What do you think about the education bubble & its effects on different professions?

Discussion in 'Politics, Religion, Social Issues' started by Hieveryone, Apr 28, 2015.

  1. Hieveryone, Apr 28, 2015
    Last edited: Apr 30, 2015

    Hieveryone macrumors 68020

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    #1
    Let's take medical school as an example.

    Tuition runs $60,000 for many schools + housing = ~$85,000 per year for four years

    So, when a medical student graduates, he will have about $400,000 in debt at 8% interest a year which is the current interest rate. It accrues while in school as well.

    During residency which can last for 5 years, they will not be able to pay much back since they are earning little.

    So at the end of residency he will have ~$587,000 in debt and at 8% they are adding $47,000 a year in interest alone.

    If they earn $200,000 a year then after taxes, Social Security tax, etc they can expect to take home $130,000 a year.

    They would need to pay at least $55,000 a year if they want to pay it back in 25 years.

    Which means, they get about $73,000 in hand...which isn't a lot for a doctor given the amount of schooling and the work....:mad:

    https://services.aamc.org/tsfreports/report.cfm?select_control=PRI&year_of_study=2015
     
  2. mobilehaathi macrumors G3

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  3. Scepticalscribe, Apr 28, 2015
    Last edited: Apr 28, 2015

    Scepticalscribe Contributor

    Scepticalscribe

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    #3
    Firstly, the thread title is odd. What does the OP mean by the term 'education bubble'? Why not something in line with that the actual post is about with the use of words such as 'education expense'?

    Secondly, this situation is not applicable in Europe, to anything like the same extent. Access to education is not quite as clearly determined by monetary means as it is in the US.

    Thirdly, while I accept that access to good degrees in good universities in the US has become prohibitively expensive, I don't see it as a result of some vague 'bubble' but- rather, as a result of a number of choices that have been made over the past thirty years or so.

    These choices - in politics, economics, culture, - have had the cumulative effect of curtailing and curbing access to quality higher education, and making it a lot less affordable, especially for those from the less well off sections of society.

    In turn, this will make social mobility a lot harder to achieve, especially the sort of social mobility that used to occur when access to education was the ladder for the able and clever, poor.

    In other words, increasingly, only the well off - or those born into well off families - will be able to afford higher education, which may well serve to reinforce inequality, social stratification, and inbuilt and inherited patterns of privilege and inequality.

    Obviously, this is not remotely desirable for a country, or a society, or any sort of social cohesion, or even basic fairness or affording opportunity equally to all.
     
  4. mobilehaathi, Apr 28, 2015
    Last edited: Apr 28, 2015

    mobilehaathi macrumors G3

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    #4
    I'd venture a guess that the OP sees education through the narrow lens of a market economy, hence the characterization of accelerating costs as a 'bubble.' This (the accelerating costs of education) should only be a surprise to people who don't pay careful attention to the way the education 'sector' (even that characterization betrays certain guiding principles) has been directed in the last few decades. These are cascade effects from multiple sources, originating in the organization and incentivization structuring of how basic and applied research is funded and conducted and the decimation of public funding for universities (to scratch the surface).

    Austerity hides in plain sight disguised as a forceful commitment to all things "Science, Technology, Engineering, and Mathematics." Forget about the humanities. Forget about history, literature, language, and the social sciences. Just focus on becoming a mindless number cruncher (I say this as someone holding a PhD in a STEM field).

    Nobody seems willing to question the guiding principles here, and I think we are in danger of creating a society of two educational classes, neither of which can critically analyze the world around them.
     
  5. Hieveryone, Apr 28, 2015
    Last edited: Apr 28, 2015

    Hieveryone thread starter macrumors 68020

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    #5
    I and about a million other people (not literally but figuratively) are calling it a bubble. My source is a very simple search on google.

    It's even on wikipedia- First link!

    https://www.google.com/webhp?sourceid=chrome-instant&ion=1&espv=2&ie=UTF-8#q=education bubble

    It has been a topic of discussion for quite some time.

    ----------

    When things become too expensive they can form bubbles. Many people are calling it so as referenced above.
     
  6. Scepticalscribe Contributor

    Scepticalscribe

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    #6
    Agree completely with you. This is as a result of choices made re access to opportunities, and curtailing public spending, seeing education as something best reduced to a commodity and a product rather than a necessity for society and a right, and students as consumers rather than scholars.

    I worked as an academic for the best part of twenty years - including teaching in a university that is older than the United States by a few centuries - and I never once heard the term, or expression, 'bubble' used in this context.

    In economics, yes, and in term's of a self-referential delusional fools paradise, most certainly, but regarding an intelligent discussion on education, educational resources, and costs of access to education, no.

