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Notes of
Concern…
…Jackson Blair
______________________________________
Revisit the Apprentice
Take
a look at the budget for your local public school system.
Find
the antacids!
And
if your child is in private boarding school you are probably paying tuition, of
after tax dollars, between $35,000 and $60,000.
Find
the antacids!
You
will spend much of your adult life saving money to pay the high cost of tuition
at the college and university of choice for your children. And many of those
children will leave school with staggering debt. “According to the
Federal Reserve Bank, two-thirds of college graduates leave with some debt, and
37 million Americans are repaying a student loan right now (Walsh in ‘We Must
Hate Our Children.’”
We
are like lemmings. We do this just because we are supposed to do it. We do it
because parents hope their children will be better off in a future world. And
they think this is the only way. There are lots of paths to success in the
world. And while it is true that most involve learning, they do not all require
“formal/classroom” learning.
I
suggest that you suspend the belief that more and more classroom learning is
the only key to success and look at the facts.
You
will go into retirement with far less than you need because of all the taxes,
costs of raising children, and huge cost of home owning. A significant
portion of this outlay of monies relates to education.
The
payoff is supposed to be that your children will go out into the world and
enjoy a good life.
You
read the newspapers. You watch the television news. Do you really think the
payoff is there?
What
I see are over- educated young men and women who cannot find work in their
chosen field.
For
those who do find careers the high cost of paying off their education debt is
overwhelming.
I
see young people regularly purchasing homes that cost hundreds of thousands of
dollars more than I paid for our first home when I was in my twenties. And I
see banks encouraging them to do it.
So
between paying off debts, the costs of living day-to-day, and the uncertainty
of the job market we have young couples loaded up with stress.
Here
is a revolutionary suggestion: the system will not provide a better life for
our children.
In
my young life I was a banker with a very large Midwest bank that made many
mortgage loans. We were taught never to lend mortgage money to anyone who did
not have a 20% down payment ( unless they qualified for a federally insured
loan (FHA) that permitted a 10% down payment.) We had another rule: the cost of
the house purchased could not exceed a 250 percent of the borrower’s income.
These
two simple provisions guaranteed young people were buying something they could
afford. Further, they were buying something that could decrease in value
without putting them “underwater.”
What
happened between then and now? When did we throw out the good rules and begin
playing with no rules?
I
trace the problem to the indiscriminate issuing of credit cards and the
lessening of banking regulation.
Not
too long ago banks would loan you 110% of the value of the house you were
buying so you could upgrade the things you wanted to change. Money was
available everywhere.
No
credit?
No
problem!
What
if the housing markets tanks?
Won’t
happen!
Well,
the lack of having basic credit rules came back to bite us.
The
housing market did tank.
We
need to get back to basics. It is time for us to take control of the costs of preparing
children for a future and to be certain it is a realistic future. And it is a
time for returning to the basic principles that should be in place for lending
money.
In
the early days of our slide to irresponsibility I served on a committee of one
of the most prestigious business schools in the United States.
The
Dean called me to ask me to serve on a committee that would be making fast
track MBA degrees available to very bright students who had pursued a terminal
degree, a PhD, in a subject field only to find there were no jobs available in
that field. Now these brilliant young people needed to actually study something
that would land them a job. So they wanted to come back for a business degree
but they did not want to put in the two years the other students had to commit
to their studies.
The
committee was named Alternative Careers for PhDs.
I
attended the first meeting. I came away with the following observations:
Really
bright students earned a PhD after years and years of study without once
looking to see if there was any demand for their newly acquired knowledge in
the marketplace. This did not seem to me to qualify as a definition of
“bright.”
Students
who knew from the beginning that a business degree was marketable and were willing
to study for two additional years to earn an MBA were to be faced with a bunch
of PhD holders who would get the coveted MBA in half the time. And the reason
for this was that they were so smart they qualified for a PhD.
I
resigned from the committee.
I
left with the realization that parents had not taught their children about the
marketplace. And teachers, counselors and mentors had failed those young
people, too.
There
was a day, long ago, where you were apprenticed to someone who already knew what
you wanted to learn and who practiced the trade.
You
worked while you learned.
Your
classroom was the everyday experience of actually working and learning.
These
apprenticeships were available not only with plumbers, electricians, carpenters
but with bankers, teachers and newspapers. It was highly desirable in European
countries to seek an apprenticeship.
These
young men and women did not enter the world of work with thousands of dollars
of debt. They received wages commensurate with their knowledge, wages that were
raised as they became more competent. The teacher, the actual worker, got help
at a reduced cost in return for sharing his wisdom.
Maybe
we ought to take a long look at what was good in the past.
There
were some pretty good ideas out there during the time of apprenticeships. There
were some wonderfully trained young people coming out of that experience. And
more than a few of them were collecting salaries eventually that well exceeded
what the new college degree holders could command.
If
you are in the position to consider taking on an apprentice, but never gave it
any thought, perhaps you could revisit the idea. Find a hard working and talented
young person, hire them, train them and prepare them for a realistic future…one
with a much greater guarantee of success.
If
you are a parent facing the huge burden of the cost of education, maybe you
should talk to your child about being an apprentice.
And
if you are taking out loans to realize your dreams, no one is stopping you from
applying the two measures I suggested earlier when commenting about reasonable
borrowing, measures that would go a long way to providing financial stability
in your life.
The writer welcomes your comments,
ideas and suggestions.
Please take a moment to share your
views on the topic by emailing
jacksonblair@gmail.com
or leaving a comment on his blog at
www.blair-notes.blogspot.com
