
Will Higher Education Be the Next Bubble to Burst? - nickb
http://chronicle.com/free/v55/i37/37a05601.htm
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baguasquirrel
This 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...](http://www.theatlantic.com/doc/200511/financial-aid-leveraging)

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?

~~~
netsp
I'm still hoping for some sort of disruption that will change the game.

The line of thinking is along these lines: The core of what elite colleges (or
any colleges) is not really valuable. A university course is mostly a
syllabus, a textbook, lectures, tutorials, papers & exams. All are based on
knowledge that is freely available. You do not need a Professor who spends
most of his time on research that doesn't benefit you teaching you.

It wouldn't even be hard to offer the _core_ of what Universities offer at a
much lower cost. What is hard to offer is the vast periphery. The clubs &
socialisation. The Gyms. The contact with researchers & other talented and/or
rich young people. The social norms & leeway associated with Undergraduate
life (this might be more important then we think). The prestige. The prospects
created by the contacts, the prestige, the social conditioning & whatever else
goes in to making a University education other then education.

A potential catalyst could be the growing Internationalisation of Uni
education.

~~~
potatolicious
I just finished my undergrad degree a month ago, and I think I have some
insight into this.

By far the most valuable thing I take away from university is _not_ the
classes, but rather the experience. As a student you get a lot of leeway to
screw up and learn - even interning at large, private corporations. This has
helped me in my life (and my career) more immensely than anything else I've
ever learned at school (most of which I doubt I will apply in a job, ever).

Secondly, the networking opportunities that you have at a university is
ridiculously useful. Short of going to war together I doubt there are many
forces that bind people together as tightly as the college experience. I have
made many friends, many of whom are incredibly talented and will no doubt go
far in life - it's a network that you can't replicate, say, studying online.

Thirdly is the name - prestigious schools, whether justifiably or not, do for
some reason make you more employable in a lot of places. I know many a hacker
from "lesser" colleges who can't find a job in this economy, while I had
multiple offers before my final semester even started.

~~~
netsp
I suspect that the strongest thing holding all those aspects together is
convention. I think the institution is very entrenched in the US. maybe the
place for innovation is outside.

In Israel (where I am from), a lot of people do go to war together. So they're
sorted for friends. Actually, most don't physically fight, but they still make
friends. There is an additional (recent) institution of backpacking/travelling
that tackles some of this friends/experiences/growth/leeway territory.
University entrance tends to be 20-25 yr olds. So, the whole dynamic is very
different. A lot of no frills courses are offered. Cost effectiveness is a big
factor ,though naturally the level of Government intervention messes with this
and doesn't allow private colleges to compete with research Unis on equal
footing.

Another place change might come from are the places in the world now entering
the growing middle income per capita range (not sure what that is exactly. But
I think around 2-$10k pa) where people care about education, can afford some
of it, but can't afford $100k or even 10k. They also are first generation
entrants & don't have too formulated an idea of what schools should be.

Basically, what I am saying is that if you took Universities away and then let
something else grow in their place, it probably wouldn't be universities.

~~~
bored
I don't think we need to take universities away, just the unnecessary
competition-induced crap that makes them so expensive. The "college
experience" we all hear about can be done on a way smaller budget. And like
you mention, universities probably aren't the best at it anyways.

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lvecsey
I'm always surprised when people suggest "community college", as opposed to an
elite university, for the masses to flock to. I don't mind if people take on
vocational tasks like welding, and as Mike Rowe of dirty jobs explained at his
TED talk society definitely has a problem with imbuing meaning towards regular
tasks. But all too often I hear that snide remark, which translates to: "Not
everyone can excel towards, or afford, an elite education with all the debt
and opportunity it offers. But get yourself to a community college and do
something basic, to get your portion of the pie. Otherwise you are nothing."

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drawkbox
That or healthcare.

~~~
timothychung
It is disappointing that these service based industries come to a point when
making money is becoming so important especially when they are commodities. I
hope that some institutions will reduce their price for a greater purpose
especially for poor people.

~~~
pj
I agree that they are over priced, but they aren't commodities. Commodity
products are indistinguishable, but there are definitely different qualities
of healthcare and higher education.

~~~
jnovek
Pragmatically, I would describe health care and education as commodities with
some providers who sell a "premium" service. How much education happens at top
tier, how much health care happens at the Mayo Clinic?

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parbo
Yet another reason to make higher education universal and free. Just like
where I live, Sweden.

~~~
tokenadult
Just how universal is higher education in Sweden? Can all people who desire to
attend the best university in Sweden enroll if they wish, or are there
entrance requirements for that university?

~~~
Emore
Anyone can attend any university (with the exception of a couple of private
ones, mainly within marketing and design). This includes medicine, law and
business. The only requirements are high school grades and/or a public
"university entrance"-exam.

