College Tuition Is Marketing Fraud

https://cactus.substack.com/p/the-secret-to-college-tuition-is

by jseliger • 4 years ago

53 22 4 years ago

cactus.substack.com

jdlshore• 4 years ago

I'm sympathetic to the author's frustration, but I didn't find the article compelling. He asks the question, "What is the primary advantage of college compared to other education businesses?" It's an excellent question.

But then he goes off the rails into conspiracy-theory land, saying that the advantage is "marketing." Marketing is the bogeyman of everything popular that subgroups don't like. Why is Windows more popular than OS/2? Marketing! Why does this game I hate sell better than that game I love? Marketing! It's a lazy way to ignore the other products' real advantages. People who trot it out as an excuse often think "marketing" just means "advertising."

In this case, I think the author is missing the fundamental advantage of college over other educational offerings: signaling. A degree, especially a degree from a prestigious university, is a signal to employers. It's a way of standing out from the crowd. Unfortunately, the crowd is now going to college, so it's harder to stand out. But you still need the degree to compete in most cases.

The solution to this isn't to fight "fradulent marketing," it's to come up with better signals. I don't know how, and it's a big fight. But at least it would be fighting something that exists, not a conspiracy theory.

randomdata4• 4 years ago

But you still need the degree to compete in most cases.

But who wants to compete in the first place? Those of us in the tech industry know better than anyone that the path that is beneficial is one where employers struggle to hire. Compensation and benefits rise where employers have to compete for talent, not where talent has to compete for jobs. Fortune favours those who are able to offer something that isn't copied a many times over; where competition is nowhere to be found.

Certainly that does make it easy for us in tech to sit in our ivory towers that lack degrees hanging on the wall and scoff at those flipping burgers at McDonalds who perhaps really did need a degree to win the spot, but there's something wrong if you have to burden the opportunity cost that equates to near one million dollars in a lifetime to secure a precarious minimum wage position. That needs to be scrutinized, not emboldened with additional government supports.

Whether or not the marketing was intended to be fraudulent, it is certain that colleges have benefitted from the commonly held, but mistaken, belief that a degree will increase one's income. That notion is what students use to justify the high cost of college, seeing it as a long term investment that will pay dividends later. In fairness, it was a reasonable prediction at the time it was first asserted given the limited information available, but now that we have more data it is abundantly clear that incomes have remained stagnant. The promise of higher incomes did not materialize and colleges are more than happy to sweep that under the rug.

musicale2• 4 years ago

The cost of college also drastically increased, greatly outpacing inflation for half a century or more, further altering the financial proposition.

musicale2• 4 years ago

signaling

One might even call it "credentialing."

The idea of credentialing seems to make some sense (this person is declared to be [minimally] qualified for some job/position, or at least able to read/write/do basic math), but credentialing organizations tend to act like cartels.

Another advantage colleges provide is networking, including classmates, alumni, recruiting networks, etc..

jjeaff• 4 years ago

Well, signalling is generally the result of marketing. So if a brand is exposed to be crap, people stop trying to use it to signal.

Unfortunately, unlike a LV purse or Nike sneakers, an alma mater is very difficult to change. So you have an existing, powerful group of people out there that are very interested in protecting the brand of their alma mater.

etempleton• 4 years ago

“Moreover that this level of fraud is allowed to exist is absurd even if it is infrequent. We have laws on drug marketing, multi-level marketing schemes, et cetera that continue to be applied even if there is a low number of perpetrators and I don’t see why this should be an exception.”

There are laws and regulations about marketing a college degree and a college’s accreditation and reputation relies on it. Thousands of human hours are spent every year at every accredited college to avoid inadvertently falling out of compliance and to be in the good graces of accreditors.

In fact, one could argue, and I will, that most of the added administrative cost you see in this articles expense chart is to ensure regulatory compliance.

And colleges that egregiously or repeatedly fall out of compliance either lose accreditation or are sued, sometimes out of existence. This almost always happens at for-profit schools not non-profits, though non-profits do get in trouble every once in awhile.

“I, my class, and their parents were told sternly — commanded is a fair word here — several times throughout every year that the goal of schooling is to send children to universities.”

This isn’t direct marketing. This is people saying what they believe to be true. You can debate the validity of this opinion all day, but these are people giving the best opinion they have. They are not getting paid to say it. There are no kickbacks.

diordiderot• 4 years ago

most of the added administrative cost you see in this articles expense chart is to ensure regulatory compliance.

Very interested in this. Do you have links / books?

randomdata4• 4 years ago

There are laws and regulations about marketing a college degree

That's easy to evade by having staff researchers who profit from the success of college publish the marketing material instead.

The popular choice is the one where they show that smart people who have few life challenge are able to graduate college and also do well in the workplace while those who suffer from disabilities and other life challenges fail to graduate and also struggle in the workplace. Often entitled something to the effect of "Is a college degree worth it?"

