10 ms·

How the College Bubble Will Pop

86 points by muzz 13y ago

TrainedMonkey 13y ago
I think current situation is amalgamation of two distinct problems: 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.
- watwut 13y ago
  Are there truly that many useless philosophy/liberal arts majors? According to stats I read, most students actually go for majors that are currently in demand. What happened during depression is that majors in demand changed and the one that looked good when you started is not good anymore. Plus, some law schools exaggerated success of their students. Not all STEM majors and not all computer related majors are in demand btw.
- cinquemb 13y ago
  I know how zerohedge is autobanned on hn, but they included some charts that should make people think (especially for those who have been looking away)[0][1]. 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… [0] http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2012/09-2/20120928_coll5.png http://www.zerohedge.com/sites/default/files/images/user3303... [1] http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2012/09-2/20120928_coll6.png http://www.zerohedge.com/sites/default/files/images/user3303...
  - delluminatus 13y ago
    I would like to point out that those graphs are very misleading if not carefully read. 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.
    - cinquemb 13y ago
      I'm pretty sure both charts mention that they are rates or % change, if one needs a degree to read things carefully to not be mislead, we have bigger problems… 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.
      - delluminatus 13y ago
        I'm not attacking your position, just trying to clarify some graphs that are obviously confusing (whether deliberately or not I don't know). 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.
        cinquemb 13y ago
        There isn't an agreed upon purpose of a graph, but luckily for us, there is for what a graph is: a diagram showing the relation between variable quantities, typically of two variables, each measured along one of a pair of axes at right angles.[0] I missed the part on "makes information visually available and easily digestible", but considering that you recognized it as a graph means that it did its job and everything else can be stroked upon to infinity, and like I said, we have bigger problems… 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). [0] http://www.oxforddictionaries.com/definition/english/graph http://www.oxforddictionaries.com/definition/english/graph
- _random_ 13y ago
  #2 - some people go to college for networking (BA turned politician types), I doubt you can become a senator by learning hard.
  - TrainedMonkey 13y ago
    That is true, however this is orthogonal to the problem because: 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.
- cma 13y ago
  I don't think the problem is philosophy majors; they aren't a significant percentage of students: http://nces.ed.gov/programs/digest/d11/tables/dt11_286.asp http://nces.ed.gov/programs/digest/d11/tables/dt11_286.asp Their pay 10 years out is also supposedly in the top 10% (I recall the logic courses help them do well on the LSAT...): http://www.forbes.com/2009/08/02/college-degree-pay-careers-leadership-salaries.html http://www.forbes.com/2009/08/02/college-degree-pay-careers-...
  - TrainedMonkey 13y ago
    I used philosophy major as an example. Perchance somewhat hastily. What I really meant to say, that there is a certain number of majors that are considered easy and give degrees that confer no substantial benefit in modern workforce. Those majors become default goto majors for people who do not know what to do and people who simply want to do as little as possible.
    - cma 13y ago
      Point them out and give us a percentage. On top of that it would be nice to see the number of students relying on loans in your category of majors--I suspect (from personal experience) that more well-to-do people would major in Latin or Art History.
      - TrainedMonkey 13y ago
        I do not have exact study major by major, however here is a summary of a study based on a sample of few recent grads: http://www.accountingprincipals.com/Documents/downloads/api-workonomix-survey-post-graduation-2012.pdf http://www.accountingprincipals.com/Documents/downloads/api-... 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. http://blogs.wsj.com/atwork/2013/04/29/and-the-highest-paid-college-majors-are/ http://blogs.wsj.com/atwork/2013/04/29/and-the-highest-paid-... 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.
- cabbeer 13y ago
  University is now considered "the next step" after high school, rather than one of the available options. So many people go to university with a superficial idea of what they want to do or become. But how can you blame them when it's become a requirement for pretty much any job, and not going is a social stigma.
- cmollis 13y ago
  exactly.. why don't more people say this? so much of the 'worth' of your college degree is essentially a function of how valuable it is in the current workplace. If you major in 'business' or 'communications' then you are majoring in 'fucking around'. There aren't too many jobs that I know of are looking for this. 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.
  - ahomescu1 13y ago
    > so much of the 'worth' of your college degree is essentially a function of how valuable it is in the current workplace. 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.
  - TarpitCarnivore 13y ago
    > If you major in 'business' or 'communications' then you are majoring in 'fucking around'. There aren't too many jobs that I know of are looking for this. 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.
  - ahoy 13y ago
    >If you major in 'business' or 'communications' then you are majoring in 'fucking around'. 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.
- leoedin 13y ago
