The Higher Education Bubble

In a recent publication of The Chronicle of Higher Education, they ask Will Higher Education Be the Next Bubble to Burst?

Reading the Chronicle is interesting because you know that the administration is reading it, too, and you sometimes find ideas discussed on it that are later implemented. For example, this article talks about the Justice Brandeis Semester:

Two former college presidents, Charles Karelis of Colgate University and Stephen J. Trachtenberg of George Washington University, recently argued for the year-round university, noting that the two-semester format now in vogue places students in classrooms barely 60 percent of the year, or 30 weeks out of 52. They propose a 15-percent increase in productivity without adding buildings if students agree to study one summer and spend one semester abroad or in another site, like Washington or New York. Such a model may command attention if more education is offered without more tuition.

Furthermore, it talks about the rising costs of education, and how Universities are hurting themselves by raising tuition even more these days.

With tuitions, fees, and room and board at dozens of colleges now reaching $50,000 a year, the ability to sustain private higher education for all but the very well-heeled is questionable. According to the National Center for Public Policy and Higher Education, over the past 25 years, average college tuition and fees have risen by 440 percent — more than four times the rate of inflation and almost twice the rate of medical care. Patrick M. Callan, the center’s president, has warned that low-income students will find college unaffordable.

Meanwhile, the middle class, which has paid for higher education in the past mainly by taking out loans, may now be precluded from doing so as the private student-loan market has all but dried up. In addition, endowment cushions that allowed colleges to engage in steep tuition discounting are gone. Declines in housing valuations are making it difficult for families to rely on home-equity loans for college financing. Even when the equity is there, parents are reluctant to further leverage themselves into a future where job security is uncertain.

Anyways, just an interesting link between our financial troubles and the wider world.

P.S. You may have noticed that Innermost Parts has stopped posting so much during the summer. That should be expected: It’s summer vacation, and we’re not even on campus. That said, you should check our RSS feed to keep up with us during the summer. Had an interesting summer experience? Going to a progressive conference? Let us know! Write about it.