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FRIDAY, SEPTEMBER 10, 2010


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C3 Some question hefty price tag of a college degree education from C1


and then studying the stock market on his own — analyzing Warren Buffett’s de- cisions so closely he ended up writing a book about him — for Altucher to learn enough about the financial world to sur- vive in it. He thinks he would have been better off getting the real-world lessons earlier, rather than thrashing himself to pay for school and shouldering so much debt. It’s cold comfort, but the loans put him


in good company: Hundreds of billions of dollars of national student-loan debt has now overtaken American credit-card debt, the Wall Street Journal recently re- ported, using numbers compiled by Fin Aid.org, a Web site for college financial aid information. “There’s a billion other things you could do with your money,” Altucher says. One option: Invest the money you’d spend on tuition in Treasury bills for your child’s retirement. According to Al- tucher, $200,000 earning 5 percent a year over 50 years would amount to $2.8million. Few families have that kind of money lying around. But if you can give your child $10,000 or so to start his own busi- ness, Altucher says, your child will reap practical lessons never taught in a class- room. Later, when he’s more mature and focused, college might be more meaning- ful.


The hefty price tag of a college degree has some experts worried that its ben- efits are fading. “I think it makes less sense for more families than it did five years ago,” says Richard Vedder, an economics professor at Ohio University who has been study- ing education issues. “It’s become more and more problematic about whether people should be going to college.” That applies not just to astronomically priced private schools but to state schools as well, where tuitions have spiked. Student loans can postpone the pain of paying, but they come due when many young adults are at their most fi- nancially vulnerable, and default rates are high. Even community colleges, while helping some to keep costs down, prompt many to take out loans — which can land them in severe credit trouble. According to a report in the Chronicle


of Higher Education, 31 percent of loans made to community college students are in default. (The same report found that 25 percent of all government student loans default.) Default on a student loan and face dire consequences, beyond a bad credit record — which can tarnish hopes of getting a car, an apartment or even a job: Uncle Sam can claim your tax refunds and wages. Now, take a key argument in favor of


getting a four-year degree, the one that says on average, those with one earn more than those without it. Education Department numbers support this: In 2008, the median annual earnings of young adults with bachelor’s degrees was $46,000; it was $30,000 for those with high school diplomas or equivalencies.


This means that, for those with a bach- elor’s degree, the middle range of earn- ings was about 53 percent more than for those holding only a high school diplo- ma.


But a lot of college graduates fall out- side the middle range — and many stand to make considerably less.


“If you major in accounting or engi-


neering, you’re pretty likely to get a re- turn on your investment,” Vedder says. “If you’re majoring in anthropology or social work or education, the rate on re- turn is going to be a good deal lower, on average. “I’ve talked to some of my own stu- dents who’ve graduated and who are working in grocery stores or Wal-Mart,” he says. “The fellow who cut my tree down had a master’s degree and was an honors grad.” The unemployment rate among those with bachelor’s degrees is at an all-time high. In 1970, when the overall un- employment rate was 4.9 percent, un- employment among college graduates was negligible, at 1.2 percent, Vedder says, citing figures from the Bureau of Labor Statistics. But this year, with the national rate of unemployment at 9.6 percent, unemployment for college graduates has risen to 4.9 percent — more than half the rate of the general population. The bonus for those with de- grees is “less pronounced than it used to be,” Vedder says. “The return on investment is clearly lower today than it was five years ago,” he says. “The gains for going to college have leveled off.” Before hackles are raised about boiling the salutary effects of higher education down to its cost, there are obvious dis- claimers: Education is a priceless thing. Many high school graduates are not ready for independence and adult re- sponsibilities, and college provides a safe place for them to grow up — for a fee. But what about the lessons offered by the success stories that have unspooled along a different path? Dropouts are the toast of the dot-com world. To the non- degreed billionaires’ club headed by Mi- crosoft’s Bill Gates (Harvard’s most fa- mous quitter) and Apple’s Steve Jobs (left Oregon’s Reed College after a single se- mester), add: Michael Dell (founder of Dell Computers, University of Texas dropout), Microsoft co-founder and Seat- tle Seahawks owner Paul Allen (quit Washington State University) and Larry Ellison (founder of Oracle Systems, gave up on the University of Illinois). Success sans sheepskin isn’t only for the technology set. David Geffen, co-founder of Dream-


Works, bowed out of several schools, in- cluding the University of Texas. Redskins owner Daniel Snyder dropped out of the University of Mary- land.


Barry Gossett, chief executive of Balti-


more’s Acton Mobile Industries, builders of temporary trailers, also left Maryland without a degree. (No hard feelings, ap- parently: In 2007, he donated $10mil- lion to the school.) Perhaps these are unique individuals in whom a driving entrepreneurial spirit


outstripped the plodding pace of book learning.


