7 ms·

Glenn Reynolds: Higher education's bubble is about to burst

70 points by cwan 16y ago

muerdeme 16y ago
The social stigma associated with vocational and trade schools needs to end, and the university "experience" is BS. I imagine a big opportunity to fill the social needs of young people that don't go to college (even beyond selling them alcohol). Businesses that do a good job of matching people socially (maybe IM sports teams not associated with universities) would go a long way to dispelling the idea that you have to pay $50k/year for the intangible college experience.
- deleted 16y ago
  [deleted]
- lsc 16y ago
  but a big part of the point of college is to perpetuate the class system. so, uh, yeah. Trade school is great, if you just want to make money. but your earning power has little to do with your 'class' I think; in many ways, getting a degree that doesn't qualify you for a job is conspicuous consumption. What could be more conspicuous than spending a hundred grand on "self actualization" - the only outward effect basically being more interesting at parties?
  - fuzzmeister 16y ago
    The outward effect of a liberal arts education is being a more knowledgeable citizen, better able to think about the world around you. I'd say that goes a bit beyond conversations over cocktails.
    - lsc 16y ago
      > The outward effect of a liberal arts education is being a more knowledgeable citizen, better able to think about the world around you. be concrete. You are still speaking of internal changes; and I'm asking, "what does that mean?" - how does a person's behaviour improve after getting, say, an art history degree?
      - derefr 16y ago
        More knowledge means more neural connectivity, which means a greater level of creativity (as long as you also develop critical thought at the same pace.) For art, you need creativity. People tell artists that "the best way to paint/write/draw/act/sculpt better is to go out and experience the world." Well, in the same way a degree in the sciences offers a good topical coverage of the knowledge the world has to offer, a liberal arts degree offers a pretty good topical coverage of the experiences the world has to offer, so you can decide what to dig into. They're useful from that perspective.
        JoeAltmaier 16y ago
        Great if you can afford it. Not useful for making money, usually.
        deleted 16y ago
        [deleted]
roboneal 16y ago
We've practically made "attending college" a universal expectation for every American high school graduate. Realistic options such as trade schools, community colleges, military enlistment, and good old fashion "on the job training" need to be valid FIRST choices of most high school grads! Not some fall back plan after dropping out of college with lingering debt and 2,3, and 4 lost earning years.
- stretchwithme 16y ago
  amen. I think if government would stop subsidizing college and stop brainwashing students on this all through high school, I think they'd be much more likely to make the choices that suit their circumstances. And private funding mechanisms wouldn't fund unrealistic choices nearly as often as public mechanisms.
- joe_the_user 16y ago
  Student loans for trade school are actually the dicest commodity out there. The problem isn't that college is over-rated compared to trade school. The problem is that both mechanics and college graduates can't look forward to jobs that will pay off their education.
mnemonicsloth 16y ago
Here's a YouTube channel for the Indian Institute of Technology. You can get a mostly complete engineering education up to the early graduate level by watching these videos and downloading problem/solution sets from MIT's OCW. http://www.youtube.com/user/nptelhrd http://www.youtube.com/user/nptelhrd Then there's github. Portfolios > resumes and everyone knows it. It doesn't take a genius to figure out where we're headed.
- sabat 16y ago
  No idea why your previous post was killed, but the moderators do seem to be kill-happy today.
- scott_s 16y ago
  I think this underestimates the value of having someone who will answer your questions.
  - w1ntermute 16y ago
    I don't think using a set of online lectures as your primary source of education necessarily implies that you can't supplement it with someone who can answer your questions.
    - scott_s 16y ago
      But who will? When you're taking a course, it is literally someone's job to answer your questions. If you're not enrolled in a course, you would need a patient friend who is an expert in the subject, an extremely patient acquaintance who is an expert, or an expert tutor. All of those are hard to come by. Further, I rarely give straight answers to my student's questions. Their question is usually a symptom of a deeper misunderstanding, and figuring out what that is, and leading them to understand that, is my real job. Someone who just says "The answer is X" does not serve the same role as a teacher.
      - w1ntermute 16y ago
deleted 16y ago
[deleted]
joe_the_user 16y ago
I think that bubbles first came really strong to my attention in 2002, after the dot-com crash. I watched the housing bubble welling up massively. Reading Doug Noland of prudenbear.com and other commentators, there was no great mystery about it unless you believed some patently false reasoning ("housing price always good up..."). The thing is that bubbles have a remarkable staying power. The housing bubble only partially burst in 2008 and that was at least five years from the start. From health care, to education, to Chinese capital-spending, to housing-again, it seems like the many bubbles currently sustaining the peudo-recovery are all about to burst. But I'd add a "fudge-factor" of a couple year still. Plus, that brings us to 2012, a auspicious year for the end of the world.
