Mark Cuban: This Is Just The Start Of The College Implosion

Discuss anything else athletic or non-athletic related that doesn't belong on the main Tulane athletics forum.
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jonathanjoseph
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Mon Mar 09, 2015 12:30 pm

I think it is very clear that Mark Cuban would consider Tulane's future survival to be very much in question. We're already $20M/year in the hole and are in serious danger of losing another $20M-$40M/year if the bubble bursting spreads to Tulane, as Cuban notes. Such a scenario would probably bankrupt Tulane within 5 years. But I guarantee you that Scott Cowen will continue collecting those large paychecks right up until the bank accounts are seized.
As this little college saw, there will be other students that get their heart set on one college, and it won't be there when they graduate
"At some point," he added, "it's going to pop."

"When you're 18 years old and you don't really understand all the nuances of what it's going to cost to pay something back — it was almost inevitable,"
This debt ultimately will outweigh most of the potential benefit you're getting from the college education, Cuban said. "What you thought you were going to get in quality of life by going to that college, you've just undermined with the amount of debt you're taking on," Cuban said.
Potential students and their families, according to Cuban, are "going to get smarter and not want to pay."

"There's an efficiency of the market — particularly in this age, when all the information is available everywhere," he said.

A tiny drop in enrollment can have a big impact on a college that charges $40,000 a year, Cuban said. Losing 500 students would put such a college $20 million a year short. Losing 1,000 moves that number to $40 million.

"That's a huge number," Cuban said.
http://www.businessinsider.com/mark-cub ... sis-2015-3


mbawavefan12
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Mon Mar 09, 2015 12:33 pm

jonathanjoseph wrote:I think it is very clear that Mark Cuban would consider Tulane's future survival to be very much in question. We're already $20M/year in the hole and are in serious danger of losing another $20M-$40M/year if the bubble bursting spreads to Tulane, as Cuban notes. Such a scenario would probably bankrupt Tulane within 5 years. But I guarantee you that Scott Cowen will continue collecting those large paychecks right up until the bank accounts are seized.
As this little college saw, there will be other students that get their heart set on one college, and it won't be there when they graduate
"At some point," he added, "it's going to pop."

"When you're 18 years old and you don't really understand all the nuances of what it's going to cost to pay something back — it was almost inevitable,"
This debt ultimately will outweigh most of the potential benefit you're getting from the college education, Cuban said. "What you thought you were going to get in quality of life by going to that college, you've just undermined with the amount of debt you're taking on," Cuban said.
Potential students and their families, according to Cuban, are "going to get smarter and not want to pay."

"There's an efficiency of the market — particularly in this age, when all the information is available everywhere," he said.

A tiny drop in enrollment can have a big impact on a college that charges $40,000 a year, Cuban said. Losing 500 students would put such a college $20 million a year short. Losing 1,000 moves that number to $40 million.

"That's a huge number," Cuban said.
http://www.businessinsider.com/mark-cub ... sis-2015-3
I don;t disagree that the system is unsustainable in its current form. But this guy throws out a lot of opinions. He said the NFL is in risk of dying as well. He also doesn't understand the dynamics by saying that a $40k a year school charges students the actual sticker price. Well over 80% of TU students get aid and its a large average package, TMK. The quoted price is just to make it look more fancy than it actually is........
jonathanjoseph
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Mon Mar 09, 2015 12:46 pm

mbawavefan12 wrote: I don;t disagree that the system is unsustainable in its current form. But this guy throws out a lot of opinions. He said the NFL is in risk of dying as well. He also doesn't understand the dynamics by saying that a $40k a year school charges students the actual sticker price. Well over 80% of TU students get aid and its a large average package, TMK. The quoted price is just to make it look more fancy than it actually is........
I would agree that Cuban throws out some stuff that is off the wall, but how could you not agree with his take on education? He's certainly right about a good number of things and this is an obvious example.

As to the financial aid statistics, all that proves is that the bubble is indeed real and all this is just accounting tricks. Cuban is correctly noting that people are quickly figuring out that there is ZERO path to a return on investment for $250K on an undergraduate education that doesn't include engineering. So we're supposed to feel ok because we're merely advertising that our education is overpriced even if it isn't?