    Wikipedia is not my sole source for such research.
     
  7. Hieveryone, Apr 28, 2015
    Last edited: Apr 28, 2015

    Hieveryone thread starter macrumors 68020

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    #7
    It is it possible your school is behind or ranked pretty low?

    I've been using the Internet for at least 10 years, sites such as Wikipedia, Forbes, CNN money, etc.

    Education bubble is used widely.

    Regardless, did you understand my point though?

    Basically education costs a lot so loans are probably not going to be repaid like housing. Do you remember the housing bubble? It's like that.
     
  8. ravenvii macrumors 604

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    #8
    Oh, you mean the educational loan bubble? :)
     
  9. Scepticalscribe Contributor

    Scepticalscribe

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    #9
    I am from Europe.

    That means that what happens in the US is not always a default setting for us.

    Actually, I truly get the sense that some of the posters here are of the view that the only examples worth citing are those from the US.

    In Europe, in general, (because education is still seen as a public good to a large extent) you do not come out of university owing a fortune.


    ----------

    Did you understand mine?

    In countries such as the US, where this is increasingly the norm, this has not happened by accident.

    This is the result of a deliberate set of political and economic choices and policies designed to make access to quality education more inaccessible and unaffordable, to turn it back into the optional luxury as it was centuries ago, rather than the right it had become since the middle of the nineteenth century.
     
  10. Hieveryone thread starter macrumors 68020

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    #10
    That's not what I've heard. It's just greed. Administrators are making 200K+ a year. The president of some of these NO NAME state schools make $600K a year!
     
  11. A.Goldberg, Apr 29, 2015
    Last edited: Apr 29, 2015

    A.Goldberg macrumors 68000

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    #11
    I don't think this model truly represents reality.

    First off, your $400,000 education figure assumes a private education with zero financial aid. There are many state school institutions that cost far less than $60,000/year, especially with in-state tuition, which students usually receive after 1 year. Living expenses can be achieved for far less than $15,000/yr. Not always, but inn a lot of cases, those who achieved the level of education to be accepted into medical school often have affluent upbringings that have provided them a superior and/or more prestigious educational background.

    It's true some doctors (particularly GP's, pediatricians, psychiatrists,) earn on average about $200,000/yr -currently. You will see that currently the US healthcare system is suffering due to a shortage of these lower level physicians, part of this is attributed to the cost of education versus income potential (and thus increasing number and responsibilities of nurse practitioners, PA's, and pharmacists). Often doctors are persuaded to specialize due to higher wages (2x-3x higher in some cases), job satisfaction, and prestige.

    The biggest flaw I see is that this does not account for inflation/increases in pay. A salary is not a static figure by any means. The average US national wage in 2013 was ~$45,000. 20 years earlier in 1993 it was ~$23,000. Go back another 20 years and the average wage was $7,600. We have hit slow spot in our economy, yes, but this likely will not be permanent.

    Obviously the cost of education is a problem and does limit the opportunities available. It has always been like this in the US. It's curious that the cost of college is determined by the wealth of the student's family. I believe the opportunities are improving, but it is perhaps not as ideal as other countries that offer public education at nominal cost. Assessing one's career aspirations, finances, and academic abilities has to be considered when choosing an academic program, if any. If you believe your calling is to be a doctor, but you cannot readily afford tuition, then you will have to sacrifice income later in life. Everything has its cost.

    My mother is an orthopedic surgeon and my sister is a dentist, soon to be oral surgeon (DMD + MD). Comparing the two educational costs, even considering the time period, is quite remarkable (about $4000/yr in the 1970's at a private school). So my point here is the average doctor's medical school costs were very little back then compared to their current salary (though still 1/2 as much comparing 1970's money to today). I suspect eventually, given the exclusivity as a profession, the pay will reflect the rapidly rising educational costs.

    I would say medical school is a poor example. The medical field employees generally the best educational loan repayment rates of anyone. I would be more concerned with the average person getting a bachelor's degree.
     
  12. tzhu07 macrumors regular

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    #12
  13. juanm, Apr 29, 2015
    Last edited: Apr 29, 2015

    juanm macrumors 65816

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    #13
    Very relevant, and worth keeping an eye on:

    http://uopeople.edu

    and the nowadays-mandatory inspirational TED talk:

    http://www.ted.com/talks/shai_reshef_a_tuition_free_college_degree?language=en

    Basically you can get an AS/BS degree for $2000/$4000 (you only pay the exam fees, tuition itself is free) in Business Administration and Computer Science (other degrees might get added to the offer later on). For the price, even I'm very tempted, honestly.

