Thursday, February 23, 2023

Young professors should think about their retirement before taking their first job

 The academic job market is terrible right now--especially for people with newly minted PhDs in the humanities or social sciences. A person who graduates with a doctorate in those fields might be tempted to take the first job offer rather than wait for an offer from a more prestigious university or one that pays a higher salary--an offer that might never come.

That could be a big mistake. Before taking any academic job, young profs must investigate the university's retirement plan. Why? Because retirement programs at universities differ widely from state to state.

Here are two cautions for academicians looking for that first tenure-track job:

First, look at the retirement programs at the colleges you are considering. Some states have better retirement plans for public-college professors than others. 

Some states do not participate in Social Security, and public employees in those states will not get a Social Security check when they retire.  Louisiana is one of those states, along with Alaska, Colorado, Maine, Massachusetts, Nevada, Ohio, and several others that do not have universal coverage for all their public employees.

That may not mean much to young scholars in their twenties or thirties, but it will mean a lot to them when they celebrate their 65th birthday.

You may think this is not a big problem because you plan to accumulate Social Security credits when you work in states that participate in Social Security (most of them). You will get a Social Security check based on those credits. 

You should know, however, that you will be penalized for being in a non-Social Security retirement program, which will reduce your Social Security benefits.

The rules are complicated, so do your own research. However, if you spend your entire career at a public university in Louisiana, you will get nothing from the Social Security Administration when you retire.

Second, professors at the beginning of their careers should carefully consider whether they want to join their public university's defined-benefit plan or select an optional retirement plan (offered by companies like VALIC and TIAA-CREF) that builds retirement income by investing in mutual funds.

You may think the stock market will produce more income for you than a defined-benefit plan, but who knows? Sometimes the stock market is up, and sometimes it is down. Where will the markets be when you plan to retire?

Make your own decision, but you will be asked to decide when you start work, and that decision is likely irreversible.

This is my experience. I have a defined-benefits pension from my Texas years and retirement income from my optional retirement plan based on the years I worked in Louisiana.  

You know what? I like the Texas defined-benefit plan better than the Louisiana ORP.

What do you mean I'm not in the Social Security program?

Sunday, February 19, 2023

Are we out of our minds? LSU's women's basketball coach makes $2.5 million and has 171 pairs of shoes

 General Motors found a cash cow when it created GMAC, its lucrative auto financing arm. People said that GM evolved from being a car maker with a finance company to a financial institution that also made automobiles.

We might say something similar about the nation's public universities. Once, they were educational institutions that offered varsity sports. Now they are becoming sports franchises that educate students as a side business.

Look at Louisiana State University, the Pelican State's flagship public university. According to Tiger Rag, "the Bible of LSU Sports," LSU's football program spent $25 million in salaries and wages last year and lost almost $14 million in Fiscal Year 2022.  

LSU's head football coach Brian Kelly makes about $6.5 million annually. Ed Orgeron, who took LSU to a national championship, was bought out in 2021, costing LSU's athletic program $17 million.

Kim Mulkey, LSU's women's basketball coach, makes $2.5 million a year and owns 171 pairs of shoes. She also has a gig endorsing Gordon McKernan, a personal injury lawyer. Her likeness appears on billboards all over Baton Rouge. 

Speaking of Gordon McKernan, perhaps Baton Rouge's leading personal injury attorney, he estimates that he gave between $750,000 and $1,000,000 to NIL (short for "Names, Images, and Likeness,") an outfit that helps college athletes sell their "brand" by marketing themselves for cash.

How much money do LSU football players get for selling their brands? According to Tiger Rag, LSU's 85 scholarship football players are worth an average of $479,000!

And then there is the sports betting revenue. LSU proudly announced that it was the first university in the Southeastern Conference to sign a contract with a gaming company. Sports betting is now advertised in Tiger Stadium (along with the Louisiana Lottery). 

LSU's spin doctors emphasize that much of the money that pours into LSU athletics comes from its athletic foundation, which is a separate entity from the university. This is true, but does it make sense for wealthy individuals and corporations to get tax breaks for supporting university sports? 

LSU's Tiger Athletic Foundation generated $41 million in revenue in 2021, mostly from donations from wealthy individuals and businesses. And LSU is the only school in the SEC that gets more donations for athletics than it does for academics.

