The patterns seem extremely similar to the housing bubble with certain segments taking up the roll of subprime lenders and the entire industry getting excited by easy finance and an unrelenting line of demand. The only problem of courses is the debt is being backed by the U.S. government (i.e., taxpayers) and we all know what happens when the bubble pops.
Plenty of charts at the link. (h/tInstapundit)
Given the inelastic supply of classroom space, nearly all of any subsidy goes directly to the school. That is, if a student receives a grant then tuition will rise by almost as much.
Another component of the bubble is that prior loans go into deferment when someone is enrolled full time. Unable to find a job, someone with a BA will pursue a MA not as much for the additional human capital but to relieve payment stress and wait for a better market. This is good sense for a lot of people, but the incentives draw too many to this conclusion.
It’s all the same
In the housing bubble, millions were sold homes they could not afford. and in the education bubble millions were sold an education they could not afford.
At least those in the housing bubble got a viable home for awhile. Can’t say that for all those 150K arts degrees,
Many of those homes will be re sold and eventually have some value …. those pointless arts degrees will never have value.
Hey, If you can’t con the young and the stupid, who can you con? You can also con the poor in to believing they can have a home .. that’s who.
I found the problem!!!
Ahem:
“Interdisciplinary Master’s Program in Humanities and Social Thought”
That should get you a good job at… Subway. Dealing with customers (Humanities) and communicating what they want on their sandwich(Social Thought).
Academia is just proving that besides not being a preserve of free speech and critical thiniking they are jsut plain greedy with a captive market.
Despite claims to the contrary, Academia is an unaccountable, irresponsible civil service, which sets their own pay scale.
Anyone go to Itunes U?
Lectures and classes available through Itunes from Universities around the world…for free!
(Course that won’t help with credentials…but you could get a trade skill for a fraction of the price and earn big money immediately. Then do a Women’s Studies course for free online!)
Over the weekend I caught a short segment on Roy Green with a nitwit from Queens about how ‘in all thy sons command’ is sexist. (I think her premis is that people mistake sons for son’s, and that changes it from patriot love from all your sons into the state commanding patriot love upon the son. (or some stupid thing like that)
It wasn’t the fact that Queen’s employed such a naval gazer that pissed me off, rather it was that I payed for it. And Queen’s (and I’m sure their professor) would claim that post secondary was underfunded.
In the US, tuition is a function of availability of student financing. There are mediocre universities charging $30,000 annually because they can. That’s how you get profs teaching 3 hours per week making $100,000 plus and university presidents making $500,000 plus. They really don’t provide any better instruction and indeed it’s often worse than the $5,000 or less community college. The reputation of the big school is usually better because they have Albert Einstein types on life support on staff who never actually talk to students.
Entertaining. Financing of higher education in Canada is different, however. It relies much more on government funding, and has been under downward pressure for a decade. Again, unionisation of TAs makes it more difficult for faculty to turn them into chattel slaves. The mean quality of higher education has always been higher here than in the US; we have never had the enthusiasm for football, or courses in fly fishing. As for $500,000 university presidents, well, there is one at Memorial in Nfld now, and he seems to be no better than you would expect.
As for community colleges, the ones I know about have really vicious problems with grade inflation – I wouldn’t put any credence on a grade from our local College of the North Atlantic campuses, for instance. They do, however, teach subjects which don’t find a place in universities, such as welding (vice versa – engineers come from universities, technologists from colleges). Again, where the Yanks have three year arts colleges, we have trades colleges, some of which are good.
I know that folks from the Prairies sometimes think that Canada and the US are identical (my Dad came from Saskatoon, so I know the syndrome intimately), but it is not so. As far as higher education goes the countries are different, but how different is not clear. And of course we import the US problems with ethusiasm.
Walter Russell Mead often has posts about higher education. A few days back one of them contained an intriguing idea – a universal test of graduates to grade individual accomplishment rather than rely on the prestige of the school. What if the high priced schools are not turning out better students or, at least, not enough to justify the cost? Wouldn’t that be something of interest to students, parents and employers?
Here is the post:
“All this said, it is still true that the scandal points to the absurd overvaluation that America gives the imprimatur from blue chip schools. Via Meadia wants national exams that would allow students from less famous or non-traditional schools to demonstrate that a hardworking kid at Wayne State can come out of college better educated than a lazy wastrel from the Ivy League. The absence of such recognized credentials is what gives prestigious degrees excessive weight in the job market, and this system is not only dysfunctional but morally wrong. (Of course those exams would have to have procedures in place to discourage and punish cheats.)”
http://blogs.the-american-interest.com/wrm/2011/12/02/beyond-cheating-on-long-island/
I’m not sure. What happens when the bubble pops? As we have all witnessed, the only result of the last bubble popping is more government intervention and the printing of ever more vast quantities of fiat currency.
I’m still waiting for the Democrats to introduce negative interest rates. You just wait and see. If the Dems win the next election, we will see people get paid by the government to borrow money. In fact, I would bet Obama’s “Jobs bill” has some form of negative interest rates.
Can you even call it education?
Seems to me its all a plot to make the educrates even more rich.
Academia is the one percent.
The product dispensed is bogus as their claims to know it all.
You will learn more traveling, or reading old tomes.
I’m just wondering how the lender is going to repo all those empty brains…
Where to begin with Scar’s comments …
“That’s how you get profs teaching 3 hours per week making $100,000 plus…” – One seldom finds professors teaching 3 hours a week, but even those who teach only 9 hours a week (much more common) are expected to put much more time into their work than the time in the classroom, and most of them do. I’m not sure how one could do anything in those nine hours otherwise. Still, like school teaching and a number of other lines of work, university teaching is a difficult job to do well and a very easy job to do badly.
“… and university presidents making $500,000 plus.” – This is very rare, according to the reports on university salaries. The usual proportion at major American universities is that the president will make, say, $200,000; the dean of medicine will earn about $400,000; the dean of management/business will earn between $300,000 and $500,000; and the football coach will be paid around $750,000.
“The reputation of the big school is usually better because they have Albert Einstein types on life support on staff who never actually talk to students.” — It all depends on the kind of reputation. Most high end researchers do talk to students, though most often the graduate students who choose to study with them and assist in their research. You find good teaching and bad teaching in nearly every institution; some students do best in smaller places, while others flourish in large universities. Caveat emptor.
One of the first things BO (BHO) did upon becoming president was making it illegal for private lenders to issue government-backed student loans. Or consolidate existing loans from borrowers using more than one lender.