The real truth regarding education now starting to come out....
Given all the disinformation and sensationalist headlines that have been promoted by short sellers in the education sector and a willing media to publish outlandish headlines touting the same short seller garbage, the education industry and profession has undertaken a huge behind the scenes effort to get at the real facts. The short seller anecdotal stories are simply not to be trusted as the self dealing and self interest in promoting a negative perspective is so obvious. These new, well documented and well researched studies are now coming out fast and furious and the picture they paint is virtually 100% opposite of what the short sellers have put forth. Many of these studies are being done by leading intellectual specialists (like Georgetown University) and state governments, for instance. These are not reports that are soft-peddled smooch jobs by educational professionals attempting to make the industry, or their profession, look good. These are objective analyses showing the good and the weak aspects of education.
So, let's take one of the top headlines from the short sellers and the press. "Many students graduate with +$100,000 student loan debt and can't find jobs!!!" Jeez, that sounds scary. What a nightmare. Who want to be in that situation!
Well, what are the real facts.
1. Overall, only 0.2% of all undergraduate graduated with six-figure student loan
debt in 2007-08. If you attended graduate school, then 6.5% had loans over $100,000. Six-figure student loan debt is more common among graduate students. 2.6% of Master's degree recipients, 9.7% of doctoral degree recipients, 36.2% of law school graduates and 49.0% of medical school graduates graduated with six-figure debt.
2. Students graduating from more expensive colleges are more likely to graduate with six-figure
student loan debt.
3. More than half of undergraduate students who graduate with six-figure student loan debt attended
the most selective colleges and universities.
4. Nearly three-quarters (72%) of undergraduate students (72% of 0.2% of undergraduates) graduating with six-figure student loan debt graduated from non-profit colleges, even though non-profit colleges represent only 17% of total undergraduate student enrollment. A quarter (24%) of undergraduate students with six-figure student loan debt graduated from public colleges and ONLY 3% from for-profit colleges.
5. Undergraduate students majoring in computer science, mathematics and health care are less likely to graduate with six-figure student loan debt.
This reality is so far removed from the bunk that the education short sellers have been spreading that it is amazing anyone attaches any credence to what the short sellers say at all.
This is why the game is over for the shorts in the education space. There fundamental thesis is wrong. Their thesis that student loan defaults would rise given the lousy job employment rates has been correct, but they got lucky that the unemployment rates stayed so high after the 2007/2008 real estate crash. Most everything else they have said about education companies is not correct or are statements that are discolored by false innuendo or outright misrepresentation.
This game for the short sellers is so over. Their misrepresentations no longer carry any weight except for those that are the last to the party and those that are the most gullible of investors.