  University taught me a huge amount, and only part of that was related to my degree. The person I emerged after 4 years of dealing with life on my own, making (and losing) friends and even partying is very different to the person who started. The utility of university is far, far greater than simply "a place to learn". It's a place to forge out on your own in a semi-protected environment, somewhere to learn the art of making friends, of meeting people, and somewhere to discover what you want to do in life. Even if I hadn't gone to a single class I would still say that I learnt a lot at 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. I'd argue that society benefits from that. 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.
  - ahomescu1 13y ago
    > The person I emerged after 4 years of dealing with life on my own, making (and losing) friends and even partying is very different to the person who started. 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".
    - ahoy 13y ago
      >By the time you're 20, you should already be an independent adult. 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.
      - rzt 13y ago
- ImprovedSilence 13y ago
  I went to school to learn, spent long hours in the library and lab, and was a whore for knowledge. Many of my friends were/are the same way, and are very successful post college. We also partied our asses off, made a million and one friends, and had a hell of time doing it. And some even managed to be competitive athletes at the D-I or club level. Don't begrudge us for it, or think there is an inverse correlation between beer consumed or frat you joined, and willingness to learn/do work.
- morgante 13y ago
  I think the whole liberal arts majors issue is a red herring. The problem students aren't the ones studying liberal arts, indeed they aren't even usually attending liberal arts institutions. I'd bet more on a literature major from Harvard winning out over a CS major from University of Phoenix. 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.
  - SiVal 13y ago
    I'd bet more on a literature major from Harvard winning out over a CS major from University of Phoenix. 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.
    - morgante 13y ago
      I do think the liberal arts teach you something. Critical reasoning matters. So even if the actual content of what you learned is irrelevant, the way you learned it is helpful by teaching you to be a good thinker. 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.
- zackmorris 13y ago
  I disagree with both of these points. 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?
  - kansface 13y ago
    You missed the point. "Free" education for everyone is the largest contributing factor in the inflation of the cost of degrees. Free education is a nice thought, but you didn't propose any way to pay for it. 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.
    - zackmorris 13y ago
      I see what you're saying. Reading it now, it hit me that government programs have to ask for budget increases, but colleges can just raise the price and be guaranteed the money because students can always get more loans. 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.
- KMag 13y ago
  When I attended MIT, approximately half of the men were in fraternities. The rate of alcohol consumption was also quite high, both in the FSILGs and the dorms. I don't think either of these necessarily mean that MIT students lacked motivation. In fact, the average fraternity GPA was above the average on-campus GPA. 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.
  - argonaut 13y ago
    As someone who doesn't go ton MIT but has been to a few MIT frats and partied there before, MIT greek culture is not at all representative of the wider greek culture at American universities. In fact, MIT is an outlier. MIT is very much academics driven. At MIT, taking 6 or more classes (in a technical field) makes you an awesome badass. 50% of MIT is involved in greeks precisely because the greek culture there is very much tied into the wider MIT culture. 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.
pessimizer 13y ago
The cab driver stat is really interesting, but I'd like to see the comparison between 2007 and now even more than the 1970 to now comparison. We have a lot more degrees, but also a lot more unemployment and underemployment.
- cafard 13y ago
  Cabbie is also not infrequently an immigrant's first or second job. I can remember a Ph.D. cabbie from West Africa--driving cabs in Washington, DC, wasn't the safest occupation, but for him it was safer than staying in his native land.
  - rzt 13y ago
    This was the first thing I thought when I saw that subhead.
johnohara 13y ago
There are exceptions. Applications to top universities are booming, as employers recognize these graduates will become our society's future innovators and leaders. How strong is the evidence to support this statement?
- bluedino 13y ago
  Which statement, the increase in applications to top universities or the employers recognizing they are the cream of the crop? https://newscenter.berkeley.edu/2012/01/12/freshman-applications-increase-dramatically/ https://newscenter.berkeley.edu/2012/01/12/freshman-applicat...
  - j2kun 13y ago
    The latter, of course.
- the_watcher 13y ago
  As a UCLA grad, I can tell you that for something like the past 8 years UCLA has set a new record for undergraduate applications to a college. They get over 100K applicants a year now, and when I applied in 2006, they had just been the first school to receive 50K applicants.
- cafard 13y ago
  I don't doubt that applications to top universities are booming. Kids routinely apply to a dozen schools these days. Employers might well figure that the kids they hire of these schools are better prepared. They might also find it a way to hire their own or their friends' children.
cafard 13y ago
1. Does working at the American Enterprise Institute qualify one as a member of "[t]he American political class"? 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.
j2kun 13y ago
The article phrases things in terms of economics (as WSJ is wont to do), but there are more issues. > 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.
- chaosphere2112 13y ago
  Right, but, at least in theory, getting a college degree is a sign of having put in effort, hard work, and other qualities commonly associated with the American Dream.
- wonderzombie 13y ago
  You wouldn't characterize education as a commonly discussed component of upward mobility? It seems to me that an education is exactly how you'd expect your children to do well, as opposed to the "effort" and "hard work" of a mostly-unskilled job with an obvious ceiling on wages, etc.
