“Is the College Debt Bubble Ready to Explode?,” asks Laura Rowley at Yahoo! Finance. College tuition has skyrocketed much more than housing did during the housing bubble, in percentage terms. One hundred colleges charge $50,000 or more a year, compared to just 5 in 2008-09. College tuition has surged along with federal financial-aid spending, which effectively rewards colleges for increasing tuition. College financial-aid policies punish thrifty families, so that “parents who scrimp and save to come up with the tuition are in effect subsidizing the others.”
“University administrators are the equivalent of subprime mortgage brokers,” notes Facebook investor Peter Thiel, “selling you a story that you should go into debt massively, that it’s not a consumption decision, it’s an investment decision. Actually, no, it’s a bad consumption decision. Most colleges are four-year parties,” he says, an assessment shared by prominent law professor Glenn Reynolds.
My wife is French. She spent twice as much time in class at her second-tier French university as I did in my flagship American university (the University of Virginia), and more time studying, too (even though I was studious by American standards, and as a result, later went on to attend Harvard Law School). France spends less per student on higher education than we do, to produce a more literate and knowledgeable citizenry.
Vast amounts of money are spent by American colleges on useless administrators and politically correct indoctrination. For many people, college no longer pays off as an investment.
Much of college “education” is a waste of time. I learned more practical law in six weeks of studying for the bar exam and a couple summers of working for law firms than I did in three years of law school. I spent much of my time at Harvard Law School watching “Married… With Children” or engaged in political arguments with classmates, rather than studying (much of what I did study was useless). Even students who were high on drugs had no difficulty graduating.
(Higher education is no guarantee of even basic literacy. When I worked at the Department of Education handling administrative appeals, I was dismayed by the poor writing skills of the graduate students who lodged complaints against their universities.)
I used to work for a polling firm, and found that people with a couple years of college were frequently factually dumber about the world around them, and more politically correct, than people who had not attended college at all, in their responses to public-opinion surveys. An electrician with no college degree is far more likely to know who his congressman is and to understand the economy than some liberal arts college dropout.
When law schools claim almost all of their graduates find jobs, what they don’t tell you is that they include low-paying, part-time and temporary jobs in non-legal fields in making that claim. Sending excessive numbers of people to college results in even unskilled jobs being performed by people with college degrees.
Image credit: Honeywell-Nobel Initiative’s flickr photostream.
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My thought is that since college, except for a few areas, is no longer an economic benefit, its a status benefit. Sort of like old noble ranks, a degree in most areas will get you a seat among your betters, but won't have any positive effect on your income.
The exception is government service. Government service rewards credentialism, so, like the old Chineese education system, you must get your degree (and genuflect towards the politically-correct creed) for government jobs.
What stares everyone in the face is that credentials do not add to the prosperity of the economy. Sure, in the hard sciences, and then, maybe, listen to engineers tell you how long their education was useful in the outside world. So we are faced with a very expensive institution interlaced with the support of the goverment that, in large part, doesn't add to the prosperity of society, which is the provisioning of goods and services that people want to buy.
"listen to engineers tell you how long their education was useful in the outside world." I don't know if the meaning is that engineers are likely to often be out of work, or they always have a job. I am a civil engineer and have had a long career working in the oil industry. I kept my skills up and was always employed. It's been very good for me. But I got my degree before tuition inflation; I worked summers in construction and could save enough for the following school year (books tuition, R&B). I know a recent engineering grad who also worked summers in construction and was able to get through school without going into debt. He now works in the oil industry with a good salary.
"An [fill in the blank here] with no college degree is far more likely to … understand the economy than some liberal arts college dropout."
Goes without saying. The average Joe also understands the economy better than any Obama cabinet member.
I've been an engineer for 30 years. I earn a living using things I learned in school. No problem.
I got an MBA from a top-5 school and was astonished by how much I learned about business and the business world. It was a zero-to-sixty (or at least thirty-to-sixty) experience, doubled my pre-MBA salary and I've used all the skills I studied in one way or another. For me it was absolutely the right move, but I probably wouldn't recommend a mid-tier or lower B-school.
If you go to college for a real education, e.g. engineering, medicine, physics, etc…, you will shed your college loans in no time. If you go to college to find yourself, get a degree in English literature or anthropology or (women, gender, African, etc…)-studies, etc…, you are a fool.
Yes, the college tuition bubble is ready to explode.
As TheOldMan says, people who get fluffy liberal arts degrees are fools.
The only way they can get jobs is with the government, and the government can't keep growing forever, given the huge budget deficits.
The bubble will probably explode at no-name liberal arts colleges, but it is less likely to do so at the Ivy League.
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