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August 11, 2011 8:24 AM Subscribe

Has the Higher Education Bubble Popped? According to the CSM, the boom in demand for bankers, barristers, and bureaucrats is over.
posted by blue_beetle (79 comments total) 26 users marked this as a favorite

Anyone else get that creeping feeling of being completely superfluous to the economy at large?
posted by The Whelk at 8:26 AM on August 11, 2011 [36 favorites]

The bubble will pop once student loans stop being easy credit.
posted by Blazecock Pileon at 8:29 AM on August 11, 2011 [11 favorites]

"Try living on $27,000 a year — before taxes — in a city like New York, Washington or Chicago."

Statements like that always bug me, even in this context. I don't know about Washington or Chicago but I've "tried" living in New York for less than that for a number of years. It's rough -- roommates, shady neighborhoods, more nights spent at home than out -- but it's not some sort of Dickensian horrorshow where you hunt for scraps and steal toilet paper from work on a regular basis.
posted by griphus at 8:34 AM on August 11, 2011 [40 favorites]

I don't think this is a particularly good take on the "education bubble" debate. He mostly seems to cherry-pick from recent NY Times articles.

First, he seems to confuse the current economic situation with a steady state. Yes, it is harder to get jobs now, and even harder to get good jobs, but it is harder across the board, and the college-educated have a much lower unemployment rate (5% versus 10%), and higher earnings in general.

Second, he conflates a whole bunch of different economic changes - downsizing among lawyers and government, for example, with college degrees as a whole.

Third, colleges are not just for training, as he quotes Mises, they are also for signalling, which is an important function. That means that different types of schools, and different types of degrees, have different economic value - a Big 10 school is probably worth it, a for-profit school is not.

Finally, education is not just about economics. It is worth paying attention to, but not the only thing.
posted by blahblahblah at 8:38 AM on August 11, 2011 [3 favorites]

Anyone else get that creeping feeling of being completely superfluous to the economy at large?

My company has been bought out twice in the past 6 months. I'm note even sure the new company knows I exist yet.
posted by empath at 8:38 AM on August 11, 2011 [4 favorites]

Anyone else get that creeping feeling of being completely superfluous to the economy at large?

All my non-profit arts management people throw your hands up.

Look, we'll know when the higher education bubble has really popped — young people will be amassing in the streets and refusing to go home, calling for the ouster of politicians and heads of business, and disregarding the orders of the police and military. Viz. Egypt.

And then we'll all say oh I guess that higher education bubble finally popped between 18 months and three years ago, huh? And the rest of us will say "yep" and go put on our black sweatshirts to join the kids in the streets. Or resume hammering plywood over our windows or whatever.
posted by penduluum at 8:40 AM on August 11, 2011 [24 favorites]

I just paid off my undergrad student loans, and used investments to go back to graduate school debt free. Regardless - what Blazecock Pileon said.
posted by BuffaloChickenWing at 8:40 AM on August 11, 2011

Well shit. Does that mean my student loans can go away too?
posted by msbutah at 8:41 AM on August 11, 2011 [1 favorite]

I'm note even sure the new company knows I exist yet.

The American Dream, Revised!
posted by griphus at 8:41 AM on August 11, 2011 [5 favorites]

And then we'll all say oh I guess that higher education bubble finally popped between 18 months and three years ago, huh? And the rest of us will say "yep" and go put on our black sweatshirts to join the kids in the streets.

Yep. I think in the next year or so.
posted by empath at 8:41 AM on August 11, 2011

I misread the headline as demand for bankers, baristas, and bureaucrats is over. and thought "that's really going to be hard on all those art history graduates."
posted by backseatpilot at 8:54 AM on August 11, 2011 [30 favorites]

I've been feeling for a couple of years now that college and retirement are twentieth century concepts.
posted by incessant at 8:54 AM on August 11, 2011 [21 favorites]

I just paid off my undergrad student loans, and used investments to go back to graduate school debt free.

Cool story, bro.
posted by atrazine at 9:03 AM on August 11, 2011 [25 favorites]

griphus: "Statements like that always bug me, even in this context. I don't know about Washington or Chicago but I've "tried" living in New York for less than that for a number of years. It's rough -- roommates, shady neighborhoods, more nights spent at home than out -- but it's not some sort of Dickensian horrorshow where you hunt for scraps and steal toilet paper from work on a regular basis."

