8 Reasons College Tuition Is the Next Bubble to Burst

June 8, 2010 Money, Politics
By

Tuition has been increasing at such an alarming rate that some say we’re witnessing yet another bubble in America — this time not in the stock market or in housing, but in college tuition.

Stephen Burd, of the Education Policy Program at the New America Foundation, explains in this interview how federal student loans became non dischargeable in bankruptcy in 1998, and then private loans became non dischargeable as well in 2005.  Taken together, these laws mean that students who are overpaying for degrees now with borrowed money will suffer the consequences for life.

Here are 8 reasons to believe we’re in the middle of a college tuition bubble (that’s about to burst).

1) Tuition is, and has been, increasing at double triple the rate of inflation

On average, college tuition increases at around 8 percent per year, which means the cost of college doubles every nine years.  Because colleges know that students will simply borrow more money to cover tuition increases, colleges have been relying on steady tuition hikes to solve all of their money problems.  If this continues a college degree will soon cost as much as a house.

2) Students are borrowing more than ever to pay for college

The number of college students graduating with over $25,000 in student loan debt has tripled in the past decade alone.  Today, 66% of students borrow to pay for college, taking on an average of $23,165 in debt.  Twelve years ago, 58% borrowed to pay for college, taking on only $13,172 in debt.

3) For profit colleges are paying homeless people to take out federal loans to enroll

Because student loans are so easy to acquire, enterprising colleges are paying homeless people to enroll.  The math makes sense when you think about it: if paying someone a $2,000 “stipend” gets the college $20,000/year in tuition courtesy of the federal government, that’s money well spent.  Unfortunately, many people who accept such “stipend” offers never graduate, become overwhelmed with student debt, and destroy their already bad financial records.

4) Colleges are on a non-teaching staff hiring spree that far outpaces enrollment

Why hire a full-time professor when you can hire an “environmental sustainability officer”?  According to the a New York Times article, over the past two decades colleges have doubled their non-teaching staff, while enrollment has only increased by 40%.  Often times staff members have exotic duties like monitoring environmental sustainability, or their focus is on student “lifestyle.”  Economist Daniel Bennett, who conducted this study, says “Universities and colleges are catering more to students, trying to make college a lifestyle, not just people getting an education. There’s more social programs, more athletics, more trainers, more sustainable environmental programs.”  Of course, much this exotic hiring and lifestyle catering is made possible by student loan money.

5) For profit reliance on federal loans has reached an all time high

According to Bloomberg, publicly traded higher education companies derive three-fourths of their revenue from federal funds, up from just 48 percent in 2001 and approaching the 90 percent limit set by federal law.  The fact that colleges are almost completely relying on borrowed money to finance tuition, up to the legal limit, means we’ve almost hit the breaking point.  If not for the easy student loan money sloshing around, many colleges would go belly up tomorrow.

6) Schools are spending on luxurious amenities to lure in more students

Flush with student loan money and wanting to attract even more, colleges are increasingly spending on luxury dorms, gyms, swimming pools and other amenities.

Freakonomics author Stephen Dubner noted that when he went back to his college, a chancellor told him that “[the gym] was a top priority because parents and prospective students increasingly think of themselves as customers, shopping for the most amenities for the best price, and the colleges that didn’t come to grips with this would soon see their customers going elsewhere.”  But gyms are just the tip of the iceberg.  At High Point University in North Carolina, students are treated to valet parking, live music in the cafeteria and Starbucks gift cards on their birthdays.

7) College president salaries are sky high, even in a historical economic downturn

USA Today reported that 23 Private College Presidents Made More Than $1 Million in 2008, while 110 made more than $500,000.  In case you were wondering, this is not the norm — as recently as 2002, there were no million-dollar presidents.  And it’s no wonder the college administrator gravy train continues despite the down economy.  After all, when your “customers” have easy access to credit and pay you with money they don’t have, the economy doesn’t really matter, does it?

8) The student loan problem cuts across all schools, for profit and nonprofit

Often times the discussion about high tuition leads to a flogging of for profit colleges.  And while for profit colleges are often the worst about shamelessly fattening themselves at the trough of student loans, it’s not a for profit vs. non profit issue. In fact, for profit colleges account for less than half of student loan defaults.  Nor is the issue one of “good colleges” vs. “bad colleges.”  As this New York Times article illustrates, even students at prestigious non-profit schools like NYU can find themselves in financially ruinous circumstances because of their student loans.

Whose fault is this?

The federal government for making student loans non dischargeable in bankruptcy and loosening lending standards? State governments for refusing to directly fund higher education?  Schools for taking advantage of students and relying too much on tuition increases? Lenders for handing out student loans like candy? Students for borrowing money like there’s no tomorrow?

One thing is for sure, things cannot continue as they are, regardless of how we got to this point.  The housing bubble gave America a hard lesson in what happens when loose credit leads to unsustainable prices.  But unlike the housing bubble, in which foreclosure and bankruptcy allowed people to have a fresh start, the college tuition bubble will haunt young people for life unless bankruptcy laws change.

Avvo

About





Get more articles like this by email!



  • http://www.arizonabankruptcyblog.info/ Joseph C. McDaniel

    This is a great article.

    What it omits is this: the debt associated with student loans is treated like housing debt, or other bundles of debt instruments.

    When there are mass defaults on student loans, which is coming, as clearly as can be, the results will be similar to the effects of defaults on mortgages, although smaller.

    And ultimately the winners will be students who went to cheaper schools, or worked their way through, and schools smart enough to convert entirely to online classes, and pass the savings on to their students.

    Putting it another way, in five years, online colleges will be much cheaper, much bigger, and much more successful than brick and mortar colleges; it’s the old Amazon vs. the Brick and Mortar Bookstore issue.

