College Alternatives, Part 1: Watch Out for 'Debt-Dealers' and the 'Scholarship' Game

Column by Steve Seachman.

Exclusive to STR

If someone waves a scholarship in your face to get a GREAT DEAL!!! . . . but only if you sign a bunch of fine print with long-term ramifications . . . maintain a healthy level of skepticism. Also beware of the false sense of security that comes along with the college package.

In an age of warning labels on coffee lids and defensive medicine to avoid lawsuits, one controversial practice still openly gets promoted without caution: sending kids off to college, with the full knowledge they will likely be saddled with harmful levels of debt (and may pick up anti-social attitudes while not learning much in the process). We’ll skip most of the valid concerns on educational quality for today and focus on the debt and some of its key contributors.

To begin with, the average 2017 graduate started their career with $39,400 of college debt, which typically takes about ten years to pay off. Over 44 million college graduates in America are now burdened with paying back their student loans and interest, in addition to any auto, home and credit card debt they need to service. And there are no signs of that condition relenting. 

Before diving in further, some background is helpful. For all the complaining about the low quality and high cost of modern colleges and universities, it’s surprisingly rare to see anyone try to explain “how it got this way.” I did my best on that last month, since knowing how we got here is an important first step in finding a solution.

In summary, the university business model made sense nine centuries ago, when expensive and rare, hand-written manuscripts were the state of the art. That model became less practical after the Printing Press was invented around 1450 and was largely irrelevant after America became liberated from British rule and its aristocratic structure. As of 1800, colleges in America consisted of about 20 small institutions primarily catering to aspiring politicians, the idle rich and some state-subsidized religious groups (such as Harvard, Yale and Princeton). Then in three increasingly giant leaps of federal involvement (during the Civil War and World Wars I and II) and other subsequent intervention, a combination of outside subsidies, professional privileges, HR hiring policies, induced entitlement attitudes and lack of market alternatives resuscitated the university model back to a life-like appearance. Today, this mix of flawed methods and political pressures is a virtual monopoly for gaining entrance to the professional world. But this unnatural, unsustainable and coercive system cannot last.

Since subsidies don’t create value—they just cause artificial distortions—and since university scientists have yet to repeal the laws of gravity or the economics of gravy trains, sooner or later, a change is gonna come. The main choice is whether to: A) proceed calmly to the nearest exit and build a better alternative, or B) run around screaming as if your hair is on fire and grabbing any flammable liquid available (such as scholarships, loans and long-term debt) to supposedly quell the flames. Option B is currently winning the popularity contest, but it is not working.

Regarding the explosive rise of college debt, that was a mere $64 billion as of 1985 and now stands at nearly $1,500 billion. The single biggest contributor to that unnatural growth was the Higher Education Act of 1965 (HEA), which was part of the so-called Great Society of LBJ. For the first time in American history, the HEA promoted the idea of college as a human right, opening the door to more federal intrusion into educational matters and a corresponding rise of PC intolerance (usually pro-government, hyper-legalistic, anti-business and anti-individual, it just so happens).

(PC fanaticism is so pervasive that America now has two well-staffed organizations to document the frequent harassment and anti-academic behavior: The College Fix and Campus Reform. Yet many parents feel the college “experience” is worth the risk.)

Among the many features of the 1965 law was Title IV, which created a federal authority to dispense financial “assistance” to students for any reason whatsoever (sans the military rationale of the GI Bill of 1944). This foray into personal career decisions—unimaginable even during the manic days of the 1930s New Deal—eventually led to the explosion of college debt.

The Many Helping Hands of the Subsidy System

The Center for Online Education provides further insight on the significance of the 1965 Higher Education Act (this data is a couple years behind on job stats):

One year after the HEA was enacted, the precursor to the National Association of Student Financial Aid Administrators (NASFAA) was established. Today, this organization enlists more than 18,000 professionals at colleges and universities across the country to help students access higher education through financial aid.

Since the 1970s, Congress has amended the HEA to build a growing constituency for this new entitlement, broadening availability and raising borrowing limits that make it easier for schools to boost prices and for students to rack up more debt. According to the NASFAA website, the advocacy group now employs nearly 20,000 staffers to help students access all the debt they can dream of. Sallie Mae has another 1,400 employees hawking private student loans, and its spin-off Navient Corporation has another 6,000 workers managing “nearly $300 billion in student loans for more than 12 million customers,” according to Wikipedia. Dozens of other special-interest associations and trade organizations are scrambling along their side to grab every penny they can squeeze out of taxpayers’ wallets to put students where they belong (in some people’s vested opinion).

Once again, we see the economic maxim at work: When you subsidize something, you get more of it. That includes a buzzing bureaucracy to help people secure the subsidies in the first place.

