Elon Musk says MBA degrees are overrated: Does it make sense to go to graduate school?

 Elon Musk says MBA degrees are overrated, and he should know.  Musk doesn't have an MBA, and he's worth $166 billion.

Here is what Musk said in a recent interview:

The path to leadership should not be through an MBA business school situation. It should be kind of work your way up and do useful things. There's a bit too much of the somebody goes to a high-profile MBA school land then kind of parachutes in as the leader but they don't actually know how things work. They could be good at, say PowerPoint presentations or something like that, and they can present well, but they don't actually know how things work. They parachute in instead of working their way up. 

Not surprisingly, many MBA teachers disagree with Musk. Robert Siegel, who teaches at the Stanford Graduate School of Business, said Musk is "completely off base talking about M.B.A.s." Siegel challenges Musk's charge that MBA  courses don't teach people how to be entrepreneurs. 

But a Canadian professor of management studies admitted that "[t]he MBA trains the wrong people in the wrong ways with the wrong consequences." And Jessica Stillman, writing for Inc., suggests that people could save a lot of money simply by reading ten well-known books about business. 

Musk's skepticism about MBA degrees falls within a larger debate about the value of graduate degrees in general. Speaking as a person who is embarrassed to have two graduate degrees from Harvard, here is my take on this topic.

First, don't go to graduate school unless you believe a graduate degree will improve your job prospects.  Public-school educators in some school systems get an automatic raise if they have a master's degree in education, so it may make economic sense for a teacher to pursue an advanced degree in education regardless of whether there is any substance to the program.

Second, don't pay too much money to get a graduate degree--especially a degree from a non-elite institution. Many colleges introduced expensive MBA programs after Congress introduced the Grad PLUS program that lifted the cap on how much people could borrow for graduate school.

Northeastern University, for example, offers an online MBA program costing $78,000, which Northeastern claims is "an affordable option" compared to other programs, which charge as much as $200,000. 

Maybe that is so, but ask your friends who have MBAs if they think the experience was worth the cost.  You may be surprised by some of the responses you will get.

Third, don't get a graduate degree that might actually hurt your job prospects.  For example, many law schools offer master's degrees, which require an additional year of study beyond the basic J.D. degree. Some law schools offer graduate degrees in law for people who do not intend to practice law. 

I've known people who pursued a graduate degree in law because they didn't excel in law school and didn't get a good law job after graduating.  An extra law degree, they think, will enhance their job prospects.

But employers can sniff out the motivation for that strategy. If the job applicant had a brilliant career in law school, that person would probably be pulling down a six-figure salary in a prestigious law firm instead of hanging around a law school for an additional year.

And an online graduate degree from a for-profit school may be absolutely worthless in the job market. I've sat on many faculty hiring committees and heard committee members reject any job candidate who obtained a doctoral degree from a for-profit school.

Finally, weigh the opportunity costs of going to graduate school. Are you gaining experience in your present job that will likely pay off later in salary increases and promotions?  If so, why leave the job market and take out student loans to go to graduate school?

This is the bottom line. Don't take out student loans to go to graduate school unless there is absolutely no other way to achieve your professional goals. Millions of Americans have had successful careers without graduate degrees, and millions more have graduate degrees and don't know nuthin'.

Independent expert predicts student loan program will lose a half trillion bucks: Is he right?

 In 2018, Education Secretary Betsy DeVos hired Jeff Courtney, a former JP Morgan executive, to do a forensic analysis of the federal student loan program.  DeVos suspected the program was generating huge losses. 

In fact, in November 2018, DeVos said publicly that only one in four student borrowers were paying down both principal and interest on their debt. She also acknowledged that 20 percent of all federal student loans were either delinquent or in default.

Mr. Courtney's analysis confirmed Secretary DeVos's suspicions. Courtney concluded that roughly one-third of the Education Department's student-loan portfolio will never be paid back. That's about a half-trillion-dollar loss.

