Wednesday, May 16, 2012

The coming college debt bubble bursting: You mean I do not have to have a six figure debt to get a degree? Update: Mark Cuban and Glenn Reynolds are having a mind meld!

You really don't have a brain if you get yourself in crippling debt getting a degree..
Pajama Media notes that the college cost bubble will burst by people exercising some common sense and a certain Professor over there actually wrote a book about it!  Professor Reynolds:  The Higher Education Bubble!

A different Professor notes that law schools are failing, but that is a function of too many law schools, too high tuition, and too many graduates finding there are no jobs out there.  And that is the problem.  Justice Scalia admitted he hires clerks from Harvard based on his belief that they screen smarter people into their program (rather than on the basis of the program itself).  That elite status is why law schools are so obsessed with the rankings.  There has been a stigma in ranking and accreditation (and professional regulation licensing requirements) that has prevented students in law and other professions from looking for less expensive options.

And obstacles like this are not just a problem in higher education.  It is harder to become a barber or interor designer in some states than a EMT?  Something is seriously wrong.

The solution is some schools figuring out a way to offer degrees less expensively and letting the market sort this out.  Looking at law schools as an example, other than a library, they do not require a lot of infrastructure.  They require good professors (and obviously wooing them from the private sector is not cheap) but the question is how to teach a subject in a cost effective efficient manner.  Let the private sector work.

The Other McCain has more on it.
Professor Reynolds has more on how you will not get what you are paying for...
What we should be teaching is avoiding the culture of poverty...  The culture used to be hard work would get you ahead and colleges, trades and professions were made reasonably affordable and accessible (especially after WWII to returning veterans).
Professor Bainbridge notes tenure does impact costs...
Salon notes the problem for law students:  Too many, too much debt, not enough jobs...

Update:  Freakonomics blog notes Mark Cuban is predicting a college meltdown too!  Mark Cuban is mind melding with Glenn Reynolds!  

2 comments:

  1. I don't believe in conspiracies, so much. But if I did, the current crisis would be a left-wing ploy straight out of the Alinsky playbook. Take a generation of young people, saddle them with crippling debt in pursuit of worthless degrees, and send them out into the worst job market in generations. Genius, if it were on purpose...

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    1. I do not believe it was by design. Not in the sense you describe (although it would be evilly brilliant if it were so planned). It is making college loans available to all (and young people not realizing that you cannot get rid of these things short of paying them off or dying first). That and professions making specific expensive degrees required to get to even participate (for example Abe Lincoln did not go to law school). Colleges expenses have grown far faster than inflation as they expand campuses and chairs and seek to promote their own elitism. It feeds on itself.

      Basically we are subsidizing a bubble through federal guaranteed student loans, just like expanding home ownership to all (even those without any income) fed the real estate bubble. There needs to be a correction. And it is coming.

      It is not just higher education. These anti market forces also exist in many trades (and student loans play a roll in those trades too). And we know when they claim it is for public safety what they often really mean it is for protectionism of the particular trade. I am not for no regulation, but I am for minimum regulations for a specific goal.

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