Monthly Archives: May 2016

A popular college investment promised students a career, but didn’t pay off

By Max Ehrenfreund

Five casual students sitting on the grass looking at laptop on c

(Bigstock)

Students who earned vocational certificates from for-profit colleges made an average of $900 less annually after attending the schools than they did before, according to a new study, leaving those who took out loans hard-pressed to pay them back.

By contrast, demographically similar students who received the same certifications from public community colleges earned $1,500 more than they did before attending school.

The paper from the National Bureau of Economic Research, published this week, offered new evidence for critics who say the for-profit college industry swindled students by pressuring them into racking up tens of thousands of dollars in debt while adding comparatively little value to their careers.

In 2014, the Obama administration issued new rules limiting the amount of debt students can take on in career-training programs. Though no schools were named in the study, some of the biggest for-profit colleges — including DeVry University and the University of Phoenix — have faced federal lawsuits or investigations that suggested they deceived students about the likelihood of finding jobs in their fields of study and how much they would earn.

The NBER paper analyzed data for 567,000 students who pursued vocational certificates at for-profit schools between 2006 and 2008. Eighty-three percent of them carried student loan debt. Of the 278,000 who earned similar certificates from public community colleges, just 25 percent were indebted, adjusting for demographic differences between the groups.

In 2014, the average tuition for certificate students at for-profit colleges was $8,118, compared to $712 for community college students in these programs, again adjusting for differences between the groups.


[Where to go to college if you want the highest starting salary]

The researchers — Treasury Department financial economist Nicholas Turner and economist Stephanie Riegg Cellini of George Washington University — focused the analysis on students seeking …read more

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Taxpayers wasted billions of dollars on a war on cocaine that didn’t work, economists say

By Christopher Ingraham

The U.S. government declared war on a plant. You probably already know how it turned out. (Anthony Tong Lee/Flickr)

The U.S. government declared war on a plant. (Anthony Tong Lee/Flickr)

American taxpayers got a dismal return on their $4.3 billion investment in the Colombian drug war between 2000 and 2o08, according to a new analysis by economists at MIT and Colombia’s Universidad de los Andes.

In the paper, which will be published in the June issue of the Journal of Economic Behavior and Organization, Daniel Mejia and Pascual Restrepo analyzed the cost to U.S. taxpayers of the two big U.S.-funded anti-cocaine efforts in Colombia: eradication of coca plants via the aerial spraying of pesticides, and interdiction efforts to block cocaine transit routes and seize shipments of cocaine. These efforts took place under the umbrella of Plan Colombia, a decade-long U.S.-backed initiative to fight the drug trade and organized crime in Colombia.

Mejia and Restrepo created a sophisticated economic model to account for the costs and benefits of these efforts. The model describes the international cocaine trade in its entirety, from production to transportation to sale. And it considers the tactics that coca growers and drug traffickers use to respond to enforcement efforts, like increasing production and shifting trade routes.

Mejia and Restrepo found that between 2000 and 2008, it cost the U.S. government $940,000 to eliminate a single kilogram of cocaine from the domestic market via pesticide spraying in Colombia. Eliminating that kilo via interdiction was considerably cheaper, at $175,000.

Why is interdiction so much more cost-effective than eradication? One reason is that cocaine’s raw material — the coca plants targeted by eradication — make up a fairly tiny fraction of the final product’s overall cost. For instance, the farm gate price of raw coca leaves is as little as $4.30 per kilogram in neighboring Peru. But by the time refined cocaine reaches the U.S. market, <a class="colorbox" …read more

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1.4 million college kids will drink alcohol today

By Christopher Ingraham

Thai Nguyen/Flickr

On any given day in America, roughly 1.4 million college students between the ages of 18 and 22 — or more than 1 out of every 8 American undergrads — will drink alcohol, according to new data from the federal Substance Abuse and Mental Health Services Administration.

Those who partake will consume an average of about four drinks each — just below the five-drink threshold that defines binge drinking. Of course, many of them will drink more than that. Many will drink less.

Other young people will opt to alter their consciousness with different substances. Roughly 900,000 college students, or 1 in 12, will get stoned. About 15,000 will do cocaine, 13,000 will do hallucinogens of some kind (magic mushrooms, LSD), and more than 7,200 will do heroin.

The very next day, the exact same scenario will play out again. Some of those who drink and do drugs tomorrow will be the same ones who drank and did drugs today. Others will take a break from the partying, perhaps waiting a day, a week or a month before doing it again.


[Think you drink a lot? This chart will tell you.]

It all adds up to paint a vivid picture of the prevalence of substance use among college kids in America today. This isn’t necessarily a problem — statistically speaking, most of this drinking and drug-taking is normal behavior. Most college drinkers and drug users graduate on to their next phase of life without suffering any adverse consequences from all those nights at the bar.

But if it’s normal behavior, it also isn’t without risk. On-campus drinking and drug use is associated with higher dropout rates. According to the National Institute on Alcohol Abuse and …read more

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