Glenn Reynolds writes in the Washington Examiner; “It's a story of an industry that may sound familiar.”
“The buyers think what they're buying will appreciate in value, making them rich in the future. The product grows more and more elaborate, and more and more expensive, but the expense is offset by cheap credit provided by sellers eager to encourage buyers to buy.”
“Buyers see that everyone else is taking on mounds of debt, and so are more comfortable when they do so themselves; besides, for a generation, the value of what they're buying has gone up steadily. What could go wrong? Everything continues smoothly until, at some point, it doesn't.”
“Yes, this sounds like the housing bubble, but I'm afraid it's also sounding a lot like a still-inflating higher education bubble. And despite (or because of) the fact that my day job involves higher education, I think it's better for us to face up to what's going on before the bubble bursts messily.”
On May 28, 2010 Ron Lieber wrote in the New Your Times; “Like many middle-class families, Cortney Munna and her mother began the college selection process with a grim determination. They would do whatever they could to get Cortney into the best possible college, and they maintained a blind faith that the investment would be worth it.”
“Today, however, Ms. Munna, a 26-year-old graduate of New York University, has nearly $100,000 in student loan debt from her four years in college, and affording the full monthly payments would be a struggle. For much of the time since her 2005 graduation, she’s been enrolled in night school, which allows her to defer loan payments.”
“She recently received a raise and now makes $22 an hour working for a photographer. It’s the highest salary she’s earned since graduating with an interdisciplinary degree in religious and women’s studies. After taxes, she takes home about $2,300 a month. Rent runs $750, and the full monthly payments on her student loans would be about $700 if they weren’t being deferred, which would not leave a lot left over.”
In a follow up article in the New York Times Ms. Munna responded to Mr. Lieber’s article and the nearly 600 comments posted on the story; “It’s not possible for me to answer every question that Ron’s column raised. But I do feel it’s fair, both for the reader’s and my own sake, to clarify a few points.”
“First and foremost, I openly acknowledge my responsibility for my current situation, as well as the naïveté in my estimation of the return on investment of a “high quality” education and a liberal arts degree. My only explanation is that once I was in school, I didn’t think much about tuition beyond filling out the paperwork, and I did what I always had done: focused on my education.”
“I accept that this was negligent on my part, but unfortunately, I was too young to know better. I also willingly admit that I am responsible for repaying the money I borrowed. I have been doing this, to the best of my ability, over the course of the last five years and have every intention of continuing to do so.”
Government-subsidized loans have injected money into higher education, as they did into housing, causing prices to balloon. But at some point people figure out they're not getting their money's worth, and the bubble bursts.
Some think this would be a good thing. Writing for the American Enterprise Institute Charles Murray has called for the abolition of college for almost all students. Save it for genuine scholars, he says, and let others qualify for jobs by standardized national tests, as accountants already do.
It’s not only accountants that can reach the professional level by passing a national or state examination. It is also attorneys, engineers and land surveyors like this author. I practiced as a professional land surveyor for over 45 years sans a college degree. I did, however, attend community college night courses, took correspondence courses (now on line courses) and attended numerous professional seminars and I never borrowed a dime or used a penny of taxpayer’s money.
I often equate today’s colleges with the corner apple stand. If the owner of the apple stand is selling his apples for one dollar a pound and the other stands in the neighborhood are selling theirs for $0.95 per pound he has several options.
Now enter the government. It says to the potential apple buyer that they will subsidize his apple buying purse with tax dollars. Now the buyer is less discriminating and all of the apple stands raise their prices to $1.50 per pound without adding any additional value to the apple. This is how the colleges and universities have done their business since the inception of he G.I Bill in 1944.
Where is the added value offered by the institutions of higher learning, or for that matter our secondary schools? "Are our students learning?" George W. Bush once asked, and the evidence for colleges points to no. The National Center for Education Statistics found that most college graduates are below proficiency in verbal and quantitative literacy. University of California scholars Philip Babcock and Mindy Marks report that students these days study an average of 14 hours a week, down from 24 hours in 1961.
Glenn Reynolds writes; “Bubbles burst when people catch on, and there's some evidence that people are beginning to catch on. Student loan demand, according to a recent report in the Washington Post, is going soft, and students are expressing a willingness to go to a cheaper school rather than run up debt. Things haven't collapsed yet, but they're looking shakier -- kind of like the housing market looked in 2007.”