  - gaius 13y ago
    There's education and there's education. Academic learning is only one kind of intelligence, learning physical skills is intelligence too. Which is why plumbers are so well paid. Here in the UK the Labour government told all the working class kids hey, don't bother to learn a trade like your parents, go to an ex-poly and get a degree in media studies! Now they're unemployable and all our tradesmen come from Poland, where they do still understand education and they do still respect the trades. And without them, the UK is in a lot of trouble.
  - j2kun 13y ago
    I mean that going through the education system is not enough alone to guarantee success, but this is implied by the use of the word "ticket." 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."
WalterBright 13y ago
Probably one of the most productive skills one can learn, that will pay off for your entire career, is selling. No matter what career path you choose, having sales skills will help considerably. Even if it's just selling yourself to a potential employer.
ekidd 13y ago
The author seems to have particular ax to grind against tenured faculty. This seems, at least in my personal experience, to be a bit of red herring. 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.
- deleted 13y ago
  [deleted]
- jseliger 13y ago
  I do not know why US education keeps getting more expensive 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/measuring-baumol-and-bowen-effects-in-public-research-universities.html http://marginalrevolution.com/marginalrevolution/2012/11/mea... for one good discussion. See here: http://www.washingtonpost.com/blogs/wonkblog/wp/2013/09/02/the-tuition-is-too-damn-high-part-vi-why-theres-no-reason-for-big-universities-to-rein-in-spending/ 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.
brohoolio 13y ago
Education has been labor intensive. Being labor intensive means that it is exposed to healthcare costs. I wonder how much of the rise is cost is tied to our inefficient healthcare system?
- greenyoda 13y ago
  Depends on the course. An intro-level lecture course like Econ 101 is very labor-efficient: one professor teaches 500 students in a huge lecture hall, with the help of a few very poorly paid TAs. Also, colleges are increasingly hiring adjunct faculty who receive no healthcare or other benefits.
  - zecho 13y ago
    If you measure efficiency as the number of students per lecture, sure. I never found large classrooms to be all that useful while I was at university. I certainly remember more from my smaller classrooms where I was more closely connected to my classmates and profs.
protomyth 13y ago
One very large problem in University costs is administration spending. Cutting that spending would go a long way towards reducing the costs back to something acceptable and makes college a better economic choice. http://www.washingtonmonthly.com/magazine/septemberoctober_2011/features/administrators_ate_my_tuition031641.php?page=all http://www.washingtonmonthly.com/magazine/septemberoctober_2...
codegeek 13y ago
I have strong opinions about the whole college bubble issue. In my opinion, the single biggest reason for this mess in America is the whole "student loan" scam. Let me explain. Colleges don't really care about what their actual cost is because whatever they bill, they get paid by the govt. (aka student loans) for the most part. Yes, the students have no choice but to get those loans and get enrolled. Imagine if the easy supply of these loans was stopped AND the colleges were actually demanded to justify their tuition costs, I bet the student enrollment will not go down while the costs will go down significantly. 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.
nemesisj 13y ago
There's a third path here which the author ignores, but is already well underway both online and throughout the rest of the world - an increased emphasis on non-degreed training programs. Yes, the "for-profit" education model is rife with its own problems, but for much of the world, many don't have the option to attend a 4 year degree school and beyond. For those who don't (or increasingly, won't due to rising costs and lower advantages) the option to get skill specific training for their job or specific interests is becoming increasingly attractive. 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.
Tycho 13y ago
Since 2006, the gap between what the median college graduate earned compared with the median high-school graduate has narrowed by $1,387 for men over 25 working full time, a 5% fall. Women in the same category have fared worse, losing 7% of their income advantage ($1,496). 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?
- muzz 13y ago
  Even if not, the decrease in earnings per year of $1,387 is a 5% drop, that would indicate that the median college graduate earned $27,740 more than the median high-school graduate PER YEAR. 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.
rmcfeeley 13y ago
Interesting that few of the comments here address the question: "What is the true goal of higher education?" 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.
- skylan_q 13y ago
  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?
  - ido 13y ago
    Buildings are often payed for by donations, and they can't use the donations to pay for the basic upkeep.
incision 13y ago
As someone who dropped out of high school and took a gradual, but relatively direct route to pretty well-paid work my opinion on College has changed quite a bit over the years. 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 [0] providing an outlook far less dreary than this piece. 0: http://freakonomics.com/2012/07/30/freakonomics-goes-to-college-part-1-a-new-freakonomics-radio-podcast/ http://freakonomics.com/2012/07/30/freakonomics-goes-to-coll...
vorg 13y ago
The college/university industry is self-perpetuating, like many other industries. A typical example... 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.
aidenn0 13y ago
The bump in median annual wage is still greater than the average total debt per student. It still seems like a no-brainer financially.
deleted 13y ago
[deleted]