Of course, everyone in Louisiana loves sports. I get pumped when the LSU Tigers play one of their arch-rivals during the SEC football season.  But who can afford a ticket to a ballgame, much less the eight-dollar beer sold in the stadium?

I wonder whether Louisianians are focused on the right things--the future of our youth, for example.

Louisiana's public universities rank next to last in terms of return on investments for students enrolled in them. According to U.S. News, Louisiana ranks #48 in education. The state is the nation's second poorest, with a poverty rate of almost 18 percent. 

Some Louisianians are doing fine. LSU football players get paid to endorse Hooters and a personal injury lawyer.  The athletic coaches are getting rich, and even some assistant coaches make more than a million dollars a year.

Yet our state's public schools are the third worst in the US, and our coastline loses the equivalent of a football field every ninety minutes.

Maybe Louisians should rethink their priorities. In the meantime, Go Tigers!!

Kim Mulkey, you look fabulous!

Friday, February 17, 2023

Surprise! Surprise! Survey finds college graduates are not emotionally ready to enter the workforce

 Before the French signed an armistice with Germany in 1940, France and England were allies against Hitler. One of their first major joint ventures was a plan to invade Norway and deprive Germany of the iron ore that the Nazis needed to wage war.

British, French, Norwegian, and Polish forces attacked German troops at Narvik, the leading Norwegian port for exporting iron ore. Ten times larger than the Germans' defending force, it took the allies a long time to dislodge the Nazis. Then France and Great Britain threw their victory away by abandoning Norway to send troops to deal with the Wehrmacht onslaught in France.

British General Claude Auchinleck, reflecting on the Norwegian campaign, expressed disappointment with his country's army. "By comparison with the French, or the Germans for that matter, our men for the most part[,] seemed distressingly young, not so much in years as in self reliance and manliness generally."  In other words, in the spring of 1940, the British army wasn't up to the dirty job of defeating the Nazis.

Something similar is happening with American college graduates. A recent survey of recent college graduates by the Mary Christie Institute concluded that many recent college graduates aren't emotionally prepared for the world of work.

"Our findings found that once in the workplace, young people continue to struggle mentally and emotionally," MCI reported.  Overall, more than half the respondents reported mental health problems, with women reporting more mental health issues than men (p. 4).

Disturbingly, almost 40 percent "of respondents said their college did not help them develop skills to prepare them for the emotional or behavioral impact of the transition to the workplace" (p.  5).

Over half the respondents said they experienced burnout at least once a week (p. 4). Not surprisingly, graduates with heavy financial obligations reported more anxiety than their peers who were not excessively burdened by debt.

The MCI authors pointed out that the COVID pandemic probably contributed to the stress and anxiety young college graduates are facing. And I'm sure that's true.

Nevertheless, the MCI report highlights the fact that colleges need to do more to prepare their graduates to be confident and successful workers. Unfortunately, I believe colleges are contributing to their graduates' anxieties by placing them in an artificial environment that is very different from the corporate workplace.

First, grade inflation is rampant throughout higher education, which means that students are getting good grades without doing much work. Many perceive their stellar report cards as participation trophies--they get a good grade if they just show up for class. That attitude often transfers to the workplace, where college graduates' perception of work conflicts with employers' expectation that their professional workers do their best to excel.

Second, students who graduate from college without trying hard may believe their bachelor's degrees prove that they are more intelligent than most people.  In fact, someone who graduates with a high GPA from a humanities program at a mediocre college often doesn't know anything that would be useful on the job.

Finally, colleges that cause their students to take on heavy student-loan burdens are increasing their graduates' anxiety when their student loans stop, and they have to pay their rent and monthly student-loan payments.


Wednesday, February 15, 2023

What happens to young people who go to college without basic reading and writing skills? It's not good

  The Baton Rouge Advocate published an editorial a few days ago titled "Get ahead in colleges like LSU, without all the hard work." 

The editorial quoted Benjamin Haines, a graduate student at Louisiana State University, who has discovered that many LSU students arrive on campus without the basic skills they should have learned in high school.

"In my anecdotal experience as a teaching assistant at LSU," Haines wrote, "many young college students aren't equipped with the requisite writing or literary tools necessary to produce passable writing, a product of a failing secondary education system, rather than an indication of students' abilities. 

