Recently people began talking about the college bubble. There are numerous media articles, online documentaries, and books on the subject. The gist of the argument is that US colleges are way too expensive, students are getting into horrendous debt, and the college bubble will eventually burst when the reality settles in just like the case of dot-com stocks in the early 2000s, As a lower middle-class parent, I have been spending tens of thousands of $$ for a son’s education at a marginally elite university. But I am not quite sure if this is a good deal for him, not to mention for my family. I am just one of the millions of ordinary parents who are doing what others are doing. What do you think of the debate on the college bubble? Will it really burst sooner or later?
By “burst”, do you mean colleges going out of business? Or do you mean large scale defaults on student loans?
People have been talking about the college bubble busting any time now since I was in high school… and I’m now in grad school. I’m becoming less and less convinced.
The can is getting kicked but eventually there will be no place to kick it. The payer of last resort is the public so it is more likely our children’s generation than ours that will both have the debt and be forced to pay the defaulted debts of others when can hits the dead end. I hope I’m wrong because this is true of of a myriad of obligations we have created for ourselves.
other than rich people whose kids can go to school just for the experience…you will see more career degrees and less of the basket weaving degrees. many schools will have to recalibrate what they offer and shed some departments that have very questionable value. elitist schools like the ivies will be able to continue with all those questionable departments/degrees. that is what I think will happen.
Colleges are doing a great job of drumming up increased interest from international applications.
Basket weaving degrees? Questionable departments/degrees? Really?
What does one do with a “grievance studies” degree?
Becomes a professional mourner?
That’s a new one by me, @GMTplus7. Where’s that offered?
@zobroward, have you looked at the distribution of majors at any flagship or regional public (the type that many/most college students actually go to) recently?
The distribution the majors is already heavily tilted towards the professional areas, with the “practical” majors (though it’s arguable how practical some of those business-lite majors are) typically numbering in the hundreds while you can count the number of Comp Lit majors with both hands.
Where’s the bubble? I haven’t seen proof it exists.
A majority of bachelor’s degrees granted these days are in overtly pre-professional majors. Beyond that, even many liberal arts majors are chosen for pre-professional reasons (e.g. applied math and statistics → actuarial and finance jobs, biology → pre-med, political science and English → pre-law, economics → business jobs).
However, the distribution of pre-professional versus liberal arts majors varies roughly with school selectivity. In general, the more selective the school, the more liberal arts majors predominate. Most pre-professional majors gain in popularity at the less selective schools. Engineering majors are unusual in that they tend to be more popular at more selective schools (presumably because those schools have more students who can handle the rigor of such majors), but may be absent or uncommon at some of the most selective schools.
Indeed, these choices of major may be rational choices by the students. At more selective schools, the students tend to be both academically stronger and from wealthier families, so that they are more likely to be able to find and adapt to a job despite a non-specific major, while having greater familial support for an extended job search that may be necessary with a non-specific major. Additionally, the most selective schools are targeted by well paying elitist employers. An average college student from a family without much extra money, attending a non-flagship state university or an undistinguished private school, needing some loans to pay for school, needs a job immediately at graduation, and just hopes that the job market associated with his/her major is still good at the time of graduation.
Isn’t the declared closure of Sweet Briar the leading edge of the bubble bursting?
The super prestige schools, however, will always have a waiting line, just like there will always be a waiting line for status handbags.
Is the problem that people can’t be honest with themselves about their suitability for certain careers? Everyone imagines themselves to be doctors and bankers when in reality they are nurses and insurance reps, or maybe x-ray techs and electricians?
Overpaying for a college education (with respect to a family’s finances) doesn’t make sense, whether there’s a bubble or not.
many folks joke about students graduating with degrees in sociology ,philosophy etc…going straight back to living in mommy and daddy’s basement and working as a “barrista” at Starbucks…it is very common.
if you get a BSN, degree in pharmacy , etc… you will be in a position to hit the ground running.
Yes. The bubble will burst. Harvard and Stanford and Amherst and Pomona will not go away. But many other schools will suffer as the cost of secondary education has been rising dramatically. Because the top 1%'s income has been going up perhaps faster, the high-end schools will stick around. Schools that don’t get a lot of serious full-pay folks may need to reorient to train people the workplace wants and cut costs to stay alive. The LACs will need to figure out how not to sniff too much at the word vocational and figure out how to have more linkage between liberal artsy critical thinking (really important) and how it relates to the world so that their alums can also walk into jobs with some more directly useful skills along with critical thinking and writing skills. I love what Minerva University is doing in this regard – they start with what makes for an effective citizen and person in the world and work backwards from that (http://www.theatlantic.com/features/archive/2014/08/the-future-of-college/375071/).
