I've spent time around a couple of research universities (the kind where the degrees do pay for themselves), and I've known a lot people who pursued PhDs, post-docs and faculty positions. Most of these people are extremely bright and incredibly hard-working, and many of them were paid less than than third of what a typical programmer makes. Why did they put up with it? Because they loved their subject, and they convinced themselves they had a shot at tenure.
But tenure is incredibly hard to obtain at an elite university. You've got to sacrifice your 20s and much of your 30s in a haze of work, and the odds are still very slim that you'll win the tenure lottery. And if you do win it, well, you've just spent the last 15 years proving you're a workaholic who can't stop. And if you do manage to slack off? I know at least one professor who was told, "Absolutely, you're a professor for life, no question. But your salary is paid for by the research you bring in. If you can't bring in the grants, we can't afford to pay you. At least not much."
So for every piece of tenured deadwood, there are probably at least 4 crazed workaholics (and in my personal experience, far more). And beyond that, there's 50 or 100 grad students, postdocs and young faculty all working for ridiculously low wages in hopes of getting tenure.
So let's do a little thought experiment: What happens if we do what this writer from the American Enterprise Institute wants, and get rid of tenure? Well, to make an analogy, how would the behavior of startup founders change if they no longer had a tiny chance of a big payout someday?
I do not know why US education keeps getting more expensive. But tenure, ironically, seems to be one of the things holding down salaries at elite universities, in the same way that big chunks of equity hold down startup wages. Unless somebody can provide actual numbers demonstrating that tenure is a problem, I'm inclined to look elsewhere.
There are two major hypotheses, along with variants. One hypothesis, advanced mostly by Bill Bowen, holds that colleges are eating the student loan subsidies and engaging in amenities arms races (the growth in the number of administrators fits into this hypothesis). The other is related to Baumol's cost disease, which happens when some goods experience major productivity improvements (think of most physical goods) while others don't (think of education or medicine).
See here: http://marginalrevolution.com/marginalrevolution/2012/11/mea... for one good discussion. See here: http://www.washingtonpost.com/blogs/wonkblog/wp/2013/09/02/t... for another. See Why Does College Cost So Much? for an elaboration on the Baumol hypothesis.
I buy the Bowen hypothesis.
Tenure is not a major part of the cost story, but in any system that's not working so hot almost every part starts to come under scrutiny. I tend to favor limiting or removing tenure because of the way it distorts the academic labor market, but that's a pretty long discussion.
The Bowen hypothesis makes people feel better about themselves - it says the root of all our problems is that kids today are spoiled. However, one must consider that state subsidization of public higher education has been slashed in half since 1975; students and their families pay a higher proportion of the cost than they once did.
This is not true, generally. The cost of running a modern university (property, plant, energy) is quite material. These costs are an order of magnitude above "pocket change".
My university has a new $51m gym. $51,000,000 / 12,000 students / 30 years = $142/student/year. Roughly the price of a single science textbook, and that's assuming it only lasts 30 years.
Not pocket change on a student's personal expenses budget, but compared to the $65k sticker cost of attendance, it's a drop in the ocean. If administration had refrained from spoiling its students with nice things, cost of attendance would not be markedly less.
Expenditures for FY 2013-14
59% salaries & benefits
31% operating expenses
4% SLAC National Accelerator Laboratory
6% financial aid
=~$1.5 B on opex. Which is basically garnderers, housekeepers, lawn-mowers, and janitors. That, plus security, heat electric, etc. golf courses, gyms, etc.
Let's take "pocket change" to be around $100, an absurdly high amount for pocket change.
An order of magnitude above that would be $100 * 10 = $1000.
 ie, a "non-material" expense.
The debate needs to encompass the entirety of the US higher education system rather than making generalizations based on specific pieces of it. State universities, private schools, not for profits, for profits, schools with massive endowments, and so on, each have their own piece of the story.
Secondly, given that the issue in question involve debt, some portion of the analysis here is future prediction -- both for the students borrowing and for schools which are borrowers. Borrowing a ton of money today seems rational if the future brings great inflation, and lunacy if deflation or stagnation.