Haines continued with this condemnation:

Especially here in Louisiana, professors, instructors, and teaching assistants fight a daily uphill battle against a decrepit secondary educational system in which students are failing to receive the necessary literary skills to excel at the next level of learning, and business-minded university administrators that accept students who aren't genuinely qualified into their rolls.

As a professor who spent twenty-five years in public universities, I can attest that Haines' rebuke of secondary education is on the mark--at least here in Louisiana. Many students graduate high school without a basic understanding of grammar and punctuation and no clear idea about constructing a paragraph, much less a well-reasoned analytical or research paper.

And Haines is right to blame university administrators for admitting students unprepared to do college work. University leaders are desperate for tuition dollars and are willing to foist clueless young people off on hapless professors and instructors who are faced with three choices:

1) They can flunk unprepared students. Students whose GPAs plummet will eventually be expelled on academic grounds.

2) Professors can turn their university courses into remedial classes, which will require them to teach students basic literary skills they should have learned in the sixth grade.

3) They can indulge in grade inflation and give every student a passing grade. I fear that this is the option most college instructors are taking.

What happens to the unprepared students who go to college? Some become discouraged and drop out. Others will soldier on, drifting into soft majors with low academic standards. Often these misfits stretch out their four-year degree programs to five, six, or even seven years.

With grade inflation and declining academic standards, many unprepared students will eventually obtain college degrees without learning anything useful.

What will they do then? They will stumble into the adult world of work with a mountain of student debt and no practical job skills.

But not to worry. People who get worthless college degrees can always go on to graduate school.

Friday, February 3, 2023

Will a degree from your public university pay off?

 Education Secretary Miguel Cardona says people with college degrees earn one million dollars more over their lifetimes than people who only get a high school diploma. You're nuts, then, if you don't go to college.

Unfortunately, Secretary Cardona's cheerleading pitch for higher education is only partially accurate. For example, people who attend for-profit colleges don't do so well. According to a Brookings report published a few years back, nearly half (47 percent) of the people who attend for-profit colleges default on their student loans within five years of beginning repayment (p. 48, table 8). And the overall five-year default rate is 28 percent.

We also know that thousands of academic programs don't pay off. Higher Education analyst Robert Kelchen compared student -loan debt to earnings for 45,000 educational programs and identified thousands where students left school owing more in student loans than their first-year salaries.

And more recently, the Foundation for Research on Equal Opportunity ( released a report on educational outcomes for students who attend public universities. Foundation researcher Preston Cooper found Return on Investment (ROI) varied widely among the states.

Students who studied at a public university in these five states had the highest median return on investment: South Dakota ($216,027), Minnesota ($214,923), Iowa ($214,105), Kansas ($180,770), and Pennsylvania ($167,442).

At the bottom end of the Return-On-Investment scale were public universities in these five states: Hawaii (negative $5,720), Louisiana ($18,246), New Mexico ($20,877), Montana ($24,909), and Connecticut ($38,979).

Living as I do in Louisiana and only two blocks from Louisiana's flagship university, I was startled to learn that Louisiana public institutions have the lowest median return on investment of any public university system in the United States, except Hawaii, which has a negative return on investment.

Of course, not all students graduating from a Louisiana public college will end up with a low return on their college investment. Engineering graduates from LSU will do fairly well, as well as nursing graduates. 

Colleges will never admit that they operate academic programs with poor financial outcomes. There's no warning sign on the door to the sociology department or the department of gender studies saying, "Ye who enter here are lost."After all, tenured professors teach in those departments, and they must lure at least a few gullible students to sign up for their loser programs.

Young people planning their college careers need to do their own research about the universities and academic programs they are considering. Don't be seduced by the colleges' glossy brochures--the ones that show pretty cheerleaders cavorting at sporting events and kindly professors instructing intense students on how they can cure cancer.

Before choosing a college and a major, ask yourself these questions. 1) How much will it cost?

2) How much money will I need to borrow, and how will I pay it back?

3) What's the monetary return on my college investment? 

If you don't ask those questions, you may wind up with a bogus college degree, a mountain of student debt, and no clear way to earn a middle-class living.


Sunday, January 22, 2023

Robert Kelchen Calcuates Debt-to-Earnings Ratio For 45,000 Post-Secondary Programs: A Treasure Trove of Data

 As Education Secretary Miguel Cardona observed recently, college graduates, on average, make about one million dollars more over their working careers than people who only have high school credentials. 

