[applause] thank you very much. Ive never been but i knew. One small correction. 10,000 page view from a link is not bad. You can double, triple, or quadruple as long as it contains the word boobies. Ive never been able to do it one of johns. Maybe hell be inspired to offer something. John is right. My take on education in america is Higher Education and k12 education comes from it. Somebody like to call it sign law. Originally propounded as something cannot go on forever. It will stop. And frequently compress even by sign later on. You see a lot of stuff that cant on forever. One thing is the divergence between what people make when they get out of college and what it costs to go to college. Ever since the 70s which is about the time the federal government got in the business of subsidizing tuition. Weve had a growth in tuition and fees that has been more than double the rate growth and family incomes. That means people have made up the difference with gap. The debt being the form of federally subsidized and guaranteed student loan. Before the housing bubble people would take out a Home Equity Loan to finance juniors college. While it probably goes on theres probably less. What does it mean . It means when you graduate from college, you owe at lough money. When you graduate from college and you owe a lot of money. You need a job that pays a lot of money to pay it off. And here is a problem. There arent so many of those jobs. Not as many as there used to be. Youth unemployment is dreadful. The youth misery index which somebody came up, today, i think, combine unemployment rates under 29 and student loan balances. Its at the record high. I think thats actually a moderately useful metric. You see it all the time. On tv a couple of nights ago, talking about the book. When it came out the sound man was disconnecting my microphone and everything and said you were telling the story of my life. I owe 110 ,000 and i work 70 hours a week to try to get it paid off thats a common problem. People dont think it through. When i was in law school i had a friend paying his way through law school on student loans, and he borrowed more money than he needed to. He said i think buying lawyer rob. Rob a law student buy a beer. Yale law school was cheap compared to now. And salaries were lower not as much as Yale Law School is more expensive. I see it with my own law students. You see people graduating with a lot of Student Loan Debt and getting good jobs that pay a lot and still being strapped. Its easy to great with sixfigure debt. The highest debt locate for a student was 400 ,000. I stress to add was not accrued at the university of Tennessee College of law where i teach but pricey private undergraduate and graduate institutions attended prior to law school. But, you know, you get out 400 ,000 it almost doesnt matter how much you make. The job that pays the salary, its a brutal burden. The Federal Reserve if a study of the impact of the student debt. They found students are putting off marriage, car purchase, home purchases, and all sorts of things we normally think of as the kind of thing young and middleage adults do and sort of align to drive our economy. They cant afford it. Cant buy a car when youre already making a big freaking car payment in the form of a student loan payment. You cant buy a house when you are carrying a mortgage on your back. Maybe both. You cant get married, as i was about to say. When you cant afford to buy a house or car. And that is part of the problem. And that is hurting the live of people. And economy and people and society as a whole. Its something we cant go on forever. It wont. It in fact, there are already signs its starting to not go on forever. Which is to say colleges this year in particular are starting to see buyer resistance. People are thinking very hard about where they really want to spend 50,000 a year and up. Every time people find out due wigs. I cant believe how expensive compared to last year or five years ago. Theyre not seeing it as a good buy. Especially financed by debt. Right now, a lot of colleges are dealing with it sub price discrimination thats what Financial Aid is. Price discrimination. You can figure out how much to pay. Thats the price for you. I like you. Thats is what is going on. You are seeing some schools having the Credit Rating downgraded and look at high tuition and expenses and doesnt think its sustainable. You are seeing enrollment drop across the board in lot of schools. Within colleges, you are seeing humanities. The New York Times did a piece on this recently. Humanities Department Unhappy because they are losing press teeing and major and enrollee. Specialsly women dont want to major in the humanities because they are concerned about getting a job when they get pout. Has internal ramifications within universities budgets are set based on how many students take your class and things like that. Its farley dramatic. I think we cant go on forever. And i think it wont. So what happens next . Well, for a lot of it you can do. One thing you might see is people just not going college. I mean, 40 of College Graduates wind up in jobs that dont require a student degree. What is a different between a starbucks baa homeless guy lying in the gutter. He has 500 million more than me. He was broke and not in debt. Its pretty much the lesson for some College Graduates. And, you know, in todays world, while getting ahead is probably harder than its ever been, just getting by is probably easier than its ever been. Between video games, internet porn, who needs college. They used to have to think to exert themselves to enjoy life are available more easily. Ill leave it at that. One thing you see is there is some evidence that men in particular are less likely to go to college now because they dont see it as efficiently rewarding. Ill leave it to the experts on that subject. Another possibility is cheaper alternative. We see growth in some of that already too. Online education theres a lot going on. Its no longer at the university of phoenix and few other for profit school. Georgia tech is offering a masters in Computer Science online a fullservice degree. Everybody as good as l regular masters. Except super cheep. Its kind of