The Department of Education rejects Mr. Courtney's conclusions. DOE says his "analysis used incomplete, inaccurate data and suffered from significant methodological shortcomings . .  . ."

Maybe. But we don't need a sophisticated economic model to know that the federal student-loan program is underwater.  We know that 8 million student borrowers are in income-based repayment programs and are making payments too small to pay down their loans' principal plus accruing interest.

So, that is 8 million student debtors who will never pay back their loans. That fact alone should dispel any notion that the federal student loan program is solvent.

Policymakers on the left and on the right can continue arguing about the student-loan crisis as if it were merely a political issue.  But it is not--it is an economic calamity for millions of distressed student-loan debtors. 

We know for sure that burdensome student-loan debt is hindering young Americans from buying homes, having children, and saving for their retirement.  Granting partial student-debt relief, as some politicians propose, will do little to relieve widespread suffering.

In my view, the way to address the student-loan mess is for Congress to amend the Bankruptcy Code to allow insolvent student borrowers to discharge their loans in bankruptcy like any other consumer debt.

Congress also needs shut down the Parent PLUS program, which has a high default rate, particularly among minority and low-income families. 

And Congress must put some realistic cap on the amount of money students can borrow for their college education. It is insane for private colleges to peg their tuition rates at $25,000 a semester. They can only get away with this highway robbery because students can take out federal loans to finance their studies.

Mr. Jeff Courtney believes one-third of student-loan dollars will never be paid back. If Congress doesn't address the college-loan crisis forthrightly and very soon, the losses will be much higher than that.

Bard College: Tuition is $56,000 a year

An online college education: What is it worth?

 In olden times, college students took classes in the ivy-covered halls of universities. 

Male professors showed up for class wearing professorial togs: corduroy pants or rumpled khakis, a blue L.L. Bean oxford-cloth shirt, a knit tie, and a baggy sports coat with elbow patches. (At least that's how I dressed.) Female professors had a different dress code, but I suspect it also came from the L.L. Bean catalog.

Then along came online college courses that students could take from home on their computers. How convenient!  The for-profit schools were the first colleges to aggressively market online courses.  The for-profits charged more than traditional universities--but you could attend class anytime you liked: in the middle of the night if that worked best for you.

At first, the traditional colleges turned up their noses at the online degree programs offered by the for-profits.  An online degree from the University of Phoenix couldn't be compared to a degree from a real university--Oklahoma State University, for example--the Princeton of the Prairies!

But then the admissions officers at the public universities asked themselves this question: Why don't we cash in on the online education racket?

And that's what they did. Many public colleges tacked on a "technology fee" to online courses even though those courses were far less expensive to offer than face-to-face instruction.

When people like me questioned the value of giving students college credit for asynchronous online courses, higher education defended the new technology.  Online instruction is just as good as face-to-face, they stoutly maintained.

But then, the coronavirus crisis forced almost every American college to close in mid-semester. The schools shifted their instruction from the classroom to the home commuter because they had no other choice.

And--the best I can determine--not a single college discounted its tuition. Some of them argued that their online instruction was comparable to having the gasbag professor in the same room.

But the students didn't buy it.  At least 167 lawsuits have been filed by disappointed students who want their money back.  Where did I get that number? From a law firm that keeps track of the litigation and posts the individual lawsuits on its website.

The case against Quinnipiac University in Connecticut is an interesting one to examine.  Stonehill's spring tuition in 2020 was almost 25 grand.  That's for one semester!

Students sued, and they made an interesting argument.  Quinnipiac offered online courses in 2020, and tuition for online classes was only one-third the cost of face-to-face instruction.

In the students' view, Quinnipiac owes them a tuition refund because, by the university's own pricing structure, online courses are only one-third the cost of classes taken on campus.

Now here is my take on the tuition-refund litigation going on around the United States. In my opinion, the universities acted responsibly when they closed their campuses in March 2020 and shifted instruction to an online format.  

