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Higher Education Bubble Update January 31, 2012

Posted by federalist in Education.

The higher education industry’s credential cartel is under financial threat, … legal threat, [and] cultural threat.

That’s the latest from James Taranto, who has been one of the more eloquent heralds of the higher education bubble. He elaborates on the credential-writing nature of the cartel:

The industry has exploded over the past few decades based on a business model that focuses more on selling the college degree as a credential–an “investment” that yields an increase in one’s own “human capital”–than on persuading young adults that education is intrinsically valuable.

If someone could offer a less expensive job-hunting license–one that assessed an entry-level job-seeker’s worth to a prospective employer at least as accurately as a college degree does–then the demand for college would plummet, as young adults could realize the same gains from a much smaller investment.

Last year I proposed a facetious alternative.

Charles Murray is another scourge of higher education I have cited frequently. His latest commentary on the subject is buried in a withering attack on the Department of Education:

The bachelor of arts degree as it has evolved over the last half-century has become the work of the devil. It is now a substantively meaningless piece of paper—genuinely meaningless, if you don’t know where the degree was obtained and what courses were taken. It is expensive, too…. And yet the B.A. has become the minimum requirement for getting a job interview for millions of jobs, a cost-free way for employers to screen for a certain amount of IQ and perseverance. Employers seldom even bother to check grades or courses, being able to tell enough about a graduate just by knowing the institution that he or she got into as an 18-year-old.

So what happens when a paper credential is essential for securing a job interview, but that credential can be obtained by taking the easiest courses and doing the minimum amount of work? The result is hundreds of thousands of college students who go to college not to get an education, but to get a piece of paper. When the dean of one East Coast college is asked how many students are in his institution, he likes to answer, “Oh, maybe six or seven.” The situation at his college is not unusual. The degradation of American college education is not a matter of a few parents horrified at stories of silly courses, trivial study requirements, and campus binge drinking. It has been documented in detail, affects a large proportion of the students in colleges, and is a disgrace.



1. federalist - June 6, 2012

Peter Thiel, quoted in Jennifer Fulwiler’s article The End of College:

Education is a bubble in a classic sense. To call something a bubble, it must be overpriced and there must be an intense belief in it. Housing was a classic bubble, as were tech stocks in the ’90s, because they were both very overvalued, but there was an incredibly widespread belief that almost could not be questioned — you had to own a house in 2005, and you had to be in an equity-market index fund in 1999.

Probably the only candidate left for a bubble — at least in the developed world (maybe emerging markets are a bubble) — is education. It’s basically extremely overpriced. People are not getting their money’s worth, objectively, when you do the math. And at the same time it is something that is incredibly intensively believed; there’s this sort of psycho-social component to people taking on these enormous debts when they go to college simply because that’s what everybody’s doing.

2. Higher Education Bubble Update | Federalist - May 9, 2013

[…] has been fighting against one of the enablers of the higher-education cartel, the Accreditors, for some […]

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