When was this? I'm having a tough time imagining even "essential" expenses making ends meet in NYC at $27k/year. Forget about it if you have any kind of debt.
posted by schmod at 9:05 AM on August 11, 2011 [3 favorites]

The education bubble will pop as soon as the government stops wars that churn out GI Bill college students. The author noted that the bubble inflated in the Nixon era. Does he not know that Vietnam Vets went to school on the GI Bill? That's what started it all. When I first went to college in 1975, my roommate was a vet, fresh from Vietnam. I dropped out and when I returned to school ~20 years later, some of my professors were Vietnam vets.
posted by charlie don't surf at 9:06 AM on August 11, 2011 [2 favorites]

This article is comparing apples to oranges. Just because high wage positions are not in demand does not mean that college degrees are less value. Plus, for lawyers, college is not the exit point - there is still three years to go. For bureaucrats, the same is true. I did not know a single government employee who had just a bachelor's degree. Many had MAs, MPPs, MPAs, MPSs, MEds, and PhDs and EdDs. This article misses the fact that professionalization is at work in fields that simple bachelor's degree recipients can't hope to match by alone going to college. At the same time, backseatpilot, there are competing certifications for baristas. As people's standards for a product rise to the point it becomes a service, traditional training routes are deemed insufficient for productive employee development. That's why McDonald's has a university!
posted by parmanparman at 9:08 AM on August 11, 2011 [2 favorites]

I just paid off my undergrad student loans, and used investments to go back to graduate school debt free.

Cool story, bro.

Bro? The man is 85 years old, please have some respect.
posted by Behemoth at 9:09 AM on August 11, 2011 [56 favorites]

Anyone else get that creeping feeling of being completely superfluous to the economy at large?

....Dude, I work in theater. That feeling's been "creeping" since 1989.
posted by EmpressCallipygos at 9:09 AM on August 11, 2011 [1 favorite]

When was this? I'm having a tough time imagining even "essential" expenses making ends meet in NYC at $27k/year. Forget about it if you have any kind of debt.

In the mid-2000s. Essential expenses are, well, expensive if you don't know where to shop and don't make and effort to figure out where food and sundries are cheap. I live way the hell out in Brooklyn -- three stops from Coney Island -- and when my girlfriend moved in with me, she said she had never seen food so cheap. There's also a lot of discount stores here selling all sorts of stuff -- toilet paper, house supplies -- for prices that the name-brand stores don't even try to match.

Basically, if you live in Manhattan and do all your shopping at Gristedes and Duane Reade, yeah, $27,000 is a pittance. If you live in an unhip/remote part Brooklyn or Queens (the parts of the Bronx that aren't a shithole are so remote you may as well move to Westchester and Staten Island is, well, Practice Long Island), and find where to shop, you can make it. It'll be tough, and you should damn well be actively looking for a better job, but it's sustainable.
posted by griphus at 9:14 AM on August 11, 2011 [1 favorite]

Bro? The man is 85 years old, please have some respect.

Oh... Then I guess I do owe him an apology. Sorry BuffaloChickenWing, I thought you were a young rich guy telling us about how great things were for you, my mistake.
posted by atrazine at 9:16 AM on August 11, 2011

You know, the biggest issue with higher ed as I see it --- and I work in higher ed, so I definitely see it --- is admitting people into college who don't belong there. Not necessarily for academic reasons, either, but because they have no interest in the offerings of higher ed.

Not everyone should go to college, even if they have great high school grades, etc.

And certainly not everyone who gets admitted should be admitted.

The job I currently hold required an associate's degree and either two years of work experience or a four year bachelor's degree in lieu of experience. My job now requires a bachelor's degree and three years of experience.

I've seen postings for similar positions that now require masters degrees.

Once upon a time, dorm RAs only needed to have just graduated from college. It was true entry level position. Now you have to have a masters degree in higher ed admin or counseling to live in a dorm with college students and make sure they don't burn the place down.

It's ridiculous how inflated the degrees themselves have become and the effect that churning out so many college students with them has been on jobs.
posted by zizzle at 9:18 AM on August 11, 2011 [15 favorites]

*when I first started this job, that is, it required an associate's and two years of experience
posted by zizzle at 9:19 AM on August 11, 2011

Hit "post" too fast.

Basically, the trick is to find an upwardly-mobile working-class immigrant neighborhood. The ones that are stagnating in the working class become food deserts and eventually they'll plop in a Walgreens and put mom and pop out of business and that's it.

The neighborhood I live in has seen three major population shifts in two generations: the Italians left working class and moved up into middle-class, leaving to Staten Island and Long Island when my (Russian) family moved in, in the early 1990s, as the neighborhood slowly began to have a majority Russian population. Then, the same thing happened with the Russian families: off to SI and LI with their middle-class money.

Now the neighborhood has a majority Chinese population, and the same thing is starting to happen to them: more Chinese-owned businesses opening in a range of products and services, catering not just to the individuals in the neighborhood, but Brooklyn/New York at large. They're also, like I said above, doing perfectly well competing with the Big Boys (while the stores have traded hands a lot, this neighborhood has been doing that since forever.) These businesses move money into the neighborhood and, eventually, the Chinese families will move out, replaced by the next ethnic class who are going to Make It.