- lsc 16y ago
  I like to tell the story of how in 1998, when I got my first programming job, I decided not to buy a house because I thought prices were irrationally high, and that it was a bubble. I could have bought, too. Obviously, even if I rode it through the current crash, I'd be way in the black today.
- forgottenpaswrd 16y ago
  You are right, but there is a reason for that: Is called "FED", they have created money so the people could borrow money and refinance houses-education-gov or whatever at very low interest rates(zero IR, after inflation, virtual and free money). My parents bought their house at 18% interest rate. This is coming to an end this year, as the big bubble of all, the credit bubble, burst, people, governments(look at Europe today, USA tomorrow) just can't borrow any more, as their debt is too high.
cma 16y ago
Any interesting ways to "short" higher education tuitions?
- gyardley 16y ago
  The closest I can think of is a short on QuinStreet (NASDAQ: QNST), which is a public lead-generation company highly reliant on marketing money from private universities. Online advertising firms in general would take a hit since education is a major category. See the analysis and presentation here: http://www.homethinking.com/brontemedia/2010/05/27/online-education-subprime-2-0/ http://www.homethinking.com/brontemedia/2010/05/27/online-ed...
  - tigerthink 16y ago
    Most of the private universities that actually have to market themselves cater to less intelligent folks who will take much longer to catch on to the fact that degrees are overpriced.
- chancho 16y ago
  Start buying up student loan debt and pooling them into Student Loan Backed Securities (SLBS). Tranche and rate them based on US News & World Report school rankings, sell these CDOs to wealthy institutional investors worldwide, then have your business partner short the shit out of them.
  - arethuza 16y ago
    You mean SLABS? http://en.wikipedia.org/wiki/Asset-backed_security#Student_loans http://en.wikipedia.org/wiki/Asset-backed_security#Student_l...
  - JoeAltmaier 16y ago
    Interesting artile on Hn this AM about Bernie Madoff. Coincidence?
- rianjs 16y ago
  There's not as much reason to bet against student loans as there was securitized consumer debt and/or MBS. This is because student debt is not dischargeable in bankruptcy.
tigerthink 16y ago
Since education can't be resold, there isn't going to be the sort of bursting bubble you see in markets for other goods. Let's say what the article predicts comes to pass and the demand for degrees goes down. If degrees could be resold, then college graduates would start selling theirs. You might get a proverbial "bursting bubble" as more and more graduates started panicking and selling their degrees before they lost all their value. But since graduates can't resell their degrees, we're more likely to see a gradual decline in their price.
- natrius 16y ago
  Sounds like a job for a financial engineer.
- adbge 16y ago
  This post has me convinced that people should be able to buy and sell degrees on the open market.
  - deleted 16y ago
    [deleted]
- krallja 16y ago
  Yeah, the first question I have after reading this article is "how do I short higher education"?
  - anthonyb 16y ago
    A college saving fund: "Pay us $x/month for the duration of your child's high school education, and we'll fund them throughout their college degree." You just have to make x low enough that people will sign up, but high enough that you make money. Of course, if the bubble doesn't burst, you get it "in the shorts"...
- joe_the_user 16y ago
  Those re-selling student-based bonds have been reselling education for a while now... and when one becomes unable to re-sell those, there will be a problem.
cpr 16y ago
Matthew Crawford has some original thinking related to this topic, in his book "Shop Class as Soulcraft": http://www.matthewbcrawford.com/ http://www.matthewbcrawford.com/
tman 16y ago
"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." 4 years out of a young person's life when a 2-hour test works better for predicting job performance is sort of awful, isn't it?.
- chrischen 16y ago
  To be fair IQ tests would probably be weighted less in relation to other things on the resume than a college degree is relative to other things on the resume. But since a college degree is perceived as a more raw evaluation of skill/potential skill than an IQ test (which is more speculative as it only evaluates potential and evaluated in a short test), the degree is often given too much weight. IQ test: speculative evaluation of potential but requires virtually no money/wealth to master. College degree: can/must be bought with (sufficient) money or (semi) inherited (in the case of legacy admissions). Both are bad.
spamizbad 16y ago
I'm inclined to think this bubble will be limited to expensive private colleges that lack significant clout. State schools and community colleges will remain attractive options for students due to cost factors, and private universities with excellent reputations will continue to attract bright students. But any school that isn't affordable or famous will may see a decline in applications when this bubble bursts.
HistoryInAction 16y ago