    • Nick

      I tend to agree that the future is online (Seattle actually has online public high schools), but the problem is there’s still a stigma attached to “online degrees” at the college level.

      Unless established, reputable colleges start to heavily convert to an online model, the stigma attached to online degrees will only get worse.

      • Kelly

        ITA. There is definitely a stigma attached because most of the online colleges are still diploma mills. The federal gov’t. should do a better job shutting down some of the more egregious offenders. (Or at the very least shouldn’t allow student loans to go to these “colleges”).

      • http://www.CollegeRealityCheck.com ProfessorDad

        Today, many online degree programs are extensions of fully accredited public and private colleges. So, I don’t think there is a reasonable difference between the two formats.

        Generally, what counts is the completed degree, the GPA, some specified coursework (maybe,) an internship/apprenticeship, memberships with professional organizations, and good presentation and attitude.

        Can you cite a practical instance of ‘stigma’ of online degrees? Business or Post-graduate?

        The BA and most BS degrees are not much more than a short-term “job hunting license.”

        ProfessorDad

        • john in brooklyn

          Look on any major job website – monster.com, careerbuilder.com – and you will find plenty of HR postings where they specifically say they are not looking for candidates with degrees from the big online schools such as the University of Phoenix. And you only need to spend a little time in corporate America to know that these schools do have a negative stigma. Plus they are crazy expensive.

          • Reggie

            John;

            If this is the case for HR postings, then why does corporate America broadly support these same online college programs through their own HR departments?

            I’m actively looking at job websites everyday – now and for the last year. I want better and bigger, so I’m always looking for education and skills opportunity.

            I haven’t seen one HR posting “where they specifically say they are not looking for candidates with degrees from the big online schools such as the University of Phoenix.” Not one listing.

            R

    • http://www.therealrevo.com Locke n Load

      Thats a good point Joe about the bundling of these loans. I suspect it WILL come up not far into the future but I haven’t seen figures on the total debt carried by Sallie or the total amount bundled and traunched. That said I would disagree with your assumption at the end. If online colleges are to get cheaper as they grow, and I’ll grant you they WILL grow inpopularity, they will have to be exempt from govt tuition aid. If they are able to get their students into Sallie Mae loans then they won’t be bound, any more than brick and mortar, to the rules of a free market. the fundamental problem here is government interferece in the market. They remove the risk from one party and transfer it completely and irrevocably to the student. In effect, big government is taking the place of Visa only THEY get to make the lending rules. Nothing stops the government from playing the same game with Online schools and even now you can see it happening. have a look at the tuition for Phoenix U Online. I think that makes my point. The online schools will simply pick up the slack and charge more because the govt guarantees it.

      • Education123

        Locke n Load

        You bring up some interesting points however it’s the larger system which is the problem within higher education. Nothing is going to change within higher education because the government largely sets the rules with respects to loans but those are really the only rules set by the government. For example once a school is accredited it typically opens the doors for gov’t student aid. However the government does not examine or really even review the college accreditation bodies. So currently the gov’t cannot really say they don’t allow their funds to be used at one institution over another, especially with respects to say for-profit schools because some of the largest for-profits ( university of Phoenix Devry etc) have the same accreditation as traditional colleges ( Penn State University, University of Texas, etc). Although yes there are smaller schools that don’t have similar accreditation the bulk of these crazy loans are being given to students at Large for profits that boast University enrollments of over 400,000 students.

        With respects to the tuition increase discussion schools everywhere are increasing tuition. Public, private, for-profit, traditional, and online have all been increasing their tuition.

    • Sceth

      I go to a Stanford entirely on grant money, and I think that in many areas online universities will remain permanently incredulous.
      Science programs will be fairly pointless without labs;
      Education programs, without practica;
      Performing Arts, without studios;
      Engineering, without metalshops etc;
      Mathematics, without intimacy;

      You cannot build an economy on degrees in Marketing and English Lit. And even my philosophy program was residential, so I could live with people who read common material and discuss literature over breakfast, lunch and dinner.

      Communications, by the way, is an engineering-intensive major here. I think that the models in the elite schools are likely to stand.

      • Sceth

        Correction: “I go to Stanford entirely…”

    • Norberto

      It would seem that online degrees might be a solution, but the ones I have come across charge more per credit hour than the local state university, never mind community college.

  • Pingback: 8 Reasons College Tuition Is the Next Bubble to Burst « Economics Info

  • http://www.SchoolofCoachingMastery.com Julia Stewart

    The school loan scandal goes even deeper than this. A credit counselor at a reputable agency once told me that banks routinely engage in a scam that pushes students who borrow government guaranteed loans into default.

    Here’s how it goes: The bank ‘forgets’ to bill the student for their first three loan payments and the naive student is relieved, because in many cases they are financially strapped and have difficulty making the payments, anyway. After 90 days, the bank declares the loan ‘defaulted’ and demand payment for the full amount. In many cases the student can’t come up with the full amount, so the bank turns to the Federal Government, which guaranteed the loan.

    The government pays the loan, including interest, in full. Thus the bank makes their profit in less than one year, rather than over ten years and they are free to loan the money to more unsuspecting students. Meanwhile, the students’ credit is ruined and the tax payer foots the bill.

    • http://www.CollegeRealityCheck.com ProfessorDad

      Julia Stewart;

      If possible, I’d like to interview that credit counselor, in confidence. Have your contact send me a note at my website contact page.

      I’m writing about this very topic, at the moment.

      Thanks for your help,

      ProfessorDad

      PS. Any others that have relevant information, I would appreciate a word with you as well.

      • Nadine

        If collectively every student in America would just not attend college for one year together then the colleges would be forced to drop rates. Imagine all of the colleges having no income for an entire year….why are we not trying to drive the prices down???

  • Don in AZ

    Online might be considered “the future,” but college is about far more than merely acquiring knowledge. It’s about maturing, flying on their own, and coming to understand the realities of the world.

