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The College Scam


What do Michael Dell, Mark Zuckerberg, Bill Gates and Mark Cuban have in common?

They're all college dropouts.

Richard Branson, Simon Cowell and Peter Jennings have in common?

They never went to college at all.

But today all kids are told: To succeed, you must go to college.

Hillary Clinton tells students: "Graduates from four-year colleges earn nearly twice as much as high school graduates, an estimated $1 million more."

We hear that from people who run colleges. And it's true. But it leaves out some important facts

That's why I say: For many people, college is a scam.

I spoke with Richard Vedder, author of "Going Broke by Degree: Why College Costs Too Much," and Naomi Schafer Riley, who just published "Faculty Lounges and Other Reasons Why You Won't Get the College Education You Paid For."

Vedder explained why that million-dollar comparison is ridiculous:

"People that go to college are different kind of people ... (more) disciplined ... smarter. They did better in high school."

They would have made more money even if they never went to college.

Riley says some college students don't get what they pay for because their professors have little incentive to teach.

"You think you're paying for them to be in the classroom with you, but every hour a professor spends in the classroom, he gets paid less. The incentives are all for more research."

The research is often on obscure topics for journals nobody reads.

Also, lots of people not suited for higher education get pushed into it. This doesn't do them good. They feel like failures when they don't graduate. Vedder said two out of five students entering four-year programs don't have a bachelor's degree after year six.

"Why do colleges accept (these students) in the first place?"

Because money comes with the student — usually government-guaranteed loans.

"There are 80,000 bartenders in the United States with bachelor's degrees," Vedder said. He says that 17 percent of baggage porters and bellhops have a college degree, 15 percent of taxi and limo drivers.

It's hard to pay off student loans with jobs like those. These days, many students graduate with big debts.

Entrepreneur Peter Thiel, who got rich helping to build good things like PayPal and Facebook, is so eager to wake people up to alternatives to college that he's paying students $100,000 each if they drop out of college and do something else, like start a business.

"We're asking nothing in return other than meetings so we make sure (they) work hard, and not be in school for two years," said Jim O'Neill, who runs the foundation.

For some reason, this upsets the left. A writer called Thiel's grant a "nasty idea" that leads students into "halting their intellectual development ... maintaining a narrow-minded focus on getting rich."

But Darren Zhu, a grant winner who quit Yale for the $100,000, told me, "Building a start-up and learning the sort of hardships that are associated with building a company is a much better education path."

I agree. Much better. Zhu plans to start a biotech company.

What puzzles is me is why the market doesn't punish colleges that don't serve their customers well. The opposite has happened: Tuitions have risen four times faster than inflation.

"There's a lot of bad information out there," Vedder replied. "We don't know ... if (students) learned anything" during their college years.

"Do kids learn anything at Harvard? People at Harvard tell us they do. ... They were bright when they entered Harvard, but do ... seniors know more than freshman? The literacy rate among college graduates is lower today than it was 15 or 20 year ago. It is kind of hard for people to respond in market fashion when you don't have full information."

Despite the scam, the Obama administration plans to increase the number of students getting Pell grants by 50 percent. And even a darling of conservatives, New Jersey Gov. Chris Christie, says college is a must: "Graduating from high school is just the first step."

We need to wake people up.

John Stossel is host of "Stossel" on the Fox Business Network. He's the author of "Give Me a Break" and of "Myth, Lies, and Downright Stupidity." To find out more about John Stossel, visit his site at <a href="" <>></a>. To read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate Web page at




15 Comments | Post Comment
Hmm. It seems to me that people are using "college" for different things. Some people view it as a career move. If you have a particular career in mind and it requires a university level education as the price of admission, then you either pay the price of admission or choose some other career. For others, "college" is an opportunity to find a husband. For still others it's a time to party and relax, paid for by somebody else.

If a person's goal is to spend four years getting ready to be a member of the privileged caste, such that it's practical to spend a few years doing something emotionally fulfilling and "finding" himself or herself, probably higher education is as good a way to do that as any.