For more on this bubble, I recommend the Commonfund's HEPI site, which has a lot of information about the breakdown of cost increases in higher education (much is from general increases in health insurance costs, though the 2007 energy spike affected things significantly as well). The link is here: http://www.commonfund.org/CommonfundInstitute/HEPI/Pages/default.aspx http://www.commonfund.org/CommonfundInstitute/HEPI/Pages/def...
sliverstorm 16y ago
Maybe I need to change my thought pattern, but alarmist headlines immediately pre-dispose me to be unreceptive to the idea the author is trying to convey...
kadavy 16y ago
I did get an undergraduate degree. But when it came time to consider getting a graduate degree in business, I made the following comparison: a) I could spend two years of my life, and over $100,000 to learn business, then graduate in debt, but without actual experience running a business. b) I could start my own business, learn what I can from books in the public library, and other entrepreneurs; and within two years, have way more experience running a business than if I had gone to Business school. I would also spend less (though still quite a bit) of money. I chose option b, starting with a year of wandering from cafe to cafe in SF, experimenting with various projects, and meeting other entrepreneurs. Three years later, my business is paying my bills, I've learned a ton, and I feel I have a very strong network. Option b might not work for everyone, but I feel it was the right choice for me. I'm not sure I would have done the same thing with an undergraduate degree though.
zach 16y ago
I actually think it isn't too overblown to hold up a college degree as something that, like homeownership, has been touted as the American dream and become a status item to be worshipped and sacrificed to. Our country's capitalistic nature seems to end up exploding every cultural norm that becomes too widely subscribed to. Have you seen how much weddings cost? For one thing, I think there are a lot of bubble-like indicators out there. Just this week Forbes has a story on a charter school, Think College Now, which takes the universal attendance expectation to a new level. This is an elementary school, an elementary school, filled with college-is-for-everyone cheerleading like signs asking "Am I making college-bound choices today?" http://www.forbes.com/forbes/2010/0607/education-tcn-teamwork-oakland-california-think-college.html http://www.forbes.com/forbes/2010/0607/education-tcn-teamwor... Yes, it's gotten to a point where we've invented the college-prep public elementary school. I admit I'm partisan (I'm one of probably very few non-college-graduate Jeopardy! champions), yet isn't this substantial evidence that the attitude toward college education has become unglued from rationality?
looprecur 16y ago
I really don't think anyone can predict when this bubble bursts. There are too many political and cultural factors involved. Also, as employment prospects decline and remain dismal throughout our second "lost decade", I tend to predict more shelter-seeking "students", debts be damned. People used to think of financial insolvency and bankruptcy as a shameful failure. Not any more. There's a widespread sense that money isn't real and that repayment of debt is somewhat voluntary. This is why people were willing to buy houses at prices of 20-30 years' after-tax income during the bubble. Also, the fact that unexpected medical problems (and insurance malfeasance) can make virtually anyone bankrupt eradicates the association of insolvency with personal failure; now it's something that can happen to anyone, like a lightning bolt from the sky. The result is that, absent regulation, people will continue to take out loans for unaffordable education costs, default on their student debts (which are nondischargeable, but this doesn't prevent default, only discharge in bankruptcy) and maybe have their wages garnished a bit. So we have debt bondage, but when the alternative is economic nonexistence (Wal-Mart job) this starts to look pretty good. At least the guy in the low-end office job, with 20% of his meager pay garnished, can sit down at work. TL;DR version: in other words, as things are now, if college tuition cost $100,000 per year and loan companies were willing to offer it, people would still buy it, future insolvency be damned. If you take this offer, you have hope of an eventual regulatory change ("jubilee") that forgives or at least makes dischargeable student debt. If you don't, you face economic obliteration, unless you're visibly (at 18) in the top 0.01% of your age group in something (computer programming, acting, athletics).
coned88 16y ago
Even though many of you are anti-education there are still many fields and disciplines where one must go to University. Engineers, lawyers, Doctors, Managers, Accountants, Teachers, etc all need some form of higher education. No employer in their right mind would hire anybody in any of those disciplines without the proper education, it simply does not happen. It used to happen in engineering, but those cases were very rare and now it doesn't anymore. Then we move onto programing. Well, sure one could learn all of this stuff themselves. But, can a self taught programmer really say he knows all of the math to program physics modeling software? What about working on programs like autocad and pro engineering. What about MatLab and Mathematica. Huge fields of projects, you are essentially negating yourself from, solely because you have no proven ability to do higher math and likely haven't put in the years of time it takes to become good at that math.