The research is 100% valid. Smart people with few life challenges statistically do much better in virtually everything they try over people with crippling disabilities and other life challenges (drug addiction, poverty, etc.). That includes college and the workplace along with a whole lot of other things people like to do in life. There is good reason the Fortune 500 doesn't have down syndrome sufferers as CEOs, as unfortunate as that may be.

But it doesn't tell us much and only confuses the issue with selection bias. This is where it gets picked up by the layman who then thinks: "Look! College graduates have an easier life. If I go to college, my life will be easier too!" without realizing that not going to college won't actually cause contraction of down syndrome or push them into a new drug addiction and that colleges fail, if not deny entry to, anyone who struggles.

janef0421• 4 years ago

I think this article is correct that college price inflation is due to a perception of college as a prerequisite to a good life, but that perception is caused by a lot of things, not just college marketing.

nullc• 4 years ago

cites Curtis Yarvin as an authority.

unconed• 4 years ago

No it cites him as someone who coined a term, and then explains the definition of that term.

LarsDu88• 4 years ago

This article starts of interesting but goes totally off the rails. If you want to make an argument that college tuition is a fraud, you need to quantify and quality that. Other than evidence for administrative bloat, the real number to look at is ROI. If you look at ROI, the numbers are positive. People who go to college have higher lifetime incomes that folks that don't. If you were to go into that in more detail, you'd find that this differs drastically by major, with certain majors being negative.

A good article would've broken this down further and asked the question of whether return on college education was causation or reverse-causation or whether lucrative engineering education can now be done online for lower cost. There's also the idea of college as a means of accreditation for the job market. The author goes into none of this.

What about the development of nuclear energy, football, DNA fingerprinting, birth-control and LSD? All created in American colleges.

devwastaken• 4 years ago

People whom go to university would have higher ROI regardless. Before covid companies continued to argue "no remote, this is how things are done and we know it's right". Then rules came along that forced industries to actually do things differently, and what do you know, we didn't need offices. Efficiency increased, useless corporate bloat deleted.

If tomorrow we closed all public uni doors, the companies that profit from it will finally be pushed to fund education. Especially tech. They have the money, but we keep pulling money out of our neighbors pockets instead.

R&D in private industry does far more than any uni can. They don't have the market to be attracting top talent, or equipment nor facilities. Which is why you see everything under a company, not a university.

These are institutions far out of date. All we need to do is push it and it'll crumble.

randomdata4• 4 years ago

People who go to college have higher lifetime incomes that folks that don't.

A flawed comparison, though. Nobody was ever expecting the academic superstar, who breezed his way through college, to make the same or less than someone who suffers from crippling down syndrome, who was rejected by college admissions. Clearly people exist on a spectrum. Some people are much more capable than others and the marketplace will pay more for those who are more capable. Contrary to popular belief, down syndrome is established in the womb, not caused by not going to college.

What we really want to know is if the same person will realize a higher lifetime income by going to college verses not. That's impossible to determine experimentally, but what we can do is observe people on the spectrum over time. Within a sufficiently large population, the spectrum will remain continuous even as individuals come and go. Unfortunately, when we do that we find that incomes have held stagnant. The matching person of the past without a college degree made the same amount of money as the equivalent person today with a degree. This means that college does not provide an income boost.

The selection bias you point out is real, but doesn't provide anything useful other than to remind us that correlation does not imply causation.

endisneigh• 4 years ago

Unfortunately, when we do that we find that incomes have held stagnant. The matching person of the past without a college degree made the same amount of money as the equivalent person today with a degree. This means that college does not provide an income boost.

Citation?

tengbretson• 4 years ago

People who go to college have higher lifetime incomes that folks that don't.

The stat you are trying to cite relates to graduating college, not simply "going to". Currently the 4 year graduation rate is ~40%, and the 6 year graduation rate only around 60%.

That is an incredible population to have yoked with debt through their most productive years with nothing to show for it.

iamcrazyyounus• 4 years ago

I believe this article is correct in that college price inflation is caused by a perception of college as a requirement for a good life, but that perception is caused by a variety of factors other than college marketing.

syockit• 4 years ago

The postulate that college price inflation is a result of college being seen as essential to having joyful living may well be agreed upon, but as to why it is seen that was may, there may be other things at play rather than solely college marketing.

zcw1002• 4 years ago

I don't know any other business that quotes an outrageously high cost then says, "Well, let me see all your bank accounts and I'll let you know what it's really going to cost you", then gives you a kickback. It is designed to extract the maximum from every customer. If you've got the money, they're going to take the money, otherwise they're going to take all that you've got.

redanddead• 4 years ago

boomers gonna boom.

sometimes I wonder how gen x were cowed into submission by their parents into letting these shenanigans happen

zcw1002• 4 years ago

What exactly did you think gen X was going to do about it? How many gen-x-ers do you think were on the board of any of those schools? When they were out voted at the ballot box? Being encouraged to drop out of college because the dot-com boom? When they were encouraged to buy homes at massively inflated prices with zero down and variable rate loans that then crashed? After 9/11 and during 20 years of foreign wars that they went to fight?

College Tuition Is Marketing Fraud

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