appealing. Another thing i would like to see more, i think we will, is certification in case of diploma. Im not optimistic as convinced an in the article of business review. Showing they know how do things instead of diploma. Ic that certificates actual ability are big deal. People who think that are colleges. The Higher Education establishment sits getting behind Third Party Certification as a way of demonstrating to people that their degree means something. I think its useful. Another thing is the rise of apprenticeship. There was a i thought it was a sad article in the Washington Post stf about people who had gone to college and couldnt get jobs going back to trade school to learn how to be electricians. Theres nothing sad about being an electrician or plumper. I was talking to one of my fellow law professor about Michael Lynns article about the exploitation of the working class and his response was, yeah, my electricians house. [laughter] being an electrician is good work. Theres no reason why a smart person cant be an electrician. The story said that the sad thing for the people is they have gone to college and run the debt up before they become plumbers or electricians. They would have been better off if they skipped the College Stage entirely. But according to the article Guidance Counselors dont want to smart people. They steer them to college. Smart people make better electricians. I dont know thats so bad. Electricians make good money. People in trade make good money. They make more than people with ba. In the coming years one huge advantage of being hands on jobs is that they cant be outsourced. Back in the 90s we had the stuff from robert and michael about the growing symbolic analyst to acknowledge workers and how they run the world. Here is a problem. If youre a worker youre in competition with every other smart person on the planet. Thanks to the internet. When youre a toilet fixer youre in competition with the people in a 30 minute drive. Thats are a advantage. I think those things might be better. Other possible alternatives one thick i think the model of education, as we have pursued it recently is probably obsolete in an era where things change rapidly and people live long time. You have the education up front. Its like filling a gas tank in your car. You go high school, college, session on f and set for life and go cruising down the highway and drawing on education you pumped in before. Its not vailed before because people change a lot. They change careers a lot. Some careers people used to are go away. A sad story a guy came up for partner with a lucrative policy. A sad story. Its a met for for all kinds of things that can happen in all kind of jobs. Then you there to less than things or skills or area of knowledge without having to commit themselves to the sort of four year traditional thing. Another reason why its not so bad the colleges isnt so great for everybody. We see it as an opportunity and way to address income inequal if i. Turns out not to be the case. Theres a good deal of research that shows who come in to college with identical predictor in term of test score come out on different track depending on the socioeconomic status. Yeah. Its sad, really. Its true. And the big danger for the lower people getting on with the sociologist is party pathway otherwise known as college. But they often come out burdened with debt in jobs no better than if they skipped college and the liver damage as well. If you want to get a negative view on twitter. Other people develop alcohol problems and drugs and sex that last for a lifetime. And theres even some evidence that minority students leave college with less in the way of academic ability than they had when they got there in the many cases. You probably heard the joke college is a case where knowledge accumulation. I think thats enough to rethink college for everyone approach and look at some of the alternatives. College has been cutting fees but cutting prices isnt the same as cutting cost. The problem colleges have for the most part is they bloated. The gold Water Institute did a study and found it was the single biggest contributor to high college cost. Some of you may have read. If you havent you should. Its a magnificent rant. Its beautiful. Should take away points for bloating the administration. That probably could more good and reducing college overhead than anything government could do. They have to do it anyway because except for the few elite colleges, they are going have to bring it under control. Even the elite colleges have to bring cost under control ultimately so long as they expect somebody to pay for it. If they dont, they will sphshing school to rich people which is what college were 150 years ago. What we really see as john quoted me as saying, five elite colleges in the future. They might. Im not the only one to think that. Hes cofounder of an Online Education program. The thinks something will happen we will see a small number of big brand in education just as we saw a shrinkage from lot of Automobile Companies to a small number of big Automobile Companies. Im actually the more i think about it, not so sure that is the case. The, economy of scale that was a lot cheaper to make cars than a big factory than a small. Im not actually sure that its a lot cheaper to educate people in big universities and small. Im not sure the marketplace is good for a few brand. A lot of colleges that relied on people to show up and willing to pay 50 ,000 a year for undistinguished degree arent going to go out of business. It they dont offer very much in exchange for the cost. They have religious afghanistans that are Strong Enough to get people to come. Some may have Strong Enough reputations to get people to come. Dont borrow a lot of money to go school. I hope its not from personal experience. [laughter] a whrooft students going college didnt get that. Unwith of the things that happens, i see with law students. You want to get a wall street job with a starting salary of upwards close to 200,000 now. There arent a lot of those job. Theyre fewer all the time. There are some. Well, you ought to ask yourself what do i get if i win . If you go to law school, and you run up debt. Say you borrow oid sthowrks