The Business School Tuition Bubble (Could it follow the Housing Collapse?)

Business Insider ^ | 05/06/2011 | Michael Ryall, Harvard Business Review

[SeekAndFind]

Following the collapse of housing prices, a growing number of people have voiced concerns over a looming collapse of higher education tuition.

Initial apprehensions were expressed at least as early as 2009 in places like The Economist and The Chronicle of Higher Education. Today, there is a wikipedia page devoted to the topic and, in the last week alone, articles about this issue appeared here, here, and here.

As Glenn Reynolds, a faculty member at the University of Tennessee law school, points out, higher education shares some salient features with the pre-collapse housing market. (And Mark Perry, a professor of economics and finance at the University of Michigan, puts it in perspective with a handy chart.)

The doom-and-gloom scenarios always struck me as overly pessimistic. Last week, though, a number of things happened that caused me to reassess.

First, I learned that the cost of an MBA in the flagship, 2-year program where I teach is roughly $100,000, not counting lost earnings during full-time enrollment. Second, I discovered that the financial projections supporting the construction of our shiny new building assume significant enrollment and tuition rate increases into the foreseeable future. My colleagues refer to this as the Growth Model (although it seems more an aspiration than a plan). Third, I heard that two of our graduates are presently working in low-skill jobs.

[Yet_Again]

The liberals envisioned a society in which everyone had the chance to go to college (or at least, be indoctrinated by liberal professors for a minimum of two years). They accomplished this by expanding university enrollments and opening new (in many cases for profit) schools.

They forgot that every society needs both managers and janitors and that when everyone has an MBA, so will the janitors.

[ConservativeDude]

Third, I heard that two of our graduates are presently working in low-skill jobs.”

I am not going to jump to the conclusion that these particular graduates were affirmative action admissions. That would be racist, so I won’t assume that.....

[Thane_Banquo]

Universities have to charge huge tuition on money-making degrees like an MBA in order to fund left-wing things like “Women’s Studies” and “African-American Studies” that make no money and have little to no enrollment. All part of the PC culture at modern universities.

[cicero2k]

See the article in the WSJ where the editorial says that a job in the California prison system is way more luractive than an MBA. The former requires four months of paid for training and offers essentially a millionaire’s nest egg retirement plan. The latter offers six years of lost income and incurred debt, with no guarantees of outcome.

Then we have an administration that is not exactly kind to business.

I’m shorting the B-schools (if I could).