There's a ton of data that supports the bursting of a massive education bubble. There's no credible data that the NFL is dying on any short term horizon. Long term everything changes/dies, so that's actually not that crazy.
DfromCT
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Mon Mar 09, 2015 1:08 pm

Umm, I might have missed something, but what makes Mark Cuban an expert on the state of higher education? I don't disagree that the bubble bursting is inevitable, but still wonder why we listen to Mark Cuban?
" For every alum, no matter where they are...I want a football coach that's going to make Saturday something you anticipate and look forward to." --Troy Dannen

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mbawavefan12
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Mon Mar 09, 2015 1:49 pm

jonathanjoseph wrote:
mbawavefan12 wrote: I don;t disagree that the system is unsustainable in its current form. But this guy throws out a lot of opinions. He said the NFL is in risk of dying as well. He also doesn't understand the dynamics by saying that a $40k a year school charges students the actual sticker price. Well over 80% of TU students get aid and its a large average package, TMK. The quoted price is just to make it look more fancy than it actually is........
I would agree that Cuban throws out some stuff that is off the wall, but how could you not agree with his take on education? He's certainly right about a good number of things and this is an obvious example.

As to the financial aid statistics, all that proves is that the bubble is indeed real and all this is just accounting tricks. Cuban is correctly noting that people are quickly figuring out that there is ZERO path to a return on investment for $250K on an undergraduate education that doesn't include engineering. So we're supposed to feel ok because we're merely advertising that our education is overpriced even if it isn't?

There's a ton of data that supports the bursting of a massive education bubble. There's no credible data that the NFL is dying on any short term horizon. Long term everything changes/dies, so that's actually not that crazy.

What part of "I don't disagree that the system is unsustainable in its current form" was not clear?
Dr. Rosenrosen
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Mon Mar 09, 2015 1:59 pm

I think Tulane's endowment insulates the school from real disaster for the time being. But I agree that TU could be headed for trouble in the near future. Higher ed will be going through MAJOR changes over the next decade and the market for most $50 or 60K/year liberal arts schools is going to fade.
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GreenLantern
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Mon Mar 09, 2015 3:12 pm

This is what will change higher education.

A college degree must:
  • Offer value to the student. The student's cost must be returned in lifetime earnings and must not hinder the individual with decades of residual debt
  • Be recognized as legitimate professional preparation by prospective employers
  • Help employers identify advanced academic work through the use of certifiable e-badges: digital tokens that they are designed to be found by employers using search algorithms to locate people with specific skills.
Nowhere in this list was mentioned paying lard-azzed, pompous administrators (and their spouses) million-dollar annual salaries to do (less than) nothing while on sabbatical.
jonathanjoseph
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Mon Mar 09, 2015 4:32 pm

Dr. Rosenrosen wrote:I think Tulane's endowment insulates the school from real disaster for the time being. But I agree that TU could be headed for trouble in the near future. Higher ed will be going through MAJOR changes over the next decade and the market for most $50 or 60K/year liberal arts schools is going to fade.
Sure, but I'm guessing that at the point where the endowment is being liquidated to support operations will mean we are probably past the point of no return. Would you send your kid to a school that needs to liquidate it's endowment to stay open?
jonathanjoseph
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Mon Mar 09, 2015 4:32 pm

GreenLantern wrote:This is what will change higher education.

A college degree must:
  • Offer value to the student. The student's cost must be returned in lifetime earnings and must not hinder the individual with decades of residual debt
  • Be recognized as legitimate professional preparation by prospective employers
  • Help employers identify advanced academic work through the use of certifiable e-badges: digital tokens that they are designed to be found by employers using search algorithms to locate people with specific skills.
Nowhere in this list was mentioned paying lard-azzed, pompous administrators (and their spouses) million-dollar annual salaries to do (less than) nothing while on sabbatical.
This is a great post. Worth noting that said lard-azzed, pompous administrator has actually moved Tulane decidedly backwards in the above categories.
cajunfanatico
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Mon Mar 09, 2015 4:41 pm

jonathanjoseph wrote:
GreenLantern wrote:This is what will change higher education.

A college degree must:
  • Offer value to the student. The student's cost must be returned in lifetime earnings and must not hinder the individual with decades of residual debt
  • Be recognized as legitimate professional preparation by prospective employers
  • Help employers identify advanced academic work through the use of certifiable e-badges: digital tokens that they are designed to be found by employers using search algorithms to locate people with specific skills.
Nowhere in this list was mentioned paying lard-azzed, pompous administrators (and their spouses) million-dollar annual salaries to do (less than) nothing while on sabbatical.
This is a great post. Worth noting that said lard-azzed, pompous administrator has actually moved Tulane decidedly backwards in the above categories.
What exactly is lard-azz doing for $2700+ per day?
Jonathan: I have nothing now to complain about on any TU coaches.
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