The Higher Education Bubble

Clarice Feldman and Rosslyn Smith
The coming burst of the higher education bubble is being discussed by Glenn Reynolds of Instapundit. He has had a series of links to articles about people giving up college for trade school.  He also wrote a recent opinion piece in the Washington Examiner.  A few days ago he had an uncharacteristically long thread for Instapundit.  It began with a heartfelt letter from a new law school graduate who can't find work and who is feeling cheated by the conventional wisdom of recent years.   

To grow up in the late 1990's and in the aughts was to be constantly inundated with the importance, the absolute necessity of Almighty Higher Education. I started hearing about planning for college when I was around 13, and my parents were comparatively very laid back. For the vast majority of people who are now in their 20's, adolescence wasn't about anything at all but getting in to college. Our teachers talked about College the way that Churchill talked about Victory. I've long argued that the reason why popular culture among young adults today is so obnoxiously, insufferably adolescent is at least partly due to the fact that we were never /allowed/ to be adolescents. You didn't play sports or write for the school newspaper or volunteer at the soup kitchen because you wanted to, you did it to pad that college application. I can't tell you how many times I was told, point blank, that the way to success was to get into the best college you could, and borrow as much money as you could to pay for it. Of /course/ college was worth six figures in debt. To even ask the question was unthinkable for most of us, because we had never been allowed to consider the possibility that it might be otherwise.

The letter writer and many others are saddled with substantial student loans.   It began a fierce debate. Some Instapundit readers noted they had similar problems finding work in 1980 and again in 1992. A second line of argument from readers noted that few schools today teach students how to create economic value, so what do they expect?  That was also the case with earlier generations.  Many of my friends were not thinking about what they would do for a living when they selected their majors in the late 1960s and early 1970s. I recall my own undergraduate institution institituting a totally bogus major in the then trendy human development movement while I was there in 1971-1974.  Purportedly a cross disciplinary program, Human Development eschewed academics altogether in favor of granting college credit for life enhancing activities like working in a homeless shelter or hiking the Appalachian Trail   In the Carter years, the pendulum moved quickly the other way. There was a boom in night MBA programs by 1980 as baby boomers with English, Philosophy and History majors realized they had to become bankers, adverstising executives, insurance administrators and accountants if they wanted to earn a decent living.  Articles from the mid 1980s worried that so few college students had been majoring in the liberal arts that entire programs were in jeopardy.   An extended period without a prolonged recession caused the pendulum to swing the other way.  Liberal Arts majors increased and gender/ethnic departments arose at many institutions.   And now recent graduates again can't find work.  The major difference between then and now is that there are far more college graduates today and they are far, far deeper in debt than earlier generations.  

Yesterday Reynolds ran another item about students spending six figures on a degree from a non elite law schools only to find that the only jobs out there offer $20 hour for a two week gig.   Personally I think the inability of the economy to absorb new lawyers is a positive development.   A law school education may teach one to think critically but it seldom reaches one to create value. 
Reynolds offer his own solution for the economic future of higher education.  

I have a structural solution: Make institutions of higher education partially liable when students are unable to pay student loans. A really strict system would make the school a co-signer, but making it even 5 or 10% liable for missed payments would really change the dynamic. Give schools some skin in the game. . . .

Think of the changes that would be made in American education if schools had to warranty their products?  While entire departments like gender studies might not completely disappear overnight there would certainly be very few degrees issued in disciplines of dubious merit.   Instead of counselling marginal and indifferent students into less rigorous programs to keep the enrollment numbers up, a practice that created a large number of education, sociology and communications majors when I was in college, administrators wouldn't be cutting slackers any slack any more.  Such a system might even create more jobs for currently under employed lawyers.  After all, Reynold's suggestion discriminates in favor of students who borrowed to get the education,   Shouldn't parents be able to sue the college for a refund if they paid for their child's degree from their own pocket and now he or she can't get a job? 
The coming burst of the higher education bubble is being discussed by Glenn Reynolds of Instapundit. He has had a series of links to articles about people giving up college for trade school.  He also wrote a recent opinion piece in the Washington Examiner.  A few days ago he had an uncharacteristically long thread for Instapundit.  It began with a heartfelt letter from a new law school graduate who can't find work and who is feeling cheated by the conventional wisdom of recent years.   

To grow up in the late 1990's and in the aughts was to be constantly inundated with the importance, the absolute necessity of Almighty Higher Education. I started hearing about planning for college when I was around 13, and my parents were comparatively very laid back. For the vast majority of people who are now in their 20's, adolescence wasn't about anything at all but getting in to college. Our teachers talked about College the way that Churchill talked about Victory. I've long argued that the reason why popular culture among young adults today is so obnoxiously, insufferably adolescent is at least partly due to the fact that we were never /allowed/ to be adolescents. You didn't play sports or write for the school newspaper or volunteer at the soup kitchen because you wanted to, you did it to pad that college application. I can't tell you how many times I was told, point blank, that the way to success was to get into the best college you could, and borrow as much money as you could to pay for it. Of /course/ college was worth six figures in debt. To even ask the question was unthinkable for most of us, because we had never been allowed to consider the possibility that it might be otherwise.

The letter writer and many others are saddled with substantial student loans.   It began a fierce debate. Some Instapundit readers noted they had similar problems finding work in 1980 and again in 1992. A second line of argument from readers noted that few schools today teach students how to create economic value, so what do they expect?  That was also the case with earlier generations.  Many of my friends were not thinking about what they would do for a living when they selected their majors in the late 1960s and early 1970s. I recall my own undergraduate institution institituting a totally bogus major in the then trendy human development movement while I was there in 1971-1974.  Purportedly a cross disciplinary program, Human Development eschewed academics altogether in favor of granting college credit for life enhancing activities like working in a homeless shelter or hiking the Appalachian Trail   In the Carter years, the pendulum moved quickly the other way. There was a boom in night MBA programs by 1980 as baby boomers with English, Philosophy and History majors realized they had to become bankers, adverstising executives, insurance administrators and accountants if they wanted to earn a decent living.  Articles from the mid 1980s worried that so few college students had been majoring in the liberal arts that entire programs were in jeopardy.   An extended period without a prolonged recession caused the pendulum to swing the other way.  Liberal Arts majors increased and gender/ethnic departments arose at many institutions.   And now recent graduates again can't find work.  The major difference between then and now is that there are far more college graduates today and they are far, far deeper in debt than earlier generations.  

Yesterday Reynolds ran another item about students spending six figures on a degree from a non elite law schools only to find that the only jobs out there offer $20 hour for a two week gig.   Personally I think the inability of the economy to absorb new lawyers is a positive development.   A law school education may teach one to think critically but it seldom reaches one to create value. 
Reynolds offer his own solution for the economic future of higher education.  

I have a structural solution: Make institutions of higher education partially liable when students are unable to pay student loans. A really strict system would make the school a co-signer, but making it even 5 or 10% liable for missed payments would really change the dynamic. Give schools some skin in the game. . . .

Think of the changes that would be made in American education if schools had to warranty their products?  While entire departments like gender studies might not completely disappear overnight there would certainly be very few degrees issued in disciplines of dubious merit.   Instead of counselling marginal and indifferent students into less rigorous programs to keep the enrollment numbers up, a practice that created a large number of education, sociology and communications majors when I was in college, administrators wouldn't be cutting slackers any slack any more.  Such a system might even create more jobs for currently under employed lawyers.  After all, Reynold's suggestion discriminates in favor of students who borrowed to get the education,   Shouldn't parents be able to sue the college for a refund if they paid for their child's degree from their own pocket and now he or she can't get a job?