86 points by muzz 13y ago

I think current situation is amalgamation of two distinct problems: 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.

watwut 13y ago
Are there truly that many useless philosophy/liberal arts majors? According to stats I read, most students actually go for majors that are currently in demand. What happened during depression is that majors in demand changed and the one that looked good when you started is not good anymore. Plus, some law schools exaggerated success of their students. Not all STEM majors and not all computer related majors are in demand btw.
cinquemb 13y ago
I know how zerohedge is autobanned on hn, but they included some charts that should make people think (especially for those who have been looking away)[0][1]. 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… [0] http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2012/09-2/20120928_coll5.png http://www.zerohedge.com/sites/default/files/images/user3303... [1] http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2012/09-2/20120928_coll6.png http://www.zerohedge.com/sites/default/files/images/user3303...
- delluminatus 13y ago
  I would like to point out that those graphs are very misleading if not carefully read. 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.
  - cinquemb 13y ago
    I'm pretty sure both charts mention that they are rates or % change, if one needs a degree to read things carefully to not be mislead, we have bigger problems… 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.
    - delluminatus 13y ago
      I'm not attacking your position, just trying to clarify some graphs that are obviously confusing (whether deliberately or not I don't know). 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.
      - cinquemb 13y ago
        There isn't an agreed upon purpose of a graph, but luckily for us, there is for what a graph is: a diagram showing the relation between variable quantities, typically of two variables, each measured along one of a pair of axes at right angles.[0] I missed the part on "makes information visually available and easily digestible", but considering that you recognized it as a graph means that it did its job and everything else can be stroked upon to infinity, and like I said, we have bigger problems… 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). [0] http://www.oxforddictionaries.com/definition/english/graph http://www.oxforddictionaries.com/definition/english/graph
_random_ 13y ago
#2 - some people go to college for networking (BA turned politician types), I doubt you can become a senator by learning hard.
- TrainedMonkey 13y ago
  That is true, however this is orthogonal to the problem because: 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.
cma 13y ago
I don't think the problem is philosophy majors; they aren't a significant percentage of students: http://nces.ed.gov/programs/digest/d11/tables/dt11_286.asp http://nces.ed.gov/programs/digest/d11/tables/dt11_286.asp Their pay 10 years out is also supposedly in the top 10% (I recall the logic courses help them do well on the LSAT...): http://www.forbes.com/2009/08/02/college-degree-pay-careers-leadership-salaries.html http://www.forbes.com/2009/08/02/college-degree-pay-careers-...
- TrainedMonkey 13y ago
  I used philosophy major as an example. Perchance somewhat hastily. What I really meant to say, that there is a certain number of majors that are considered easy and give degrees that confer no substantial benefit in modern workforce. Those majors become default goto majors for people who do not know what to do and people who simply want to do as little as possible.
  - cma 13y ago
    Point them out and give us a percentage. On top of that it would be nice to see the number of students relying on loans in your category of majors--I suspect (from personal experience) that more well-to-do people would major in Latin or Art History.
    - TrainedMonkey 13y ago
      I do not have exact study major by major, however here is a summary of a study based on a sample of few recent grads: http://www.accountingprincipals.com/Documents/downloads/api-workonomix-survey-post-graduation-2012.pdf http://www.accountingprincipals.com/Documents/downloads/api-... 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. http://blogs.wsj.com/atwork/2013/04/29/and-the-highest-paid-college-majors-are/ http://blogs.wsj.com/atwork/2013/04/29/and-the-highest-paid-... 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.
cabbeer 13y ago
University is now considered "the next step" after high school, rather than one of the available options. So many people go to university with a superficial idea of what they want to do or become. But how can you blame them when it's become a requirement for pretty much any job, and not going is a social stigma.
cmollis 13y ago
