September 6, 2013

When even banks flee from college loans

From CNBC:

The largest bank in the United States will stop making student loans in a few weeks.

Even banks, who have been known to fish around troubled waters for revenue, such as with mortgage-backed securities during the subprime mortgage crisis, are pulling out of providing further loans to college students who want to take out a loan.

Why? Because college tuition is mounting, and as college students take out more loans to be able to afford that, only to graduate into joblessness or low-paying jobs that are insufficient for them to service their repayments, many default on their loans, causing banks losses.

I bet the student loan sector is so dismal that even the most creative of banks cannot re-package it into a lucrative derivative product. Unless the investors are really that daft.

With over $1 trillion in outstanding loans, the second highest in the country, over $8 billion in default, and about 13% of payers defaulting within three years of servicing their loan, no wonder JP Morgan Chase wants out of this rapidly-collapsing market.

And of course, loans from JP Mogan Chase are a variable prime rate subject to market forces, unlike federal loans, and should interest rates go up, more students are likely to default and less students will be willing to take these loans out.

It is not so much that the jobs students are taking are less capable of living a standard life than they were decades ago; job wage increment has been slight but at least still barely keeping with inflation (2-3% wage increase vs 2-3% inflation) in the past two years. Compare that with tuition increase in the past two years, which has increased by 4-5%, plus state funding for colleges have fallen 15% in the past six years.

The problem is most definitely with the free-wheeling increase of tuition costs with no seeming checks. I have written about this previously and how if we are to maintain the momentum of development and progress in the country, something must be done to the incendiary college side of rapidly rising tuition costs, rather than just working on the palliative side of the solution of providing more government aid.

August 30, 2013

Learning to be divided by education

I was explaining the Singapore education system to my friend from the States, and it turned out to be quite complicated:

For primary education (elementary school), we have a compulsory six years.

In secondary education (middle school), we have either a four-year program (Special/Express), or a four/five-year program (Normal Academic/Technical).

For post-secondary education (high school), we have either a two-year grammar school (Junior college), a three-year grammar school (Centralised Institute) or three-year vocational diploma program (Polytechnic). There is also a vocational institute known as the Institute of Technical Education (ITE).

I was telling my friend about how children are subject to segregation by ability from as young as third grade. In third grade, we had to take a test to see if we could be admitted into the “Gifted” stream, comprising the top 1% of the student population. These students get to be schooled in an environment full of other “gifted” kids, where they probably develop mutant powers. I did not make it into “Gifted,” most likely because I wasn’t very gifted. I was kind of distraught to learn that I wasn’t gifted.

In fourth grade, we had our first serious, proper national-level examination that would ‘stream’ us into various ability bands. There was EM1, for kids who were ‘smart,’ EM2, for average kids (this band had the widest spectrum), and EM3, for kids who needed assistance with their studies. Needless to say everyone strove for EM1, and EM3 kids were given the snub. Elitism ran rampant amongst students and especially parents, even to the extent that some parents wouldn’t want their EM1 kids to hang out with EM3 kids. The Singapore government probably realised how divisive such a system was, and subsumed EM3 into EM2, but everyone knows EM3 still exists, and the last few classes of EM2 are the new de facto EM3. I didn’t make it into EM1, and I was kind of distraught to learn that I wasn’t smart enough for it.

At the end of primary school, at sixth grade, students take their Primary School Leaving Examination (PSLE), which is scored out of 300. The score determines which secondary school a student can enter. More prestigious schools would have cut-offs at perhaps 250 or so, while less discriminating schools took in students at lower scores. In secondary school, there are multiple tracks. In “Special,” students take a four-year program with the option to take higher Mother Tongue or a third language. “Express” students take a four-year program without the language perks, and both “Special” and “Express” culminate in taking the ‘O’ Level examinations. There is the “Normal” track, divided into two types, “Normal (Academic)” where students take a five-year program, taking the ‘N’ Level on the fourth year, with the option for the ‘O’ Level on the fifth, and “Normal (Technical)” students take a four-year program with more technical subjects such as woodworking and finish up with the ‘N’ Level. I made it into “Express,” but I was kind of distraught to learn that I wasn’t “special.”

Finally, we get to post-secondary education, where there’s a two-year and three-year grammar school (Junior College and Centralised Institute respectively), or a three-year vocational diploma at a Polytechnic or a two-year vocational course at the Institute of Technical Education (ITE). Entry into any of these post-secondary institutions require the ‘O’ or ‘N’ levels, and specifically for the JC, CI and Polytechnics, the ‘O’ levels (‘O’ levels stand for “Ordinary” levels, ‘N’ stands for “Normal”). Getting into grammar school is pretty competitive, as there are only 16 of them in the entire country of a population of 5.5 million. Many who do not go into grammar school usually go to a Polytechnic. However, the difference between grammar school and vocational institutes is that the majority of seats in university are more or less set aside for grammar school students, where perhaps 65-70% of the student body makes it into university, as opposed to perhaps 10% from a polytechnic. Thus, for those who wish to end up in college, the pressure to enter a grammar school is really high, unless one is really confident of being on top of the cohort in polytechnic. Even then, to get to enter college a year earlier is certainly a boon for those set on entering college.