Or perhaps they point to a new model. “There’s nothing you can’t do on your


own,” Altucher says. A provocative idea — and a liberating one. Even if it’s not en- tirely true.


But you don’t have to agree with Al- tucher to concede that the debt-stress many graduates or their parents — or both — are left with after tossing off the cap and gown works against the merits of the degree. Even if a kid doesn’t party his way through college, chances are he or his family has plowed a boatload of money into a few memorable classes and a lot of boredom.


On top of that, you don’t know how big


a boatload it’ll be. For many college stu- dents, four years of anticipated tuition payments grows to five years or six — or more. Government statistics show just 57 percent of full-time college students get their bachelor’s degrees in six or few- er years.


And the rest . . . don’t.


In her youth, Toni Reinhart, 55, owner of Comfort Keepers Reston, a licensed home-care agency in Northern Virginia, abandoned hopes of completing a busi- ness degree at George Mason University. There was that C in accounting, and then trigonometry. . . . “My problem was not being able to put the time in to learn things I wasn’t inter- ested in,” she says. Has dropping out held her back? “Oh sure,” says Reinhart, a self-de- scribed late-bloomer. “But maybe that’s good. Maybe it held me back from things I shouldn’t have been doing anyway.” Now she manages 56 employees and in recent years hit the million-dollar mark in gross revenue.


“I understand the case for finishing, because you’ve proven you can stick with something,” she says. “But wouldn’t it be nice if we did have another path that didn’t put people in debt for . . . $100,000? Isn’t there another way to in- still those kinds of lessons in people that would be cheaper?” Nelson Cortez, 20, wishes there were.


NO DEGREES:From top, Microsoft’s Bill Gates, Apple’s Steve Jobs, Washington Redskins owner Daniel Snyder, computer magnate Michael Dell and DreamWorks’ David Geffen.


The Napa resident starts his third year this month at the University of California at Santa Cruz. He’s received state grants and works 15 hours a week while school is in session, but with the loans he’s taken out, he estimates he’s already about $25,000 in debt. This is why, when the California Board of Regents last year an- nounced a 32 percent increase in fees, he joined protests that galvanized students around the state — and set off similar protests around the country. Cortez helped shut down the Santa Cruz campus and traveled to the District to rally outside the U.S. Capitol. (On Oct. 2, students will demonstrate on the Mall for affordable education as part of the One Nation march, organized by civil rights and youth groups and unions.) “Rent was due yesterday, and I was $20 short, and I’m running around the house looking for $20,” Cortez says. His money problems have caused him to


question whether he’s made the right de- cision: “Am I going to be able to afford it, should I take a semester off? . . . I do have in the back of my mind, would it be bet- ter not to have those loans and just work?”


According to the Education Depart- ment, between 1997-98 and 2007-08, prices for undergraduate tuition, room and board at public institutions of higher education rose by 30 percent, and prices at private institutions rose by 23 percent — after adjustments for inflation. “The reason colleges have been getting away with raising their fees so much is that loans allow parents to tough it out,” Ved- der says. Federal government moves, such as tuition tax credits, allow those paying college costs to subtract a certain amount from their tax bills. But it does little to alleviate the financial burden, Vedder says, adding that it gives colleges an excuse to raise costs further.


The cost of college is putting the finan- cial screws to an entire generation, say student activists. “I think it’s absolutely despicable that students are asked to pay that much,” says Lindsay McCluskey, president of the United States Student Association. “In terms of public education, you can’t even call that public when students are taking out an average of $25,000 to complete college and then are paying off student loan debt until they’re 50 or 60 years old.” A recent graduate of the University of


Massachusetts at Amherst, where she majored in anthropology, McCluskey is paying down a $20,000 student loan. She thinks it will probably take her a decade to dig out of that hole — while the bal- ance is accumulating interest — because she can’t afford to make more than the minimum monthly payments. “For my generation,” McCluskey, 23,


says, “that loan debt is taking the place of the house we could be buying or a num- ber of other investments we could be making in our lives. The loan debt just sucks a lot of that out.” Now consider Jeremiah Stone, 25. The


graduate of Rockville’s Thomas S. Woot- ton High School is living in Paris, pursu- ing a drool-worthy international career as a chef. After high school, he took a job as a barback in a Houston’s Restaurant, worked up to kitchen assistant, took a nine-month cooking course at the French Culinary Institute in New York and final- ly landed in France, where he has free- lanced as a chef throughout the country. Eventually he hopes to open his own res- taurant in New York. “People I meet for the first time,


they’re always saying, ‘Oh, if I had an- other career, I’d be a pastry chef instead of becoming a lawyer,’ ” Stone says. In the eyes of some of his friends, he says, he’s become emblematic of simply doing what you love. In his case, it turns out that not following the herd was the best investment of all.


kaufmans@washpost.com


Staff researcher Meg Smith contributed to this report.