    The problem is, colleges today increasingly shield the students from all that. It’s all about collecting their money, filling their minds with post-modern mush, and pushing them out the doors.

    I hope the bubble does burst. I hope many a radical humanities professor loses his or her job. Ditto all the “studies” disciplines. Ditto all the nonsense areas nobody is willing to pay a plug nickel for in terms of employment.

    We need to get back to a strong connection between choices and consequences. The breakage of that link is the root of all our problems.

    • http://www.csdeyiz.biz/forum/member.php?u=12656 Lenore Barbaglia

      After representation whatsoever of your blogposts I moldiness say i pioneer this particularised one to generally be top nick. I mortal a weblog also and necessary to repost a few shear of your articles on my own diary tract. Should it be alright if I use this as daylong I private reference your web diary or create a incoming linkage to your article I procured the snipping from? If not I make and could not do it without having your tolerance . I hump collection starred this article to cheep and zynga calculate motivated for publication. Anyway revalue it either way!

  • Rachel

    I teach at college and find it hilarious that people are looking forward to this burst, especially educators. Don’t they realize it will be their jobs on the line?

    Also, a college education will still be the filter for jobs. I find it naive and elitist that college educators – the ones who did get the full time and tenure in college – claim that “there are many more jobs out there that do not require a college education.” True, but most of those have poor pay (remember wages have been stagnant since the 70′s) or require some sort of post secondary education and training. If they mean ivy league bubble burst it could possibly happen. But as a community college professor who worked in the real world before going for a masters in liberal arts, I can vouch that those great, non-college jobs are not there. And training and certification(in such jobs like plumbing, welding, etc) cost money. And many white collar jobs are being outsourced (H1b visas, anyone?) or technology has taken over.

    If anything, there will be what always happens when college enrollment goes down, attrition of teachers and some services.

    • Themike

      Maybe those educators you find so hilarious care more about their students and the education system in general than stuffing their pockets?

      I think your reasoning is misguided. While it may be true that the job market for non college grads is bleak, it doesn’t follow that if everyone were a college grad, then everyone would have better job prospects.

      The economy can only use so many white collar workers, and that’s not going to change no matter how many colleges pop up or students are shoved through their doors. Put another way, employers aren’t wanting to hire more college grads, except that can’t because there’s a shortage. Quite the opposite, they have too many college grads applying for too few positions.

      What will happen if people follow your reasoning, and the college industrial complex expands more than it already has, is a bunch of students will be unpleasantly surprised to find out their degree doesn’t mean much to employers and they’ve been saddled with crippling debt for life.

      Perhaps we’d all be better off with fewer liberal arts professors.

      • Ed Luddley

        How nonsensical! What we need more than ever is MORE liberal arts teachers–people who can engage students in person and get them to care about examining complexity and understanding systems. All of the claptrap over the past 10 or 15 years about preparing people for “jobs! jobs! jobs!” has done nothing to help our country or our civilization. The coming online education bubble is a clear example of how poorly prepared we as a nation have become to analyze, criticize, and discard shoddy systems like the entire for-profit, online ed system as outlined in Frontline’s expose, College Inc.

        • Themike

          Ed,

          “Examining complexity and understanding systems” is certainly valuable, but how valuable? Is it worth 20K? 50K? 100K? 300K?

          You poo poo the idea of analyzing college from a financial ROI perspective, but doesn’t the high cost of college force a practical person to do so?

          And if a person is not able to feed himself or his family, what good is the ability to “examine complexity and understand systems”?

          People need to be economically productive first and foremost, and then once that is taken care of they can go further up the hierarchy of needs (where liberal arts professors live). Your post smacks of someone who lives in la la land, someone who scoffs at petty minutia like earning a living.

          Besides, why should critical thought and analysis be exclusively taught in college? At an absurd cost, no less? Couldn’t these skills be taught in the four years a person spends in high school?

          • Matt

            I agree that it certainly does not follow that if everyone were a college grad, everyone would have better job prospects. But unfortunately, no one claimed that they would.

            There is an unspoken assumption here that there are enough jobs for everyone. As we’re finding out now, there are not. “People need to be economically productive first and foremost” – agreed, but sometimes it’s not quite that easy.

            Yes, brick-and-mortar colleges are too expensive, and because it’s so lucrative, colleges drive up their prices in order to compete amenity-wise. There is, however, something to be said for the experience and the sheer amount of information that can be learned there as opposed to online (where you will likely be distracted by the life you live outside of your cheap education).

            Rosetta Stone vs. learning from a native speaker who legitimately tests you and watches you an hour a day. Accounting checked and sent through the internet rather than put up on the board and done as a group. Group projects done without a physical group. And if you’re working while you take classes, there will be complaints of “this is too much work after an 8-hour day” and a subsequent lowering of standards. Some of us had to work our tails off in college to pass and are better for it.

            Lower the prices, stop with the silly amenities and bring the college experience back to what it should be.

        • Linda in Seattle

          Yes, thank you!!!

  • Army of Davids

    The Administration is throwing record amounts of Pell Grant and student loan money at the universities this fall as well as community colleges and historically black universities.

    The goal I believe is to keep more of the under 25 crowd enrolled in school and off the jobs numbers.

    Smart politics. Wise policy?

  • Tex Taylor

    Good. Higher Education deserves to have its bubble burst. From Leftist Indoctrination of Little Eichmanns, to poorly trained college graduates, to outrageous fees and services, to feckless research grants at tax payer’s expense, let it burn.

    With the exception of few degrees, I can’t off hand think of anything more overrated than a college campus – except the short term fun.

    Really, how many more liberal arts degreed majors do we need. Psychologists analyzing psychologists.

    • Ed Doerr

      FYI…Eichmann wasn’t a lefty, he was one of your guys.