While everyone knows that college costs have been skyrocketing for decades, the most puzzling part is how nearly everyone just keeps going along with it. Over the last few generations, Americans have apparently become too frightened to even imagine anything other than the status quo of classroom lectures and theories from academic professors who probably don’t have any significant private-sector experience. Some people just cannot resist a subsidy and an official stamp of approval. And “those people” seem to presently be in the vast majority.

For reasons I’ll touch on below, the tide seems to be slowly turning thanks to some innovative non-college alternatives. But this is a huge uphill struggle, as I’ve seen first hand. And roughly 20 million students are still stuck in the college mold, whether they want to be there or not.

Modern Teaching Methods: Minimum Quality, Maximum Conformity and Control

Next week I’ll elaborate more on effective teaching styles (e.g., why dynamic two-way interaction, including a healthy amount of professional mentoring, is more challenging than a steady diet of passive books and lectures that can lead to pandering and confusion). These common sense observations have been known for at least 3,000 years and were well understood in America just a century ago. But the better methods of teaching are harder to subsidize, mass-produce and manipulate (unlike, perhaps, a history textbook selected by a political committee).

For today, this basic understanding is important to be aware of because most education industry insiders have a personal interest in resisting institutional change, no matter how “radical” their political views. The group-think on education is so bad that evenoutside the campus setting, nearly all private-sector professionals I encounter can’t imagine life without a college degree, even though most admit college is a rip-off and many agree on its poor quality.

This attitude of widespread conformity—fearful of trying anything new, no matter how bad the present methods are failing—has all sorts of artificial stimulants. Most obvious is the multi-billion-dollar college advertising blitz that plays up superficial distractions such as sprawling campuses of huge buildings, organized pseudo-amateur sporting events, and smiling youths adorned in flowing graduation robes holding “their” degree, extended families beaming with pride. One independent critic summed up their message as: “Success isn’t dependent on hard work, vision and creativity. It’s dependent on the degree you achieve before you start achieving in your career.”

The dominant news industry—exemplified by the exclusive club of FCC license holders, urban newspaper monopolies and their collection of other subsidized platforms—can’t stop praising the virtues of their sponsors in “higher education,” since they depend on corporate advertising and inherently prefer central planning versus private alternatives. So do scholars on the government payroll who insist that pushing more people into extended classroom schooling is a great thing. Regardless of cost and quality, they all claim—it’s the only way!

But that conclusion is highly questionable, once we allow ourselves to ask some valid questions. Today, virtually all government and most corporate educational spending is on one-way lectures, books and their online equivalents—along with large buildings and certified teachers to deliver those lectures and bookish products. These methods are far more easily subsidized and controlled, it just so happens. Not that “quality control” is a bad idea; it’s just that obsessing on CONTROL at the expense of quality can be problematic.

A few quick observations and rhetorical questions help demonstrate why the college model is lacking. First of all, very few adults voluntarily choose to re-enter the college system once they’ve “served their time” (unless some HR policy says they must for career advancement). Why is this?

If college professors with their dusty bookshelves and impressive titles are such eternal fountains of wisdom, why not sit at their feet (or at least stay in close proximity to them) every chance you get? Have you learned everything there is to know and no longer require academic assistance? Or, perhaps, have you found more cost-effective ways of learning?

If going back to college would be a “waste of time” for you (as most adults will reluctantly admit) then why are you insisting that high school graduates waste four more years in this unproductive setting?

Yet a college degree is now a de facto mandate for virtually all professional jobs. How can this be?

Since the quality of a college education is suspect as best (according to this study and others like it) there must be other reasons for maintaining the relatively recent college fixation, beyond the deceptive advertising noted above. Unlike “free speech” on college campuses, the laws of “cause and effect” have not been abolished. Since few others seem to be asking this question, and it’s an important topic that has interested me for some time, I set out years ago for a plausible answer.

Subsidies, Credentials and a False Sense of Security

My conclusion is that the dynamics of subsidies, mandatory credentials and a false sense of security play a big role. I wouldn’t be surprised if many of other people have come to the same conclusion—since these findings fall into the category of “so obvious, only an academic could miss it.” But to appease the “credentials” crowd, I’ll throw in that my assessments are based on 25 years of working in the consulting business, briefly with hard-earned but worthless letters after my name (P.E.), and collectively spending a few years onsite at dozens of client’s facilities. The last 10 years of that time has increasingly involved looking at historically successful teaching methods, educational funding mechanisms and positive incentives for mentoring (initially for personal interest, but full-time for the last six months).

In the modern educational realm, subsidies and credentials are everything. Total subsidies from combined U.S. federal, state and local government on all education (K through college) for FY2018 will be nearly $1.1 trillion. A trillion bucks a year of “easy money”—with hidden strings attached—influences a lot of decisions and leaves a big impact. And virtually every public and private school in America is burdened with licensing restrictions, teacher credentials and accreditation requirements. That’s part of the “strings attached” package.

