Higher Education: The Coming Shakeout

Higher Education: The Coming Shakeout
Posted: 05/26/2013 10:22 pm

Just as markets over-built housing, mispriced mortgages and bid up prices beyond the real financial capacity of homebuyers, America’s colleges and universities have over-expanded and over-priced their product. We are getting an education bubble with dynamics similar to the late housing bubble.

As more and more students find themselves with debts that exceed the salaries offered by the current job market, colleges have expanded beyond the capacity of their markets. Some kind of shakeout is coming. The question is: what kind.

During the long boom in higher education, colleges have also dramatically increased salaries and staffing levels of administrations. Some of this reflects efforts to game the rankings, which also is another aspect of the same imbalance.

For-profit universities, with high dropout rates, heavily reliant on federal Pell grants and student loans, are only the more explicit and extreme expression of a general trend of colleges and universities becoming more marketized. Colleges are doing deals to set up satellite campuses in sheikhdoms, recruiting full-tuition state-supported foreign students and creating vanity diploma mills as profit centers. The flip side is a massive disinvestment by state legislatures in America’s great public universities and an under-investment in community colleges.

https://www.huffingtonpost.com/robert-kuttner/higher-education_b_3340828.html?utm_source=Sailthru&utm_medium=email&utm_term=Wake%20Up%20Call%20NJ&utm_campaign=Wake%20Up%20Call