      • Windy Wilson

        Actually, Eichmann the Nazi was a national socialist ( the party’s initials stood for National Socialist German Workers’ Party. In German those initials were NSDAP, which you saw on official papers. The spoken contraction was Nazi, much like the communist East German Stasi, for Staats Sicherheit, or State Security.) As a National Socialist, Eichman believed in government doing all those same socialist things as the international socialists, except the ownership of stuff remained with the people. Heavy regulation made the question of ownership, the point of contention between the capitalists and the Internationals Socialists or Communists, irrelevant.

        • Michael Rosenberg

          Seriously, you don’t even know what socialism or communism consist of. I find it most amusing to see you associate Nazism with socialists. Nazis were right wing extremists. You know that. Nazism appears all the time in right wing propaganda. Communism and Nazism are enemies of each other. I don’t care for either. I do know the stupid corporate agenda running America is proceeding exactly as it should, and when it’s done, there will be nothing left. That should come as no surprise. Did you think free enterprise was good for people? How foolish. Free enterprise is good for making money, the end result is a monopoly and a market controlled artificially.

  • q12345q6789

    I agree, the stigma of an online degree makes it inherently worth less currently; but the kicker is that online degrees are not currently that much cheaper than an in-state, state college tuition (and more than junior college) at a lot of schools and you don’t get any of the ancillary benefits of face to face social feedback. Does anyone think that in the upcoming years after this presumed implosion there will be massive student loan debt forgiveness/re-negotiations to recoup and sustain any semblance of the current system?

  • Pingback: cant pay off flight school debt - Page 5 - Airline Pilot Central Forums

  • Pingback: The Razor » Blog Archive » If You Want to a Degree in Religious and Women’s Studies…

  • TB

    It’s pretty simple. You subsidize something, and the prices go up. Keep pumping government money into a system, and it will expand to absorb that amount and more.

    It’s not just colleges, either.

  • edh

    I do think colleges have been enriching themselves at the trough of cheap money, and have been overcharging student. Stipulated.

    Yet, I’m not sure what to think about $25k, $50k, $75k or even $100k being characterized as a ruinous debt burden for students to pay over a lifetime.

    At 5%, that’s $100 to $400 a month to cover the interest. Not fun, but hardly what I’d call impossible to handle.

    Look at what some many of these kids spend on weekends “partying.”

    Am I wrong here?

    • Dave893

      Is it going to kill a young person? No, if they’re lucky enough to get a “real” job (which is far from guaranteed), but student loan payments in effect depress real wages, which have already been stagnant for decades in the face of ballooning cost like housing.

      This is going to leave young people unable to have families, buy homes, etc. until much later in life. Basically it’s going to extend dependency on parents and make America look more like Europe where kids live with their parents into their 30′s and opt to not have kids. This is especially the case when a college degree isn’t enough to get a job, and people have to spend even more time is school for advanced degrees (and incur even more debt).

      Just another reason why young people are going to have it much worse than previous generations who could go to school affordably (not even necessarily college), work hard, and lead a nice middle class life.

    • AE

      As for the debt being burdensome, I think it’s a question of the amount. Also, you have to have student loans repaid by a specific time.

      I agree that the debt may not be outrageous when you look at it in relation to what young adults spend on discretionary items. And how much money the student (or his or her parents) spent to sustain a partying lifestyle for four years…or longer. (A couple of college classmates come to mind.)

      Schools’ financial aid offices bear some responsibility in this fiasco as well. In the case of the NYU student in the New York Times article, they should’ve told her she didn’t belong there after exceeding $60,000 in loans. Again, there’s plenty of blame to go around.

      Schools can’t keep building luxury dorms and fitness centers on borrowed money.

      • http://www.cuocsongtotdep.vn/vforumlg/member.php?u=22136 Wyatt Neumaier

        I’m delighted that I’ve observed this weblog. Lastly anything not a crap, which we go through extremely frequently. The website is lovingly serviced and stored up to date. So it need to be, thanks for sharing this with us.

  • Pingback: Spencer, Ia Tea Party Patriots Blog » Our friend Amity Shlaes looks at the Glenn Beck effect

  • Pingback: The next generation of home buyers has too much college debt — Arizona Real Estate Notebook

  • Rachel

    come on suckers, did you read this article to the end? Consider the source! This article isn’t about stopping the flow of your hard earned tax dollars from gushing like oil from the gulf – it’s about keeping it going. It’s not about fixing inflated tuition costs, but rather about changing bankruptcy laws: “But unlike the housing bubble, in which foreclosure and bankruptcy allowed people to have a fresh start, the college tuition bubble will haunt young people for life unless bankruptcy laws change.”

    Get that? Unless the bankruptcy laws change. Hey kiddies, don’t complain about those overpriced presidents and homeless students sucking your future earned dollars. You just need to lobby to get the bankruptcy laws changed and all will be well.

  • Walt

    I teach at a for profit school and we a sucking up the loan money as fast as we can. We don’t sign up phantom students. We do everything by the rules, which are imposed on us by the Department of Education, the state, the college accreditation organization, and now, Sarbanes-Oxley. A great deal of our manpower is dedicated to compliance, which includes job placement standards after graduation and monitoring and educating our students so as to avoid loan default after graduation. And I repeat, we are sucking up loan money as fast as we can.

    To continue the suckage, we must continue spending extravagant amounts on compliance issues well beyond the boundaries of classroom instruction. And we generate information and routinely hit target numbers far beond what is expected of the traditional not for profit schools. Our instructional staff is just as qualified — I have a doctorate. If there is an instructional staff difference, it is that for profit schools expect more instructional hours from instructors. We don’t get to spend time publishing non-sensical academic articles. In that regard, we are more efficient than the not for profit schools.