Moreover, most private schools--the small liberal arts colleges, in particular--are cash-strapped even in the best of times. If a court forces them to give students wholesale tuition refunds, many of them will close. That would be unfortunate.

But let's not continue the charade of saying that online college courses are comparable to being in the same room with a live professor. Students across America are telling their colleges that they got an inferior product in the 2020 spring semester, and they are right.

Wouldn't you like to see your professor face to face?

References

Author, Class Action Litigation Related to COVID-19: Filed and Anticipated Cases, PIERCE ATWOOD (Nov. 9, 2020), https://www.pierceatwood.com/alerts/class-action-litigation-related-covid-19-filed-and-anticipated-cases (listing 167 cases as of March 9, 2021).

Metzner v. Quinnipiac Univ., No. 3:20-cv-00784 (KAD), 2021 WL 1146922 (D. Conn. March 25, 2021).

College students: Don't take out student loans to get a degree in an easy discipline

"Easy money lays light in the hand," Solzhenitsyn observed, "and doesn't give you the feeling you've earned it."

We can say the same thing about easy college courses and easy academic majors. 

It is quite feasible for a student to get an easy college degree. Universities have ditched rigorous admission standards so that anyone can get into college, and grade inflation has made it possible to pass through a university without studying and without learning anything. 

Every university has a few academic majors that are known not to be challenging. And every college has a few professors who are too lazy to engage in rigorous grading.  

Twenty years ago, when I was teaching at the University of Houston, a professor in my department taught multiple sections of a general education course--a course that students from across the university could count toward their degree requirements. Semester after semester, his classes were packed because he did not grade any assignments, and he gave every student an A. 

Young people may think they are playing it smart by choosing nonchallenging classes and easy academic majors. Why enroll in a class taught by a brilliant professor if the prof is a hard grader?  Why not sign up for classes taught by an indolent professor who gives out puffball assignments and then doesn't grade them?

I confess that I am not speaking from the pinnacle of academic rigor. I majored in sociology--the painful enumeration of the obvious. I made straight As my last semester without even buying textbooks.  And I learned absolutely nothing.

Then I went to law school, where the professors graded on a strict curve. Only 5 percent of first-year students received As, 10 percent got Bs, and 75 percent had to settle for a C (or worse).

To my surprise, I excelled in this rigorous environment, and I graduated with honors from the University of Texas School of Law. Forty years later, this is still my proudest professional accomplishment.

Please take my advice and don't choose the easy path while in college, especially if you are taking out student loans. After four, or five, or six years of study, you will wind up with a vacuous degree and no job skills.  

You may then decide to get a master's degree and select a graduate program with low admission requirements. That choice will lead to a second worthless degree.

Then where will you be?  You will find yourself buried under a mountain of debt you cannot pay off. Those mindless courses and that easy major will embarrass you, and you will feel like a fool. 

As Solzhenitsyn put it, "There [is] truth in the old saying: pay short money and get short value."

Tingling v. ECMC: 52-year old student-loan debtor with multiple degrees loses her case before Second Circuit Court of Appeals

Bankruptcy is intended to give honest but unfortunate debtors a fresh start in life. People who mismanage their finances, spend money improvidently or go broke through their own stupidity can shed their debts in a bankruptcy court.

That is a good thing. 

But the Bankruptcy Code contains an exception for insolvent student-loan borrowers. Unless they can show "undue hardship," they can't get free of their college loans. 

The Second Circuit Court of Appeals defined undue hardship in its Brunner decision, rendered in 1987.  To qualify for a discharge of their student loans, debtors must make three showings: 

1) They cannot pay off their loans and maintain a minimum standard of living.  

2) Their financial condition is unlikely to improve over the terms of the loans.

3) They handled their student loans in good faith.  

Some commentators (including me) hope the Second Circuit will reconsider the harsh Brunner test and perhaps overrule it or at least interpret it more humanely.