exactly.. why don't more people say this? so much of the 'worth' of your college degree is essentially a function of how valuable it is in the current workplace. If you major in 'business' or 'communications' then you are majoring in 'fucking around'. There aren't too many jobs that I know of are looking for this. 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.
- ahomescu1 13y ago
  > so much of the 'worth' of your college degree is essentially a function of how valuable it is in the current workplace. 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.
- TarpitCarnivore 13y ago
  > If you major in 'business' or 'communications' then you are majoring in 'fucking around'. There aren't too many jobs that I know of are looking for this. 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.
- ahoy 13y ago
  >If you major in 'business' or 'communications' then you are majoring in 'fucking around'. 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.
leoedin 13y ago
University taught me a huge amount, and only part of that was related to my degree. The person I emerged after 4 years of dealing with life on my own, making (and losing) friends and even partying is very different to the person who started. The utility of university is far, far greater than simply "a place to learn". It's a place to forge out on your own in a semi-protected environment, somewhere to learn the art of making friends, of meeting people, and somewhere to discover what you want to do in life. Even if I hadn't gone to a single class I would still say that I learnt a lot at 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. I'd argue that society benefits from that. 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.
- ahomescu1 13y ago
  > The person I emerged after 4 years of dealing with life on my own, making (and losing) friends and even partying is very different to the person who started. 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".
  - ahoy 13y ago
    >By the time you're 20, you should already be an independent adult. 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.
    - rzt 13y ago
ImprovedSilence 13y ago
I went to school to learn, spent long hours in the library and lab, and was a whore for knowledge. Many of my friends were/are the same way, and are very successful post college. We also partied our asses off, made a million and one friends, and had a hell of time doing it. And some even managed to be competitive athletes at the D-I or club level. Don't begrudge us for it, or think there is an inverse correlation between beer consumed or frat you joined, and willingness to learn/do work.
morgante 13y ago
I think the whole liberal arts majors issue is a red herring. The problem students aren't the ones studying liberal arts, indeed they aren't even usually attending liberal arts institutions. I'd bet more on a literature major from Harvard winning out over a CS major from University of Phoenix. 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.
- SiVal 13y ago
  I'd bet more on a literature major from Harvard winning out over a CS major from University of Phoenix. 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.
  - morgante 13y ago
    I do think the liberal arts teach you something. Critical reasoning matters. So even if the actual content of what you learned is irrelevant, the way you learned it is helpful by teaching you to be a good thinker. 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.
zackmorris 13y ago
I disagree with both of these points. 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?
- kansface 13y ago
  You missed the point. "Free" education for everyone is the largest contributing factor in the inflation of the cost of degrees. Free education is a nice thought, but you didn't propose any way to pay for it. 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.
  - zackmorris 13y ago
    I see what you're saying. Reading it now, it hit me that government programs have to ask for budget increases, but colleges can just raise the price and be guaranteed the money because students can always get more loans. 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.
KMag 13y ago
When I attended MIT, approximately half of the men were in fraternities. The rate of alcohol consumption was also quite high, both in the FSILGs and the dorms. I don't think either of these necessarily mean that MIT students lacked motivation. In fact, the average fraternity GPA was above the average on-campus GPA. 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.
- argonaut 13y ago
  As someone who doesn't go ton MIT but has been to a few MIT frats and partied there before, MIT greek culture is not at all representative of the wider greek culture at American universities. In fact, MIT is an outlier. MIT is very much academics driven. At MIT, taking 6 or more classes (in a technical field) makes you an awesome badass. 50% of MIT is involved in greeks precisely because the greek culture there is very much tied into the wider MIT culture. 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.