    Is it worth it? Well, our students mostly love us after graduation, and if they are having trouble paying their loan, well, their loan is only about half of what it could be, and their chances of employment might be greater than those of graduates in traditional liberal arts colleges — women’s studies, for example.

    Can we deliver the same services for less? Well, our students may take a combination of online and on-site classes. They pay a little more for the online classes — it isn’t cheaper for the student to take online classes. Our online classes use the same books and the same syllabi as the onsite classes. And it isn’t actually that much cheaper, if at all, to provide online education when one considers that the online courses require additional investments in hardware for computers, networking, and servers, together with the tech people to support them 24/7 for national coverage. It wouldn’t surprise me to find that online education might actually be more expensive to provide. Provided one is actually providing a geniune educational experience.

    Can an education be provided for less? Sure, but probably not by a hell of a lot, unless we dump the old guild model of higher education where the education is provided by a professoriate bound together in dark-agel collegiality.

    Is it a student loan bubble? Maybe not. I know that our enrollment is a fine barometer of the job market. When jobs become scarce and hard to get or keep, our enrollment rises drastically and we suck up the student loan money. When employment becomes more available, our enrollment shrinks, as does our revenue, and we have to lose excess staff. So is the bubble about to burst? That depends on whether all the jobs that have been shed in the last three years are going to come back or not. And that depends almost directly on what our government is going to do or quit doing. Employers are not hiring because they don’t have the business, and also they aren’t hiring because they don’t know if they can stay in business themselves. And they don’t know if they can stay in business because they don’t know what the “rules” are going to be in both the near and distant future.

    Our students, and I suspect all students, are not so much blind consumers of freely available loan money as they are desperately grasping at a promise of opportunity. They know very well that they are going to have to repay a big loan, and they kknow very well that the loan will not be dischargeable in bankruptcy. But they feel they have to do something to increase their chances, even if only a little bit, at developing employment chances for themselves. These aren’t children making childish decisions. Many student loan borrowers are married, with children and one spouse works while the other goes to school. The fact that the loans are so big is both a measure of how desperate the job market is at present, but it is also an indicator that students are attempting to affect their future positively, and believe that it can be done.

    In other words, consider what it means of all of a sudden the demand for student loan money drops. That’s the time to check your ammunition inventory.

  • Jake Topler

    Young Americans should study in other countries where the above bubble dynamic does not apply. You’ll get at least another language extra out of the deal and you won’t owe much at graduation (except maybe $20K to your parents).

    Also, when a government throws money at women 18-24 (their prime reproductive years), they behave less friendly to men, especially older guys with jobs. Instead, you get the government paying 18 year old coeds to take “womyn’s studies” courses and…you know the rest of the story.

  • Mark Facloff

    I taught at the University of Oregon for ten years–from 1971 to 1981. During that time my real income as a professor dropped by about 30 percent. The entire time I was there the only new buildings put up on campus were administration buildings, and the only decent salaries were those paid by the university went to administrators (like the “affirmative action coordinator”). I doubt the situation has changed since I gave up academic life–with no regrets, I must say.

  • Pingback: College tuition bubble followup « Da Mook

  • Sarge

    Well, if you go bankrupt and your home loan is discharged – - you have to GIVE THE HOUSE BACK.

    You want student loans to be dischargeable, using home loans as your model logic? Fine… but the deadbeat student should have to relinquish the sheepskin. Permanently. make it a federal felony to claim a degree to which one is not entitled, as well.

    Why should a defaulter be allowed to keep something of value that they did not pay for?

    Oh, you say “That’s different?”

    Well, that’s why studnet loans are not dischargeable – - because the property of value they were spent on is not recoverable.

    Frankly, anyone stupid enough to take on massive debt they cannot hope to pay back within the term of the loan shouldn’t be allowed to graduate from college anyway.

    • Andrew

      How do I give back my degree? I’ll be the first one to sign up for this program!!!

  • Themike

    So according to your brilliant logic medical debt should be non dischargeable in bankruptcy as well because you can’t give back a surgery?

  • Pingback: Adventure to the end of the galaxy … » I been sayin’ it!

  • Pingback: 8 Reasons College Tuition Is Next Bubble to Burst | solarpoweredgarden-lights.com

  • http://www.speedyprep.com Jason

    Reading this article makes me realize how fortunate I am to be graduating this year with $0 in student loans. This hasn’t been easy, because my parents were unable to assist me with tuition, so it has been up to me to work and earn my degree.

    The only way this ended up being possible for me was to pursue a non-traditional route. I extensively used CLEP testing and other forms of credit-by-exam, and for those classes I couldn’t study for and test on my own, I did online classes.

    I’m graduating from Thomas Edison State College in NJ, and my entire degree has cost less than what most people have in college debt.

    If more people would take the approach I did and take some CLEP exams, they would have less student debt.

  • Alex

    I am happy that more and more people have started to see beyond the smokescreen.

    Two years ago, I wrote a similar article and all I got was brickbats.

    In fact one irate mother snapped back whether I want parents to take over the burden of fees from the government.

    She didn’t want to listen to the fact that the loan amount was not consistent with the service our children got in return.

    Any way glad that soon this fake “non-profit” racketeering will be exposed.

  • Pingback: The Next Bubble – College Tuition « Realstreet Blog

  • Pingback: How to cut tuition by 20% « Don Surber

  • Pingback: The Higher Education Bubble « Tai-Chi Policy

  • Pingback: Distortions in the higher education market? « Renovo: The Catholic Higher Education Blog

  • Intelligencer

    I work in the industry… and I see problems with any government subsidy because it does change the market landscape.

    I can buy a Timex watch that will last for years, if not my whole life for about $20. I can also buy a watch with a polished movement, gold case, emerald crystal… and a name like Vacharon or Patek Phillipe or Rolex… for $100K. There are people making a living selling $100K watches when a functional watch can be had for $20.

