Student Loans and STEM

Blog 21 Oct 10 student debt

Random thoughts generated by observing all the PYTs (pretty young things) in the grocery store on a Sunday evening:

How many of the people just graduated from universities are hamstrung by their student loans? Anecdotally, most students graduating from college are saddled with about $20,000 worth of debt. If they’ve just graduated from law school, or earned an MBA, or gotten a Ph.d. in the sciences or liberal arts, it is likely double that. At a minimum, they have to figure out a way to come up with about $300 every month, for at least 5 years.

Easy enough if they are computer science majors, or hard science types whose diploma is in high demand. Not so much for your basic English Lit. major, or, even worse, those gender studies folks. For the latter, it’s likely a struggle to find any job, let alone a job that comes with a salary sufficient to meet the debt obligation.

So, for a lot of them, it’s a future that doesn’t include a shiny new car, or saving for a few years to accumulate a down payment for that first house. No, it’s back to the parents, or slumming with a few room-mates in that edgy part of town where the rents are low enough for a group effort to pay the landlord. Last year, the Washington Post reported that the total outstanding student loan debt was $865 Billion.

Every year, our institutions of higher learning churn out thousands of graduates whose educational achievement, for the most part, doesn’t promise a future of movement up the social ladder.

It is such a waste.

Here’s what I think. First, instead of wasting more money on crony capitalism, investing in solar panel plants, and lending money to Brazilians so they can sell oil to China, let’s write off existing student loans, subject to a few simple rules. Give each debtor a 2-1 tax credit for ever dollar invested in short term Treasuries. Suspend debt repayment while saving is occurring. Once the debtor has accumulated sufficient savings and tax credits, write off the debt. Allow the student to transfer the accumulated funds to savings program created for the establishment of a 10% down payment on a house or condo. I don’t think I have to spell out the benefits to our economy of such a program.


Second, going forward, student loans would only be offered to students enrolled in a STEM degree. Remember, STEM stands for science, technology, engineering, and mathematics. Those degrees just happen to have the highest starting salaries for new employees, represent the hardest degrees at most universities, and are those programs most needed for the US to continue as a dominant player in the world economy.

Want to major in gender studies, women’s contemporary literary issues, or African-American history? Feel free, but don’t expect a dime from the US taxpayer. Because you likely won’t be able to pay your debt, and you most likely won’t be able to find a job to support yourself. Which means the degree is essentially worthless. And that is a luxury this country cannot afford any longer.

The Light at the End of the Tunnel


The end is near, at least for this stage of the journey. Standing between me and the end of my college experience, part deux, are three classes and a semester-long internship. The internship is the most important item on the schedule in that it may point the way to a career and the return of a predictable revenue stream. The classes are intended to take the knowledge acquired over the last three years and turn theory into practical applications of research, analysis, and financial modeling, which will be the engine of a successful career.

Whatever the future holds, this experience has been worth the time, the effort, and the cost. The friendships developed with my fellow students and professors, the discovery of new knowledge, and the realization that perfection, and its sidekick total understanding, are ideals and not reality have all provided me with an understanding of things that is priceless.

Let’s get this last semester going!

Watch Cash Flow

I understand the fundamental meaning of cash flow. Being a middle-aged college student means, simply, that there ain’t no cash coming in, and there is a lot of cash flowing out. What I have not really understood until recently is the financial concept of cash flow. Not to worry, though; Dr. Evans is making damn sure every student in her class has a very clear understanding of the cash flow principles in our corporate finance textbook (you remember, the book I bought online and had shipped from India).

What a surprise then, after slogging through the text, working the examples, studying the powerpoint, and using the online study aids, that the final words of the introductory chapter on cash flow should be a poem. Not a literary milepost, for sure, but a tale to remind the budding business-people that the subject does carry some weight in their futures.

Quoth the Banker, "Watch Cash Flow"

Once upon a midnight dreary as I pondered weak and weary
Over many a quaint and curious volume of accounting lore,
Seeking gimmicks (without scruple) to squeeze through
Some new tax loophole,
Suddenly I heard a knock upon my door,
Only this, and nothing more.

Then I felt a queasy tingling and I heard the cash a-jingling
As a fearsome banker entered whom I’d often seen before.
His face was money-green and in his eyes there could be seen
Dollar-signs that seemed to glitter as he reckoned up the score.
“Cash flow,” the banker said, and nothing more.