So if you find a neighborhood like this, you're made in the shade for a low-income lifestyle. Just don't expect a nightlife and it'll be a hell of a commute to the city.
posted by griphus at 9:23 AM on August 11, 2011 [3 favorites]

The bubble is being driven by the "credential craze". As parmanparman notes, the bachelors degree doesn't even cut it anymore. You need that advanced degree as well. Employers, whether they be private or public, for profit or non profit, are really creating these bubbles by requiring degrees for jobs that probably could be done well by a smart and motivated high school graduate, if given a chance to try. The bubble will not truly pop until those without a college degree can get good paying jobs in the business world. What it will take is for 1 high profile company to say "We are looking for new employees in marketing, human resources, sales, advertising, who can demonstrate their worth regardless of their degree status. If that happens, and they actually hire some highly motivated people without a degree, that could change everything.
posted by Seymour Zamboni at 9:24 AM on August 11, 2011 [16 favorites]

I thought boom for hiring everyone was over, cf. recent political and economic events.

According to the BLS, in July 2011 the unemployment rate for college graduates was 4.3% and the rate for HS grads was 9.3%, So I kind of call BS on this article.

A couple of points from the article:

1) The article mentioned bartenders and waiters with college degrees, even though the job does not require them. I say that just because the job does not require a degree does not mean the degree did not help them get the job. You get more from a college degree than just some specialized knowledge.

2) The article specifically singles out law grads not being able to find full time work in their field. I say this is a good thing not only for existing employed lawyers, but society as a whole. Yes, we need (some) lawyers, but maybe they've reached a saturation point, as a result of the law school building boom also mentioned.
posted by lordrunningclam at 9:34 AM on August 11, 2011 [1 favorite]

From a historical perspective, I think the blame falls on Vietnam. Prior to the draft of the mid-60's, a high school student had a multitude of option -- go directly into a business, family or otherwise, apprentice in one of the crafts, or if the career path required it, go to college. But the draft changed all of that -- the options were college or Vietnam. And not surprisingly, everyone that could chose college. And that "everyone that could" somehow stuck. College has become just other hurdle. It does nothing (in many cases) but show employers that the applicant has the where-with-all to get through school.
posted by rtimmel at 9:38 AM on August 11, 2011 [1 favorite]

There is a trend afoot to create micro-credentials that measure skill sets needed for the contemporary workplace - both in terms of general education and specific kinds of tech or professional knowledge. Aided by online (via the network, through multiple devices) expert-system-driven, pre-and-post-learning assessments, we are going to see a future where education becomes truly on demand for most, and most of all *functional* for students and employers. It won't be perfect, but it will far more accessible, affordable, and better outcome based. Any school that doesn't have a brand, or a forward looking partnership with industry or other colleges to leverage this trend, is toast in the long-term (7-10 years).

One more thing: we simply are not going to need as many workers down the road as we do now. Our industrial and service systems are getting "smarter", via tech. We won't replace everything with robots,. but there is a definite trend toward work becoming less "necessary" that prior. How are we going to deal with that? It's a huge, looming problem that no culture seems to be planning for.
posted by Vibrissae at 9:55 AM on August 11, 2011 [4 favorites]

It's rough -- roommates, shady neighborhoods, more nights spent at home than out

That's pretty rough all right. I guess it explains why my answer in the other thread about coming up with $1000 would be "yes--probably around 30 times".
posted by DU at 9:55 AM on August 11, 2011 [1 favorite]

All I know is that going to nightschool and upgrading my 2-year technical diploma into a Bachelor's at a public university got me a job making 30% more, and paid for itself in the first year. I'm now debating a masters degree, and trying to figure out if I can work out the numbers to make it pay for itself in the short-term.
posted by blue_beetle at 10:09 AM on August 11, 2011

Are we talking about higher education as a necessary prerequisite to a chosen career path, or higher education strictly for personal fulfillment? The latter will be popular as long as the loans keep getting approved.
posted by rocket88 at 10:12 AM on August 11, 2011

The article specifically singles out law grads not being able to find full time work in their field. I say this is a good thing not only for existing employed lawyers, but society as a whole.

Not really. The result for consumers of legal services has been that their costs have continued to rise while the remaining law firm partners take a larger share of the profits and place a larger work burden on the remaining associates, whose own salaries have been cut. It's basically the same story as the rest of big business: bonuses all around for the top level executives while the rank and file are forced to work harder in order keep their increasingly low-paying jobs.