(This is different than "eating up subsidies", since, while the subsidies are a contributor, they aren't generally viewed as the only, or even the most important, driver of increased demand.)
What's killing the middle class in the US is the Satanic Trinity: housing, healthcare, and tuition. Healthcare is an obvious need, usually bought in crisis. With housing and tuition, it's the need for people to increasingly pull themselves closer to successful people and make connections as the middle class breaks apart and mostly falls into the ocean.
Tuition (and dark tuition, such as legacy-family donations, admissions counselors, elite high schools and grade schools and pre-schools, and test prep) is skyrocketing because of middle-class panic-- and non-dischargeable, federally-enabled debt fuels it. Nothing more.
1. Extremely easy access to loans for higher education. This, along with systematic misinformation makes for tons of philosophy/liberal arts majors that do not know what to do with themselves and their massive debt at the end of education.
2. Lack of student motivation. I went to college in order to obtain skills and knowledge. On the other hand, many people have other priorities as evidenced by amount of fraternities/sorrorities as well general alcohol consumption in college (Can anyone find number of liters of alcohol purchased in area near universities vs average? I remember seeing quite stark figure few years ago).
So, #1 was brought by college for everyone mantra. Problem with that is illustrated in #2, college should be only for people that want to and are willing to learn. IMHO, until those two issues are reconciled this particular higher education problem will not go away.
The issue is lots of third-rate universities proliferating for people who just don't belong in college. That's the bubble—not particular majors.
In fact, many of these terrible universities offer far more vocational/non-liberal-arts majors than the elite universities. You won't find communications majors at Yale. Indeed, the abundance of liberal arts majors is probably an indicator of a quality institution.
But that's not because of the great value of Harvard's teaching; it's because of what the two of them did in high school that got one into Harvard and the other into UP. It's not as though the two of started out equivalent at time of graduation but the benefit of $160,000 worth of Marxist post-whatever hogwash training turned the Harvard kid into a real-world champion. After being the kind of person who could fight his way into Harvard to begin with, then spending four years socially integrating with the children of the rich, smart, and powerful, then getting to walk away with a Harvard diploma and his contacts list, he could have majored in Sustainable Shoe Repair and he'd be no less prepared for success than with most non-STEM majors.
But for the kids who aren't qualified for entry into an elite university, what they major in (at least for a terminal degree) will matter more.
Indeed, the abundance of liberal arts majors is probably an indicator of a quality institution.
Well, yes, it's an indication that the more prestigious the institution, the less what they learn in class matters.
For example, a lot of philosophers make great programmers. Not because they specifically learned important things in philosophy, but because they know how to think logically.
I'm more impressed by the critical thinking in the physics department than the philosophy department, but departments like philosophy and law are way ahead of the pure activist studies departments, because they tend to genuinely reason about issues from multiple perspectives, not just proselytize the approved one.
Eh? I'm not sure what your college experience is based on, but I don't even know what you mean by "activist studies" departments. Most humanities classes don't even touch contemporary politics, and I couldn't even guess the political leanings of (for example) my literature professor.
I'd probably agree with your criticism when it comes to, say, gender studies. But the majority of liberal arts classes don't involve the "teacher's political agenda." In my experience, it's extremely possible to do well while completely disagreeing with the professor as long as your argument is well-reasoned and articulate.
But how can you blame them when it's become a requirement for pretty much any job, and not going is a social stigma.
Their pay 10 years out is also supposedly in the top 10% (I recall the logic courses help them do well on the LSAT...):
Slide 13 is of particular interest, almost a third of all graduates wish they could:
a. Pursue more scholarship opportunities. While there is obvious parallel to reduction of their net debt, I also take this point as motivation to study harder (Quite a few of scholarships are merit based).
b. Pursue a different major. It is no secret that some majors have jobs out there that have high starting salaries.
c. Getting a job while in college. This is another work harder point.
Here you can see jobs that pay well. I think it is safe to say, that significant portion of people who want to switch majors did not choose one of the well paying majors. AFAIK every single one of those top paying majors requires you to study hard.