Unfortunately, Tingling v. ECMC, decided about a month ago, is a signal that the Second Circuit is not willing to abandon Brunner.

Janet Tingling, age 52, tried to discharge student debt accumulated to obtain multiple degrees (a B.S. and M.S. in biology, an M.B.A., and a Doctorate in Business Administration). Her adjusted gross income was about $50,000 before filing bankruptcy. Her total student-loan debt (including principal, interest, fees, and costs) was $59,000.

Tingling was initially represented by a lawyer in her bankruptcy proceedings, but she released her attorney and pursued her adversary action alone.

Bankruptcy Judge Alan S. Trust denied Ms. Tingling's application to shed her student loans, finding that she failed all three parts of the Brunner test. She appealed to U.S. District Court Judge Joanna Seybert, and she upheld Judge Trust's ruling.

Last month, a three-judge panel of the Second Circuit Court of Appeals (Judges Cabranes, Raggi, and Sullivan) upheld Judge Trust's bankruptcy opinion, ruling that he had applied the Brunner test correctly. The panel expressed no interest in modifying or overruling the Brunner standard.

I am not unduly disheartened by the Second Circuit's Tingling decision.  After all, Janet Tingling's situation was not as compelling as that of other more hard-pressed debtors who have wound up in a bankruptcy court. 

The Second Circuit pointed out that she "is of relatively young age (52 years old), in good health, possesses two graduate degrees in healthcare administration, lacks dependents, and, by all indications, is able to maintain her current level of income" (Tingling v. ECMC, 990 F.3d at 309).

I hope another debtor--someone in more desperate circumstances--takes her case to the Second Circuit and challenges the Brunner test.

 And I hope that person is represented by a competent and energetic lawyer.  Ms. Tingling was handicapped, no doubt, by the fact that she fought her case into the appellate courts on her own, without legal counsel to advise and assist her. 

References

Tingling v. Educational Credit Management Corporation, 900 F.3d 304 (2d Cir. 2021).

President Biden ponders $50,000 student-loan cancelation: That doesn't go nearly far enough

 President Biden has asked Education Secretary Miguel Cardona to prepare a memo on the president's legal authority to cancel up to $50,000 in student debt.  

If he did that, the experts tell us, President Biden would forgive all college-loan debt for 36 million people--about 80 percent of all borrowers. 

Is that a good idea? 

Sort of. Anything the federal government does to provide relief to distressed student-loan debtors is good, so I support a massive cancelation of student debt.

Nevertheless, one-time debt forgiveness is the wrong approach. 

Wiping out student debt without reforming the student-loan program is like fixing a flat tire on a broken-down car and then putting it back on the highway with no brakes. Someone down the road is going to get hurt.

The whole damned, rotten student-loan system has to be torn down. Otherwise, the corrupt, venal, and incompetent American higher education system will continue ripping off the American people.

Obviously, massive reform can't be accomplished overnight.  But here is what we need to do for starters:

1) Congress must remove the "undue hardship" clause from the Bankruptcy Code and allow insolvent student-loan debtors to discharge their loans in bankruptcy. 

2) We've got to shut down the Parent Plus program.

3) The federal government has got to stop subsidizing the for-profit colleges, which have hurt so many young people--especially people of color and low-income people.

4) We've got to stop shoving student borrowers into 25-year, income-based repayment plans that are structured such that no one in these plans can ever pay off their loans.  There almost 9 million people in IBRPs now. 

5) The universities have got to start offering programs that help their graduates get a real job. Degrees in ethnic studies, diversity studies, LGBT studies, and gender studies only prepare people for jobs teaching ethnic studies, diversity studies, gender studies, and LGBT studies.

6) Finally, we must restore the integrity of the nation's law schools.  We've got too many mediocre law schools. California alone has more than 50 law schools, with only 18 accredited by the American Bar Association.   And the law schools need to go back to admitting students based on objective criteria--the LSAT score, in particular.

