Will Higher Education Be the Next Bubble to Burst?
chronicle.com
chronicle.com
http://www.theatlantic.com/doc/200511/financial-aid-leveragi...
If this hypothesis is correct, then it has interesting implications for how a pop in the education bubble might play out. Since a fair portion of college budgets are propped up by moms and pops taking Mortgage Equity Withdrawals to finance their kid's education (who may or may not actually be deserving to go the college of their choice, but probably not) then we can expect (1) the tuition portion of institutions' income to drop precipitously and (2) that there will be fewer sort-of-rich-kids going to elite schools.
This doesn't seem all bad in my opinion. Maybe academia should return to humbler roots. Do the top schools really need Olympic sized swimming pools, or gyms that would require a $100 a month membership in any big city?
Attendance will just evaporate as people ask "do I need college?" Not in the smug 90's startup way, but in the cold, calculated "great recession" way.
The line of thinking is along these lines: The core of what elite colleges (or any colleges) is not really valuable. A university course is mostly a syllabus, a textbook, lectures, tutorials, papers & exams. All are based on knowledge that is freely available. You do not need a Professor who spends most of his time on research that doesn't benefit you teaching you.
It wouldn't even be hard to offer the core of what Universities offer at a much lower cost. What is hard to offer is the vast periphery. The clubs & socialisation. The Gyms. The contact with researchers & other talented and/or rich young people. The social norms & leeway associated with Undergraduate life (this might be more important then we think). The prestige. The prospects created by the contacts, the prestige, the social conditioning & whatever else goes in to making a University education other then education.
A potential catalyst could be the growing Internationalisation of Uni education.
By far the most valuable thing I take away from university is not the classes, but rather the experience. As a student you get a lot of leeway to screw up and learn - even interning at large, private corporations. This has helped me in my life (and my career) more immensely than anything else I've ever learned at school (most of which I doubt I will apply in a job, ever).
Secondly, the networking opportunities that you have at a university is ridiculously useful. Short of going to war together I doubt there are many forces that bind people together as tightly as the college experience. I have made many friends, many of whom are incredibly talented and will no doubt go far in life - it's a network that you can't replicate, say, studying online.
Thirdly is the name - prestigious schools, whether justifiably or not, do for some reason make you more employable in a lot of places. I know many a hacker from "lesser" colleges who can't find a job in this economy, while I had multiple offers before my final semester even started.
In Israel (where I am from), a lot of people do go to war together. So they're sorted for friends. Actually, most don't physically fight, but they still make friends. There is an additional (recent) institution of backpacking/travelling that tackles some of this friends/experiences/growth/leeway territory. University entrance tends to be 20-25 yr olds. So, the whole dynamic is very different. A lot of no frills courses are offered. Cost effectiveness is a big factor ,though naturally the level of Government intervention messes with this and doesn't allow private colleges to compete with research Unis on equal footing.
Another place change might come from are the places in the world now entering the growing middle income per capita range (not sure what that is exactly. But I think around 2-$10k pa) where people care about education, can afford some of it, but can't afford $100k or even 10k. They also are first generation entrants & don't have too formulated an idea of what schools should be.
Basically, what I am saying is that if you took Universities away and then let something else grow in their place, it probably wouldn't be universities.
On a broader level you also need to consider the value of networking opportunities. Is the course content of a Harvard MBA really that much better than elsewhere? Of course not. It's the contacts you make while you're there.
I listen to this economist podcast here & there. Recently, they were talking about how strange it is that they need any kind of qualifications to do the thing that they get paid for. They tell undergrads that the demand curve slopes down & the supply curve slopes the other way. That knowledge is freely available and easily accessible. Yet their students bid up the price of the best academics to tell them this.
A better professor's demand curve slopes the same as a crappier one's. You may be right that this does not apply to dentistry.
From my perspective I am paying for 3 things: 1. A ready made (albiet small) community of other math grad students that can answer my questions when I don't understand some of the freely available information. 2. A highly educated professor that can provide further explanation and advice if my peer group of math grad students can't explain it well enough to me. 3. (arguably most important) A respected institution prepared to certify to prospective employers that I really have gained gained those skills.
The knowledge is free, you can get #1 on your own with a little work and a little luck, but #2 is hard to get without being an actual student and #3 is is very hard to get without the institution.
