculty members can write term papers for each other thatalmost nobody will ever actually read. This is called “publishor perish.”
Unless a student wants to major in physics, chemistry, or engineering,any college should be able to teach him whatever he needs toknow through the Internet. This education should not cost morethan $2,000 per year for four years. And that is with no governmentsubsidy.
Even today, with very little competition among the colleges,it need not cost more than $1,750 a year if you know where tolook. But you have to look very carefully.
So, why does it usually cost so much more? Because the collegeswant it this way.
Only a handful of colleges have adopted 100% Internet-basedB.A. degree programs. The instructors employed by a 100% Internet-basedcollege would have to work a lot harder than they do now. Theywould have to grade a lot more papers for a lot more students.They would not be paid $50,000 a year mainly to deliver ninehours of lectures a week, 32 weeks a year – lectures that theywrote 20 years ago. The only thing that keeps Internet-basededucation from replacing 90% of the colleges in America is this:the people who run the colleges have got themselves what economistscall a cartel. They don’t want to lose it.
THE ACADEMIC CARTEL
What is a cartel? You have heard of OPEC, the cartel that controlsthe supply of oil. Its full name is the Organization of PetroleumExporting Countries. OPEC representatives get together and agreeto reduce their production of oil. This keeps oil prices high:high demand, low supply.
That’sexactly what colleges do. They have set up an academic cartel.They keepout new colleges – colleges that are willingto meet consumer demand by selling educational services at alower price. The higher education system doesn’t allow them todo this. There is a legal barrier to entry for new colleges.It’s called “accreditation.”
Existing colleges have joined regional accrediting associationsthat Ph.D.-holding bureaucrats operate. The representatives ofthese colleges set the standards for accreditation. It’s kindof like a club. I mean the kind of club that you hit people overthe head with.
Accreditingorganizations are not run by the government, but they dependon state governmentsto make non-accredited collegesillegal. The legal use of the words “college” and “university” iscontrolled by the states.
State governments define what constitutes a college or universityinside their own borders. Most states define a college in termsof one criterion: it is accredited by one of the regional accreditingassociations. This pretty much freezes the number of collegesthat are legally allowed to issue accredited degrees.
Accreditation reduces the supply of degrees actually awarded.This reduced supply of education is not based on a lack of supplyof students who are smart enough and who are willing to workhard enough to qualify for a college degree. It’s a questionof an artificially limited supply of degree-granting institutions.
The colleges have those huge buildings, lawns to mow, employeesto pay, and all of those professors, assistant professors, andteaching assistants with no Ph.D.’s (who do most of the workgrading papers and leading discussion sections for freshmen andsophomore classes). This is a huge investment. If there weretrue competition, 100% Internet-based colleges would bankrupthundreds of these schools. Most of the others would have to learnhow to compete.
As a general rule, accrediting associations only accredit schoolsthat invest millions of dollars in buildings. But in today’sdigital world, liberal arts instruction doesn’t require realestate. It only requires dedicated teachers and dedicated studentswho are self-motivated.
If the degree-granting system were really honest – if it werenot run by a cartel – then accredited college degrees wouldbe offered to any person who could pass the same exams that thetuition-paying students also have to pass. If the student couldlearn the material on his own, but pass the standardized exams,then he would get the degree.
Accrediting associations don’t allow this. Why not? Becauseit would bankrupt hundreds of colleges that are protected fromtrue competition by the accrediting associations. It would wipeout the colleges’ tuition system, real estate system, and lowteaching load system.
Inevery system, there are loopholes. Accreditation has left intactat least seven of them. Hardly anyone knows about allseven. One of them is off-campus learning.
A DISTANCE LEARNING PROGRAM
A distancelearning program, i.e., an accredited program that offers aninternet college degree online, is a huge threat to the economicsof today’s campus-based system of higher education. But hereand there, you can find an accredited distance learning collegeprogram or a distance learning university program. The accreditingagencies dare not ban every distance learning degree program,for that would be undemocratic. But they monitor every distancelearning degree program very carefully to make sure that theprograms don’t get too price-competitive. Nevertheless, I knowof at least four well-respected universities that offer an accrediteddistance learning degree with very low tuition costs (under $100per credit).
