Viewpoint: Higher-education bubble is preventable
By Danny Huizinga
As our economy recovers from the bursting of the housing bubble, some warn another is looming on the horizon.
The phrase “higher-education bubble” was first popularized by Glenn Reynolds, a distinguished professor of law at the University of Tennessee. In his book, “The Higher-Education Bubble,” he defines the term:
“Bubbles form when too many people expect values to go up forever.”
How do we properly value education against its cost? We all know that tuition prices across the nation are rising and have been for years.
Data from College Board’s Trends in Student Aid, one of the most comprehensive sources of statistics on college pricing, indicate that financial aid per student in constant (inflation-adjusted) dollars has been consistently rising as well.
Because salaries for highly educated professionals have risen rapidly in recent years, an increase in college pricing is somewhat justified. Robert Archibald, chancellor professor of economics at the College of William and Mary, said this:
“Everyone has three objectives for higher education: lower tuition, higher quality, and less government spending on subsidies. The unfortunate truth is that we can have any two of these, but we can’t have all three. If we mandate low tuition, we have to give on one of the other two.”
Tamar Lewin of the New York Times takes a different position, attributing much of the rising education cost to unnecessary increases in administrative staff in colleges across the country.
Students have a responsibility to make smart decisions in order to sustain the value of education. College is still worth it; however, if we are not careful, we can make the mistake of overvaluing our education. Maximizing future benefit requires more than sitting through classes.
We are not entitled to a job offer or high salaries once we graduate. In order to deserve these things, we must continue to work hard in classes and focus on enriching ourselves outside the classroom, building time management and communication skills.
According to multiple studies, students at college spend less time studying today than 60 years ago. Social development is a crucial aspect of the college experience, but it is not the reason tax dollars are funding federal student loan and grant programs.
Nor is enrolling in college an automatic guarantee to future success. According to the American Enterprise Institute,
“Data from the National Center for Education Statistics show that only 58 percent of new college students who began in 2004 had graduated six years later.”
The 42 percent of students who dropped out (roughly 2/3 of which cited reasons not related to tuition prices) are left holding thousands in student loans with no diploma to show for it.
For these people, it may have been better if they had considered an alternative to college.
For those of us that are already here, we need to continually strive to merit the generosity we have been given and work to achieve the success we dream of.
Danny Huizinga is a sophomore Baylor Business Fellow from Chicago. He manages the political blog Consider Again. Read other works by Danny at www.consideragain.com.