We know that credentials (i.e., official mandates for state-issued licenses) are more about control than quality for many reasons. Unlike market-based measures that balance cost and quality to meet consumer preference, all government licensing mandates work as a selective economic blockade. This subtle but effective barrier establishes a wall of separation between consumers and “unapproved” vendors (i.e., merchants who didn’t pay sufficient tribute to the ruling authorities and give sufficient homage to the powerful interest groups who influence them).

If licensed professionals (particularly college professors) rock the boat in any meaningful way, they risk having their credentials revoked by the same hand that initially offered the favor. In this climate of fear, political control is maximized and quality is a farce.

In the case of primary and secondary schools (K-12th grade), the education lobby has successfully badgered politicians to enact such economic barriers to boost the salaries and prestige of their paid membership since the 1960s. Subsidized college administrators have employed similar measures over the entire American history of higher education.

Yet quality has tanked on all levels of U.S. education. Even the mainstream press has acknowledged the tremendous difficulties in firing incompetent but “credentialed” teachers, such as the March 2010 Newsweek cover story “We Must Fire Bad Teachers” and many other similar examples. In most cases, the proposed solutions are (what else) more money and more central planning.

In the end, mandatory credentials only succeed at conveying a temporary and false sense of security to both sides of the bargain. The title holder (college professor) is rewarded by being shielded from market competition, while also curtailing any need for improvement. The consumer is given a contrived display of “virtue signaling” since the teacher holds an official title, regardless of competence. Over an extended period, these two misleading indicators lead to confusion and discord.

Perhaps the worst overall feature about subsidies and mandatory credentials—in a land already saturated with Fake News and false advertising, PC group-think, a daily loyalty oath for kids, government anthems at sporting events, passive classroom lectures, cradle-to-grave welfare entitlements, etc.—is that millions of people simply cannot fathom any major decision without some type of corporate or government stamp of approval. We also can’t resist our share of “free stuff” taken from someone else. It’s the new American way . . . that America never asked for (but can’t walk away from)!

And since the rigorous process of innovation doesn’t come from back-slapping group-think—it starts with one person, an idea and considerable effort—that doesn’t bode well for progress.

Having spent many hours over the last few months talking with parents, teachers, students and employers about alternatives to the 4-year college degree, I cannot believe the level of extreme hesitation displayed to anything different, particularly from adults. But I’m optimistic that there are some brave souls left who are eager to climb out of the current college pit. In fact, I know there are, thanks to the impressive marketing efforts and initial traction from some pioneers in the field of non-college alternatives for professional jobs, such as MissionU and Praxis.

Yet for the most part, a beleaguered public keeps asking for more “benefits” from their federal benefactors to hopefully keep from drowning in an ocean of debt. As time goes on and more people hear about alternatives—and merely “treading water” with concrete shackles in the college system becomes less appealing—I think this will change.

Hooked on Failure: Scholarships and Loans

When it comes to college, the current “benefits” of choice are scholarships and loans. Just a suggestion you might not be hearing elsewhere: If someone waves a scholarship in your face to get a GREAT DEAL!!! . . . but only if you sign a bunch of fine print with long-term ramifications . . . at the very minimum, maintain a healthy level of skepticism. That may seem obvious, but this particular gimmick is obviously enticing a lot of otherwise intelligent people who are wildly skeptical when you combine the words “college” and “alternative” in the same sentence. Yet when the words “college” and “scholarship” are mashed together, the mental faculties go into hibernation.

Conventional wisdom on college (even among conservative critics and parents who really can’t afford it) is to just suck it up and do anything necessary—grabbing all the free goodies you can find along the way—to get a “degree.” This mystical piece of paper, suitable for hanging on your next corporate cubicle divider, is nothing less than the cosmic gravity (or maybe duct tape) that holds the entire college universe in orbit. It’s all about the degree. And the “check box” it satisfies on the poorly drafted hiring application.

So it’s no wonder that college administrators flaunt it like a matador taunting an exhausted bull. The message (in so many words) is that “You’ll need this degree, boys and girls . . . or Your Life. Will Be. A Faaaiiillll-yuuurrre.” And, sadly, millions of students and employers still believe it.

Feeding into that mentality, scholarship hustlers are extremely aggressive these days. A Google search on the phrase “college scholarships” yields 163 million results. Over at Bing, there’s even a subgroup for “35 scholarships anyone can get.”

The pro-college website College Data helps students by “debunking myths” such as “There isn’t enough aid for everyone” with the response:

According to the College Board [page 11], more than $181 billion in financial aid was given to undergraduates during the 2016-17 academic year. This included $38.8 billion in federal grants; $46.1 billion in grants from institutions, and $58 billion in federal student loans.