“So what happens if the bubble collapses? Will it be a tragedy, with millions of Americans losing their path to higher-paying jobs? Maybe not. College is often described as a path to prosperity, but is it? A college education can help people make more money in three different ways.”
“First, it may actually make them more economically productive by teaching them skills valued in the workplace: Computer programming, nursing or engineering, say. (Religious and women's studies, not so much.)”
“Second, it may provide a credential that employers want, not because it represents actual skills, but because it's a weeding tool that doesn't produce civil-rights suits as, say, IQ tests might. A four-year college degree, even if its holder acquired no actual skills, at least indicates some ability to show up on time and perform as instructed.”
“And, third, a college degree -- at least an elite one -- may hook its holder up with a useful social network that can provide jobs and opportunities in the future. (This is more true if it's a degree from Yale than if it's one from Eastern Kentucky, but it's true everywhere to some degree).”
“While an individual might rationally pursue all three of these, only the first one -- actual added skills -- produces a net benefit for society. The other two are just distributional -- about who gets the goodies, not about making more of them.”
The American Council of Alumni and Trustees concluded, after a survey of 714 colleges and universities, "by and large, higher education has abandoned a coherent content-rich general education curriculum."
They aren't taught the basics of literature, history or science. ACTA reports that most schools don't require a foreign language, hardly any require economics, American history and government "are badly neglected," and schools "have much to do" on math and science.
ACTA's whatwilltheylearn.com Website provides the grisly details for each school, together with the amount of tuition. Students and parents can see if they will get their money's worth.
Former Harvard Dean Harry Lewis writes in his Dean’s Letter; “If I may, let me draw your particular attention to one area. Many studies have shown that our college graduates are ignorant of the basic principles on which our government runs. For starters, most cannot identify the purpose of the First Amendment, what Reconstruction was, or the historical context of the Voting Rights Act. If you peruse this website, you will see why: the vast majority of our colleges have made a course on the broad themes of U.S. history or government optional. This is especially dangerous in America, where nothing holds us together except our democratic principles. If universities don’t pass them down, our children will not inherit our nationhood genetically. They can receive that heritage only through learning. That’s one key reason that during the college search you must ask: what will they learn?”
That's also a goal of Strive for College, which encourages young people of minority backgrounds to go to college. Its Website lets students look up the percentage of similarly situated applicants admitted to each college -- and, perhaps more important, the percentage who graduate.
Transparency could also undermine the numerous dropout factories, public and private, described and listed by the liberal Washington Monthly. More than 90 percent of students there never graduate, but most end up with student loan debt.
Increasing transparency is hitting higher education at the same time it is getting squeezed financially. Universities have seen their endowments plunge as the stock market fell and they got stuck with illiquid investments. State governments have raised tuition at public schools, but budgets have declined. Competition from for-profit universities, with curricula oriented to job opportunities, has been increasing.
People are beginning to note that administrative bloat, so common in government, seems especially egregious in colleges and universities. Somehow previous generations got by and even prospered without these legions of counselors, liaison officers and facilitators. Perhaps we can do so again.
Presidents and politicians of both parties have promised for years to provide college opportunities for everyone and measure progress by the percentage of students enrolled. But it's becoming increasingly clear that college doesn't make sense for everyone. Some simply lack the necessary verbal and math capacity. Others are interested in worthy non-college careers like carpentry and automotive repair.
“The buyers think what they're buying will appreciate in value, making them rich in the future. The product grows more and more elaborate, and more and more expensive, but the expense is offset by cheap credit provided by sellers eager to encourage buyers to buy.”
“Buyers see that everyone else is taking on mounds of debt, and so are more comfortable when they do so themselves; besides, for a generation, the value of what they're buying has gone up steadily. What could go wrong? Everything continues smoothly until, at some point, it doesn't.”
“Yes, this sounds like the housing bubble, but I'm afraid it's also sounding a lot like a still-inflating higher education bubble. And despite (or because of) the fact that my day job involves higher education, I think it's better for us to face up to what's going on before the bubble bursts messily.”