If a person's goal is to get education that can help him or her earn a living, a 4-year degree is often a waste. Too many institutions have larded an otherwise practical curriculum up with remedial courses and exposure courses designed to waste time and money. Instead of admitting only students who are academically prepared to handle the curriculum (and forcing the rest to do remedial work on their own time and dime), schools are forcing all students to take "100-level" introductory courses (formerly known as remedial courses for students who didn't get the necessary prerequisites in high school). Likewise, students are required to take introductory courses in a wide range of activities that are totally irrelevant to their field but that are too rudimentary to actually give any proficiency in the subject matter being studied. Mandatory introductory language courses for engineers, hard science courses for liberal arts majors, and humanities courses for scientists come to mind. Add to this the absurd spending on facilities that are enjoyed and used by a few but subsidized at the expense of the entire student body, and you've got a very expensive boondoggle. There's no reason a 4-year "degree" should take more than two years of full-time, year-round study for someone who is actually prepared to do the work.
Comment: #1
Posted by: R.A.
Tue Jul 5, 2011 2:28 PM
The more out of whack the costs of college education become, the more compelling these kinds of arguments become. There is also the problem that many college degrees do not serve as indicators that the graduates will bring critical skills to the industrial operations they may apply to for a job.
That being said, I learned organic chemistry, a lot of the basics of physics, and how to speak and Spanish as a result of my college education. In my work these are all essentials. That simply would not have happened if I had not gone to college.
Interestingly, I never really understood special and general relativity a la Albert Einstein even though they were taught in my physics classes, and I got A's in those classes. I didn't get the whole thing until I read a simple book written by a community college teacher, which got both of those theories across handily by approaching them in a totally different way than was done in my college science classes. (That book is "Relativity Visualized" by Lewis Carroll Epstein, in case anyone is interested.)
I don't believe we are at some inflection point in the history of civilization at which we are going to benefit by doing away with college education. Unfortunately, the sad state of the economy and the increasing stupidity of the average voting member of the mob are pointing us in that direction.
We need to take a serious look at the issue of college education and its availability and cost, as well as how our approach to it differs or does not from how the rest of the civilized world handles it.
Comment: #2
Posted by: Masako
Tue Jul 5, 2011 6:47 PM
I agree with this column. I do think that there are some degrees that are worthwhile, but many of them could be shortened while still offering the same amount of relevant content. For example, I have a business degree and I could have taken all of my business courses in about 2.5 rather than 4 years. The other 1.5 years were just 101 courses and others that were totally unrelated to my degree (but fulfilled some requirement). While I do think it's nice to get a broad education that covers some of those random topics like Geology, Physics, Religion in America, etc. ... the reality is that college is VERY expensive and every student seeking a degree in business should not be forced to pay for the luxury of learning about these unrelated topics. If you stop and think about it, it makes absolutely no sense that the same number of credit-hours are required for degrees as diverse as Marketing, Chemical Engineering and English.
Comment: #3
Posted by: Kim
Wed Jul 6, 2011 9:02 AM
Re: Masako
If the objective of going to college for a specfic career, then it's a must. Otherwise serving as apprentice in the field you want to enter will place you steps ahead in the real world of work and business as opposed to the fantasy of academia.
Thanks for including the name of the book.
Comment: #4
Posted by: Rachel
Thu Jul 7, 2011 5:03 AM
Mr. Stossel, first of all, Mark Cuban is a college graduate. He received a bachelors degree in business administration from Indiana University in 1981. Also, for every name you gave me related to college dropout success story, I can give you 100 success stories of people who have gone on to college and received a degree. However, the largest point is that it all depends on what one's career aspiration is. If an individual wants to be an accountant, lawyer, doctor, teacher ect... college is a MUST. Period! If one wants to be a mechanic, electricion, plumber, then perhaps a trade school is necessary. If one wants to be a garbage man, janitor, fast-food worker, then I believe you are correct, college would be a scam and therefore unneeded. Therefore, I don't understand the point of your article...
Comment: #5
Posted by: sundayj6
Thu Jul 7, 2011 12:38 PM
Today, the national unemployment rate is 9.2. However, the unemployment rate for college graduates is 4.4.

I wouldn't argue that college is a scam. Many college graduates work for Facebook, Microsoft, and Dell. Zuckerberg and Gates may not have needed the coursework, but they benefited from the networking opportunities.