70 points by cwan 16y ago

The social stigma associated with vocational and trade schools needs to end, and the university "experience" is BS. I imagine a big opportunity to fill the social needs of young people that don't go to college (even beyond selling them alcohol). Businesses that do a good job of matching people socially (maybe IM sports teams not associated with universities) would go a long way to dispelling the idea that you have to pay $50k/year for the intangible college experience.

deleted 16y ago
[deleted]
lsc 16y ago
but a big part of the point of college is to perpetuate the class system. so, uh, yeah. Trade school is great, if you just want to make money. but your earning power has little to do with your 'class' I think; in many ways, getting a degree that doesn't qualify you for a job is conspicuous consumption. What could be more conspicuous than spending a hundred grand on "self actualization" - the only outward effect basically being more interesting at parties?
- fuzzmeister 16y ago
  The outward effect of a liberal arts education is being a more knowledgeable citizen, better able to think about the world around you. I'd say that goes a bit beyond conversations over cocktails.
  - lsc 16y ago
    > The outward effect of a liberal arts education is being a more knowledgeable citizen, better able to think about the world around you. be concrete. You are still speaking of internal changes; and I'm asking, "what does that mean?" - how does a person's behaviour improve after getting, say, an art history degree?
    - derefr 16y ago
      More knowledge means more neural connectivity, which means a greater level of creativity (as long as you also develop critical thought at the same pace.) For art, you need creativity. People tell artists that "the best way to paint/write/draw/act/sculpt better is to go out and experience the world." Well, in the same way a degree in the sciences offers a good topical coverage of the knowledge the world has to offer, a liberal arts degree offers a pretty good topical coverage of the experiences the world has to offer, so you can decide what to dig into. They're useful from that perspective.
      - JoeAltmaier 16y ago
        Great if you can afford it. Not useful for making money, usually.
      - deleted 16y ago
        [deleted]

roboneal 16y ago

We've practically made "attending college" a universal expectation for every American high school graduate. Realistic options such as trade schools, community colleges, military enlistment, and good old fashion "on the job training" need to be valid FIRST choices of most high school grads! Not some fall back plan after dropping out of college with lingering debt and 2,3, and 4 lost earning years.