But even within grammar schools and polytechnics, they are not ranked equally. We have what is informally known as ‘elite’ junior colleges and ‘neighbourhood’ junior colleges, where the junior colleges with more stringent entry requirements tend to produce more stellar students who get to go farther and further.

‘Elite’ junior colleges tend to have resources to prepare their students prepare for further education anywhere, even overseas, while most ‘neighbourhood’ junior college students are more or less expected to stay local. Not that local universities are any bad, but when you’re talking about the reaching the limits of Oxbridge and the Ivies, most ‘neighbourhood’ JC students would never even dream of such endeavours.

I only made it into a ‘neighbourhood’ JC, having come from a ‘neighbourhood’ secondary school as well, and today, there is no distress — I have come to hold it as a badge of honour.

Despite my odds of never having been ‘gifted,’ ‘special,’ or ‘elite,’ I have been able to, through dogged determination, been able to hold ranks with those who have achieved those labels.

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August 21, 2013

Making the progress of the country affordable

From the New York Times:

Obama to Offer Plans to Ease Burden of Paying for College

It is about time the wildly sky-rocketing prices of a college education be addressed. While not actually depressing or stemming the increase in tuition, offering more aid is just as good a solution as any.

It must be, and I believe it is, recognised that a college education is ultimately how a country can begin progress. Oh don’t get me wrong, a college education is not necessary for an individual to be successful and happy in life — a person who has never been to college, through innovation, hard work and the right mixture of conditions can live the life he or she wants to. I’m talking about advancement and success at a national level.

A lot of the “better life” we talk about is made capable through invention — green energy, more effective farming methods, waste reduction technologies, communication, etc. — all these are the results of research and development, most if not all, made possible by researchers and scientists who have had to start in college. There are not many prodigies around who, without having to go to college, are capable of inventions at a scale enough to impact a nation as a whole; most innovations are from the toil of thousands of regular scientists who become proficient at what they do from having received the know-how and training from college and university. If a prodigy is the equivalent of a hundred scientists, rather than focus trying to find the wayward genius, it makes more sense to groom a hundred scientists instead.

If the very basic step of even attaining a bachelors remains out of reach to many because “college is too expensive”, and there might be countless untapped future inventors and pioneers waiting for the right academic environment to unleash their potential, a lot of talent and potential is wasted; all that is achieved is college heads having their pockets lined with more money.

Why is college the vital stepping stone, and not say, high school, to a country’s advancement? It is true to say that every step along of the path of education contributes to innovation’s path, but high schools being unaffordable is not quite a problem in this country, college is.

The government is investing in the country’s future when it decides to give students access to their own ingenuity by helping make the tools affordable; knowledge, and an environment to inspire.

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July 31, 2013

Whatever was that?

Last night, I attended the premiere of internet TV series, Whatever This is. The creators of this series previously made The Outs, which fairly enjoyed. The event was well-attended and that floor was packed with so many plaid, skinny, mostly-white, creative-industry-looking people that I actually raised an eyebrow the moment I stepped in. I’m not calling them hipsters, because I’m sure they probably are not; I’m making a fashion and demographic observation (honest!).

The show played, and… I felt a searing sense of loneliness and distancing from everyone else in the room. In my opinion, the episode was not particularly funny to me. I don’t laugh very easily at things, and even the original outs only had me smile a couple times, but never left me adequately-humoured. However, the room erupted into laughter at what I thought were some of the most banal moments. I wondered if I have had botox done to my face at point in the screening, because my face felt stiff from not emoting in response to the show.

Don’t get me wrong, the show had good writing, and seemed to have set itself up for a good story ahead, but I just did not find it particularly funny as the audience seem to have indicated from their response.

It seems as if the American public were pre-programmed to laugh and applause at stipulated moments in television. A funny point is not funny by being funny inherently, but becomes funny because the audience participates in recognising it as funny. “This is funny because I am laughing,” so as to speak, and not “I am laughing because this is funny.”

I feel like the audience expected the show to be funny, hence the laughter and the clapping. What if the director intended the show to be sombre, but directed it exactly the same, with the same one liners that painfully reveal our dreary existence, financial woes and personal insecurities that had led the audience gleeful? Would the director feel anguished, or would he approve?

But I digress. I stood, unmoving, unsmiling, watching the show, feeling painfully removed from everyone else’s mirth. And it’s not only this show — I’ve been to stand-up comedies and felt exactly the same thing. Comic says something really ordinary, but at moments where it seems primed to harvest laughter, and the audience delivers.

I had definitely spent such shows paying attention to the audience more than I did the show. I wouldn’t know which parts of the show was funny otherwise.

Eventually the screening of the first episode of Whatever This Is ended, and everyone clapped and cheered, especially hard so at certain lines in the credits (were half the audience cast and crew members?). I clapped because everyone else did, but I’m not sure if I’ve made the premiere a success because I clapped or that I was clapping because the premiere was a success.

The Hexacoto

Tag: America