    A liberal arts degree is the same. Anyone can get a degree to hang on your wall for a couple thousand dollars if you go through community colleges and state schools… but students keep choosing luxury schools… starting at $40K to $50K a year. For some of those students it’s no big deal. Daddy can buy it without thinking twice… and they drive there in a $60K car and have a $20K wardrobe and take Christmas in Aspen and Spring Break in Jamaica… and life is a dream.

    It’s the aspirational spenders at those places that are a concern. The students who can’t quite afford it but are willing to stretch and take on debt. In economic terms we say they are leveraging future earnings and most of the time this is still a viable model that over the course of a lifetime comes back into the black for the student and his or her spouse and children. A student should be making that sort of decision with eyes wide open, though.

  • JC

    I visited a college with my son recently and all the admission guy wanted to show us and talk about were the great ‘amenities, the pool that looked like it belonged at a resort in Cancun, the health club that had literally hundreds of pieces of equipment with 6 full size b-ball courts, the brand new doorms, brand new football statdium, open air mall with starbucks, pizza places, etc, etc, etc. I went to college on the GI bill, worked and paid my own way, and the only ‘amenity’ people bragged about was the new library they had built a couple years before. Times they are a’changing. The good news is that he’s way smarter than me and has a scholarship.

  • Pingback: Surrounded by Bursting Bubbles in the Land of Opportunity

  • Randall

    I teach at a community college and my husband teaches at a private university. Our salaries have not kept up with inflation.
    Far worse, however, is the plight of the adjunct instructors who comprise almost 70 per cent of our faculty. Meanwhile the percentage of administrators and staffers constantly increases.
    These priorities are a disgrace.

    When advising students I warn them to minimize debt even if holding an extra job prolongs the time spent in school.

  • uh huh….

    So the problem is that bum students can’t discharge their loans in bankruptcy-? The article made a lot of sense until that idiotic conclusion.

    Looks like they took away the plan of action for fools who major in frisbee playing and the history of consciousness (to graduate & default). Well boo-hoo f-ing hoo. I have no sympathy for retards who plan bankruptcy in advance.

    You might want to look at the very existence of federal student loans in the first place. Without the crack cocaine of guaranteed student loans, there would be no such problem as demand would drop for worthless degrees, be they from profit or non profit schools. Blame everyone else all you want, but when the loans were cheap and your congressman told you he would “make college more affordable” you cheered when the student loan program grew even more. Now it’s time to pay the piper, bitches.

    See you in China – where you might be lucky enough to shine my shoes!

  • Jill Andrews

    ….are we wasting time sending so many to college? The jobs have disappeared to countries where the work ethic is stronger and the paychecks lower and without all the so-called safety insurances (retirement, healthcare, recreation, etc.,) attached here in the states.

    Personally I think if you have college age sons and daughters–teach them a trade. Trade schools should be a large part of any high-school system. Right now, the No-Win Wars keep going because young folks find there are no jobs available. Yeah–Our kids are fodder for the “finer” folks running these ridiculous systems.

  • john in brooklyn

    I think another problem are these “national rankings” of schools that make high schoolers think that a private $50,000 year a school is so much better than a $10,000 a year state school. There’s also such a distorted emphasis on the prestige of a school even though most of us over the age of 25 learn that once you’re in the workplace it rarely matters where you went to school. Unless you’re trying to get a job in the Obama administration or on the Supreme Court, an expensive private school education isn’t a necessary requirement.

    • Education123

      Agreed

      You make such a good point about how in the “real world” or business world really The name if the school is “not that big of a deal”. In addition you bring up the other great point of the “national ranking” systems for colleges. These college guides are just great sales and advertising tools. Yes these guides contain great information, but agian there is no real scale to compare schools. Companies like the “Princeton Review” come up with all these scales that apparently give the school a score which measures the worthiness of the school. If anyone has some spare time you should research the schemes that schools are getting in trouble for in attempts to boots their scores given to them by ranking guides. At the institution where I earned my undergrad degree there was a big investigation by ( I think the Wall Street Journal or the New York Times) about how one of the factors that contributes to a schools score by these guide books, is the percentage of the schools alumni that donate money. Every freshmen entering the college is required to make a $150 deposit to attend school. If you leave the college before you graduate you loose this deposit, and if you graduate from the school you get it back after graduation. However what my college was doing was not refunding this deposit to graduates unless it was asked for. This deposit was then calculated as an alumni donation.In what my school called “an error” and issued a statement went unchecked and noticed for years. And in case you were wondering : yes it is a little small private college which charges yearly tuition in upwards of $40,000 annually. The type of school which these guide books are perfect for.

  • john in brooklyn

    I teach at a major university – both online and in the classroom. I much prefer in the classroom because you get the discussion back and forth. Teaching online is much more a one-way street. I also get the impression that schools are looking at online classes as huge money makers and that classroom quality isn’t as important as building out the classes and filling them up with students.

  • G. Wright

    Yeah, and….?
    The author titles this article: ”
    8 Reasons College Tuition Is the Next Bubble to Burst” yet fails to tell the reader what does it mean if this “bubble bursts?” What happens? Does tuition drop like home prices did when the real estate bubble burst?

    I read and read and yet nothing about this from the author as one would otherwise expect.
    Very disappointing.

  • RL

    The strategy here is to slowly, but SURELY, aim America towards a third world country, where only the rich and poor exist. Making higher education so expensive that only the rich can afford, will permanently eliminate the middle class. Intelligence will no longer prevail, only deep pockets. How pathetic.

  • Pingback: Is college tuition a bubble that’s about to burst? « Get Out of Bankruptcy Blog

  • http://www.mbaunderground.blogspot.com MBA Underground

    It’s a huge bubble. Anyone with a pulse can get a college degree or an MBA. It has become a joke.

    http://www.mbaunderground.blogspot.com

  • http://www.kellycanhelp.com/ Jeff Kelly

    A great step toward ending this bubble would be to change the bankruptcy laws and allow student loan debt to wiped out in bankruptcy. By making all student loans nondischargeable, we are creating a large class of economic slaves.