a year and owe 18 0,000 which is plausible. Say you start at the firm that i practiced law for awhile and i liked it already except on payday i never miss decade since. One of my law professors used to say lawyers paid a lot of money. People wouldnt dot job for less. [laughter] if you take 180,000 a year job on wall street and owe 180,000 you are actually a prisoner. Because you cant leave that. You after a year or two you decide you dont like it and want to do pro bono work for poor people or work in a legal aid clinic, absolutely impossible. You can flip house and file bankruptcy. Fresh start. You move on with your life. Student loan debt, you cant coit. There are people with Social Security checks being garnished for Student Loan Debt even as we speak. There will be more in the future. Which brings me to my final suggestion for change. That is made dischargeable. And that the schools and universities be liable for a portion that debt upon discharge. The reason for that, some of you have evil grins on your faces. I guess you figured it out. The reason is incentive effect. What weve had for years is colleging acting like sub prime lenders. Students come in and sign papers and probably actually theres no probably about it. Theres gallup polling that indicate they dont understand what theyre signing. They borrow a lot of money. The college get the cut up front like a sub prime mortgage deal. And years later they are stuck with it. If colleges knew they were on the hook for even a relatively maul portion of that get. 5, 10 . Im not whetted to a particular number. I think they would be more careful about how much debt they let students take on and more careful about what they let student major in and what kind of degree they turned out by the end profit excess. I think it would have a tremendous effect. It seems like it should be an issue for republicans. But theres a reason for the phrase stupid party, i guess. The democrats have stolen. Elizabeth warren and dick are pushing half of my proposal. Way they whyed doctor democrats. I dont know. It makes sense no matter who is behind it. The incentive have been entirely one sided for universities to scarf up as much federally subsidized loan money as they can and leave students suffering. There are a lot of students suffering. Guiltlike industries. Change. It was better to be an Airline Captain before airline deregulation. Im sorry to say this. Its better to be tenured full professor under the system weve had for the last several decades than it is likely to be over the next several decades. But especially for the last 20 or so the comfiness weve been enjoying is built on the back of student and Student Loan Debt. Its not fair. It cant go on forever. It wont. Thanks. [inaudible] [laughter] [inaudible] james points out that several decades ago there was a u. S. Supreme Court Decision that essentially outlawed the use of iq test its in lieu of College Degrees to permit people not College Graduates to get jobs that matched up with the iq. In some way they were racially discriminate story, i believe. I i dont remember the name yeah. It strikes me when you speak of credentially in some sort that isnt a college dip. Diploma. I noticed harvard started an online program. Its moving to the ivy as well. You might encounter a similar credentialing problem. What are your thoughts about that . , i mean, i think its possible. I dont think its likely. I think its possible for not likely for two reasons. If occupies an special place in american sober owe and competency testing probably nothing will sue that. Im not saying well file it to suit and no chance a court will hold it. It seems unlikely to me. The other interesting thing about it is if i were a marxist. What i would say you look at cases like that and a lot of other things. The last gathering a lot of power for themselves at the expense of a lot other people. It is a subsidy that i. T. Racially discriminate story. They are less likely to be complete college and less likely to succeed. I think thats probably clear enough that since no longer 128969 we will probably not have that kind of a problem. [inaudible] Community College has been in your discussion. Right now theyre winners. One reason is a lot of people to cut down on College Expenses are doing the two years at collegety college. Its more flexible. A lot of times they tend to cater to nonfulltime studenters to a greater degree than fouryear college. And frequently the quality of teaching is actually better. People at Community Colleges tend to be good teachers and focus on that and do it a lot. I think in the short term its a boost for the Community College. If we reach a situation where its a pure certification environment where people can learn stuff however they want and the portal is not going to classes that might have a negative impact on Community Colleges. It might not. Im not sure. [inaudible] why do you think bing drinking at colleges is prevalent in this country compared to western europe . There are two possible answers. One answer in western europe what we call bing drinking is just called drinking. [laughter] based on my pa relatives we seem to be correct. [laughter] more seriously i think the culprit is the 21yearold drinking age. There is some research to support this. Theres a group of College President s called the [inaudible] which has been trying to get it changed. The research seems to indicate that when people could drink legally at 18 students went bar. You drink until you get cut off. When you cant do that you sit around in the dorm room you drink something made with ever clear and cool aid with nobody in sight to tell you to stop. I think t plausible. Ive said this before and nobody listened to me. But yet another political issue that would have been good for the republicans is to campaign on lowering the drinking age back to 18. It was a dumb republican idea and it has done nothing good and a lot of harm. In the mind of the public at large, especially low information voters, republicans have are identified with the preacher in foot least coming out in favor of lowering the drinking age would be a brilliant move. Naturally nobody has done a thing. [inaudible] i was wondering hypothetically speaking