As I see it, the main problem with college is that we as a society have put all of our eggs into a basket which is not owned by we the people (the public). If you would like to see a future in which all Americans go to college, then the cost should be spread across everyone. If you don't, then, I think we have different views of what the future could be. We should go back to free tuition, at least for state colleges, because an education requires so much more material than it did a century ago that stopping at K-12 was shortsighted/irresponsible, and now other countries are eating our lunch. An analogy is the private prison system: when we began outsourcing incarceration we created an incentive for prison industry lobbyists to interfere with the criminal justice system. Show me a private school that costs less than a public one.
Student motivation is a red herring. I've met just as many slackers who didn't go to college. In fact I would go as far as to say that pure book learning without introspection is not conducive to the human spirit. The best things I learned in college were how to redefine myself, and how to explore alternate ways of seeing the world. In essence my conscious and subconscious minds both grew as needed. Sometimes I wish that the US didn't have such a puritanical stance on recreation because we are in danger of creating a dystopian, authoritarian future. I wish with all our wealth and potential we could live more like europeans and invest in culture and the human experience. College isn't a trade school, I mean, who goes there to study besides freshmen?
The only way your proposed system could work would be if the government required all degrees to cost no more than X$ or severely restricted the number of people it paid for. More realistically, we can stop subsidizing students past 5 or perhaps 10K$ per year.
So this was actually the intention behind transitioning colleges from free to paid. It created the student loan bubble because there was no check on how much college could cost. To fix it, we could just do the reverse and make state colleges free with their budgets set by the government, substantially lower than they are now.
Free education is done from the K-12 level. Its' done in many European countries as well.
Is there any reason that the US government is special, and won't be able to handle a free university education without going bankrupt?
If you go to college to get a degree that is useless, then you will work at Walmart. I mean, seriously, is that really fucking news?
What's news is how colleges still manage to increase their tuition costs some 5 times the inflation rate year over year just to crank out vast quantities of mindless degrees that are of no use in this economy.
Bill Gates thinks it's a supply-and-demand issue, but it sounds like unmitigated greed to me.
Not true, and this is a large issue of the STEM mindset. People majoring in communications or business can work just as hard as someone who is a STEM major (note: I say work just as hard, not that one is more or less difficult). It is what you, as the individual, choose to take from the experience.
Most of the sales team that I work with must have majored in 'fucking around' then. Somehow they manage to work just as hard as us dev guys and pull their weight anyway.
It could be that both 1) People genuinely interested and determined to get into business, and 2) People fucking around major in business. This matches my anecdotal experience.
I wouldn't call it "valuable in the current workplace", but "valuable in the current world" instead. The former makes it sound like the situation would be solved if only corporations/government created more jobs for those unemployed/not valuable people. However, people with useful/practical skills can freelance as well, or start their own businesses. The problem is no one (even other people) is willing to pay them money for their skills, talents or output.
Businesses aren't looking for finance guys, salesmen, and accountants? My technology company has quite a few, including me. I guess I should tell them they're wasting millions of dollars a year.
Perhaps the difference between the US and UK higher education systems is that I did all that for $5000/year in fees. The ludicrous debt that some people get into is not particularly justifiable for social or educational reasons.
Wouldn't you have done all of that even without going to university?
> Universities are (obviously) places to learn in the academic sense, but an undergraduate degree is also a framework for developing into an independent adult.
By the time you're 20, you should already be an independent adult. I think modern parents are generally not doing a good job raising their kids, if people hit 18 and then need 4 more years to "become adults".
What are you basing should be on?
The age at which you're a functioning adult varies greatly among cultures, and it's usually based on necessity. In some cultures, children continue living with their parents well into their 20s and by definition aren't independent. There are also places where people we would consider children get married and start families of their own.
The age of adulthood is also constantly changing. I've seen polls that show that modern American's don't consider adulthood to really start until your mid 20s, while 150 years ago 12 year-olds went to work and were responsible for providing for the family.
As life expectancy and wealth goes up, the age before you are forced to take on adult responsibilities goes up.
Is this really a fair expectation? Your mind hasn't really fully matured until your early or mid 20s (25 is the most oft-cited age if I recall). I'd say that yes, when you're 18, you need about 4 more years to become an adult. Maybe spending $40k on a degree you don't really care about isn't the best way to do that, but I hardly think 18-year-olds are adults.