I had always thought it fine to show a jet black bottom line.
But the banker sounded a resounding, “No.
Your receivables are high, mounting upward toward the sky;
Write-offs loom.  What matters is cash flow.”
He repeated, “Watch cash flow.”

Then I tried to tell the story of our lovely inventory
Which, though large, is full of most delightful stuff.
But the banker saw its growth, and with a might oath
He waved his arms and shouted, “Stop!  Enough!
Pay the interest, and don’t give me any guff!”

Next I looked for noncash items which could add ad infinitum
To replace the ever-outward flow of cash,
But to keep my statement black I’d held depreciation back,
And my banker said that I’d done something rash.
He quivered, and his teeth began to gnash.

When I asked him for a loan, he responded, with a groan,
That the interest rate would be just prime plus eight,
And to guarantee my purity he’d insist on some security—
All my assets plus the scalp upon my pate.
Only this, a standard rate.

Though my bottom line is black, I am flat upon my back,
My cash flows out and customers pay slow.
The growth of my receivables is almost unbelievable:
The result is certain—unremitting woe!
And I hear the banker utter an ominous low mutter,
“Watch cash flow.”
Herbert S. Bailey, Jr.

Come on, admit it. It’s kinda cute.


Globalization – An Illustration

A new semester means another opportunity to rant about textbook prices – but we’ve been over this before, so I won’t waster our readership’s time. Instead, a tale of global business, intrigue, and, hopefully, happiness.

Some background. That great engine of entrepeneurial opportunism, E-Bay, also operates as another company called specializes in selling used textbooks to poor, desperate students like me at prices that  typically undercut our local "college bookstore" by about 30%. Hey, every dollar counts.

I found out about from a buddy earlier this year; I ordered a book and the seller turned out to be his ex-girlfriend who had just taken the class. The price was right, the service impeccable, she sold the book for more than our "local bookstore" was willing to pay for it, and I saved about $25. As Steven Covey would say, it was a win-win.

Naturally I upped the ante for this semester. I decided to order as many books as I could; in the end, the grand total was 3 books. Patting myself on the back for being thrifty and ingenious, I moved on the next items of the preschool checklist.

School started today and only one of the books is on my bookshelf. It came from Jacksonville, FL. This morning, my mailman dropped off a card telling me that an items is ready to be picked up at the post office, and, by the way, the postage due is $7.00. That order has come from Banning, CA. Still no sign of the third book, although I do have some email correspondence with the "vendor".

The missing book is "Understanding Financial Statement", published in 2009, in the USA.  I sent an email to the "vendor" on August 24, and got this reply:

Hello Agricola,

Hope you must be doing good. As per our order book, the order for the book ‘ Understanding Financial Statements’ was placed by you on August 18,2009. I am glad to tell you that the book was shipped on August 21,2009 using the "DHL" shipment service. You may track the book’s status by putting in the tracking number ‘1329118663’ in the required field of the link ‘‘.

Sorry for the inconvenience. Hope to serve you in a more efficient manner in the future.

Thank You,
(name hidden)


Alarm bells immediately rang. First, broken English. Second, DHL. Aren’t they that Dutch company that ships everything via Air in all of the countries of the world except the US? WTF?

So here is the tracking info:

Tracking history…   Help 
Date and time Status Location Service Area
8/25/2009      1:23 am Transit through DHL facility   Cincinnati Hub, OH
8/24/2009    10:37 pm Depart Facility   East Midlands, United Kingdom
                    10:36 pm In transit.   East Midlands, United Kingdom
                      5:33 am Scheduled to move   East Midlands, United Kingdom
8/23/2009      5:46 pm Depart Facility   London-heathrow, United Kingdom
                      9:05 am Processed at DHL Location.   London-heathrow, United Kingdom
                      8:45 am Transit through DHL facility   London-heathrow, United Kingdom
                    12:44 am Depart Facility   Delhi (new Delhi), India
8/22/2009    11:12 pm Processed at DHL Location.   Delhi (new Delhi), India
                      1:08 pm Transit through DHL facility   Delhi (new Delhi), India
                      3:23 am Depart Facility   Mumbai (bombay), India
                      3:18 am Processed at DHL Location.   Mumbai (bombay), India
                      1:48 am Departing origin.   Mumbai (bombay), India
8/21/2009    11:38 pm Shipment picked up   Mumbai (bombay), India


Yes, you read the report correctly. My $65 textbook (used) is coming to American from Bombay, India. Somehow, this entrepeneur will sell a book, published in the US in 2009, ship it back to the US, paying the air freight charges, and make a profit. Is this a great world or what?