I'm sure that's true, but that fact doesn't mean that all college programs lead to higher incomes or that all programs are reasonably priced.

Robert Kelchen, a professor at the University of Tennessee, Knoxville, performed a valuable service by creating a dataset that compares program-level debt with earnings outcomes for more than 45,000 postsecondary programs. This dataset calculates the debt-to-earnings ratio for students one year after they leave their respective institutions.

Obviously, this enormous dataset can be analyzed in many different ways. My brief analysis examined programs with the highest debt-to-earnings ratios--those that left former students with three times as much debt as their first-year earnings.

Forty programs are in this category, and all but six are graduate programs. Five Branches University, a private institution in California, tops the list with a debt-to-earnings ratio for its master's degree in Alternative and Complementary Medicine of more than nine to one. Its students leave the program with an average debt load of $144,276  and an average salary one year after leaving the school of only $16,011.

Second on the list, with a debt-to-earnings ratio of almost eight to one, is Bastyr University's program in Alternative and Complementary Medicine. One year after leaving the program, its former students have a median income of $22,411 and an average debt load of $175,690.

In fact, of the 40 programs with debt-to-earnings ratios of more than three to one, eleven are programs in alternative medicine, complementary medicine, or acupuncture.  

Film, fine arts, and drama are also well-represented among programs with high debt-to-earnings ratios. Of the 40 programs with debt-to-earnings ratios of more than three to one, thirteen are fine arts, film, or drama programs.

Professor Kelchen's database prompts this question.  How much should students borrow to fund their education? 

Camilo Maldonado, writing for Forbes, recommends a borrowing limit of no more than two-thirds of a graduate's expected starting salary. Thus, if you expect your starting salary to be $50,000, you should borrow at most about $33,000. 

Applying that formula to Professor Kelchen's database, students graduating from almost 4,000 academic programs are leaving school owing more money than they can comfortably pay back.

As Maldonado pointed out, the federal student loan system is designed to lend students potentially more money than they can repay. The colleges don't care how much debt their students amass to finance their studies.

On the contrary, students must decide for themselves how much college debt is prudent to accrue. Unfortunately, as Professor Kelchen's database makes clear, a great many students are not making that calculation. 

In his commentary, Maldonado reminds us that the price of a college education is increasing almost eight times faster than wages. Thus, Maldonado warns, "This means that overpaying for an education is becoming increasingly disastrous." 

Wednesday, January 18, 2023

DOE wants to modernize the student loan program but mucks up the planning process

Like a repentant boozer who promises to give up drinking, the Department of Education pledged to modernize its neanderthal student loan program. Unfortunately, like a chronic drunk, DOE simply can't clean up its act.

DOE's own Inspector General audited the Department's modernization efforts and issued a report last week.  The audit concluded that DOE bungled its modernization job.  

Typical of a government document, the Inspector General's report is written in govspeak and is almost incomprehensible.  Here's just one sentence from the audit report, which I urge you not to read:
FSA not completing the required or applicable planning steps or following best practices for acquisition planning for the Next Gen projects we reviewed may have contributed to the stakeholders’ misunderstandings regarding scope, project requirements, and stakeholder needs; and to multiple changes to some of the projects’ solicitations, multiple bid protests, budget deficiencies, and poorly scoped solutions that FSA described in its Summary of Lessons Learned for the Next Gen Enhanced Processing Solution and Interim Servicing Solution projects and in FSA’s Fiscal Year 2023 Congressional Budget Request.

Fortunately, Katherine Knott, an Inside Higher Ed reporter, understands govspeak and translated the auditor's report into plain English. In a nutshell, Knot reported that DOE "didn't follow best practices in budgeting, planning and managing the modernization of its student loan system." Knott also wrote that DOE's Office of Student Aid "didn't complete budget requests for many components of the modernization until after the bid solicitations were issued."Apparently, senior DOE officials couldn't even agree on the modernization initiative's objectives.

As we might expect, DOE's officials had a govspeak excuse for the screwup. Stakeholders, including Congress, were confused and frustrated due in part to "inadequately defined changes in strategy and a failure to account for constituent feedback."

In short, DOE's bumbling effort to modernize its byzantine student loan program ended in a SNAFU: Situation Normal; All Fucked Up."

Hey, man. The situation is normal