And before people say you don't need #3, it helps you get interviews if not necessarily jobs. I have been that hiring manager that has to weed through dozens of resumes to determine who I am going to spend my time interviewing. A degree was certainly a good discriminator for who was worth my time. I certainly didn't require it and I interviewed people who had experience but no degree, but they had to have something else on their resume to show me it was worth my time.
I worked for a small company, when dealing with middle management (or worse, HR) at a big company, they really want to be able to cover themselves and show why they hired someone on paper. To many of them being able to justify the decision is more important then actually getting the best person. The degree makes it alot easier for them to do that.
If you plan to start your own company, a degree is meaningless of course, but even Paul Graham says that path should be approached with great caution if you are married with children.
I could for instance create a facebook page and start gathering a group of other people interested in math to ask questions. But it would take time to find that was worth the time to actually talk and listen to and then of those the ones that were actually interested in my specific topic. With a class, those are ready made. You rarely find foolish people in upper division math classes at all so I know everyone there is (most likely) worth my time to deal with and we have the class in common so we are all looking at the same broad field at least.
Similarly, we could create certifications for math skills similar to certain technologies, but it would take a long time (if ever) before employers and HR departments in particular gave those the same weight as a normal degree.
Universities are certainly not the only choice, but for the meantime they are the best choice for someone who wants that combination of a ready made, (partially) vetted community of peers along with later certification of the skills gained.
Say I thought that blogging could be easier 5 years ago. It would not be easier to build an easier blogging engine. It would be easier to just use whatever existed. But it would have been correct to identify that easier blogging is possible, a market exists & someone would cater to it at some point.
I think that University education (and possibly also the other features of Universities) could be available for easier/cheaper/different. I also think there is a market for this. I think that eventually Universities may not have the same prominence they do now.
With that said, I do not know what that partial replacement will be and I do not think (though I certainly could be wrong) that it will come anytime in the near future.
One problematic issue is accreditation/validation. Part of the reason vocational training is so different is because of this. This could work for a wide range of areas from programming or accounting to medicine & carpentry.
Other changes such as a move towards more self employment might also trigger something.
The chance of success is basically zero, but you could lobby for the overturn of the Griggs v. Duke Power Co. decision, the famous lawsuit which resulted in U.S. employers being officially prohibited from using IQ tests in hiring:
http://supreme.justia.com/us/401/424/case.html
This is what gave colleges their monopoly as gatekeepers of the intellectual labor market.
I don't know if my math professor does research or not. But the guy is a fucking brilliant lecturer.
On the other hand, I'm at a community college :o)
It is the small and mid grade schools that may need to carefully look at their models.
Personally, I think a bigger question is what will it do to families trying to help their children climb into a higher income bracket if there is a major shake up in the higher education market?
Will that happen? Not unless getting university grads gets hard.
The problem here is that people are going to university expecting this to lead nicely into a job - it does not, particularly for the liberal arts where the path is even more vague. People expect the fact that they have a degree to mean something to employers, when it in fact does not.
This whole thing would be a lot simpler if we didn't have such a grudge against vocational schools - who by and large do not seem to have trouble placing their graduates into jobs.
The medicine path is very similar to the electrician path. Medical school is vocational school. We have nothing against those.
This goal should be furthered by private foundations and government. More things should be "priceless".
I'd guess that students are less likely to use their college gym than members are to use their gym. If I'm correct, the per-student cost of a college gym may be in the noise.
http://www.overcomingbias.com/2009/02/what-is-medical-qualit...
Having more educated citizens benefits an entire society, not just those citizen.
Having healthier citizens works similarly.
Certainly both education and healthcare been private for a long time BUT often effectively on a non-profit basis.
Every kind of loan aside from payday loans...
If you meant something else, I'm happy to explain that too :)
What exactly does it mean for higher schooling to be both universal and free?
There are very few programmes that don't have any requirements. However, if one doesn't have any good high school grade, the "university entrance"-exam is a way in, or else professional experience. Hence, there are (again, depending on the education) a wider range of ages represented. However, 28% of all applicants are 19 years old. No one in my class is older than 25.
About universal and free, I'd say the system here is close to very good. According to me "universal" apply more to the possibility of actually studying, than the numbers of students accepted. And "free" is simply no tuition fees, which Sweden does not have. This is also the main difference, with the US having (large) fees.
a) the majority of United States students attend universities that are much less expensive in their official price,
and
b) a majority of students attending expensive universities get "financial aid" (discounts from the list price).