@zobroward, there will continue to be cobweb cycles in employment for nurses, pharmacy as well as various kinds of engineers (not enough engineers and pay is good, so lots of students enroll in engineering, four years later there is a glut on the market and pay is not so good, then students enroll in something else and four years later, there are not enough engineers, and so on). Nursing has had them. But, it is less subject to outsourcing than engineering.
@JustOneDad you are correct, but I think it goes a step further - in the past 30 years, college enrollment has doubled in the US, during the greatest period of corporate efficiency in history. I would argue that the problem is that today’s world doesn’t need as many college graduates as we produce. Not only are kids being pushed towards goals and careers that are beyond their capabilities, but there are kids being pushed to get a four year degree, when maybe they just need a two-year degree or a high school diploma to reach their potential.
Maybe it’s just where I live, but I see no kids being pushed towards a trade anymore. Who is going to fix all of our stuff in the future? Is it such an ignoble profession? My dad’s tree guy has 5 rental properties debt free, I would be considered the top 1.5% or so, I have none. A union electrician makes $35/hr, or $70K/yr, and pays into a pension (what is that??). That’s after a several year apprenticeship making $20-25/hr - yes, making money while learning, not dropping $250K on a degree (or even $80K at a state school). My handyman charges $70/hr for his time.
I believe that the idea of “college” has been over marketed as a panacea for careers and life, when in reality, there are those who would be better served taking other paths. When you pair this with the astronomically rising cost of college tuition, there will not only be more Sweet Briars, but also significant education loan defaults in the future. By no means am I talking about the end or downfall of higher education as some will probably imply, it’s more that there will be a culling of the herd - the number of students in college have doubled over the last 30 years - that is a lot of kids chasing the dream when there are a lot fewer middle management positions out there.
I think we’ll be seeing lots of mergers and closures over the next few years. Upper middle class people, who used to pay what they could and borrow the rest, are now very often following the money. We’re already seeing state flagships becoming much more competitive. Even state subsidized Temple - which for years had essentially an open admissions policy - is now getting competitive. I know many local kids who are going to Temple primarily because they know they can graduate debt free. And as states cut back their aid and schools raise their tuitions in response, the state schools are getting filled with more and more upper middle class and even rich kids whose families see the relatively high tuition as a bargain.
I predict that we’ll start seeing alumni donations to state schools rise in the not so distant future as all those decently connected upper middle class and rich kids start their adult lives. I also think schools like Harvard, etc. will go to a tuition free model and begin relying solely on donations and room and board fees.
Not if, but when. Check out this article from Bloomberg yesterday:
“Nice Ivy League degree. Now if you want a job, go to coding school”
It’s been reported that over 50% of recent college grads are either unemployed or underemployed. We urgently need to make the last 2 years of high school free vocational training for those without the interest or aptitude for college. Teach these kids some practical job skills such as basic coding, office management, healthcare assistance, plumbing, electrician, auto mechanics, machine operation etc. so they can graduate high school with some practical skills.
For those who argue that college is a place to make good connections for future career, even 2 out of 3 Harvard students graduate without a job offer (read: The New College Reality). Meanwhile, foreign students who focused heavily on math and science in high school instead of sports and volunteering like our HS students end up going to our state schools for STEM majors and taking all the high paying jobs after graduation, while our “well rounded” grads with “critical thinking skills” are pouring lattes, folding t-shirts, answering phones, working at the health club or unemployed, with a mountain of debt. With the world’s labor supply at their finger tips, companies are no longer willing to train. Entry level jobs that used to hire 'blank slates" like Lib Art majors are increasingly being automated or offshored.
For those who argue that college is not for job preparation but to learn “critical thinking skills”, read the book “Academically adrift”. A third to a half of college students graduate without any significant gain in critical thinking skills, or any other skills (reading, writing, arithmetic). Not only that, but thanks to MOOCs, the internet and the public library, anyone who wants to learn in-depth about any subject today has a multitude of free resources easily available at their finger tips. You don’t need to go to college to learn all you want to learn about Sociology, Athropology etc.
I look forward to the day MOOCs begin granting meaningful credentials based on proctored exams, and employers begin to accept them in lieu of college diplomas. More brick-and-mortar colleges will go out of business. As it is many are already struggling financially, and relying heavily on international students to help foot the bill. More need to go out of business. The only thing anyone will miss out on is 4 years of (very expensive) partying.