stretchwithme 16y ago
amen. I think if government would stop subsidizing college and stop brainwashing students on this all through high school, I think they'd be much more likely to make the choices that suit their circumstances. And private funding mechanisms wouldn't fund unrealistic choices nearly as often as public mechanisms.
joe_the_user 16y ago
Student loans for trade school are actually the dicest commodity out there. The problem isn't that college is over-rated compared to trade school. The problem is that both mechanics and college graduates can't look forward to jobs that will pay off their education.

mnemonicsloth 16y ago

Here's a YouTube channel for the Indian Institute of Technology. You can get a mostly complete engineering education up to the early graduate level by watching these videos and downloading problem/solution sets from MIT's OCW. http://www.youtube.com/user/nptelhrd http://www.youtube.com/user/nptelhrd Then there's github. Portfolios > resumes and everyone knows it. It doesn't take a genius to figure out where we're headed.

sabat 16y ago
No idea why your previous post was killed, but the moderators do seem to be kill-happy today.
scott_s 16y ago
I think this underestimates the value of having someone who will answer your questions.
- w1ntermute 16y ago
  I don't think using a set of online lectures as your primary source of education necessarily implies that you can't supplement it with someone who can answer your questions.
  - scott_s 16y ago
    But who will? When you're taking a course, it is literally someone's job to answer your questions. If you're not enrolled in a course, you would need a patient friend who is an expert in the subject, an extremely patient acquaintance who is an expert, or an expert tutor. All of those are hard to come by. Further, I rarely give straight answers to my student's questions. Their question is usually a symptom of a deeper misunderstanding, and figuring out what that is, and leading them to understand that, is my real job. Someone who just says "The answer is X" does not serve the same role as a teacher.
    - w1ntermute 16y ago

deleted 16y ago

[deleted]

joe_the_user 16y ago

I think that bubbles first came really strong to my attention in 2002, after the dot-com crash. I watched the housing bubble welling up massively. Reading Doug Noland of prudenbear.com and other commentators, there was no great mystery about it unless you believed some patently false reasoning ("housing price always good up..."). The thing is that bubbles have a remarkable staying power. The housing bubble only partially burst in 2008 and that was at least five years from the start. From health care, to education, to Chinese capital-spending, to housing-again, it seems like the many bubbles currently sustaining the peudo-recovery are all about to burst. But I'd add a "fudge-factor" of a couple year still. Plus, that brings us to 2012, a auspicious year for the end of the world.

lsc 16y ago
I like to tell the story of how in 1998, when I got my first programming job, I decided not to buy a house because I thought prices were irrationally high, and that it was a bubble. I could have bought, too. Obviously, even if I rode it through the current crash, I'd be way in the black today.
forgottenpaswrd 16y ago
You are right, but there is a reason for that: Is called "FED", they have created money so the people could borrow money and refinance houses-education-gov or whatever at very low interest rates(zero IR, after inflation, virtual and free money). My parents bought their house at 18% interest rate. This is coming to an end this year, as the big bubble of all, the credit bubble, burst, people, governments(look at Europe today, USA tomorrow) just can't borrow any more, as their debt is too high.

cma 16y ago

Any interesting ways to "short" higher education tuitions?