The main point you forgot to emphasize is that the bartenders, baggage porters, bellhops, and drivers are employed.
Comment: #6
Posted by: VetteCityDweller
Fri Jul 8, 2011 8:23 PM
I can provide additional facts from my personal life. I dropped out of college in 1988. Today, I an an IT Consultant, a director for a 2 billion in revenue consulting firm and I am in the top 1% of income earners in the US. My skills were the self taught programming skills I obtained when I was 10 yrs old in 1978 on through high school.
College is a total waste of time at this point. When I have green employees fresh from college, I know two things. Most of what they know is outdated and everything else they learned from their professors is just plain wrong. This is what happens when you try to learn from people who never actually do anything.
College does open doors a little easier. The best option to use a degree is to obtain the cheapest one you can, assuming the person is unable to make it in the world without a degree.
The rest of the world is worse off. Most countries outside of the US will not hire anyone without a degree, they have made it as necessary as breathing in most places. America still has room for those who have the desire to succeed by making their own path in this world.
Comment: #7
Posted by: Todd T
Fri Jul 8, 2011 9:26 PM
It is a pity that the traditional four year college degree is usually required for most occupations, especially in corporate America. As tuitions sky rocket past the rate of inflation (not in small part to easy money student loans, often backed by govt) it is inevitable that many students and their parents will consider alternatives. While there is already the University of Phoenix and other online college institutions, my sense is that we have only begun to scratch the surface of online higher education. Since so many undergraduate classes are held in large lecture halls where the student rarely actually meets the professor, it make sense that such lectures (they are often the same, year after year) could be posted online. Students could study from home (maybe while working full or part time) and be physically present at specified mid term and final exams twice a semester. I earned a BA in Economics from a well respected NY state university more than 25 years ago. Had today's technology been available back then, most of my courses, even the more advanced ones, could have been taken online. The day of reckoning for colleges and universities is coming. In twenty years, maybe less, online degrees will do to the overpiced and inefficient bloated college establishment what online retails have been doing to brick and mortar stores over the past decade.
Comment: #8
Posted by: Alcazar
Sun Jul 10, 2011 3:08 AM
I remember after creating a new, innovated and very successful management training program for a small Ohio Savings and Loan, I was told I could not apply for a Branch Management position because I lacked a college degree. Although I had several years of experience, developed a training program, and had been training newly hired management trainees, I could not apply for the positions in which I was doing the training.
Hummmm, some of the newly hired college graduates had degrees in forestry, biology, communication, or what have you with no, and I mean NADA experience in financial business.
I asked the VP why not me? He looked me in the eye and said that a college degree required sacrifice and discipline. A college degree opened the mind to new ways of thinking. A college degree prepared one to perform well, to think quickly and utilize all possible venues to fulfill ones desire/dreams in life.
Oh, so my years of dedicated experience, long hours (many unpaid) personal sacrifices of family to learn and then apply all that I had learned to develop and incorporate a new training program that would benefit the company and untimely save money in reducing turnover in the middle management positions did not equate sacrifice, discipline, or new ways of thinking.
Although my VP had a Master's in Business Management, I saw nothing but a myopic view of who had potential and who did not.
I have two children that do not have college degrees and are very successful business savvy professionals who entered the workforce with no debt and are now hiring people in this time of high unemployment.
Comment: #9
Posted by: Opinionwise
Mon Jul 11, 2011 8:28 AM
I agree, college is a scam, an expensive one at that. Costs have doubled in the last five years. Yet the quality has not improved. We are give figures comparing income of college grads and non-college labor, but I have to wonder if the goal is to have everyone graduate, then what will a degree be worth? Labor is part of supply and demand, and supply of college grads increases every year.

Recently our vocational colleges were converted to community colleges. This is a big mistake. Two years at a trade schools is far better than a liberal arts degree. I'm not just talking plummers or electricians, but highly technical trades such information technology, and project management just to name a couple.