I just hope it is written in English…


The first day of classes for the fall semester. A heavy load of business oriented classes, mostly as a requirement for my minor. The most daunting is Taxation, an upper level accounting course. The professor is a seasoned veteran of the public accounting wars who returned to the (relative) safety of academe to earn her PhD. in Accounting. Tax, she proudly proclaims, is her baby. To set the tone, she provides in the syllabus her most favorite quote:

People think taxation is a terribly mundane subject. But what makes it fascinating is that taxation, in reality, is life. If you know the position a person takes on taxes, you can tell their whole other philosophy. The tax code, once you get to know it, embodies all of the essence of life: greed, politics, power, goodness, charity. Everything is in there. That is why it is so hard to get a simplified tax code. Life just isn’t simple. – Sheldon Cohen, former IRS Commissioner

I open the book and see 29 chapters, 13 appendices, tables on inside front and back covers, a glossary that’s about 15 pages, all written in a font that requires my most powerful reading glasses.

She also points out that accountants learn, on the one hand, to maximize wealth in order to impress bankers, while simultaneously minimizing income to deter the IRS…

This ought to be good.


The Fork in the Road

"Life is all about choices" – Wise Old Man

"When you get to a fork in the road, take it" – Wise Old Baseball Manager


Two roads diverged in a yellow wood,
And sorry I could not travel both
And be one traveler, long I stood
And looked down one as far as I could
To where it bent in the undergrowth;

Then took the other, as just as fair
And having perhaps the better claim,
Because it was grassy and wanted wear;
Though as for that, the passing there
Had worn them really about the same,

And both that morning equally lay
In leaves no step had trodden black
Oh, I kept the first for another day!
Yet knowing how way leads on to way,
I doubted if I should ever come back.

I shall be telling this with a sigh
Somewhere ages and ages hence:
two roads diverged in a wood, and I —
I took the one less traveled by,
And that has made all the difference.

Robert Frost


One thing I learned early on is that gauging weather patterns on a college campus is impossible if you are using male attire as the metric. I’d forgotten, I’m sorry to say, that we fellas don’t need much clothing, even in the dead of darkest winter. Shorts, flip-flops, wrinkled t-shirts? It must be December. Jack Frost in town for a visit? No problem, put on that long-sleeve t-shirt under the short-sleeve t-shirt. A 19 year old guy is impervious and bullet-proof.

The girls are a different story. Bundled like eskimos, they grumpily endure the cold season, warding the winter’s chill with every weapon in their closet. But all it takes is a hint of pollen in the air, and the promise of an hour or so of air temperatures in the 70s, and like all of Nature’s great hibernants, they emerge suddenly to greedily embrace the warming rays of Sol.

It’s great to be on campus.


The Sound and the Fury

Life’s but a walking shadow, a poor player

That struts and frets his hour upon the stage

And then is heard no more: it is a tale

Told by an idiot, full of sound and fury,

Signifying nothing.

This little brouhaha , discussed in an earlier post, died a quiet death over the week of spring break. The continued existence of the College of Charleston’s historic Randolph Hall won out over the demands of students and faculty who were either opposed to the ‘removal’ of the damaging trees or offended by their lack of ‘participation’ in the planning process. 

A collage, if you will, of photos…

From 1940….note the clean lines and magnificent view.

A recent photo, with magnolias encroaching on the building.

Recently invigorated Randolph Hall, restored to its former grandeur. Calm has returned to the campus, with all concerned parties now seemingly aware that exams are just a few short weeks away.


A For Effort

candido-portinari-coffee-worker19391Once, way back when I was a working man, I had a conversation with my boss about an issue with  the operation I was managing. I can’t remember whether it was about our receiving operation, i.e. getting stock into inventory so that our call centers could sell the stuff, or whether it was about our shipping operation, i.e., getting the orders out of the distribution center and into our customers’ hands as quickly as possible. Either way, in the process of defending our operation and my management of same, I made the mistake of saying that we/I had worked our tails off to get the issue resolved to my boss’s satisfaction (and his boss, and his boss, and so forth up the food chain); but there were still problems. I will never forget his response: “We pay you for results, not effort”.