gyardley 16y ago
The closest I can think of is a short on QuinStreet (NASDAQ: QNST), which is a public lead-generation company highly reliant on marketing money from private universities. Online advertising firms in general would take a hit since education is a major category. See the analysis and presentation here: http://www.homethinking.com/brontemedia/2010/05/27/online-education-subprime-2-0/ http://www.homethinking.com/brontemedia/2010/05/27/online-ed...
- tigerthink 16y ago
  Most of the private universities that actually have to market themselves cater to less intelligent folks who will take much longer to catch on to the fact that degrees are overpriced.
chancho 16y ago
Start buying up student loan debt and pooling them into Student Loan Backed Securities (SLBS). Tranche and rate them based on US News & World Report school rankings, sell these CDOs to wealthy institutional investors worldwide, then have your business partner short the shit out of them.
- arethuza 16y ago
  You mean SLABS? http://en.wikipedia.org/wiki/Asset-backed_security#Student_loans http://en.wikipedia.org/wiki/Asset-backed_security#Student_l...
- JoeAltmaier 16y ago
  Interesting artile on Hn this AM about Bernie Madoff. Coincidence?
rianjs 16y ago
There's not as much reason to bet against student loans as there was securitized consumer debt and/or MBS. This is because student debt is not dischargeable in bankruptcy.

tigerthink 16y ago

Since education can't be resold, there isn't going to be the sort of bursting bubble you see in markets for other goods. Let's say what the article predicts comes to pass and the demand for degrees goes down. If degrees could be resold, then college graduates would start selling theirs. You might get a proverbial "bursting bubble" as more and more graduates started panicking and selling their degrees before they lost all their value. But since graduates can't resell their degrees, we're more likely to see a gradual decline in their price.

natrius 16y ago
Sounds like a job for a financial engineer.
adbge 16y ago
This post has me convinced that people should be able to buy and sell degrees on the open market.
- deleted 16y ago
  [deleted]
krallja 16y ago
Yeah, the first question I have after reading this article is "how do I short higher education"?
- anthonyb 16y ago
  A college saving fund: "Pay us $x/month for the duration of your child's high school education, and we'll fund them throughout their college degree." You just have to make x low enough that people will sign up, but high enough that you make money. Of course, if the bubble doesn't burst, you get it "in the shorts"...
joe_the_user 16y ago
Those re-selling student-based bonds have been reselling education for a while now... and when one becomes unable to re-sell those, there will be a problem.

cpr 16y ago

Matthew Crawford has some original thinking related to this topic, in his book "Shop Class as Soulcraft": http://www.matthewbcrawford.com/ http://www.matthewbcrawford.com/

tman 16y ago

"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." 4 years out of a young person's life when a 2-hour test works better for predicting job performance is sort of awful, isn't it?.

chrischen 16y ago
To be fair IQ tests would probably be weighted less in relation to other things on the resume than a college degree is relative to other things on the resume. But since a college degree is perceived as a more raw evaluation of skill/potential skill than an IQ test (which is more speculative as it only evaluates potential and evaluated in a short test), the degree is often given too much weight. IQ test: speculative evaluation of potential but requires virtually no money/wealth to master. College degree: can/must be bought with (sufficient) money or (semi) inherited (in the case of legacy admissions). Both are bad.

spamizbad 16y ago

I'm inclined to think this bubble will be limited to expensive private colleges that lack significant clout. State schools and community colleges will remain attractive options for students due to cost factors, and private universities with excellent reputations will continue to attract bright students. But any school that isn't affordable or famous will may see a decline in applications when this bubble bursts.

HistoryInAction 16y ago

For more on this bubble, I recommend the Commonfund's HEPI site, which has a lot of information about the breakdown of cost increases in higher education (much is from general increases in health insurance costs, though the 2007 energy spike affected things significantly as well). The link is here: http://www.commonfund.org/CommonfundInstitute/HEPI/Pages/default.aspx http://www.commonfund.org/CommonfundInstitute/HEPI/Pages/def...

sliverstorm 16y ago

Maybe I need to change my thought pattern, but alarmist headlines immediately pre-dispose me to be unreceptive to the idea the author is trying to convey...