pessimizer 13y ago

The cab driver stat is really interesting, but I'd like to see the comparison between 2007 and now even more than the 1970 to now comparison. We have a lot more degrees, but also a lot more unemployment and underemployment.

cafard 13y ago
Cabbie is also not infrequently an immigrant's first or second job. I can remember a Ph.D. cabbie from West Africa--driving cabs in Washington, DC, wasn't the safest occupation, but for him it was safer than staying in his native land.
- rzt 13y ago
  This was the first thing I thought when I saw that subhead.

johnohara 13y ago

There are exceptions. Applications to top universities are booming, as employers recognize these graduates will become our society's future innovators and leaders. How strong is the evidence to support this statement?

bluedino 13y ago
Which statement, the increase in applications to top universities or the employers recognizing they are the cream of the crop? https://newscenter.berkeley.edu/2012/01/12/freshman-applications-increase-dramatically/ https://newscenter.berkeley.edu/2012/01/12/freshman-applicat...
- j2kun 13y ago
  The latter, of course.
the_watcher 13y ago
As a UCLA grad, I can tell you that for something like the past 8 years UCLA has set a new record for undergraduate applications to a college. They get over 100K applicants a year now, and when I applied in 2006, they had just been the first school to receive 50K applicants.
cafard 13y ago
I don't doubt that applications to top universities are booming. Kids routinely apply to a dozen schools these days. Employers might well figure that the kids they hire of these schools are better prepared. They might also find it a way to hire their own or their friends' children.

cafard 13y ago

1. Does working at the American Enterprise Institute qualify one as a member of "[t]he American political class"? 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.

j2kun 13y ago

The article phrases things in terms of economics (as WSJ is wont to do), but there are more issues. > 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.

chaosphere2112 13y ago
Right, but, at least in theory, getting a college degree is a sign of having put in effort, hard work, and other qualities commonly associated with the American Dream.
wonderzombie 13y ago
You wouldn't characterize education as a commonly discussed component of upward mobility? It seems to me that an education is exactly how you'd expect your children to do well, as opposed to the "effort" and "hard work" of a mostly-unskilled job with an obvious ceiling on wages, etc.
- gaius 13y ago
  There's education and there's education. Academic learning is only one kind of intelligence, learning physical skills is intelligence too. Which is why plumbers are so well paid. Here in the UK the Labour government told all the working class kids hey, don't bother to learn a trade like your parents, go to an ex-poly and get a degree in media studies! Now they're unemployable and all our tradesmen come from Poland, where they do still understand education and they do still respect the trades. And without them, the UK is in a lot of trouble.
- j2kun 13y ago
  I mean that going through the education system is not enough alone to guarantee success, but this is implied by the use of the word "ticket." 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."