ISTOCKPHOTO.COM BOOK WORLD A Latin American hotel with lots of stories — and a shaky foundation


THE LADY MATADOR’S HOTEL By Cristina García Scribner. 209 pp. $24


by Carolyn See W


on Kim, a Korean textile manu- facturer, and his pregnant, teen- age peasant girlfriend, live in a


hotel. So does Aura Estrada, a shapely waitress who used to be a leftist guerrilla in this Central American country’s recent civil war. And Ricardo and Sarah, an American couple that came to this coun- try to adopt a baby girl. And Gertrudis, the avaricious lawyer who handles many of this country’s adoptions. And Col. Martín Abel, an officer in the country’s victorious rightist army, whose favorite pastime is torturing people. (In fact, he once cruelly slaughtered Aura’s little brother.) And Suki Palacios, the lady matador of the title, half Japanese, half Latina, former denizen of East Los Ange- les, who’s just arrived to participate in a women’s bullfighting competition. And there’s the unnamed country, which for decades has been no more than a playground for the American mili- tary to act out paranoid fantasies. And fi-


nally, there’s the hotel, the Miraflor, ele- gant and fairly modern, and situated around a traditional Latin American courtyard that is lavishly studded with tropical plants, a swimming pool and a nice outdoor restaurant. Cristina García has emulated the


example of the venerable Vicki Baum, whose 1929 novel “Menschen im Hotel” followed the doings of residents in an elegant “Grand Hotel,” as Edmund Goulding’s classic movie ver- sion called it in 1932. The state- ly, iconographic movements of history were reduced to under- standable size in Baum’s novel by focusing on the individuals who passed through the re- volving doors of the five-star establishment. And so, in “The Lady Mata-


dor’s Hotel,” we look at our Western Hemisphere and all its societal prob- lems, beginning with the exploitation of minority workers. Won Kim, who inher- ited a textile factory from his father and is expecting the death of his mother, is now stuck in the fanciest suite in the ho- tel, waiting for a workers’ strike to end and his child to be born. Baffled by the strike and suffering from severe depres-


sion, he’s planning a deadly yachting jaunt: “When they are far out to sea and the captain is safely drunk, Won Kim will push Berta [his girlfriend] overboard. Then he will follow her.” The colonel, on the other hand, dreams of sex and murder. He’d love to have sex with the lady matador, or, fail- ing that, the shapely waitress. Then he’d like to drag them down to a dungeon and make them plead for their lives. That’s life as he sees it. The waitress spits on his pork chops and gets an earful from her dead little brother, who tells her to murder this mon- ster now that he’s conveniently under her nose and relatively vulnerable. The adopting couple just hang around. Ricardo, the Cu-


ban husband, writes awful verse (“As the island fades / I leave behind departure it- self”) and establishes a somewhat ten- uous hold on his adopted baby, while the lawyer, an old-fashioned sharkish type, oversees a breeding farm of indigenous mothers and charges $30,000 for each infant she supplies, but she’s suddenly faced with a shift in public opinion about whether or not what she’s doing is a


crime. In the forefront is the lady matador


herself, Suki Palacios, a ritual-bound su- perwoman of sexuality and courage, who always makes it a point to sleep with someone different and eat a ripe pear be- fore she fights the bulls. She’s currently the talk of the town, but privately she broods over the death of her mother and frets over her womanizing dad. The story lasts for just seven days, and the end of each chapter gives us snippets of scattered news: “Leftist terrorists are trying to sow confusion and fear before the elections, but, mark my words, they won’t succeed. I’ve made it my personal mission to stop them,” the bloodthirsty colonel says on Channel 9. And there’s also some astrology and celebrity chit- chat. Against this trivia, the other, highly allegorical characters speak to each oth- er in oracular aphorisms: “God is drunk and in the forest breaking all the rules,” the adoption lawyer’s husband says to her at one point, meaning . . . what? When she isn’t in her suit of lights, the lady matador dresses in a tiger-striped unitard. The colonel imagines her with “a dead zebra between her teeth,” which would be quite a sight, if you think about it.


I hope I’m wrong about this novel, but


the allegory seems pretty heavy to me, and the characters stubbornly refuse to come alive. Yes, we know that the United States is considered by some people to be an imperialist disgrace — exporting jobs, importing babies, using impoverished countries for our own military games — but what is García’s actual point? Isn’t there any kind of meaningful resistance to this beyond retreat into costume and ritual? The Korean manufacturer’s girl- friend dresses up at one point in an 18th- century gown with a powdered wig. I wanted to ask: Why? And that tiger- striped unitard: Why? These people are meant to impersonate ideas, not human beings. But what’s the author trying to say? I haven’t the faintest idea. I hope that’s my fault, not hers.


bookworld@washpost.com See reviews books regularly for The Post.


Sunday in Outlook  Down the path to permanent war, again.  The faulty science of gender differenc- es.  A new history of the Korean War.  The real cost of repressed memories.  And what separates us from chimps.


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