Having a lot of lawyers is fine: tons of people need wills that don't have them, (unfortunately) lots of people need good criminal defense, many startups and entrepreneurs need help organizing their businesses and protecting their IP, etc. The problem is that the cost of legal services is too high for most of the middle class (and forget the poor!), and part of this is the high cost of law school.
posted by jedicus at 10:17 AM on August 11, 2011 [5 favorites]

I can absolutely attest to this as someone who does not have a degree. I have many years of high level experience, and the first question I get asked in every interview is why don't I have a degree. Many of the jobs I've worked at shouldn't require one, and even as I slog through college in my 30s now, I've been told by so many people that "you aren't going to learn, you are going to get the piece of paper"

Yeah, I have 7 years of experience in my field, I've launched major projects and products, I've run international teams, but the first question that always comes up is "Why don't you have a degree on here? Oh, you don't have one? Hmmm." The "hmm" indicating it's a wonder a hobo vagabond like me even made it past security. And I've had recruiters straight up tell me they don't care what it's in, they just need to check that degree box before they can even talk to me.
posted by Ghostride The Whip at 10:18 AM on August 11, 2011 [8 favorites]

When was this? I'm having a tough time imagining even "essential" expenses making ends meet in NYC at $27k/year. Forget about it if you have any kind of debt.

There are people in NYC that not only don't have a degree, they don't speak a lick of english. I know a 45 year old woman who cleans apartments and sells random stuff to get by. She carries all the money she has in the world on her at all times because she is paranoid about banks and the IRS, to my knowledge she has never paid income tax in her life. I knew people who didn't have a home phone until the early 90s, if you wanted to speak to them you stuck a note in their mailbox. Yeah, plenty of people live in New York on a pittance.
posted by Ad hominem at 10:20 AM on August 11, 2011 [4 favorites]

The education bubble will pop as soon as the government stops wars that churn out GI Bill college students.

A quarter of a million people used GI Bill benefits last year. Eighteen million were enrolled in colleges in 2007. You think the bubble is because of that 1.5 percent?
posted by Etrigan at 10:35 AM on August 11, 2011 [5 favorites]

GI Bill - so abused by predatory lenders and cheesy online 'universities.'

I've seen a number of similar articles in the last year. I think having a well-education population is a net good, and given the vast wealth of the United States, I'm certain it's very affordable. But I've become conspiracy-minded enough to wonder if the wealthy corporate cabal, the one that runs the Republican Party and other interests, wants to limit the amount we spend on higher education even further, and has no interest in a well-educated voting population.

I used to laugh at conspiracists, seriously, but the self-destructive directions that this country takes baffles the hell out of me. It's like the way astronomers know there's really another planet circling another sun; they see the strange orbit of the planets, and can predict the missing planet and it's gravitational mass that way. That's how I deduce the cabal. That and the way Dark Lord Cheney used mindcontrol on Bush.

The tinfoil, it does nothing.
posted by theora55 at 10:55 AM on August 11, 2011 [1 favorite]

And the rest of us will say "yep" and go put on our black sweatshirts to join the kids in the streets. Or resume hammering plywood over our windows or whatever.

Is it okay if I board up my windows first and then join the kids in the streets? I mean it just seems prudent.
posted by Naberius at 11:02 AM on August 11, 2011 [3 favorites]

We won't replace everything with robots,. but there is a definite trend toward work becoming less "necessary" that prior. How are we going to deal with that?

I dunno. How are we going to deal with things when we no longer need to have 95% of the population be peasant farmers? When the percentage of people working as farmers dips down to 50% or *gasp* even less, what are all those unemployed people going to do?

My hunch is they will do things that we won't even call "work". Sitting in a comfy chair for only 10 hours a day, drawing pictures on a magic box? No self-respecting farmer standing behind a plow would call that work.

I also have a hunch that no matter what they're doing, they'll be complaining about bad off they are.
posted by happyroach at 11:02 AM on August 11, 2011 [12 favorites]

"Try living on $27,000 a year — before taxes — in a city like New York, Washington or Chicago."

Done it, in Chicago, within the last 6 years. Wasn't that great, but it certainly wasn't poverty.
posted by adamdschneider at 11:02 AM on August 11, 2011

what about the demand for barristas?
posted by Taft at 11:02 AM on August 11, 2011

the boom in demand for bankers, barristers, and bureaucrats is over./i>

Maybe we should try building an economy that needs, employs, and rewards more than three career paths.
posted by Saxon Kane at 11:02 AM on August 11, 2011

That and the way Dark Lord Cheney used mindcontrol on Bush.

I think mind control is a bit generous, no? More like a marionette or a puppet with an exceptional tight hand-hole.
posted by griphus at 11:03 AM on August 11, 2011 [1 favorite]

But theora, our populace has become better educated over the last 50 years and yet self-destructive political thinking has flourished. The Republicans don't need an undereducated citizenry to keep control -- we're well-educated and still entirely unaware we're getting fucked.
posted by incessant at 11:06 AM on August 11, 2011 [1 favorite]

One more thing: we simply are not going to need as many workers down the road as we do now. Our industrial and service systems are getting "smarter", via tech.

