Posted on 05/09/2013 6:50:11 AM PDT by Kaslin
Markets work. But sometimes they take time.
That's the uncomfortable lesson that proprietors of America's colleges and universities are learning.
For many years, market forces didn't seem to apply to them. There was a widespread societal consensus that a college education was a good economic investment.
Politicians gave lip service to the idea that everyone should go to college. No one should be stopped by a lack of money.
There was historic precedent. The G.I. Bill of Rights vastly expanded college populations and helped build prosperous post-World War II America. Putting even more through college would make us even more prosperous.
So Congress passed student loan and grant programs to make it easier for people to pay for college and university tuitions. That increased potential higher education revenues.
Surprise! Over the last three decades, tuitions rose faster than the economy grew.
For a long time, that didn't seem to be a problem. College still seemed like a good investment during the quarter century of low-inflation economic growth from 1982 to 2007. You could pay off those loans with earnings increased by your degree.
Meanwhile colleges and universities -- and not just the highly selective ones -- competed for students whose test scores would improve their ratings in the U.S. News College Guide by giving "scholarships" that actually were discounts on the tuition list price.
To attract these students, the educational institutions built fancy dormitories, gymnasiums and student centers. And they vastly increased the number of administrators, to the point where colleges and universities had more administrators than teachers.
Government helped to produce an ever-increasing demand for higher education. So higher education administrators saw no need to compete on price. Higher tuitions just gave your school more prestige.
Now the higher education bubble has burst. The Wall Street Journal reported this week that that the average "tuition discount rate" offered incoming freshmen last fall by private colleges and universities has reached an all-time high of 45 percent.
At the same time, their "sticker price" tuitions have increased by the smallest amount in the last dozen years. Tuitions for in-state students at public four-year colleges and universities also increased by the smallest amount during that period.
Applicants are negotiating bigger discounts than they used to. Market competition has kicked in.
What has happened is that in a recessionary and sluggish economy, potential customers have been figuring out that a college diploma may not be a good investment -- particularly if it entails six-figure college loan debt that cannot be discharged in bankruptcy.
The Millennial Generation that voted so heavily for Barack Obama -- 66 to 32 percent in 2008, 60 to 37 percent in 2012 -- has had a hard time finding jobs, even with diplomas in hand. Especially if their degrees are in gender studies or similar fields beloved of academics.
In even worse condition are those students who never get a degree, a disproportionate number of whom are blacks and Hispanics admitted under affirmative action programs who prove unable to keep up with the pace of instruction at schools where most students enter much better prepared.
We see in higher education something like what we saw in housing. Government programs aimed at increasing college education and homeownership, particularly among minorities, turn out to hurt many of the intended beneficiaries.
The intentions of the people who created these programs were good. The results -- well, not so much.
Home ownership is a good thing generally, but it's not good for everybody. The young and transient, for example, are often better off renting.
Higher education is a good thing generally too, but again not for everyone. People whose talents are more artisanal than academic are often better off getting a job or vocational training than seeking a degree that guarantees them student loan debt but not a job.
College and university administrators are not used to being disciplined by market forces. For years, they thought they were above all that.
Many got into the habit of producing a product that didn't serve their consumers' interests well. In a prosperous and growing economy, there seems to be no penalty for doing so.
In more straitened circumstances, they are discovering that, sooner or later, markets work. Their old business model is no longer working.
Colleges and universities have been doing a good job of meeting their administrators' needs. Now, in the new normal economy, they're scrambling to serve society's needs, as well.
your average grocery cashier checker being replaced by a computer is not going to get a degree in IA, but this is about kids who spent $80K on college just to be unemployable.
My 4 year degree cost me about 20k for 4 years and I walked into a job making 40k a year roughly the average for the field... Today a degree from that same institution would cost 80k and the average entry level salary for that field is now about 50k.
It doesn’t take a genious to figure out COLLEGE is overpriced, attended by a lot of folks who really should not be there.
