Sunday, August 21, 2011

The Higher Education Bubble

Lindsey Millar of the lefty Arktimes has a piece which asks the question "is higher education a bubble soon to burst?" While I am glad to see them asking the question, readers of Arkansas Watch know that we have been talking about this for a long time from a public policy perspective.

For most young people today, all they are going to get from the deal is years of lost income, piles of student debt, some bad habits, and at the end of it the same kind of job they would have gotten if they had never spent a day in college. In this state, only a minority of freshmen will obtain a degree, but even for the ones who do, the appropriate jobs are not available.

Not made clear in the article: Tuition increases are made possible by an influx of student loan money and finnacial aide from the feds. The most indebted institution in human history, the federal government of the United States, is pumping this bubble up. How much longer can that last?

Higher education is in a bubble. One in the process of bursting as more people realize what a bad investment it is. It's nuts for a young person to start out life with $20,000 of student loan debt only to take the same kind of job they could have gotten three years earlier. We get it. The Arktimes is starting to get it. Now if only our own state legislature can get it. Unfortunately, they seem to be in a bubble themselves, an alternate reality where "economic growth" is obtained by sucking ever more dollars out of a collapsing private economy in order to lavish on "higher education."

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