Someone is going to have to debug the code and clean up the mountains of trash when it goes wrong. The more we industrialize the more we make these colossal scale messes.
posted by humanfont at 11:08 AM on August 11, 2011 [1 favorite]

Where I live in Canada, a three-year college certificate is enough to get a job... if you study mechanical or electrical engineering enough to get a "technologist" certification. A three-year computer science diploma program is also pretty popular.

As for me, I have a Creative Writing/History degree, which is, funnily enough, what I have "fallen back" on after teaching jobs dried up (actually, they never materialized until about 8 years after I got my BEd), and after I got laid off by government.
posted by KokuRyu at 11:08 AM on August 11, 2011

I think having a well-[educated] population is a net good, and given the vast wealth of the United States, I'm certain it's very affordable. But I've become conspiracy-minded enough to wonder if the wealthy corporate cabal, the one that runs the Republican Party and other interests, wants to limit the amount we spend on higher education even further, and has no interest in a well-educated voting population.

Yes, I too am coming to see these formulaic "higher education bubble" stories as a new battle front in the right's ideological war on "entitlements." I don't think there's anything conspiratorial about it, though — after the state-by-state campaigns to cut public university budgets, which have largely been massively successful, subsidized student loans and Pell Grants are the natural next targets of opportunity. The American ruling class's current, destructive predilection for imposing severe austerity on poor and working Americans, and damn the long-term social costs, surely includes not just denying them health care or retirement benefits but serious education. Their cultural front's resentment of universities as a bastion of "tenured radicals" is surely part of the campaign, too.
posted by RogerB at 11:09 AM on August 11, 2011 [6 favorites]

those in power have absolutely no vested interest in creating a well-educated, rationally-thinking populace. it serves no purpose to them and, in fact, is a detriment to their continued hold on governance and fortune.
posted by radiosilents at 11:19 AM on August 11, 2011 [2 favorites]

Related-ish: Corporate HR still has no idea how to read a lawyer's resume.

Certification creep and the growing silliness of hiring practices are doing strange things to the increasingly overeducated and underemployed young adults of America.

Having a lot of lawyers is fine: tons of people need wills that don't have them, (unfortunately) lots of people need good criminal defense, many startups and entrepreneurs need help organizing their businesses and protecting their IP, etc. The problem is that the cost of legal services is too high for most of the middle class (and forget the poor!), and part of this is the high cost of law school.

If I were the mighty god king of legal education, I'd make public law schools compete more effectively with private law schools, offering training-based education with practical, clinical practice and externship programs heavily integrated into the state's own legal apparatus. I'd make sure the public schools were cranking out more effective baby lawyers than more expensive Bottom 200 law schools could regularly produce, all for a much lower cost, and without the academic spandrels that have arisen more from tradition than good sense. Most legal education should be brought back into the arena of apprenticeship and away from the doughy mish-mosh of you-won't-remember-this-material-after-the-final classes. Less practice-focussed programs would exist for people who plan on working in quasi-legal fields or even non-legal fields.

Super-effective public law schools would be an anomaly in the USN&WR rankings, being a much better value for the money than most schools which would rank more highly than them. Even those more-highly-ranked private law schools would have to shape up or ship out in the face of more effective, less expensive alternatives. The top 40 or so schools would probably be unaffected, but everyone else would be forced to explain themselves.

And then I'd come out with a publicly-funded, vastly more inexpensive alternative to Wexis, like a much better version of Loislaw.

And then I'd get a jewel-encrusted pony with a voice like a nightingale and the scent of a single blue rose.

After law school becomes cheaper, more practical, and harder (you can't play poker in the back row of your legal job), the legal practice will lose both its mystique and its exorbitant costs, such that lawyers could turn to smaller and more independent work, passing the savings on to their clients. The legal degree could also become much more attainable for working people who simply desire legal literacy but who do not need the extra money, time, or effort required of a three-year full-time program.

...

However, none of this will happen on any large scale, for a panoply of reasons.
posted by Sticherbeast at 11:29 AM on August 11, 2011 [2 favorites]

But I've become conspiracy-minded enough to wonder if the wealthy corporate cabal, the one that runs the Republican Party and other interests, wants to limit the amount we spend on higher education even further, and has no interest in a well-educated voting population.

those in power have absolutely no vested interest in creating a well-educated, rationally-thinking populace. it serves no purpose to them and, in fact, is a detriment to their continued hold on governance and fortune.

Both of these would sound less nonsensical if it weren't precisely the kinds of jobs that could be performed by an ignorant and uneducated peasantry that we've largely automated out of existence. The complaint from the corporate ruling class is that they can't find enough people with the specialized education and skills they need to do ever more abstract and esoteric intellectual work.

Now that doesn't mean that they think the most efficient way to create those people is to pour massive amounts of money into funding large-scale educational systems to bring everybody up to the level of a bachelors degree. They don't need people with bachelor's degrees, and they don't need millions of them. They need smaller numbers of people with much more advanced skills and there are better ways to get them.