I like your story... We need more parents not giving kids a free ride...
There are a lot of folks in college and have been for decades who had no business being there, they died it because it was “what you do” and it was on someone elses dime.
ANyone who has spent any time in or around a college campus can tell you lots of them really have no academic aspirations or knowledge of what they want to do with their lives, just doing it because its what you do.
I’d say during my college experience a full 80% of the students really had no business being in college, and in days gone by would have never been accepted to any serious academic system.
I have three kids entering into college in the fall. I am amazed that among state schools the difference in tuition. Mizzou is the costliest at about 9 grand and smaller state schools run about 5 grand. The second largest, Missouri State is about 6.5, but have very generous scholarships for gpa and ACT (Mizzou virtually has none). So, Mizzou is basically 2 times the second largest school.
The difference is Mizzou has a big football and basketball program. It also has well known journalism, law and medical schools. For my one kid going there, it has an excellent ROTC program. But for the majority of kids attending, is a football and basketball team worth an extra $16K to $18K a year...?
The main character, played by Matthew Modine, is a real slacker in medical school.
I’ll check out the movie. Just read the summary. Thank you.
I’ve dealt with a fair number of medical students and residents. The sloppy ones and the slackers turn out to be poor clinicians. They don’t have the self-discipline to be good. However, some of the non-conformists are excellent.
IT shouldn’t cost more for those things, those sorts of things usually MAKE money for the school, in terms of revenues, tv contracts, larger and more support from alumni etc. If they are blaming the athletics programs for the added cost they are probably lying to you.
Smaller schools running such things add cost, big schools having those things usually makes them money.
The "catch-all" majors for washouts at my school (a large state U) were business, and interestingly enough, education.
Nice to see a school spit out 400 teachers a year, 60 or 70-odd percent of which likely didn't particularly want to do it....they just ended up in it. Says plenty for our educational system.
>>A while ago, my plumber came to my house and fixed one of my toilets. He was here about 30 minutes and charged me 160 bucks.
And I went to 4 years of college.<<
Why didn’t you look on YouTube for a video and fix it yourself?
However, when I watched the guys humping 80# bundles of shingles up 12 or 15 or 20 feet of ladder, I thought, "they're earning their money."
I'd rather people get an MS in computer science with a specialty or minor in IA.
It's bad enough that students no longer get a universal education when they go to college. Most people treat universities as white-collar trade schools and focus most of their efforts just learning a trade.
To continue that at higher levels can only lead to narrowly trained people who are good at few things and can never quite see the big picture.
That large corporations are gullible enough to hire people with degrees in something so specialized is not a good sign either.
Not really. Pretty soon we’ll have robots digging ditches.
Thank you for your service to our country.
I'm seeing a doctor now that comes pretty close. So far I'm quite pleased.
If someone gets degrees in EE or CS their MS and then DS will be much more specialized then their Freshman undergrad year. That is the way it works.
I dont see someone getting a MS in IA unless they have a technical background first, an engineer or a computer network specialist,
Nor do I see IA being obsolete in our lifetime.
My experience getting my master’s degree reflects the article’s premise.
I took a class in social science research at the University of Alaska Fairbanks. It was a tedious helping of left-wing pap served up by a self-proclaimed Latina grandmother who, not surprisingly, graded on a curve, with women and minorities on the passing end and white men on the failing end. I looked at the $20,000 tuition fee for completing the degree and took my “incomplete” for the semester.
I found an online college for about one-third the cost. The classes were excellent. Political posturing was absent. I went in, learned a lot, came out with some interesting skills, and graduated in 18 months. It was all done at home - a plus when you live way out here - and there wasn’t a speck of time wasted.
I’m betting we’ll see much more of this in the near future.
Yeah, I’d draw the line there!
“It doesn’t take a genious to figure out COLLEGE is overpriced...”
“Genious”?? I’d ask for a refund if I were you :)
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