    Of course, It lacks the prestige of some brick and mortar universities, but it's not a diploma mill, it recently got accredited, and they're actively pushing further development.

    They've got some powerful backers-partners (Microsoft, HP, Unesco Yale, NYU...).
     
  14. D.T. macrumors 603

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    #14
    Outstanding post.

    [1] No, it does not, [2] yes it is :)

    Based on my initial investigation into med school and an inordinate number of friends/family who have completed (or completing) school, intern, have practiced for short and long[er] periods. I also have pretty close working relationships with medical professionals across the US as a result of one of my ongoing projects. :cool:

    To be honest, this sounds like some kind of "anti-education" thread ([poorly] disguised as an open discussion...)
     
  15. Scepticalscribe, Apr 29, 2015
    Last edited: Apr 29, 2015

    Scepticalscribe Contributor

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    #15
    Ah. I must confess that the exact same thought crossed my mind as the thread title is somewhat disingenuous, and there is little or no thoughtful analysis behind what the OP has written.

    There is a long and serious discussion to be had about how political choices and economic policies over the past thirty years of so have helped make the US one of the most unfair - in terms of income disparities between most and least wealthy - societies in the western weld.

    These selfsame policies have also ensured that it has become one of the less socially mobile societies in the western world, - in striking contrast to its own foundation myths and narratives - and the debate about the rocketing costs of education (and how this is making access to affordable and excellent education less attainable than might have been the case a few decades a go) is but a part of this wider societal transformation.
     
  16. mobilehaathi macrumors G3

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    #16
    Well, that's OP's M.O.
     
  17. mscriv macrumors 601

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    #17
    This brings up a question for me. Here in the states private universities generally have one set price for eduation. State school differ in price between those who are "in-state" residents verses those who do not reside in the state. How do university costs work in Europe? Do national residents pay a different rate than students who may not be residents of that country?

    I'm wondering... if we continue to see education costs in the States rise then will we see an increased interest in studying abroad.
     
  18. Tomorrow macrumors 604

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    #18
    What's your source for these numbers, and where is this student living that costs more than $2,000/month? :eek:
     
  19. A.Goldberg, Apr 29, 2015
    Last edited: Apr 29, 2015

    A.Goldberg macrumors 68000

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    #19
    To clarify I don't think his model of medical schools is realistic. Med school is a minority situation compared to other grads as a whole. That was my point.

    You might spend $50,000/yr in tuition for 8 years ($400,000) but you will be making minimum $200,000. You can spend 4 years undergrad at $50k/yr ($200,000) and get out making $$44,000.

    EDIT: Ok you're agreeing with me I misread that.
     
  20. Hieveryone, Apr 29, 2015
    Last edited: Apr 29, 2015

    Hieveryone thread starter macrumors 68020

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    #20
    Sure if you go to a state school, maybe even live at home, and become a neurosurgeon you'll be fine. But that's only a few kids.

    I'm talking about the thousands of students who go to private medical schools, live in expensive cities, and end up becoming primary care physicians.

    I am good friends with quite a few, and the problem is real.

    Plus physician reimbursements is getting cut like crazy these days so instead of pay going up its been going down.

    Also, orthopedics has been hit greatly by the cuts. I have a good friend who said their reimbursement for a specific surgery fell from $4500 to $700.

    ----------

    The situation today is different than it was 30 years ago...

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    How can you not count 8% interest?

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    Not true.

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    The link I posted... NYC, LA, but ok not 25K maybe 24K. Still a problem.

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    I think the European system is very different, so you can't compare them really. Being an American, the problem presented is knowledge I have first hand seeing others in trouble.

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    I'm good friends with many med students. So I know first hand what's going on. Many are in the situation I posted

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    Here's an article about doctor pay cuts. They're not making as much as before.

    http://www.forbes.com/sites/brucejapsen/2015/01/01/multiple-pay-cuts-hit-doctors-in-2015/

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    Can anyone post some facts disproving the situation exists in my OP?

    With sources?

    Because I literally know friends personally in that situation...

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    Making a minimum of 200k is untrue.

    How much do academic faculty make? Or VA? Starts at about $97,000 and it DOES NOT go up very fast at all!

    I know doctors in academic medicine who told me.

    EDIT: 50k a year is only tuition not living.
     
  21. A.Goldberg macrumors 68000

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    #21
    Are you becoming a doctor to become a doctor, or are you becoming a doctor to to try and make a lot of money?

    Most people I know in medical school would be considered wealthy to be honest. It's not the case with all, but typically those who are not get much more financial assistance than those who do not.