Send that idea down the mountainside to Republican/Tea Party types who don't really understand it, and what you end up is a lot like what RogerB describes: education as another entitlement to be abolished. The corporate classes aren't particularly interested in the idea of universal education as a social good, and the Republicans literally don't believe there can be such a thing as a social good.
posted by Naberius at 11:53 AM on August 11, 2011 [2 favorites]

So I guess we're going to have this discussion every week, then. Ok.

According to the BLS, in July 2011 the unemployment rate for college graduates was 4.3% and the rate for HS grads was 9.3%, So I kind of call BS on this article.

And why is it that this information never seems to show up in any of these "higher ed bubble" articles, which, as noted up thread, seem to happen quite frequently?

But I've become conspiracy-minded enough to wonder if the wealthy corporate cabal, the one that runs the Republican Party and other interests, wants to limit the amount we spend on higher education even further, and has no interest in a well-educated voting population.

Although I, too, am not generally given to conspiracies, the decisions made by the higher ed authorities in my state really only make sense if what you say is true.
posted by DiscourseMarker at 12:02 PM on August 11, 2011 [1 favorite]

I think part of the "bubble" analogy is that you have an investment (house, college degree) that is overvalued by inflated prices. Part of the problem with the higher ed "bubble" is that some of the key decision makers in the loans are 17 & 18 years old (or 22 for grad school). I took on way too much debt when I was 18 because I was an idiot and didn't know anything (really) about money, but knew I had to go to college. I would like to see places charging $50K a year in tuition to take a hit in enrollment, but it's not happening any time soon.
posted by mattbucher at 12:18 PM on August 11, 2011

It's worth noting that this is part of the "(von) Mises Economics Blog, the institutional blog of the Ludwig von Mises Institute." So it is going to see bubbles everywhere. Not that I necessarily disagree that there is a bubble in US higher education tuition prices driven by cheap loans.
posted by Coventry at 12:19 PM on August 11, 2011

To be honest, I think it's less a conspiracy than it is por management; an addiction to crisis management, with policy makers and business enabling each other.

I worked for a while at a (Canadian) NGO whose mandate it was to advocate for university level education to government. We had been seeing progressive defunding of the humanities and social sciences for a number of years, and tried all sorts of arguments in the hopes that one would convince policy-makers that inequitable funding of third level education was a bad idea.

But in the end, I realized we were also seeing selective defunding of the "hard" sciences and in some cases, health sciences as well. What was true across the board was that the content of education was far less important to the conservative government than the insistence on being shown that universities could run as "lean and mean" as any corporation, agile and ready to react to market fluctuations and demands. Anything at the university level that was perceived as being reliant on government, even at two or three levels of remove, was being cut as "fat". Funded by a government agency or research council? Doing any kind of conceptual research that you couldn't immediately translate into a product to send to market? All perceived as wasteful spending. Your research not being supported by private industry? Too bad, so sad. Important research library lost its funding and about to close? Privatize that shit, and put it online behind a firewall so people have to pay to see it.

The politicians didn't seem to care about even the short-term impacts of those cuts on education, jobs, the economy, policy, etc., much less the more long-term impacts associated with the loss of knowledge. Instead, they preferred to institute tax rebates for industries willing to train apprentices. It was all geared towards creating a policy scaffolding to prop up the needs of industry in the immediate term, with little regard to long term consequences.
posted by LN at 12:37 PM on August 11, 2011 [8 favorites]

It's not like an investor can buy a college grad, keep him in storage for a year, and sell him when the market is up.

We call that an unpaid internship.
posted by The Whelk at 1:32 PM on August 11, 2011 [11 favorites]

Where I live in Canada, a three-year college certificate is enough to get a job... if you study mechanical or electrical engineering enough to get a "technologist" certification.

Credentialism creeps in though. I've worked in the Canadian scientific sector for now than a decade, watching while the local community colleges scaled back and even closed their chemical and medical technologist programs. What are employers requiring now? Three-year or majors (non-honours) four-year biologist/biochem/chem university grads. These for technician jobs. The best lab tech I have has a two-year technologist certificate. That's all these jobs require, yet we're now insisting on new grads with full university degrees which cost many times more.

There's no benefit to us as an employer. University grads are not better at tech jobs. they are arguably worse. In four years they get less practical experience than the certificate programs offer. Yet management wants better degrees than twenty years ago. "Professionalizing the workforce."

Too many chefs and not enough cooks.
posted by bonehead at 1:33 PM on August 11, 2011 [3 favorites]

There are chem programs offered at collages in Canada (Tradeschool is the US term I think)? I've always understood that those are for welders, woodworkers, carpenters, stuff like that. The people who make the real money, not people who work with there heads. Why manual labour is where the money is, I have no idea. But my understanding has always been: If you wanted to work as a lab tech you got a 3 or 4 year degree (3 being very rare at my uni). If you wanted to do actual research on your own you put in your years and got a Ph.D. or Post-doc. At least, that is what I understand as of my last year of my B.Sc. (Honours Chem.)
posted by Canageek at 1:45 PM on August 11, 2011

cheesy online 'universities.'