WalterBright 13y ago

Probably one of the most productive skills one can learn, that will pay off for your entire career, is selling. No matter what career path you choose, having sales skills will help considerably. Even if it's just selling yourself to a potential employer.

ekidd 13y ago

The author seems to have particular ax to grind against tenured faculty. This seems, at least in my personal experience, to be a bit of red herring. 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.

deleted 13y ago
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jseliger 13y ago
I do not know why US education keeps getting more expensive 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/measuring-baumol-and-bowen-effects-in-public-research-universities.html http://marginalrevolution.com/marginalrevolution/2012/11/mea... for one good discussion. See here: http://www.washingtonpost.com/blogs/wonkblog/wp/2013/09/02/the-tuition-is-too-damn-high-part-vi-why-theres-no-reason-for-big-universities-to-rein-in-spending/ 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.

brohoolio 13y ago

Education has been labor intensive. Being labor intensive means that it is exposed to healthcare costs. I wonder how much of the rise is cost is tied to our inefficient healthcare system?

greenyoda 13y ago
Depends on the course. An intro-level lecture course like Econ 101 is very labor-efficient: one professor teaches 500 students in a huge lecture hall, with the help of a few very poorly paid TAs. Also, colleges are increasingly hiring adjunct faculty who receive no healthcare or other benefits.
- zecho 13y ago
  If you measure efficiency as the number of students per lecture, sure. I never found large classrooms to be all that useful while I was at university. I certainly remember more from my smaller classrooms where I was more closely connected to my classmates and profs.

protomyth 13y ago

One very large problem in University costs is administration spending. Cutting that spending would go a long way towards reducing the costs back to something acceptable and makes college a better economic choice. http://www.washingtonmonthly.com/magazine/septemberoctober_2011/features/administrators_ate_my_tuition031641.php?page=all http://www.washingtonmonthly.com/magazine/septemberoctober_2...

codegeek 13y ago

I have strong opinions about the whole college bubble issue. In my opinion, the single biggest reason for this mess in America is the whole "student loan" scam. Let me explain. Colleges don't really care about what their actual cost is because whatever they bill, they get paid by the govt. (aka student loans) for the most part. Yes, the students have no choice but to get those loans and get enrolled. Imagine if the easy supply of these loans was stopped AND the colleges were actually demanded to justify their tuition costs, I bet the student enrollment will not go down while the costs will go down significantly. 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.

nemesisj 13y ago

There's a third path here which the author ignores, but is already well underway both online and throughout the rest of the world - an increased emphasis on non-degreed training programs. Yes, the "for-profit" education model is rife with its own problems, but for much of the world, many don't have the option to attend a 4 year degree school and beyond. For those who don't (or increasingly, won't due to rising costs and lower advantages) the option to get skill specific training for their job or specific interests is becoming increasingly attractive. 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.

Tycho 13y ago

Since 2006, the gap between what the median college graduate earned compared with the median high-school graduate has narrowed by $1,387 for men over 25 working full time, a 5% fall. Women in the same category have fared worse, losing 7% of their income advantage ($1,496). 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?

muzz 13y ago
Even if not, the decrease in earnings per year of $1,387 is a 5% drop, that would indicate that the median college graduate earned $27,740 more than the median high-school graduate PER YEAR. 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.

rmcfeeley 13y ago

Interesting that few of the comments here address the question: "What is the true goal of higher education?" 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.

skylan_q 13y ago
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?
- ido 13y ago
  Buildings are often payed for by donations, and they can't use the donations to pay for the basic upkeep.

incision 13y ago

As someone who dropped out of high school and took a gradual, but relatively direct route to pretty well-paid work my opinion on College has changed quite a bit over the years. 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 [0] providing an outlook far less dreary than this piece. 0: http://freakonomics.com/2012/07/30/freakonomics-goes-to-college-part-1-a-new-freakonomics-radio-podcast/ http://freakonomics.com/2012/07/30/freakonomics-goes-to-coll...

vorg 13y ago

The college/university industry is self-perpetuating, like many other industries. A typical example... 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.

aidenn0 13y ago

The bump in median annual wage is still greater than the average total debt per student. It still seems like a no-brainer financially.

deleted 13y ago

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