Education poised for disruption

The traditional education system is broken, at least in the US. The thing that we expect to help us land a well-paying job is getting ridiculously expensive. According to Forbes, student debt in the US is $1.3 trillion, behind only mortgage debt.

If we pay so much for the education, is it worth the time and money? I recently graduated with an MBA and MIS. To be frank, the MBA degree at my university offers little in value, yet it costs $10,000 per semester. The MIS is much more helpful, especially given that I didn’t have much technical background. Nonetheless, some courses are repetitive, but since they are part of the degree, I had to waste my time on them. I am pretty sure I am not the exception in this.

A college degree used to represent the credibility a student had. The more famous the school that issued the degree, the more credibility. It is still true to this day. Besides that, going to school does offer certain values in several cases. Some people learn more effectively from listening to a professor. Team work at school prepares students for team work and communication in real life.

Technology today allows all of those to take place in the digital world. Online courses are usually cheaper than in-class sessions at universities. Sites such as Lynda, Udacity or Coursera let learners absorb skills and get certified by a fraction of the tuition fees. With MOOCs, which is used to refer to those websites, students can study at their own pace and become qualified for employment without breaking their bank. That’s improvement. If employers only worry about skills, then what is the reason for going to a traditional college?

MBA applications have fallen for years in the US. Some universities even abolished their MBA. It goes to show that having an MBA and the debt that comes with it is not appealing or beneficial to students any more.

Recently, I learned about another innovation in education: schools such as Lambda. Lambda offers live online classes that are structured in specific curriculums, mostly in IT. Introduction classes are free, while advanced classes are not. The cool thing about Lambda is that students are not required to pay upfront (only for US citizens, US permanent residents and EU citizens). Students only need to pay 17% of monthly salary for two years if they get a job that offers higher than $50,000 in salary after taking graduation. The cap payment is $30,000. If you don’t get that salary or you get fired, the payment stops.

It is an innovative approach to education. It is designed to specifically help students get a better-paying job without worrying about student loans. The freedom from thinking about paying installments after graduation is huge. In the current system, if you have a significant amount of debt, your freedom is much limited. Regardless of whether you have a job or not, you still have to make payment. Student debt is not written off in bankruptcy. Everything you do in life, you have to take into account the debt you have. If you don’t like the job, you still have to suck it up and keep on going.

With Lambda, you still have to pay installments, but the total is capped. More importantly, you have more freedom. If you somehow get fired or sick and can’t work, you don’t have to make payments.

I am not affiliated with Lambda in anyway. I am excited about what the school has to offer. I wish universities would take note of this trend and rethink their approach.

Student Debt

Per Bloomberg today:


This phenomenon is crazy to fathom. Students go to school to get the knowledge and skills to start a career, earn a paying job and be independent. We definitely do not go to school to be saddled with debt. But apparently, it’s exactly what is happening now. Going to school or earning a degree doesn’t guarantee a good paying job nowadays. What it does guarantee in many cases is student debt. The debt is attributed to rising tuition fees, ridiculously expensive books that are used in only a few weeks and a plethora of administrative fees. Seriously, it’s quite shocking when it costs quite a significant amount to attend your own graduation and request an official diploma. I paid $75 to request my official two diplomas and $100 for the graduation gown. Students; however, are not faultless by no means. I have seen first hand some students dropped out of class after committing to paying a course for a variety of reasons. Some dropped out of school because they didn’t like the school any more.

When I was in Finland, every year I only had to pay 92 euros for the whole school year. Nothing else. The most expensive book I ever bought in Finland was 57 euros for a Spanish class. In the US, books can run up to $300 or $400 each and the book is only used for a few weeks. A semester with 4-5 courses can amount up to $1,000 in books. Something needs to change.

Our 20s and 30s are arguably the most productive period of our life in which we have fewer commitments or burdens than when we have a family of our own. It should not be spent on paying the debt that we get on our way to get a degree and to earn a shot at a career. Our choices in life should not be restricted by student debt that shouldn’t be there in the first place. If I have to pay more taxes to have free healthcare and education like what they have in Finland, in a heartbeat. Because each of us should not start our adult life and career from the place of anxiety and fear caused by student debt.