Is the Higher Education Bubble about to Burst?
In a recent post on the Pope Center for Higher Education Policy’s blog, Jenna Ashley Robinson asks whether American higher education is now in a “bubble” that is about to burst. To quote from the post . . .
“Last week, I began examining the evidence that higher education has been oversold to the point that we are now in a bubble - that is, the value of a college education may be less than the price being paid for it.”
Well if one sign of an educational bubble is that the cost of a college education is greater than its value in the marketplace, it seems pretty clear to us that we really are in a bubble, for several reasons. For one thing, students are paying a ton of money for diplomas that aren’t resulting in jobs – at least not yet. They are also graduating deep in debt. And then there’s the fact that traditional brick-and-mortar colleges are charging tens of thousands of dollars to deliver college courses that only cost a few thousand dollars to produce; they’re packing hundreds of students into lecture halls to hear one professor, shuttling more learning into computer labs and applying other strategies to deliver educational product at lower cost.
But don’t take our word for the notion that we are in a bubble situation. Consider some statistics that Robinson cites in her post:
- Tuition and college costs have risen dramatically. Between 1990 and 2010, college tuition and fees in the U.S. increased by more than 286 percent. That’s even faster than the percentage increase in real estate prices that led up to the bursting of the real estate bubble in 2006. (Okay, real estate prices and tuition are not the same thing, but it makes for an interesting comparison anyway.)
- An average year of college (tuition, fees, room and board, books, supplies and transportation) now costs about $40,000 at private four-year universities and $19,388 for in-state students at public four-year universities.
But here are the really troubling figures . . .
If the statistics above don’t worry you, consider these figures that Robinson presents from The Project on Student Debt. The average debt of seniors graduating from four-year universities was . . .
- $12,750 in 1996
- $17,350 in 2000
- $18,650 in 2004
- $23,200 in 2008
- $24,000 in 2009
If you take out a sheet of graph paper and chart those numbers, it will look like somebody kicked you on your behind while you were drawing, causing your pencil to shoot up off the page. Come to think of it, a kick on the behind is pretty much what American students are suffering today when paying for college.
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