If you went to college before the turn of the millennium and you are now trying to convince your kids to go to college, it may be worth more careful deliberation. There was a time when college was the path to a wealthy future. Back then it was one of the only ways to get a decent education.
With the advent of the internet, knowledge in many fields is at your fingertips. Unless you want to be a doctor or something similarly carefully regulated, chances are you can learn most of what you need online and at your own pace, and nearly free.
Contrast that with the current college system. Colleges are putting professors on furlough and reducing the amount of education they produce each semester. Meanwhile tuition is going up far faster than the rate of inflation. College loans have increased over 500% since 1999.
Why? What is it in the system that is justifying tuition going up while quality of education is dropping? In this case I believe it is actually a self-defeating government subsidy. Credit is tight right now. If you want a loan for most things, you have to first prove that you don’t need it. This credit crunch has hit every sector but education, in which government loans are still easily available and low interest. Combine this with the lack of work, and people are going back to school and living off loans. The natural result of this is that colleges raise tuition, since the students can afford it.
Looking back a decade, government-sponsored enterprises gave out adjustable rate mortgages to the poor, and once they had them on the hook, raised the rates. What they didn’t take into account is what would happen when they took it too far and people just defaulted and walked away. This time around, they are ensuring that it doesn’t happen again. Federal student loans follow you till you die. Bankruptcy doesn’t help. What will happen when all of this debt comes due? Will people spend the rest of their lives trying to get above water? Will the government forgive the debt on the backs of the taxpayer? Will the next credit bubble use your children as collateral? When will they stop trying to hide the debt and start working to correct it?
What still doesn’t make sense is the furloughs. If tuition is up, and full time attendance is up, and professor salaries aren’t skyrocketing, then why the furloughs? It’s because we are becoming a nation of administrators. Less than a third of your tuition goes into educating you, and the percentage of funds going to college administrative costs is going up at a truly unreasonable rate. I’m not even saying anyone is getting fat here, just that as a society, we are spending far more on administrating producers than we are on actually producing anything.
What we need now is some transparency. Unfortunately, creating the Office of Administrative Overview Regulation or some such won’t help. What we need is simple disclosure. Let the resulting outrage do the rest.