Just to be clear, not all online universities are on the level of University of Phoenix. There are legitimate, accredited, not-for-profit universities. The Open University in the UK is one example. Athabasca University in Canada is another.

(I do have a dog in this fight; I'm doing an online master's degree.)
posted by asnider at 1:47 PM on August 11, 2011 [4 favorites]

If education is a bubble, it's very different from a housing or tech stock or tulip bubble. You can't resell an education; it's a capital investment in one human being, which then can't be bought or sold. It's not like an investor can buy a college grad, keep him in storage for a year, and sell him when the market is up.

The federal government and banks are investing money in that human being in the form of loans, with the expectation that they will be able to pay back the loan with interest. If that turns out not to be the case, the repercussions will be the same as the housing market collapsing. A lot of defaults, and the economic consequences that go along with that.

And if you are deeply, deeply in debt, especially debt that you can't get out of with bankruptcy, you have essentially been placed into indentured servitude until you've paid it off.
posted by empath at 1:49 PM on August 11, 2011 [2 favorites]

It's true that you can buy and sell student loans, but the prices (interest rates) for student loans are quite low right now. It's possible to imagine a student loan bubble but it doesn't seem to be going on right now.
posted by miyabo at 1:57 PM on August 11, 2011

From the article: Not only are the returns poor, but the quality of the product is poor (as in the case of new-construction quality in the housing boom). According to the authors of Academically Adrift: Limited Learning on College Campuses, 45 percent of students make no gains in their critical reasoning and thinking skills, as well as writing ability, after two years in college. More than one out of three college seniors were no better at writing and thinking than they were when they first arrived at their campuses.

If we're to look at education as a purely economic investment (something with which I do not agree at all - I didn't get a masters in international politics because I needed it to make spreadsheets), I would argue then that the value of a degree from schools where this is the case should hold a lower value than degrees from schools where this is not the case.

Making education a requirement for a job takes away it's other intrinsic values. It's not a product you purchase. Most of the values you get from post-secondary education isn't derived from the tuition - that gets the basics of what you should expect in terms of instruction and facilities, but the greatest value comes from the effort you put into your classes, and the passion with which you engage in your studies. This is why I advise high school graduates from getting a university degree "just because" or "for a better job". This leads to taking boring, careerist topics of study (seriously, you have your entire working life to get paid for being boring and careerist - why waste your university years doing the same!) and also to cheating so that you can jump over the hurdles in the quickest, easiest way rather than actually persuing knowledge and wisdom. If you're not totally passionate about a subject of study by the time you leave high school, I see nothing wrong with taking some time in the work force and waiting for an academic passion to overtake you. If you're at all observant and/or clever, it will happen. If you're neither of those, you do not belong in an academic environment.

Personally, I'd rather get rid of the financial barriers to higher education entirely, while simultaneously undoing all the grade inflation and de-valueing of that education. There's no logical reason that my masters is the equivalent of my mother's bachelor's degree (earned 30 years earlier) in terms of job prestige, unless you let everyone with cash get a bachelors degree as if it were some widget you can buy rather than earn.
posted by Kurichina at 2:05 PM on August 11, 2011 [1 favorite]

It's possible to imagine a student loan bubble but it doesn't seem to be going on right now.

Mortgage loan imbalances also looked innocuous in 2006. It's hard to say whether there will be large-scale defaults on student loans in the future, but if the economy continues to contract it seems like a pretty good bet. If anyone were selling credit default swaps on student-loan asset-backed securities, I bet there would be interested customers.
posted by Coventry at 2:13 PM on August 11, 2011

There are CDS's on student loans, but the average investor can't buy them.

You can, however, short sallie mae.
posted by empath at 2:21 PM on August 11, 2011

So, me and my college-educated friends have about a 1% unemployment rate - I have one unemployed friend among my 100 closest associates.

The country at large has a 9% unemployment rate.

College is still worth something.
posted by mai at 2:23 PM on August 11, 2011 [1 favorite]

empath, what are the CDS's called/how can I find them online?
posted by Coventry at 2:29 PM on August 11, 2011

bonehead: "There's no benefit to us as an employer. University grads are not better at tech jobs. they are arguably worse. In four years they get less practical experience than the certificate programs offer. Yet management wants better degrees than twenty years ago. "Professionalizing the workforce."

Too many chefs and not enough cooks."

One reason to prefer a better educated workforce for promoting from within. Many people run into educational background barriers, where they don't have relevant education and their previous experience doesn't prepare them for the next step. Now, you can argue that it's inefficient to require people hold jobs for years before applying parts of their education, but from a retention standpoint, if your tech leaves to get a degree, chances are they aren't coming back.