I'm in college and the apathy I'm surrounded by, despite being at a top college, is quite disappointing.
In grad school, I was a 4.0 student. I got it.
I had the huge luck of being able to go to my local four-year, decent university for virtually free because my father was a campus architect. If it wasn't for the fact that I could squander my time taking random classes without fiscal penalty, I would have probably dropped-out or gone to a two-year school to get my act together. I only detail that to emphasize the mental shifts that sometimes happen with extremely-young adults.
Not all STEM majors and not all computer related majors are in demand btw.
Personally, I dropped out of Brown 2 years ago, and pursued other opportunities that wouldn't leave me and my family in a mound of debt upon graduation for returns that wont be monetarily or mentally satisfying (Not many interesting options for ChemE's beyond working for big oil/big pharma/big food co). Still grinding it out, but I wouldn't go back unless things change, and considering how things are now (and how they continue to be more of the same) and what I have done since, some college grads I've worked with say I'll come out ahead, but at least I know I'm not getting behind…
For instance, the first is tuned to make it appear that college and high school graduates are on exactly equal footing in mid-2006, whereas in fact in 2006 the median income of a high-school graduate with no higher education is $37,000, but the median income for a bachelor degree holder with no higher education is $60,000.
It's useful for comparing the change in the two values over time, but it is not useful for comparing the values of the two at any given time. All I'm saying is, be careful not to let your intuition get in the way, and think carefully about what the graph is saying.
All I'm saying is, if one wants to work 40+ years of their life putting a significant portion of ones increasingly diminishing difference of median income levels (which for those with high expectations for oneself, the difference is a joke anyways in the scheme of things) into 401k/403b/RothIRA's "invested" for them in the thing we call a stock "market", while paying off increasing larger debts for things one does not need to survive or to enjoy life and that's if one is apart of the decreasingly smaller group of those "successful" enough to come out "ahead" in that game, that's ones prerogative, not mine.
But let me not sit here and type away on the internet and think that some graph is going to wipe away the cognitive dissonance of populations…
There are entire classes of misleading graphs that are misleading despite being technically, literally, valid.
Your snark is not helping.
Let's have an example…
x = 60,000, y = 30,000 with difference, d = 30,000
>the fact that both wages fall a similar percentage relative
Let's pick some random rate and apply it to both, r = %10.
Now what decreased more: %10 of x or %10 of y?
>the gap between both wage classes remained the same
Really? Do the math, and d is now = 27,000.
I'm sure such math helps BoA in its positions in the private student loan market (and beyond) in such an environment.
Let's not pretend that my snark stands in the way of your understanding, clearly you had that going for you anyways…
Well, no. In dollar terms, the gap would have become smaller.
The whole purpose of a graph is that it makes information visually available and easily digestible. If you have to "read it carefully to not be mislead," that is a faulty graphic.
I'm not attacking your clarification, just clarifying my original personal anecdote that was dependent on state of the status quo and its direction (rates and % change, respectively).
1. Relatively few colleges where you can get required networking.
2. People that do that generally do not have a problem with loans.
3. To build a network you got to be motivated.
In my experience, there's a lot of value in giving students the opportunity to step up and run a small self-governing enterprise. It's one way to counter-act the extension of adolescence into the college years, and I'd like to think that MIT isn't a unique place in regard to the value of independent living. I think there's enough value there that I give annually to MIT's Independent Residence Development Fund so that others continue to have the same opportunities I did.
Nit: Your use of the plural in "amount of fraternities/sorrorities[SIC]" is a hint that you've made an amount vs. number mistake. Also, sorority is the correct way to spell the word.
People who would have been "nerds" at other schools, forgive the crass stereotype, fit right into many MIT frats. Which is an awesome thing for MIT, but doesn't really help your argument.
> The Obama administration has dubbed college "the ticket to the middle class,"
Indeed, the problem is that higher education is deemed a "ticket" to ride. Even the president is implying (whether he really believes it or not) that a college degree entitles someone to a good standard of living. Not effort, hard work, or other qualities commonly associated with the American dream.
A phrase that makes it clear there's no entitlement would be "opportunity to reach the middle class" when this is more like "pay money and you'll get there just like everyone else."