  • Pingback: c-love – Burn My Biscuits

  • http://na marc

    What is the percentage of grads actually finding what they want with their degree? I’ve a business school diploma which I never “needed”.
    How’s about the percentage of folks nearing fifty getting degrees? Any point in that (besides personal satisfaction; tho via main stream lies)?

  • Pingback: Politickles » Blog Archive » Is the Ed Bubble about to Burst?

  • Pingback: Worth Reading » The next bubble to burst

  • steve job

    one digital lecture can reach 2-4 billion people
    college gone by 2020 2030

  • Pingback: College is like a Frat Boy… | Rico Penguin

  • Pingback: College Tuition: The Next Speculative Bubble To Burst — 1389 Blog – Antijihadist Tech

  • Pingback: 5 Financial Benefits You Can Only Get By Having Kids | Naked Law by Avvo.com

  • News Flash

    Wow, I agree with most of the thought provoking posts, but I believe everyone is missing the great large picture. Here it is: The economy is in the dumps, so convince older adults to join in the fun of going to university. Meanwhile, back in realityville, the economies around the world are taking the same dump as America, why, the same reason, a fluffed market. Now does our Govt. care that everyone graduates, the answer, a Resounding No. Given the new Bankruptcy Laws anyone receiving student loan dollars owns the debt for life. Hello to a whole new Market of consumers, or should I say Students. Now the new buzz word is knowledge based economy,yeah knowledge in what, last I checked there are no real new technolgies unless you count how many attributes to a cell phone exists currently, and as for the knowledge angle, most students graduating have very little knowledge. Most universities have dumbed down programs just to get people out the door. So back to the new market place. Those that do graduate only a small percentage will find work in their chosen field while the rest filter out taking any job possible given their debt, or go to graduate school taking on more debt. So, let me break this down…go to college…take on debt for life….possibly find a job…or go to graduate school….if not graduate school…then your degree is on a retention time limit…which means…if you don’t secure a job in your chosen field within a specific time of retention employers will skip you to go fish from new graduates…more simply those that are stuck taking a job outside their field might as well chalk it up to contributing to saving the economy through the new model of….everyone go to university…Furhtermore..most of the youth don’t even know or inform themselves of the economy or their chosen profession. Practically every student asked where will you go, and how much will you make….ready…the same answer…I don’t know…and 60,000…Yeah, where the heck did the idea of informing the student go..Oh yeah, I forgot…don’t inform or give misleading information…and above all else don’t help a student be aware of how much they are spending…just spend…all jokes aside this and much more is occuring all over the United States. Currently, some employers who have cried fowl are saying, A, students are really, D, students, and how do they know, well get ready for this one, they are now giving aptitude tests…love that one. So, if trust is slipping away then the value of that degree disappears. Which leads into a great question if traditional universities are turning into diploma mills how does the Govt. rationalize having an abundance of graduates? It’s not about increasing the number of graduates ladies and Gents. It’s about convincing people to go into debt thinking it will pay off. The truth it won’t!! Once a person steps back into society and realizes how much debt they own plus interest with a horrible job market they really freak, and so they take a job to start paying off a debt that will accumalate faster than the wage they earn. The ultimate truth is our Govt. is using college as a release valve hoping to find an answer as to what will spur a new economy, or should I say new bubble…just look at the Irish…My suggestion stay away from university…take a job where you can…save money where you can…relax…take a breath…evaluate your options for what is the best direction…then if college is on the radar…plan out your finances…this goes for adults ‘n’ youth….don’t get caught up in taking on debt you cannot afford……don’t become a slave to student loan debt….

  • http://www.bestcataractsurgery.com eye cataract surgery video

    Wow?- that had been rather detailed, appreciate it.

  • Don Howard

    I hope all college administrators and staff with the exception of a very few dedicated professors starve in the streets.

  • phobelexx

    just dump the public school prison system

    See

    johntaylorgatto.com

    The Teenage Liberation Handbook

    sudval.org

    Unschooling

  • http://bnnook.ereaderjournal.com Stephen S

    I’m just hoping the bubble bursts by the time my daughter (currently age 14) enters college.

  • bookbabe

    These days, I discourage my students from going to graduate school. The law of diminishing returns definitely applies to education these days: Getting an advanced degree won’t necessarily yield a better-paying or more satisfying job.

    Just the other day, I left one former student of mine in tears. She has had her mind set on graduate school, but she’s not sure of what she wants to do. And–you guessed it–she’ll have to take out loans, even if she gets an assistantship or even a fellowship. I told her something I don’t normally tell my students: I spent fifteen years as an adjunct before I finally got a full-time position. And while the market for non-faculty staff members has swollen, it’s gotten steadily worse for faculty members in the humanities. Plus, her interests are in more established areas of literary scholarship. The few openings in English departments are as likely as not to go to candidates with backgrounds in composition or in area (e.g., Caribbean) studies.

  • S

    My eldest son is now in his 2nd semester of college. I continue to question the prudence of spending what will probably be $100,000 by the time he graduates. That same $100,000 could start 2 small businesses. …college has become so expensive, that I’m not sure it makes any financial sense anymore.

  • Pingback: The College Tuition Bubble | White Rose Institute

  • Cameron

    Face it, getting a college degree amounts to little more than jumping through hoops, hoping of getting a series of thankless corporate jobs over the subsequent two decades. Most people don’t have the enterpreneurial spirit; that’s fine, but you mustn’t believe that a degree will make the difference between a comfortable living and destitution.