Only about 10% of 4-year colleges and universitiesoffer their students as many as half a dozen accredited distancelearning degree programs, even when they offer a hundred majorsto on-campus students. Most of these public universities chargethe same tuition to in-state distance learning degree studentsthat they charge to on-campus students, even though distancelearning degree program students don’t use the colleges’ realestate. Most of the tax-funded universities charge three tofour times as much tuition to out-of-state distance learningdegreestudents. Nevertheless, some real bargains have slipped throughthe cracks. But you have to know about their existence andthen go looking for them. Here is a good introductorylist:
Most college administrators assumethat a distance learning program is substandard – second-best education. Evenif it’s an accredited distance learning college degree program, it’s supposedto be substandard. But is distance learning really substandard? The evidencesays otherwise. The most recent evidence suggests that distance learning is superiorto traditional classroom education, from highschool through college.
Maybe you think I’m exaggerating. Maybe you think there issome tremendous educational benefit that students receive byattending classes on a college campus, compared to the educationgained by students who learn at home. Let me prove to you thatyou’re wrong.
Well, actually, I won’t prove this to you. Thomas L. Russellwill. He has been studying this question for a long time. Hehas gone back and looked at the published evidence of the comparativeperformance of students who have taken their courses on-campusvs. those who have taken their courses off-campus. These academicstudies go back to 1928.
Russell’s amazing discovery is this: there is no significantdifference in student performance. This is what study after studyhas shown, decade after decade.
Go to his remarkable Web site. Read for yourself the findingsof educational professionals.
Click on any year to see a summary of that year’s report. Theyears are on the left-hand side of the screen.
Here are just a few samples from the era before TV was widelyused as an alternative to actual attendance in a classroom:
1928: “…nodifferences in test scores of college classroom and correspondencestudy students enrolled in the samesubjects.”
1936: “[Resultsof this study were very similar to Crump 1928 and showed]…nodifferences in test scores of collegeclassroom and correspondencestudy students enrolled in the same subjects…”
1940: “Inall but two comparisons, correspondence study studentsperformed as well as or better than their classroom counterpartsand in the twocases which were the exception the differences were not significant.”
1943: “…showed no significant differences between the groups interms ofmotivation to use supplementary readingmaterial.”
1949: “[Resultsof this study were very similar to Hanna 1940 and Meierhenry1946 and showed…] in all but two comparisons,correspondencestudy students performed as well as or better than their classroomcounterparts and in the two cases which were the exceptionthe differences were notsignificant.”
Itgets even more amazing. Recent studies have revealed that studentswho have been educated in an off-campus learning settingproduce higher performance rates than conventional classroom-basededucation does.
I ask you: Why are you determined to have your child at age17 or 18 go through the ritual of the dorm key? Why not keepthe child closer to home for an extra two years, and then sendthe child off to college?
Even better, why not let the child stay at home for all fouryears, work part-time, earn enough to make a down payment ona home, and get the B.A. by mail?
Best of all (this is not hypothetical), why not pay $5,000and have the child get an accredited degree in less than oneyear? Even I, as a man from inside academia, didn’t know thatthis is possible. I found out less than a year ago.
WHY PAY RETAIL?
No college can afford to give information away. Yet there isalmost nothing that is taught in a college that a student couldnot get in a local public library or on the Web.
If youhave ever seen the movie, “GoodWill Hunting,” you probablyremember the scene in the Cambridge, Massachusetts restaurantwhere Will, a high school graduate who is a genius, blows awaya hot-shot Harvard student. Will knows far more than he does.That’s because Will has spent time in the public library, andhe remembers everything he has read. He tells the Harvard studentthat he is spending a fortune to learn what Will has learnedat the public library.
There is a mid-way position between the Harvard student’s parents’enormous expenses and Will Hunting’s lack of formal education.You child or grandchild can earn an accredited degree at a fractionof the cost. I hope I have motivated you to pursue other pathsto this needlessly expensive, high-risk, government-regulatedcrap-shoot.