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Is it possible that higher education might be the next bubble to burst? Some early warnings suggest that it could be.
With tuitions, fees, and room and board at dozens of colleges now reaching $50,000 a year, the ability to sustain private higher education for all but the very well-heeled is questionable. According to the National Center for Public Policy and Higher Education, over the past 25 years, average college tuition and fees have risen by 440 percent — more than four times the rate of inflation and almost twice the rate of medical care. Patrick M. Callan, the center’s president, has warned that low-income students will find college unaffordable.
Meanwhile, the middle class, which has paid for higher education in the past mainly by taking out loans, may now be precluded from doing so as the private student-loan market has all but dried up. In addition, endowment cushions that allowed colleges to engage in steep tuition discounting are gone. Declines in housing valuations are making it difficult for families to rely on home-equity loans for college financing. Even when the equity is there, parents are reluctant to further leverage themselves into a future where job security is uncertain.
The Chronicle of Higher Education: Will Higher Education Be the Next Bubble to Burst?
(via Beerken’s Blog)
Vaguely related: Although I’ve trash talked grad school here in recent times, I’ve been thinking about going to grad school for organizational psychology. Anyone have any thoughts on this?
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Comments
05.26.09
Wait...so 90% of this post is actually someone else's work. Only two sentences belong to Klint.
Brazen...what are your publishing standards?!?!
05.26.09
I agree, and it's my article! There are probably many more deserving posts that should have been on the front page. Maybe someone at Brazen didn't notice that that was a blockquote at the beginning.
05.26.09
Even so, I do think the content is relevant. First, the fact that tuition has increased four times the rate of inflation is not necessarily a reflection of out of control costs. The typical business model for a university - especially an "elite" one - has been this: Given that many view the amount of tuition as an indicator of quality, higher tuition equals better quality. And because of market forces, some would set tuition at a high level "because they could". Then these same schools would offer large amounts of aid to offset the high tuition. Their large endowments enabled them to do that. Now with the current economic conditions, all bets are off and that business model no longer works very well. Time will tell what bubble bursting looks like in this context.
Second, regarding the decision to attend graduate school, get clear about your career goals and if the graduate school program is the "ticket to the dance" for your chosen profession, then seriously consider it. Then get clear on whether you need a Master's degree or doctorate. Attending graduate school without a clear career goal is not a good idea.
05.26.09
@Anna: I think the content in this post is extremely relevant as John points out. Klint posts a lot of interesting content that stems from other places on the Internet. I think it would be a waste to not feature some of it and see what kind of great discussions we can get going here
Try to think of the Community as a place to share ideas, rather than just another media site. I think Brazen really shines when we are able to create interesting discussions around the topic rather than critique where or who the content came from.
Hope that makes sense. If you have any issues with the content you can connect with me via Private Message through my profile page.
Thanks.
05.26.09
Thanks Ryan and John! Glad you found it interesting.
05.26.09
@Ryan
Thanks for the response. I do agree that the content is relevant; I never said it wasn't. I just don't agree with publishing something that isn't original.
I'm sure you syndicate to lots of people with original work who would love to be on the front page.
Similarly, I'd say that from reading the Rights and Permissions page on The Chronicle's website, that they frown upon this type of reproduction as well.
05.26.09
One thing that comes to mind is that the university in the past 20 years has been more than just a place for teaching and learning. In recent years gyms have been erected, social events take place, and many other non-academic activities happen on campus. All this takes money. College has become a place for socialization as much as it is a place for learning.
Perhaps the bubble will burst, but it will also take with it the amenities that exist in the current environment.
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