    It amazes me that parents and students alike don’t see through the propaganda. When a big tobacco company funds a study which concludes cigarettes aren’t so harmful, people immediately claim that the study is biased and unreliable. When educators talk up the value of a college education, those same people swallow it, hook, line, and sinker, never seeing the obvious bias and self-serving motivation of the college promoters.

  • FlyLadyFan

    #9 – The availability of completely free on-line college education; then CLEP and/or AP test for credit. Follow-up with only technical aspects, if required, at a bricks-and-mortar campus. People will soon catch on that one shouldn’t pay $50k or more for what can be obtained for less than $5k, max.

  • Pingback: 8 Reasons College Tuition Is the Next Bubble to Burst | Naked Law by Avvo.com « Points of Hype

  • http://usa-wethepeople.com/ economics9698

    It is crazy the tuition and quality of students at some of these private schools. Definitely a bubble market right now. On the flip side I get to teach Austrian economics to students I never dreamed I could reach before.

  • ToddZ

    Search on YouTube for the user named “RetiredProfessor” and watch his video about how to get a bachelor’s degree from an accredited school on the cheap.

  • Dea

    Not having a college degree today is a kin to being a high school drop out 30 years ago and yet it is nearly impossible to obtain unless you do go into debt like this or have very wealthy parents. My husband and I both went to school and life happened and neither of us was abe to graduate and then that student loan debt comes due so while you’re working to pay to live and to pay for the student loans you can’t find a way to get back into College This bubble needs to burst the USA needs to rethink its education system and if a college degree is going to be come a necessity for life the govenment needs to make it a REAL reality for EVERY man and woman without a life time of debt… Ever if you’re able to graduate you’re burdened by student loan debt until you’re 40 and thats IF you’re able to find a job using your degree in the first place…

    • Tim

      Couldn’t disagree more about the need for a college degree. I employ 26 people at my network consulting / systems integration company and whether or not someone has a college degree doesn’t even enter into my decision when I hire or promote. I don’t have one myself and I feel sorry for the kids I hire who wasted their time getting a degree.

  • LawsOfPhysics

    What are you talking about?????
    CUNY – City University of New York, SUNY – State University of New York, charges around $2500 per semester, or $5000 per year, less than my children ‘s day care center. Check your State university, it won’t be higher, maybe even less.

    • Al Camus

      Right . If you live in a urban area that is the way to go The biggest suckers are those who go away from home and incur the room and board debt. But of course that “campus experience” is so important in personal development. It’s like spending 40k for a 20 k car. Why would you do that?

  • Pingback: 8 Reasons College Tuition Is the Next Bubble to Burst « Stephen Ayer's Blog

  • Me

    Well articulated and researched article. Looking at professional paths and Collages with our 17 year old daughter shows all this. However one BIG point that is missing in this article is that collages have managed to add many unnecessary classes/credit hours to degrees. Adding now 1 to 2 years of college to many couriers. For example after 12 years of English, Math and History in high school, way dose some one seeking to work in the medical field as nurse, therapist ect still need so many more credits that do not specifically teach and belong to the chosen fields….???? $ and keeping our young longer in the Collage culture!!!

    • You

      So a nurse doesn’t ask his patient, “way does” it hurt?

      That can’t even be a typo, “h” is in the middle of the keyboard and “a” is on the left.

  • Pingback: The US College Tuition Bubble « James Williams

  • Pingback: The Daily Eudemon

  • Pingback: The College Graduate Bubble: One Student’s Story | Light from the Right

  • Pingback: Bureaucracy grows in the education cartel | ISOwatch

  • Nathan S

    “The borrower is slave to the lender.” Proverbs 22:7. The ruling class gov’t seeks to enslave everyone–the poor through their dependency on social programs like Medicaid, SS, and Welfare. Now they can enslave the middle class with huge students loans that will last them for 10-15 years with no escape. If these groups are enslaved, the “rich” will steadily shrink. The gov’t needs to stop being a lender, and stop spending like drunken….congressmen.

  • http://homeschool-college.blogspot.com cpascal

    I’m agreeing with the above poster who recommended learning from the internet for free and then doing CLEP or AP tests. In fact, there are credit-by-exam colleges where you can do the whole degree this way. Also, you can do it at home in your spare time, so that you don’t have to put your life on hold for 4 years.

  • Pingback: Laws for the GOP to Pass: End Financial Aid for College | The Conservative New Ager

  • Pingback: Ask an Economist: What’s the Deal with College Tuition? | The SunBreak

  • Pingback: Ask an Economist: What’s the Deal with College Tuition? By Michael van Baker «

  • Pingback: Ron Paul for President - Page 53 - Fires of Heaven Guild Message Board

  • http://www.hardmoneylenderschicago.com hard money lenders chicago

    I dont see how people can even afford a 4-year college anymore. I foresee a huge spike in attendence at junior colleges in he next decade. Hopefully they can accommodate the influx of students.

  • Pingback: Todays Math Problem........ You Borrow $212,000 - Talk Delaware Online

  • http://www.accountancycoursesonline.org/contact/ Online accountancy tuition

    Wonderful beat ! I wish to apprentice even as you amend your web site, how can i subscribe for a weblog site? The account aided me a acceptable deal. I have been a little bit familiar of this your broadcast provided bright clear idea

  • http://ezyhomeloan.com bestrate home loans

    Magnificent put up, very informative. I ponder why the opposite experts of this sector don’t understand this. You must continue your writing. I’m confident, you’ve a huge readers’ base already!|What’s Taking place i am new to this, I stumbled upon this I have discovered It absolutely useful and it has aided me out loads. I’m hoping to give a contribution & help different users like its aided me. Great job.

  • Pingback: Will college tuition be the next bubble to burst? | The Thinker

  • Pingback: Moral outrage!? Debt, Credit, Bankers delight. An open letter to Cons. « thecorporatechronicles

© 2013 Avvo, Inc. All Rights Reserved
Follow us on