My son graduated last spring. I hope he finds a job and sees a return on his college investment. But that will also depend on how fast he can pay off his loans.
Comment: #10
Posted by: Tim
Mon Jul 11, 2011 10:45 AM
Timely topic for me, with three children rapidly approaching college age, I've been wondering myself lately whether college is really necessary for them to have happy, prosperous lives. On the one hand, I feel college is absoutely necessary (assuming they study something which can contribute significantly to them earning a living). On the other hand, the whole college "construct" seems to be a rigged game of sorts, especially if one is not rich to begin with. That is, the middle class family needs to scrimp and save just to put their kids through college, leaving little money left for their own enjoyment of living. OR, they can simply leave the kids on their own regarding college, and let them take out student loans (but what parent wants to see their children saddled with debt?). Then, if their kids are lucky, they will make a decent living (thanks to their college degrees?), will raise families of their own, and the cycle will repeat itself with the children's children, all to the benefit of the "Education Business", and questionable benefit to the debtors.
College IS overpriced, for what you get. The whole edifice needs to be torn down, and rebuilt in a manner which is more value-added to the "customers" (i.e., the students, and the public, in so far as public funds are used in anyway to support these institutions).
Comment: #11
Posted by: Corn
Mon Jul 11, 2011 11:24 AM
I would say that many universities are not worth the money and many degrees are not worth the paper they are printed on. I am sending my first child to college in the fall, but he is seeking an engineering degree, so college is a must. He had the grades to attend elite schools, but frankly, we just couldn't justify the costs. Does anyone truly believe that an engineering degree from, say, Stanford is better than one from a big State U like Texas A & M or NC State? Except for perhaps the weight of the name in getting your first job, the courses and requirements are nearly identical and produce the same quality of engineer.
When I was in law school, studying Constitutional law, my prof mentioned that on one point in our history, most jobs did not require a college degree - even higher level ones. Those jobs required applicants to take a rigorous test or even series of tests. Because most African Americans at that time could not pass those tests, due to discriminant schooling, they were ruled unconstitutional. So, employers eventually moved to "college graduates only" can apply. This led to the sharp rise in the sheer numbers of people going to college - remember, it didn't used to be that common. And graduate school was exceptionally rare unless you were a doctor or lawyer. Nowadays lawyers are a dime a dozen, along with M.B.A.s.
The staggering problem is the myth that a college degree is the key to success. That is not true, but education IS the key. The US should be sponsoring more internships for high school graduates and less college loan money. Learning a business or trade is far more helpful in getting and keeping a job, that filling your social science requirement at college. Furthermore, businesses could use the cheap labor right now and the kids would gain work experience. The corollary fallout to the "college=success" myth, is graduating thousands of people with useless degrees and mountains of debt. Frankly, I think that if you take out $40,000 in college loans to get an English degree, you are shooting yourself in the foot.
Finally, the colleges themselves have wised up about keeping their schools rolling in the green. AP courses used to be widely accepted as college credit, now few are - even with high 4 & 5 scores. The colleges figured out that letting kids take college level courses in high school meant that they were receiving less money from them, i.e. fewer courses paid for. Colleges have also started to strongly discourage taking more than 15 hours a semester, one because it decreases the likelihood of dropping/failing out, and it stretches a normal 4 year degree to 5 or even 6 years - again, the college makes more money.
Comment: #12
Posted by: Babz
Tue Jul 12, 2011 6:38 AM
I'm a X-ray tech and when I went to school it took one year of training. Now kids are getting 4 year degrees in X-ray technology, yet the technology of X-ray makes it even more simple to take an x-ray then the knowledge I had to learn back in the mid 1980's. So the kids have 4 year of college debt to make the $17.00 dollars an hour they make at the hospital. What a deal for the colleges.. bad deal for the kids. If the government stopped the pell grants/loans etc. You would see programs taking only 2 years instead of 4 years.
Look at Germany they help kids decide if they want to go to Technical school or university. And Germany has alot of great well paying high tech jobs being done by the Germany people that pay them very good wages.
Comment: #13
Posted by: Kj Johnson
Fri Jul 22, 2011 11:09 AM
I am currently in college. I am not completely happy with it because my family pushed me into it. I keep dropping classes because the professors won't help me and yell at me when I need help. This college, admitting, was hard to get into. Every time I talk of wanting to leave and do what I really wanna do, my sister, mom and sometimes other family members get upset. I am 21 soon to be 22. I know I can't live with my family forever, and I DO have a job. I just need to be away. What I really want to do is photography and they pushed me into going into business. I'm so sad when I see students who are going for their BFA in Photography here. I kind of wish I could've been them. I feel like I'm wasting my life away going into a field i don't care too much about. Also, if I quit, I don't know if I'd wanna say with my family because of all of the "Well, you could've finished college."
Comment: #14
Posted by: Anon
Fri Feb 24, 2012 9:15 PM
Most of those bartenders, taxi drivers, etc. majored in Sociology, Afro-American Studies, Pol. Science, or some other field for which there is simply no demand.
Comment: #15
Posted by: Joe
Thu Apr 26, 2012 12:54 PM
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