~~~
tokenadult
What is the base acceptance rate for persons who take the university entrance
examination?

~~~
Emore
I'm not quite sure what you mean by "base acceptance rate". But the
universities usually accept around 50% based on high school grades, 25% based
on the entrance exam and a further 25% on mixed backgrounds (professional
experience, prior university credits etc). The numbers themselves differ
between universities.

If you meant something else, I'm happy to explain that too :)

~~~
tokenadult
Does the entire relevant age group in Sweden apply to university, or do only
some students who complete secondary schooling apply for further schooling?
The base acceptance rate for any one university is the number of students who
are admitted divided by the number who applied. (In the United States, that
number is just above 7 percent at some of the most highly desired
universities, which receive almost 30,000 applications but admit only just
more than 2,000 students.) Some universities in the United States have a base
acceptance rate above 90 percent, so on that basis I suppose one could claim
that university schooling is "universal" (that is, universally available) here
too. More than 500 schools of higher education in the United States have
explicit policies of open admission, meaning that they will admit ALL
applicants without any requirements beforehand (except possibly completion of
high school or residence in the state where the college is located).

What exactly does it mean for higher schooling to be both universal and free?

~~~
Emore
Ah, thank you for the explanation. I digged around a little, and the base
acceptance rate of all university applications was 54% för 2008. This is an
aggregated number. For Sweden's most prestigeous med school (Karolinska
Institutet) the number is 3,6%, so it does vary a lot depending on the
education.

There are very few programmes that don't have any requirements. However, if
one doesn't have any good high school grade, the "university entrance"-exam is
a way in, or else professional experience. Hence, there are (again, depending
on the education) a wider range of ages represented. However, 28% of all
applicants are 19 years old. No one in my class is older than 25.

About universal and free, I'd say the system here is close to very good.
According to me "universal" apply more to the possibility of actually
studying, than the numbers of students accepted. And "free" is simply no
tuition fees, which Sweden does not have. This is also the main difference,
with the US having (large) fees.

~~~
tokenadult
The submitted article mentioned colleges with large list prices for tuition
and other expenses, but didn't mention

a) the majority of United States students attend universities that are much
less expensive in their official price,

and

b) a majority of students attending expensive universities get "financial aid"
(discounts from the list price).

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nopinsight
The cost for higher education that steadily climbs faster than the inflation
rate will need to stop when it equals to its time-discounted marginal
benefits. (Given its many alternatives--both for learning and socializing--the
marginal benefits of higher education do not seem to increase nearly as fast.)

If the cost goes higher than that, the bubble will indeed burst--sooner or
later.

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dxjones
In order to keep "the education bubble" growing, the article speaks highly of
reducing teaching costs by 40% (by relying less on actual PhD professors who
know what they are talking about) and instead giving "students ... a choice of
learning styles and ways to get help online from ... fellow students". Oh, and
paying university presidents huge incentives for using such "cost cutting"
measures.

Yeah, right. Take their $50K+ in annual tuition, then plug students into an
e-learning social network where they "TEACH THEMSELVES" through "INNOVATIVE
LEARNING STYLES".

If these moves are genuinely embraced, it will indeed create a bubble that
will grow until these poor disillusioned students realize they are just sheep
following other sheep wandering around, going nowhere, ... when they should
instead have been following a shepherd who knew where he/she was going.

Why would we want to create a bubble anyway? By definition, it is only a
bubble if it will eventually burst.

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heycarsten
I can't help but think the real bubble is in our own inflated sense of
ourselves. Everyone thinks their child is capable of becoming the next great
whatever, but the reality is that there are only so many people with original
and useful ideas out there.

Higher education is dangled as the carrot that is the means to achieving
greatness. Everyone speculates that the future will yield awesomeness, but
when it takes too long to reach our unrealistic expectations we overreact in
the opposite fashion. We have this never-ending cycle of overinflated
possibility followed by reality and an overreaction of conservation.

Is it perhaps a flaw in our culture? Selling an idea is more important than
the idea itself. Getting "traction" or "backing" is more important than
delivering something real and of actual value.

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Alex3917
A product sold for 1/3 of cost is overvalued?

~~~
blhack
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.

~~~
jerf
"BLASPHEMY! You may be thinking, education is PARAMOUNT to any civilization!
We musn't cut spending on education!"

This logic is running rampant right now and is a major player not in the
economic collapse, but our inability to convince our governments to deal with
economic collapse. When the answer to "Are we spending enough on education?"
is simply hard-coded to "No", you get very stupid budget behaviors.

In point of fact, there must be a point where we are spending enough on
education, enough on police, enough on health care, enough on welfare, enough
on anything. There must even come a point where we are spending enough on
educating the disadvantaged, enough on health care for the elderly, enough on
programs for poor children. Because the alternative is, frankly, absurd... yet
that is where we've gotten to, politically.