The unsaid message was, of course, that a failure by me to produce results will inevitably result in my boss’s decision not to pay me.

It’s a hard world out there in the work-universe, and by all accounts it’s getting harder by the day.

Thus, it is interesting to see this article come across my google reader this morning, via Maggie’s Farm. Their post reminds us of a possibly archaic use of the term “Give an A for effort” that implied sarcasm. Yes, I do remember that usage……

Regardless, the NYT article discusses the expectations of students in college regarding grades and effort. It makes for interesting reading. Snippets:

“I tell my classes that if they just do what they are supposed to do and meet the standard requirements, that they will earn a C,” he said. “That is the default grade. They see the default grade as an A.”…

James Hogge, associate dean of the Peabody School of Education at Vanderbilt University, said: “Students often confuse the level of effort with the quality of work. There is a mentality in students that ‘if I work hard, I deserve a high grade.’ “…

Jason Greenwood, a senior kinesiology major at the University of Maryland echoed that view.

“I think putting in a lot of effort should merit a high grade,” Mr. Greenwood said. “What else is there really than the effort that you put in?”

“If you put in all the effort you have and get a C, what is the point?” he added. “If someone goes to every class and reads every chapter in the book and does everything the teacher asks of them and more, then they should be getting an A like their effort deserves. If your maximum effort can only be average in a teacher’s mind, then something is wrong.”…

At Vanderbilt, there is an emphasis on what Dean Hogge calls “the locus of control.” The goal is to put the academic burden on the student.

“Instead of getting an A, they make an A,” he said. “Similarly, if they make a lesser grade, it is not the teacher’s fault. Attributing the outcome of a failure to someone else is a common problem.”

Poor Student Greenwood. Obviously he has not yet encountered the perils of working for pay, else he would not let slip some foolish words. But, to answer his question, there is something else beyond effort. It’s called results, proficiency, mastery of the subject, the ability to excel in a job. Not everyone gets an A in life or work because they worked hard.

I know first hand.

UPDATE: Q and O, as usual, states the issue more clearly….

UPDATE #2: Michelle Cottle, writing for The New Republic, is a bit harsher on the kids…..

No, Jason. What would be wrong is if a university trained its students to believe that they were excellent simply for getting up off their futons and doing what was expected of them. Did the reading? Attended class? Stayed up late working on a paper? Good for you, puppy! Sure, you did a craptastic job on that paper–not to mention the final–suggesting that you have no more than a fourth-grader’s grasp of the material. But what the hell!? You worked hard. You showed up–even when you had that reallllly bad hangover. You may not have learned much, but you sure did try. Have a nice fat A. And here’s hoping it comes in handy when your first employer fires you for not being able to tell your ass from your elbow when it comes to doing your job.

Sweet Jesus, where did such dizzying nonsense come from? Sure, it’s easy to blame today’s youth for being whiny, spoiled, and entitled. But the kids had to get these delusional ideas from somewhere. I suspect at least part of the blame lies with all those well-intentioned self-esteem-boosting messages that anxious parents, educators, and coaches feel compelled to spout in this era of making every child feel like a winner all the time. You know, the cheery, you-can-do-it mantras along the lines of, “All that matters is that you tried,” “The only way to fail is not to try at all.”

Um. No. While I understand the self-defeating doubt that we’re trying to short-circuit here, there are, practically speaking, lots of ways to fail–much less fail to get an A. One of those is by not having much of an aptitude for a particular area of study. Not all of us are equipped to be rocket scientists, economists, or playwrights, just as not all of us are equipped to be actors or professional basketball players. If anything, a student who tries really, really, really hard at something and still repeatedly falls short might benefit from realizing that his talents lie elsewhere. (As could the rest of us: Not to state the obvious, but I don’t want a brain surgeon who graduated at the top of his class because he had perfect attendance. I want one who is an artist with a scalpel.) Go ahead: Aim for the stars. Don’t let anyone tell you you can’t do something. But if you actually try that thing and it turns out that you’re not so hot at it, don’t whine about unfair grading. Acknowledge that you have major room for improvement and decide where to go from there. The sooner kids learn how to deal with failure and move on, the less likely we are to have a bunch of whiny, fragile, self-entitled, poorly qualified adults wandering around wondering why their oh-so-stellar efforts aren’t properly appreciated in the real world.

There’s The Dip and there’s self delusion. Sometimes it’s hard to differentiate.