If the cost goes higher than that, the bubble will indeed burst--sooner or later.
Yeah, right. Take their $50K+ in annual tuition, then plug students into an e-learning social network where they "TEACH THEMSELVES" through "INNOVATIVE LEARNING STYLES".
If these moves are genuinely embraced, it will indeed create a bubble that will grow until these poor disillusioned students realize they are just sheep following other sheep wandering around, going nowhere, ... when they should instead have been following a shepherd who knew where he/she was going.
Why would we want to create a bubble anyway? By definition, it is only a bubble if it will eventually burst.
Higher education is dangled as the carrot that is the means to achieving greatness. Everyone speculates that the future will yield awesomeness, but when it takes too long to reach our unrealistic expectations we overreact in the opposite fashion. We have this never-ending cycle of overinflated possibility followed by reality and an overreaction of conservation.
Is it perhaps a flaw in our culture? Selling an idea is more important than the idea itself. Getting "traction" or "backing" is more important than delivering something real and of actual value.
BLASPHEMY! You may be thinking, education is PARAMOUNT to any civilization! We musn't cut spending on education!
Does anyone here live in the Phoenix, AZ area? If so, take a tour of ASU's recent campus renovations. The new dorms look like luxury-condos. The buildings around campus match. ASU has gotten into the habit of buying up the most expensive property available, and developing high-end real-estate on top of it.
Do we really need that?
What we need are desks, blackboards, and good professors. I could not care any less what the building I'm studying inside of looks like. Are campus aesthetics really that important, or even relevant at all, to higher education?
No. The answer is that no, they are not.
It seems cliche' for a geek to get bent out of shape about it, but lets also look at the sports teams. How much money is spent on this educationally fruitless endeavour? What is the return on it? How does it effect education?
Suggesting that post-secondary education should cost what it currently does is insane.
Private institutions can do whatever they please, in my opinion, but the state schools need to get back to their roots. That is: intellectual pursuits, not physical ones.
This logic is running rampant right now and is a major player not in the economic collapse, but our inability to convince our governments to deal with economic collapse. When the answer to "Are we spending enough on education?" is simply hard-coded to "No", you get very stupid budget behaviors.
In point of fact, there must be a point where we are spending enough on education, enough on police, enough on health care, enough on welfare, enough on anything. There must even come a point where we are spending enough on educating the disadvantaged, enough on health care for the elderly, enough on programs for poor children. Because the alternative is, frankly, absurd... yet that is where we've gotten to, politically.
Anyways, as long as it doesn't harm the educational experience then it may actually help the area as a whole. I feel I got what I needed out of my education but that is really up to the student in the end.
Also, on the sports teams, most of the time this funds a large part of the school so in the end it is a necessary evil. Much like how defense brings the most innovative technologies, even this here internet.
I agree that schools need to focus on quality education experiences and get better professors. I think that the internet and universities that open up to that can share the best professors with the world.
We will see an enormous change in this regard in our lifetime, the University as we know it will be much different. It has taken some time, but the internet and cost reducing measures to information and education are shaking harder at the pillars of these college institutions.
Yeah, and it's unfortunate that "education" often has a capital E and is viewed as being something that only formalized schools, Big Education, can provide.
Spending money on things like internet access, libraries, encouraging greater literacy and reading, and not banning "educational toys" just because they may be perceived of as dangerous (I'm thinking of things like chemistry sets here, which were a lot more fun and educational back in the day) could end up going a long way to increasing the minimum education level without actually requiring people to throw money at schools to have to attend them.
Don't confuse education with learning.
Energy source A costs $1 per unit and is sold at $1 per unit.
Energy source B costs $6 per unit and is sold at $2 per unit.
So long as A exists, B will be overpriced, even with that subsidy.
Products that cost more than they are valued tend not to be produced (or rather, there are no buyers), but that doesn't imply that everything is worth more than it costs.
Unless you value cost. The value of a degree comes from the story we tell ourselves, and paying $160,000 is part of that story. Most people wouldn't want to go to college if it was free; just look what people were saying when Seth announced his alternative MBA, or look at library participation among 20-somethings for that matter.