If we had fewer but better-trained lawyers, we'd have less litigation and fewer attorneys who see their job as being hired political hacks.

Will the Biden administration do any of the things I've outlined? I doubt it.

Higher education is in desperate need of reform. A college education is far too expensive, and much of what is taught at the universities is not useful.  Wiping out student debt will bring some relief to millions of college borrowers. But if the colleges don't change how they do business, the student-debt crisis will not be solved.

Don't let college professors persuade you that learning to speak Standard English is optional

I've been to Georgia on a fast train honey,

I wudn't born no yesterday.

Got a good Christian raisin' and an eighth-grade education

Ain't no need in y'all a treatin' me this way.

Billy Joe Shaver 

A while back, I met an elderly man who told me he had grown up in the Texas Panhandle back in the 1950s.  As a child, he spoke with a strong West Texas accent. But then his family moved to Arizona, and no one could understand him at his new school.

Fortunately, the man recounted,  an Arizona teacher began tutoring him on a one-to-one basis and taught him to speak standard English without a Texas accent. "If it hadn't been for that teacher," he said, "I would never have made a success of my life."

This man's story made an impression on me because I grew up in western Oklahoma, where the people speak very much like the West Texans.  To this day, I have some range dust in my diction; and I think at least some of my classmates at Harvard wrote me off as hick when they first heard me speak.  

Now there is a movement to de-emphasize standard English because it disadvantages minorities--particularly African Americans.  For example, Professor Asao Inoue of Arizona State University argues that students should not be graded based on the quality of writing but "purely by the labor students complete . . ." 

Why should professors stop grading students on the quality of their writing? "Because, Professor Inoue maintains, "all grading and assessment exist within systems that uphold singular, dominant standards that are racist, and White supremacist."

 Rebecca Walkowitz, chair of the English Department at Rutgers University, is on Professor Inoue's wavelength. She sent an email recently, announcing an initiative to incorporate "critical grammar" into the department's pedagogy.

Critical grammar pedagogy, Professor Walkowitz's email stated, "challenges the familiar dogma that writing instruction should limit emphasis on grammar/sentence-level issues so as not to put students from multilingual, non-standard 'academic' English backgrounds at a disadvantage."

Professors Inuoue and Walkowitz's views on language are in harmony with the ebonics movement, which asserts that Black English should be regarded as a language in its own right and not a substandard dialect of proper English.

I sympathize with the academics who argue that we should show more respect for non-standard English. Indeed, some of America's greatest literature contain expressions in non-standard dialect. Huckleberry Finn, for example. And the lyrics of country music (which I love) are full of non-standard English phrases.

When Merle Haggard wrote Hungry Eyes, he penned, "us kids was too young to realize."  Should we give him a C- because he didn't write "we children were too young to realize"? And Elvis--should he have sung "You are nothing but a hound dog"?

Nevertheless, I believe all Americans should strive to master standard English in both their speech and their writing. After all, shouldn't we endeavor to build a common culture? And if that is so, isn't a common culture built on a common language?

I acknowledge that some Americans grew up in subcultures that did not value standard English. Those subcultures should not be denigrated.  I said "y'all" as a kid, and I still say "y'all." 

But standard English is not that hard to learn. I keep Strunk and White's Elements of Style on my desk, which I consult occasionally; and I subscribe to Grammarly, an online editing tool that checks my writing for spelling and grammar. All our commuters have a spell check function.

Besides, every young American must eventually leave academia, where grammar and spelling are being emphasized, and get a paying job. American employers may insist that their employees write and speak in standard English. Indeed, job candidates who misspell words on their job applications and converse in an obscure dialect may not get hired.

In my view, academics who want to deemphasize standard English grammar and diction are doing their students a disservice. Millions of young people are graduating from universities with crushing student loans. If they leave college speaking and writing no differently from when they entered, what was the point of all that education?