    This is happening across the board in healthcare. Increasing prices of supplies/products do not correlate with reimbursement rates. In some cases the insurance companies simply force their patients out of the hospital faster. Some of this is actually because they're trying to shift more money to GP's who make substantially less money to make the job more appealing. You can thank Obamacare and Insurance companies for controlling the market.

    I'm not sure I want to go down that route talking about politics, insurance companies, reimbursement models, etc. I don't think that was the intention of this thread.


    The $200 minimum applies to practicing physicians because that's the primary job career we're talking about. I could say chemical engineers don't get paid well that work at McDonalds.

    Most doctors don't get their MD and then go straight into academia. You are pretty worthless without clinical experience and generally you will find MD's in medical academia to have already worked long careers, or still practice medicine. Educators low pay is a common topic but consider someone who is a PH.D in Religion, they could spend $400,000 on education and may never have the earning potential anywhere close to an MD.

    There are MD jobs outside of clinical and academic practice too. So if you find dealing with the insurance companies/govt too restrictive- go work for an insurance company, research company, or drug company. Currently, there are a fair number of GP's, Pediatricians, and especially psychiatrists that have decided not take insurance and charge their rates to avoid having to deal with the hassle and low reimbursement rates. Patients can usually charge the bill to their insurance manually unless they have an HMO, but will still be charged at an out of network cost.

    Again, I'm not sure what your point here is with this thread. Education in America is costly, but it is a necessary aspect of being successful in our culture for most. If you want to become a doctor, you do it because you want to do the job. If your career decision is only based on money, there are many other ways of earning money. If you find the educational costs restrictive, then you have to find a solution that works for you- whether that be state schools, living at home, etc.

    This is the case with anything in life. Sure, I'd love to buy a beautiful house down the street from where I live, but on my salary (as a post-pharmD psychiatric pharmacist specialty resident), will not allow that/make it a practical means of spending my money. I have to choose something to comply with what I can afford. My apartment meets my needs just fine for the time being. It provides the same functions a $2,000,000 house does.
     
  22. A.Goldberg macrumors 68000

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    #22
    Also, despite the cost of medical school, it continues to be one of the most competitive academic programs. There are no empty seats in any medical program.

    The shortages of doctors is not because of pay/cost. It's due to the number of doctors who specialize and the limited number of seats available in programs. Doctors have been smart to keep their numbers limited in order to maintain their stature. Lawyers did the opposite, and now they are a dime a dozen.
     
  23. Hieveryone thread starter macrumors 68020

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    #23
    The days of doctors having "stature" has ended now that their pay has been cut.

    I know 4 practices that have had to shut down because they went out of business after Obamacare.
     
  24. Hieveryone, Apr 29, 2015
    Last edited: Apr 29, 2015

    Hieveryone thread starter macrumors 68020

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    #24
    If you want to make a lot of money, I would definitely not recommend medicine especially with all the recent changes in healthcare.

    That's why I came to Wall Street.
     
  25. Scepticalscribe, Apr 29, 2015
    Last edited: Apr 29, 2015

    Scepticalscribe Contributor

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    #25
    The tuition fees differ depending on the country one chooses to study in, the course, the university, one's grades, and what citizenship category one falls into when applying for a place. Typically, in Europe, nationals of the home country, and EU citizens would pay the least by way of fees, with nationals of other countries being obliged to pay considerably more.

    While I do not know - not having studied it in any detail - how university and tuition fees in the US compare firstly, to average salaries, and secondly to above average salaries both now, and say, thirty or forty years ago, I am willing to wager that the gap has widened considerably.

    In other words, in comparative terms, as well as in absolute terms , it costs a lot more these days to fund a university education in a good college than it used to. Failing to accept that this - firstly, has reduced social mobility based on educational attainment, and secondly, is a result of societal and political changes which have been made over the past thirty years, by focussing simply on fees and the cost of re-paying loans taken out to finance these self same fees, misses the point of what the social and political and economic engineering of the past thirty years have been about.

    Now, I will take issue with that last sentence of the OP's most recent post. The one that reads:"The days of doctors having 'stature' (surely you meant 'status'?) has ended now that their pay has been cut".

    This is another example where the the OP has made the egregious error of confusing and conflating the idea of a large income, or one's financial means with social status and prestige (yet again).

    Medicine will always enjoy status and prestige, merely because there isn't - and there never has been - a society on the planet that does not value the knowledge and learning of those who know how to heal, or alleviate, or deal with, illness, disease, infection, injury or trauma. Dealing with pain offers both job satisfaction and the esteem of the community, whether you are a healer in neolithic times, or a doctor trained by the best medical faculties on offer in the modern world.

    It can also - often - offer reasonable remuneration, too, especially as a specialist.

    However, income does not always equate with status or prestige (although there is often some considerable over-lap between the two).
     

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