On May 28, 2010 Ron Lieber wrote in the New Your Times; “Like many middle-class families, Cortney Munna and her mother began the college selection process with a grim determination. They would do whatever they could to get Cortney into the best possible college, and they maintained a blind faith that the investment would be worth it.”
“Today, however, Ms. Munna, a 26-year-old graduate of New York University, has nearly $100,000 in student loan debt from her four years in college, and affording the full monthly payments would be a struggle. For much of the time since her 2005 graduation, she’s been enrolled in night school, which allows her to defer loan payments.”
“She recently received a raise and now makes $22 an hour working for a photographer. It’s the highest salary she’s earned since graduating with an interdisciplinary degree in religious and women’s studies. After taxes, she takes home about $2,300 a month. Rent runs $750, and the full monthly payments on her student loans would be about $700 if they weren’t being deferred, which would not leave a lot left over.”
In a follow up article in the New York Times Ms. Munna responded to Mr. Lieber’s article and the nearly 600 comments posted on the story; “It’s not possible for me to answer every question that Ron’s column raised. But I do feel it’s fair, both for the reader’s and my own sake, to clarify a few points.”
“First and foremost, I openly acknowledge my responsibility for my current situation, as well as the naïveté in my estimation of the return on investment of a “high quality” education and a liberal arts degree. My only explanation is that once I was in school, I didn’t think much about tuition beyond filling out the paperwork, and I did what I always had done: focused on my education.”
“I accept that this was negligent on my part, but unfortunately, I was too young to know better. I also willingly admit that I am responsible for repaying the money I borrowed. I have been doing this, to the best of my ability, over the course of the last five years and have every intention of continuing to do so.”
Government-subsidized loans have injected money into higher education, as they did into housing, causing prices to balloon. But at some point people figure out they're not getting their money's worth, and the bubble bursts.
Some think this would be a good thing. Writing for the American Enterprise Institute Charles Murray has called for the abolition of college for almost all students. Save it for genuine scholars, he says, and let others qualify for jobs by standardized national tests, as accountants already do.
It’s not only accountants that can reach the professional level by passing a national or state examination. It is also attorneys, engineers and land surveyors like this author. I practiced as a professional land surveyor for over 45 years sans a college degree. I did, however, attend community college night courses, took correspondence courses (now on line courses) and attended numerous professional seminars and I never borrowed a dime or used a penny of taxpayer’s money.
I often equate today’s colleges with the corner apple stand. If the owner of the apple stand is selling his apples for one dollar a pound and the other stands in the neighborhood are selling theirs for $0.95 per pound he has several options.
- Lower his overhead and net income so he can sell at $0.95 per pound
- Provide a better, juicer apple so the customer is willing to pay the $1.00
- Provide a value added customer service, perhaps by dressing in a clown suit and doing a circus act to draw in the customers.
Now enter the government. It says to the potential apple buyer that they will subsidize his apple buying purse with tax dollars. Now the buyer is less discriminating and all of the apple stands raise their prices to $1.50 per pound without adding any additional value to the apple. This is how the colleges and universities have done their business since the inception of he G.I Bill in 1944.
Where is the added value offered by the institutions of higher learning, or for that matter our secondary schools? "Are our students learning?" George W. Bush once asked, and the evidence for colleges points to no. The National Center for Education Statistics found that most college graduates are below proficiency in verbal and quantitative literacy. University of California scholars Philip Babcock and Mindy Marks report that students these days study an average of 14 hours a week, down from 24 hours in 1961.
Glenn Reynolds writes; “Bubbles burst when people catch on, and there's some evidence that people are beginning to catch on. Student loan demand, according to a recent report in the Washington Post, is going soft, and students are expressing a willingness to go to a cheaper school rather than run up debt. Things haven't collapsed yet, but they're looking shakier -- kind of like the housing market looked in 2007.”
“So what happens if the bubble collapses? Will it be a tragedy, with millions of Americans losing their path to higher-paying jobs? Maybe not. College is often described as a path to prosperity, but is it? A college education can help people make more money in three different ways.”
“First, it may actually make them more economically productive by teaching them skills valued in the workplace: Computer programming, nursing or engineering, say. (Religious and women's studies, not so much.)”
