Over priced higher education
Clayton Cramer:
For the last several months, an increasingly hot topic of popular discourse has been the higher education bubble. With many of the same characteristics as the housing bubble that collapsed several years ago, the higher education bubble features rapidly rising college costs, unrealistic expectations for the future value of that education, and people going to college who should not be doing so. And, oh yes, just like the housing bubble, the government is part of the problem.Higher education has gotten itself into a cost spiral by pumping out graduates who can't get jobs anywhere else and overpaying them to "teach" or do research. As a post I did yesterday shows many of them are doing very little work at great expense to taxpayers and to students and their families.
In 2008, CNN pointed out that from 1985 to 2005, college tuition had increased more than four times faster than the consumer price index. Late last year the Los Angeles Times reported that in spite of the overall collapse of the economy, college tuition was still rising rapidly — a 7.9% increase at public schools, and a 4.5% increase at private schools.
Some degrees are certainly going to pay for themselves. Students with degrees in electrical engineering, computer science, and some of the other demanding technical fields have a realistic hope of paying back their student loans. But even an optimistic evaluation, such as this one from the National Association of Colleges and Employers, admits that 2010’s graduates with bachelor’s degrees in psychology averaged just over $32,000. (Because that is the average, it means that just under half of those psychology graduates started at a lower salary.) For a student who accumulated $30,000 in student loan debt, servicing that debt is going to be painful, if at all even possible. And, of course, these are the graduates who were actually offered jobs. A bachelor’s degree is no longer the path to a certain job that it was, even in 2008.
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