Posted on 06/06/2010 11:16:47 AM PDT by decimon
SUNDAY REFLECTIONS CONTRIBUTOR — It's a story of an industry that may sound familiar.
The buyers think what they're buying will appreciate in value, making them rich in the future. The product grows more and more elaborate, and more and more expensive, but the expense is offset by cheap credit provided by sellers eager to encourage buyers to buy.
Buyers see that everyone else is taking on mounds of debt, and so are more comfortable when they do so themselves; besides, for a generation, the value of what they're buying has gone up steadily. What could go wrong? Everything continues smoothly until, at some point, it doesn't.
Yes, this sounds like the housing bubble, but I'm afraid it's also sounding a lot like a still-inflating higher education bubble. And despite (or because of) the fact that my day job involves higher education, I think it's better for us to face up to what's going on before the bubble bursts messily.
College has gotten a lot more expensive. A recent Money magazine report notes: "After adjusting for financial aid, the amount families pay for college has skyrocketed 439 percent since 1982. ... Normal supply and demand can't begin to explain cost increases of this magnitude."
Consumers would balk, except for two things.
First -- as with the housing bubble -- cheap and readily available credit has let people borrow to finance education. They're willing to do so because of (1) consumer ignorance, as students (and, often, their parents) don't fully grasp just how harsh the impact of student loan payments will be after graduation; and (2) a belief that, whatever the cost, a college education is a necessary ticket to future prosperity.
(Excerpt) Read more at washingtonexaminer.com ...
A college education is the most oversold product in American society. For most college students, learning is incidental; social life is all and universities foster this inclination with endless student parking lots, gourmet dining, luxury dorms, and social opportunities out the gazoo. Take out the frills, bogus curricula, the fine and performing arts, and the unserious students and we may have some semblance of what higher education should be about.
And how many of those took five and six years to get that degree in basket weaving. I at one time may have agreed with the statement, but today given the number of schools that give open books tests and have "Ding Bat" course study, I strongly disagree.
This is interesting.
When I was in business I purposefully did not insist on a college degree from applicants. I was much more interested in their drive, how much common sense they had and whether or not they played well with others.
This lead to some unusual combinations. Our very best programmer was a woman with a degree in Early Childhood Education. We had an excellent user interface designer who didn’t finish high school. Unfortunately he died in a car accident (drunk driver). Our best system designer had a two year associates degree in History. Interesting mix of people.
On another note, if Mr. Reynolds is correct it will be interesting to see what colleges do to maintain their employee’s high salaries. I have a feeling the tenure system will break some colleges.
GET A DEGREE is like BUY A HOME, both can lead to financial hardship in spite of promises of ever-increasing wealth. That poor girl in the story, Courtney Munna, now has $100k in debt but by golly she went to NYU! The fact that she and others like her do not stop to question the risk/benefit of a $100k degree in Religious and Women’s studies seems more like an argument AGAINST hiring such persons.
Bingo. I think you nailed it.
Coulda fooled me. Our enrollments are higher than ever.
He never even addresses marketing. The idea of college was marketed long before cheap student loans. The whole industry is a bunch of incestuous “thinkers”.
Here’s my modest proposal for education reform.
We have been discussing ways to fast track kids through high school to avoid the liberal agenda and other idiocies:
http://www.freerepublic.com/focus/f-news/1315730/posts?page=84#84
Proposal for the Free Republic High School Diploma.
http://www.freerepublic.com/focus/f-news/1316882/posts
It's not called a bubble for nothing. What's the unemployment rate in Ohio?
The unemployment in Ohio is only a little higher than it’s been for the last four or five years. But I repeat, I see no evidence whatsoever that higher education has a “bubble” that is about to burst. Enrollments are so driven by fed and state aid, that only when the $$ stops will you see higher ed cut back, and the politicization of ed means that this will likely be somewhere around the time the SS checks stop coming.
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