This might not be a reason to require more education, but it certainly explains preferring it, and in this employer friendly market, that's all you need to start the credential treadmill.
posted by pwnguin at 2:34 PM on August 11, 2011 [1 favorite]

One reason to prefer a better educated workforce for promoting from within. Many people run into educational background barriers, where they don't have relevant education and their previous experience doesn't prepare them for the next step.

That attitude too is credentialism, in my view. Why doesn't on-the job experience count? If someone has proven their worth on the job, mentoring new hires, unofficialy supervising half a dozen people, why can't I promote them? Why does HR say: "No technologist degrees for supervisors!" (and they do).

And anyway, middle managers need a Masters now, at least. There's a senior coworker of mine who's running into this problem now. The quick answer for him is one of those 16-week summer MBAs. Hey, it's still a graduate degree, right? It's only 25k and 4 months. That's an opportunity cost of only a couple years in terms of salary difference and he can almost do it in his vacation leave.
posted by bonehead at 2:56 PM on August 11, 2011

Bro? The man is 85 years old, please have some respect.

I'm no blackbelt, but I'm pretty sure I could take him out.
posted by Smedleyman at 3:34 PM on August 11, 2011

The bubble will pop once student loans stop being easy credit.

Indeed; It's a real shame to face repaying a huge loan for half your life ... when you've got a decent chance at a job that makes that possible, and strong reason to expect that you've got your money's worth.

It's a crime to encourage students to go deep into debt when there's a strong possibility that the economy won't provide a decent job for them when they get out... for a decade or more?

Students need to avoid that (recently created) trap, and stop valuing college educations that aren't expected to perform in the marketplace for more than they're worth. Colleges need to get real, get ethical, and stop helping their students step into this financial entrapment. Else they're complicit in the destruction of wide opportunity.

To quote Chomsky from April (Academic Freedom and the Corporatization of Universities): "The era of affordable four-year public universities heavily subsidized by the state may be over. Now that's one important way to implement the policy of indoctrination of the young. People who are in a debt trap have very few options....

Read that last part over and over. Pretty hard to do the stuff students traditionally do after graduation when you've got a huge debt to repay ... especially if you're not given an opportunity to repay it. But but ... but, unless daddy's rich, do whatever you can to avoid as much debt as you can. It's NO way to start out your adult life.
posted by Twang at 4:33 PM on August 11, 2011 [2 favorites]

I second those who said that there's no demand for ANYTHING any more.

I keep thinking of whatever science fiction book I read where they had easily located suicide places on every corner, y'know, just in case you felt the urge, were a useless human being, didn't living in a concrete box with your entire family... stuff like that.

Sometimes I seriously wonder if we are going in that direction.
posted by jenfullmoon at 5:31 PM on August 11, 2011

Sometimes I wonder if we're in a bubble bubble.
posted by All Out of Lulz at 6:58 PM on August 11, 2011 [2 favorites]

bonehead: "That attitude too is credentialism, in my view. Why doesn't on-the job experience count?"

At least in my line of work, being a great programmer has nothing to do with the skills you need to manage programmers.
posted by pwnguin at 7:22 PM on August 11, 2011

empath, what are the CDS's called/how can I find them online?

You basically have to be an institutional investor to get them.
posted by empath at 8:46 PM on August 11, 2011

I believe it, and I don't think I would buy them if I could. But it would still be interesting to follow the spreads on them. I've looked, and haven't found them, so I'd aappreciate a pointer.
posted by Coventry at 2:11 AM on August 12, 2011

Those saddled with student loans should treat them as the moral abomination they are and campaign to end them - and for their own loans, to have a default on them en masse and to prosecute the institutions responsible for promoting them and for attempting to make bankruptcy for loans impossible. If new laws have to be written to bring this about, then so be it: that is what politics is for.
posted by lucien_reeve at 2:21 AM on August 12, 2011 [1 favorite]

Yeah, I looked and I couldn't find them either, just articles mentioning that they were available.
posted by empath at 6:46 AM on August 12, 2011

A quarter of a million people used GI Bill benefits last year. Eighteen million were enrolled in colleges in 2007. You think the bubble is because of that 1.5 percent?

It helps establish the "going rate" for college tuition, and as others noted, diploma mill colleges set up around these government subsidies. Don't underestimate the financial contribution of even a 1.5% government paid student group.
posted by charlie don't surf at 10:52 AM on August 12, 2011

[The GI Bill] helps establish the "going rate" for college tuition

You have it exactly backwards. The Post-9/11 GI Bill (which is better, by far, than the Montgomery) sets its reimbursement based entirely on public-university tuition rates.
posted by Etrigan at 2:04 PM on August 12, 2011 [1 favorite]

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