for you had a daughter who was ready to go college in 11 years hypothetically . Hypothetically. How much money you would save for them to go a what will be decent college 11 years and bother saving at all. Thats a good question. There is, i think, every reason to say regardless. If you save money for your kid based on an expectations of college it seems like a projection from today. Youre wrong about what happens. It become a better alternative. Its good to have money in the bank. If your kids decide they dont want to go to college or start a business. Its nice to give the kid the money and let them use it to start the business instead of paying for them to bing drink and something. In term of how much. There are a lot of the people i notice in the audience with badges say theyre in capital management. They can probably advice you better on how to do that. My portfolio suggests im not a source of investment advice. I would probably save outside 529 account. The reason for a 5129 account has you get advantage upfront on taxes. It has to be spent on college. With the amount of change that is going on, that might tie you up too much. Its entirely possible if lot and lot of people wind up doing something other than college it will be changed. I thought i should mention here. Also [inaudible] if you go to you should [inaudible] were having is asian students from asia come and pay full rides. I wonder if that is going to be i dont know how common that is in other schools. I wonder if its going to be bailing schools out for awhile. They certainly hope so. In indeed my own sector of the academy which is legal education. The bubble is bursting more rapidly. Theres been a generally decay in the legal job market and another is that people still see a graduate degree as more discretionary an undergraduate degree. There are a lot of Horror Stories of people who have gone to law school and run up a lot of debt and cant get jobs. You can read about them. The response is to design programs to my guess is it works to some degree. There must be one more than chinese person born ever minute. Some are likely to come for education. It may, in fact, be no more beneficial for them. It may be better than the economical clues for somebody in america getting an degree and staying in america. Actually better than if they stay in america as well. How long that will be true, i dont know. I promise youll see at lough schools try to attract foreigners with money to make up the law. My prediction if youre stanford, it works really well. If youre some School Nobody has heard of. It doesnt work at all. In the back . Im academic [inaudible] a big point about iq test. You take your s. A. T. Score, double it, take off the zero. An accurate estimate of the iq. A suspect a lot of employer know that but not dare say it. My question is the Collateral Damage of getting rid of the parasites in the university every academic knows who they are. What is the social cost suddenly unemployed. Millions of not millions hundreds of thousand of people. Theres nothing more dangerous for a cult than a multitude of scribes. I sent the man script in. I have a passage in the conclusion of the book. He said second best passage. Change be frightening especially for those doing all right as it is. And a lot of lives get lashed to pieces as distributional flails around. Thats absolutely true. Its called creative destruction. Theres creative stuff but destruction. Theres no question just like the change in the Auto Industry or the computer industry or pretty much any industry you can name have left a lot of people unemployed or worse employed than they used to be. Security. Thats going happen too. Like most change probably going to be worse for the producers. People like me and better for the consumers. I think thats kind of thank you very much for your comments. Ive been thinking about these question farce long time. One of the areas that interest me a great deal is the whole question of what happens to the humanity. Obviously the orientation that you see in Higher Education is [inaudible] when you talk about collegety colleges what happens to our civilization when students do not read plato or aristotle do not read shakespeare or know in the bible. What happens to civilization under those circumstance. Im merely you to speculate. You already see signs. One direction that the discussion often takes is people often say everybody should study engineering. Quit wasting your time with the humanity be an engineer. They make money and increase value. There are a few problems with that. I want to make clear. Im not somebody who says that p. M. Im not somebody opposed to liberal Art Education at all. As a matter of fact, people who can read, think, and write are in surprisingly short supply. They could not write a paragraph. She was having to rewrite them. Theres a lot of demand for people who can actually read and think and write. Ic when people get on the high horse about engineering. I think the perception is engineering has remained a rigorous subject. If you go school and Something Like that you come out knowing a largely agreed upon body stuff. When you go do it works. I think if you want liberal art to survive. It has to be a value proposition. People have to believe it has to be true. If they major in this and read plato they have skills that get them a job. Tick would be true, but when tuition is so high you are investing even not in student loan but paying out of your trust fund or something, you are investing something in the six figures to college education. A fell madly rear rei is a big expense item. Its not the expense an 18yearold ought to have. [inaudible] you might. The reason why you dont see more of this. In the economics of this, if you hire somebody and train them and they leave. You dont recoup the investment. In the old days we had paren apprenticeship. Student loans are almost a form of voluntary servitude now. But thats an issue. I dont think its unbeatable. I think there is a growing interest. One of the places pushing certification, for example, is the manufacturing industry. I would like to see that. It would be good. You learn a lot. Its valuable to them. Thank you very much. [applause] thank you for coming