“Second, it may provide a credential that employers want, not because it represents actual skills, but because it's a weeding tool that doesn't produce civil-rights suits as, say, IQ tests might. A four-year college degree, even if its holder acquired no actual skills, at least indicates some ability to show up on time and perform as instructed.”
“And, third, a college degree -- at least an elite one -- may hook its holder up with a useful social network that can provide jobs and opportunities in the future. (This is more true if it's a degree from Yale than if it's one from Eastern Kentucky, but it's true everywhere to some degree).”
“While an individual might rationally pursue all three of these, only the first one -- actual added skills -- produces a net benefit for society. The other two are just distributional -- about who gets the goodies, not about making more of them.”
The American Council of Alumni and Trustees concluded, after a survey of 714 colleges and universities, "by and large, higher education has abandoned a coherent content-rich general education curriculum."
They aren't taught the basics of literature, history or science. ACTA reports that most schools don't require a foreign language, hardly any require economics, American history and government "are badly neglected," and schools "have much to do" on math and science.
ACTA's whatwilltheylearn.com Website provides the grisly details for each school, together with the amount of tuition. Students and parents can see if they will get their money's worth.
Former Harvard Dean Harry Lewis writes in his Dean’s Letter; “If I may, let me draw your particular attention to one area. Many studies have shown that our college graduates are ignorant of the basic principles on which our government runs. For starters, most cannot identify the purpose of the First Amendment, what Reconstruction was, or the historical context of the Voting Rights Act. If you peruse this website, you will see why: the vast majority of our colleges have made a course on the broad themes of U.S. history or government optional. This is especially dangerous in America, where nothing holds us together except our democratic principles. If universities don’t pass them down, our children will not inherit our nationhood genetically. They can receive that heritage only through learning. That’s one key reason that during the college search you must ask: what will they learn?”
That's also a goal of Strive for College, which encourages young people of minority backgrounds to go to college. Its Website lets students look up the percentage of similarly situated applicants admitted to each college -- and, perhaps more important, the percentage who graduate.
Transparency could also undermine the numerous dropout factories, public and private, described and listed by the liberal Washington Monthly. More than 90 percent of students there never graduate, but most end up with student loan debt.
Increasing transparency is hitting higher education at the same time it is getting squeezed financially. Universities have seen their endowments plunge as the stock market fell and they got stuck with illiquid investments. State governments have raised tuition at public schools, but budgets have declined. Competition from for-profit universities, with curricula oriented to job opportunities, has been increasing.
People are beginning to note that administrative bloat, so common in government, seems especially egregious in colleges and universities. Somehow previous generations got by and even prospered without these legions of counselors, liaison officers and facilitators. Perhaps we can do so again.
Presidents and politicians of both parties have promised for years to provide college opportunities for everyone and measure progress by the percentage of students enrolled. But it's becoming increasingly clear that college doesn't make sense for everyone. Some simply lack the necessary verbal and math capacity. Others are interested in worthy non-college careers like carpentry and automotive repair.
Still others wonder whether the four-year residential college model is worth the investment when you can spend much less on two years in community college and then transfer to a four-year school.
A century ago, only about 2 percent of American adults graduated from college; in 1910, the number of college graduates nationally was 39,755 -- smaller than the student bodies at many campuses today.
Higher education expanded when the G.I. Bill financed veterans' education after World War II and then expanded further with postwar growth. Government's student loan subsidies have enabled institutions to grow faster over the last three decades than the economy on whose productivity they ultimately depend.
As often happens, success leads to excess. America leads the world in higher education, yet there is much in our colleges and universities that is amiss and, more to the point, suddenly not sustainable. The people running America's colleges and universities have long thought they were exempt from the laws of supply and demand and unaffected by the business cycle. Turns out that's wrong.
Anya Kamenetz suggests in her new book, "DIY U" -- the real pioneering will be in online education and the work of "edupunks" who are more interested in finding new ways of teaching and learning than in protecting existing interests.
Perhaps Ms. Kamenetz is on to something. Imagine online colleges. No diversity, no opportunities for tenure. No opportunities for liberal professors to spew their agendas in class. Your work is graded on merit and the only thing they really know about you is your I.P address. Sound Orwellian, perhaps so. But the brick and mortar schools are in trouble and there will be a change. The only question I have is how will they support their football teams?
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