kadavy 16y ago

I did get an undergraduate degree. But when it came time to consider getting a graduate degree in business, I made the following comparison: a) I could spend two years of my life, and over $100,000 to learn business, then graduate in debt, but without actual experience running a business. b) I could start my own business, learn what I can from books in the public library, and other entrepreneurs; and within two years, have way more experience running a business than if I had gone to Business school. I would also spend less (though still quite a bit) of money. I chose option b, starting with a year of wandering from cafe to cafe in SF, experimenting with various projects, and meeting other entrepreneurs. Three years later, my business is paying my bills, I've learned a ton, and I feel I have a very strong network. Option b might not work for everyone, but I feel it was the right choice for me. I'm not sure I would have done the same thing with an undergraduate degree though.

zach 16y ago

I actually think it isn't too overblown to hold up a college degree as something that, like homeownership, has been touted as the American dream and become a status item to be worshipped and sacrificed to. Our country's capitalistic nature seems to end up exploding every cultural norm that becomes too widely subscribed to. Have you seen how much weddings cost? For one thing, I think there are a lot of bubble-like indicators out there. Just this week Forbes has a story on a charter school, Think College Now, which takes the universal attendance expectation to a new level. This is an elementary school, an elementary school, filled with college-is-for-everyone cheerleading like signs asking "Am I making college-bound choices today?" http://www.forbes.com/forbes/2010/0607/education-tcn-teamwork-oakland-california-think-college.html http://www.forbes.com/forbes/2010/0607/education-tcn-teamwor... Yes, it's gotten to a point where we've invented the college-prep public elementary school. I admit I'm partisan (I'm one of probably very few non-college-graduate Jeopardy! champions), yet isn't this substantial evidence that the attitude toward college education has become unglued from rationality?

looprecur 16y ago

I really don't think anyone can predict when this bubble bursts. There are too many political and cultural factors involved. Also, as employment prospects decline and remain dismal throughout our second "lost decade", I tend to predict more shelter-seeking "students", debts be damned. People used to think of financial insolvency and bankruptcy as a shameful failure. Not any more. There's a widespread sense that money isn't real and that repayment of debt is somewhat voluntary. This is why people were willing to buy houses at prices of 20-30 years' after-tax income during the bubble. Also, the fact that unexpected medical problems (and insurance malfeasance) can make virtually anyone bankrupt eradicates the association of insolvency with personal failure; now it's something that can happen to anyone, like a lightning bolt from the sky. The result is that, absent regulation, people will continue to take out loans for unaffordable education costs, default on their student debts (which are nondischargeable, but this doesn't prevent default, only discharge in bankruptcy) and maybe have their wages garnished a bit. So we have debt bondage, but when the alternative is economic nonexistence (Wal-Mart job) this starts to look pretty good. At least the guy in the low-end office job, with 20% of his meager pay garnished, can sit down at work. TL;DR version: in other words, as things are now, if college tuition cost $100,000 per year and loan companies were willing to offer it, people would still buy it, future insolvency be damned. If you take this offer, you have hope of an eventual regulatory change ("jubilee") that forgives or at least makes dischargeable student debt. If you don't, you face economic obliteration, unless you're visibly (at 18) in the top 0.01% of your age group in something (computer programming, acting, athletics).

coned88 16y ago

Even though many of you are anti-education there are still many fields and disciplines where one must go to University. Engineers, lawyers, Doctors, Managers, Accountants, Teachers, etc all need some form of higher education. No employer in their right mind would hire anybody in any of those disciplines without the proper education, it simply does not happen. It used to happen in engineering, but those cases were very rare and now it doesn't anymore. Then we move onto programing. Well, sure one could learn all of this stuff themselves. But, can a self taught programmer really say he knows all of the math to program physics modeling software? What about working on programs like autocad and pro engineering. What about MatLab and Mathematica. Huge fields of projects, you are essentially negating yourself from, solely because you have no proven ability to do higher math and likely haven't put in the years of time it takes to become good at that math.