Even if it's just selling yourself to a potential employer.
Even big time universities are getting into this - witness executive programs offered by many prestigious programs. On the flip side, companies like Treehouse and more exotic options like MOOCs and "learn a language as a service" style instruction are becoming formidable, low risk options.
I think the future will see a reversion to 4 year institutions serving those students who always used to go to college, a reduction in the amenities arms race that others on this thread have pointed out, and an increasingly level playing field (and better perception) of those people who didn't go to college, but do have highly valuable (and demonstrable) skills acquired through for-profit teaching avenues.
Many here will find this distasteful. That's OK. Many who are over 40 find internet dating inherently distasteful too, but that hasn't changed the perception among younger people or stopped its explosion as a real alternative to traditional dating.
Disclosure: I work for an educational technology company who serves a lot of commercial training providers but also many four year institutions.
Imagine this. Lets say a good private college costs $40,000/yr (making up but pretty close) on paper. The actual amount that a student pays out of pocket is wayyyyy less say $10,000. The rest is covered by student loans/grants etc. So the student still ends up with a huge debt of $40,000 while the college makes a profit from the govt. This is true for both private/public colleges.
How strong is the evidence to support this statement?
One of the root causes of the "college bubble" might just be completely overlooking this question, or taking any number of half-hearted answers for granted... or thinking that the relativistic mindset which has beset academia in the last 50 years is the final frontier.
Currently reading "The Closing of the American Mind" (as an American, wearily) and finding the history of the university as laid out there very interesting.
(Trying to formulate a general opinion but the deeper I go, the harder it is.)
There are countless difficult questions and choices which face man, and in most institutions of higher learning, they've taken a backseat to questions of employability & cost.
On an unrelated note, the new undergraduate business school building at my alma mater cost $55 million.
That's probably one of the most relevant things you could mention. Many schools don't get $55 million a year in tuition. Imagine how affordable education would be if these schools spent more money on research and education than they did on architecture?
So much so that at the moment, I'm working full-time and a full-time student.
I'm not sure what to say about this article. It makes a few points, but there's a lot there which is just odd.
I see this issue being less about what colleges are providing than the motivations and expectations of the students and particularly parents paying into them.
The common perception seems to be that degree is a binary thing, a membership with guarantees on either side. A princely income in a related field for members and a lifetime of poverty beneath a glass ceiling for non-members.
Recognize college as a multiplier more than a membership and none of this is particularly surprising.
Freakonomics did a pretty interesting series on College  providing an outlook far less dreary than this piece.
A 6-month vocational course training people in some specific in-demand skill is started at a college/technical institute, partly funded by some big company, and everyone who graduates gets a job. A bottleneck is created at the admission stage as applications soar, and only some get selected. A year or two later, the course is converted into a one-year program, teaching/admin staff numbers increased, and the original staff rise up the ladder. The course is then converted to a two-year program, the curriculum generalized to include other related skills, and enrollments for each year increased. When the student loan system recognizes the course as eligible for loans, the fees go up. When the course becomes a 3 or 4 year diploma or degree, enrollments have gone up so much the bottleneck is now at the job-seeking or internship-seeking stage and the original program creators are attending frequent overseas conferences.
Does the median tell the whole story though? What about the skewness? Maybe non-degree-holders' income has a heavy negative skew, while for degree holders a heavy positive skew. So while the mean income may not be very different, the two paths still offer very different prospects. How much is the chance that your income will not have a low ceiling worth to you?
Of course, that is before the "narrowing" of the gap-- the number is now $26,382 PER YEAR.
This annual difference in earning is much, much higher than the median debt amount for almost any college.
We have a lot more degrees, but also a lot more unemployment and underemployment.
2. What is "working in retail"? A couple of cousins with business degrees started "in retail" out of college. They weren't that I know of stocking shelves or mostly operating cash registers, and both have done quite well, though only one works in a related field now.
3. There is a rage for credentials that goes a ways back and is not helpful.
I wonder how much of the rise is cost is tied to our inefficient healthcare system?
Also, colleges are increasingly hiring adjunct faculty who receive no healthcare or other benefits.