Graduate students were given an additional $58 billion in total financial aid, according to that same report. This brings total outside subsidies for the college system to $239 billion for the most recent school year available (Fall 2016 to Spring 2017).

Yes, indeed. College politics is a big business. After all, a bloated, outdated, unstable college and university industry with annual revenues of $564 billion needs all the loans and scholarship support it can extract. It’s sort of like derivatives peddling in the banking industry, with less humility and additional moral hazard.

They now give scholarships for bowling, archery . . . and coming soon, for being good at filling out scholarship applications. “Discounts for everyone! No one pays full price!”

College Scholarships: The Most Popular Shell Game in America

Honest products are not sold this way. But modern colleges love social engineering, divisive double standards and alternatively lenient or harsh personal judgment. Unfortunately, the scholarship application review process fits neatly into all of those bad habits.

While college administrators have far too much prestige and perks on the line to abandon their entrenched lifestyle, students and employers don’t have to go along for the ride. To avoid getting “reeled in,” it helps to recognize the bait. The pro-college folks at College Data advise: 

Scholarships won’t give you money for nothing . . . . Before you sign on the dotted line, check the terms of acceptance carefully to see just what you are promising to do—and then decide if you can live with it.

Some of their noted “strings attached” include restrictions on your field of study, specific job commitments after graduation, and even requirements to live in a (possibly low opportunity, high-tax) home state—or else be forced to pay back what you thought was a “gift” and you already spent on beer and textbooks.

Particularly watch out for college pricing games where they set a ridiculously high “base price” (say, $50,000 per year), but offer a “sweetheart” deal of “only $35,000” if you sign their contract and ostensibly make a 4-year commitment. Since paying off your college loans typically takes an additional 10 years after graduation, the initial decision to accept the “financial aid” of a college scholarship is often a 14 year obligationor even longer. That’s a great deal for bankers and college administrators. But for students looking for financial independence . . . maybe not.

And what are you really getting for this major lifetime commitment? A paper “degree” that might open some doors, but also might lead to narrow career choices? Personally, I would not want to be entering the work force with a 4-year degree and no practical work experience. That approach was acceptable 10 or 20 years ago, but it won’t last long. Not with skyrocketing college debt and non-college options becoming more available.

As detailed in this link, a big part of the College Experience includes the “publish or perish” mania of professors being required to submit often-cryptic research articles to obscure publications; being “taken for granted” by instructors too immersed in the corporate and government funding process to do much teaching; and a profound loss of academic freedom that is now the hallmark of even the best colleges. Even if you do choose the route of the 4-year college degree, these are good things to be aware of in advance.

Certainly, there are still some good teachers out there—particularly in locally funded community colleges who avoid much of that mess. But the present system puts incredible strains on everyone, especially at major 4-year institutions. The model of outside subsidies and political privileges that university administrators helped build has transformed into a dense entanglement of barriers and restrictions that are choking the life out of higher education.

Is There Another Way?

Well, I sure think so. It all starts with the core principle that “training has a value” and builds up from there. In specific—ALL training has a value, not just books and lectures and their online equivalents that can be easily mass-produced and are often not relevant or personally challenging. The key is recognizing the value of professional mentoring, using in-house experts who already know your business, and attaching positive incentives and safeguards that protect the interests of everyone involved.

Since this article is getting long, I’ve moved the further discussion of The Mentor Model to my article for next week. In the meantime, more details and FAQs are on the website for those who are interested. Anyone with comments, questions or looking to get involved can feel free to send me an email.

Your rating: None Average: 10 (1 vote)
S.E. Seachman's picture
Columns on STR: 7

Steve Seachman is the owner of The Mentor Model, a new business designed to provide an alternative to the 4-year college degree for students seeking professional jobs.
His website is:
He can be reached at:


D. Saul Weiner's picture

This is a really good article. I have been trying to get a better understanding of how college costs have spun out of control and have not really seen a lot of good analysis of the topic.

As I read this through, I noted a number of parallels to the dysfunctional (to put it mildly) government vaccine program.

Just like parents who are college graduates are strongly inclined to send their kids to college, most people who were vaccinated as kids are inclined to subject their kids to vaccination. In the latter case, the parents think that since vaccination was of benefit to them (or at least, that seemed to be the case), then it will be of benefit to their kids as well. They do not take into account that the vaccine schedule has tripled over the last 30 years and that it is currently producing vastly greater harm than when they took relatively few vaccines.

Licensing and mandates are also critical components in the current vaccine mania. Parents feel a false sense of reassurance going to licensed pediatricians, who utilize FDA approved (licensed) drugs/biologics. They think that all of these economic blockades (as the author put it so well) are actually there for their own protection, so that they won't have to worry about "quackery". Then, of course we have the vaccine mandates which most parents mistakenly believe must be complied with in order for their kids to attend school. Little do they know that the government vaccine program has been built on a foundation of fraud and coercion.