Will Higher Education Be the Next Bubble to Burst?
chronicle.com
Will Higher Education Be the Next Bubble to Burst?
1–10 of 64 posts
Re: Will Higher Education Be the Next Bubble to Burst?
#2This has been discussed before in many other sources. The cause of the bubble is probably the way tuition and financial aid are used by many colleges. Perhaps the most in-depth analysis was by The Atlantic.
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?
Re: Will Higher Education Be the Next Bubble to Burst?
#3This has been discussed before in many other sources. The cause of the bubble is probably the way tuition and financial aid are used by many colleges. Perhaps the most in-depth analysis was by The Atlantic. 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 col…
I think part of the point of the article in the Chronicle is that the top schools will be fine and do not need cut back. While this only applies to the very top schools, they will still have people willing to pay the tuition and endowments large enough to cover any student they want to admit that cannot cover the tuition themselves.
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?
Re: Will Higher Education Be the Next Bubble to Burst?
#4That or healthcare.
Re: Will Higher Education Be the Next Bubble to Burst?
#5A product sold for 1/3 of cost is overvalued?
Re: Will Higher Education Be the Next Bubble to Burst?
#6This has been discussed before in many other sources. The cause of the bubble is probably the way tuition and financial aid are used by many colleges. Perhaps the most in-depth analysis was by The Atlantic. 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 col…
I think it will pop much differently. There will be enough PhD waiters and Home Depot employees that people will start to question if college was worth it. The recession also seems to be triggering a wave of self employment. That will reduce the need for the all important degree on the resume.
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.
Re: Will Higher Education Be the Next Bubble to Burst?
#7A product sold for 1/3 of cost is overvalued?
This seems entirely possible in a hypothetical case.
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.
Re: Will Higher Education Be the Next Bubble to Burst?
#8This has been discussed before in many other sources. The cause of the bubble is probably the way tuition and financial aid are used by many colleges. Perhaps the most in-depth analysis was by The Atlantic. 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 col…
I think part of the point of the article in the Chronicle is that the top schools will be fine and do not need cut back. While this only applies to the very top schools, they will still have people willing to pay the tuition and endowments large enough to cover any student they want to admit that cannot cover the tuition themselves. It is the small and mid grade schools that may need to carefully look at their models…
I think the real solution is to stop overvaluing university degrees. Most of the folks coming out of universities don't have any particularly valuable job skills. (I'm thinking of majors in business, or liberal-arts fields, or for that matter most people with a BA/BS in the sciences.)
Will that happen? Not unless getting university grads gets hard.
Re: Will Higher Education Be the Next Bubble to Burst?
#9A product sold for 1/3 of cost is overvalued?
Cost has nothing to do with value.
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.
Re: Will Higher Education Be the Next Bubble to Burst?
#10A product sold for 1/3 of cost is overvalued?
Perhaps the problem is that they're spending too much on the education.
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.