@Auerswald and I have often spoken on the subject of whether higher education is about to undergo a massive disruption and if its a bubble ready to burst? We reference Kamenitz and others. Pushing further into the question are Jon Bischke (@jonbischke) and Semil Shah (@semilshah) in a guest post at TechCrunch:
In the debate sparked by Peter Thiel’s “20 Under 20 Fellowship” (which pays bright students to drop out of college), one fact stands out: the cost of U.S. post-secondary education is spiraling upward, out of control. Thiel calls this a “bubble,” similar to the sub-prime mortgage crisis, where hopeful property owners over-leveraged themselves to lay claim to a coveted piece of the American dream: home ownership.
Higher education is another piece of this dream, offering a chance at social advancement and the potential for a high return on investment. During the sub-prime crisis, brokers financed home sales on the belief assets would appreciate. A similar situation is brewing on U.S college campuses, where institutions extract high tuitions from consumers in exchange for degrees and credentials that are thought to be like homes—assets that will always appreciate in value.
An investment in college education has historically been a smart bet. However, in the same way sub-prime housing models didn’t accommodate for potential price falls, the belief that the value of a college degree will always appreciate is potentially flawed. And, if the value of a degree stagnates while its price tag soars, our higher education system will become unsustainable. Some are going so far as to claim that some university degrees already lead to a negative return on investment.
@TheEconomist alerted me to the great Lexington Column in the magazine that takes a more critical view of the bubble debate. The Economist quotes UC Berkeley Education professor Norton Grubb, who states,
The problem is that there are no other routes to better occupations and higher salaries anymore, except for those who have odd skills (athletes, rock stars, starlets willing to reveal all) – which most of us don’t have. Education has not stopped delivering its expected returns, not in terms of income or (un)employment. It has stopped delivering on the promise of a middle-class job = professions and managerial occupations, for which a BA was sufficient inthe 60s, and for which an MA is now necessary. So this leads to education inflation = middle-class kids seeking MA degrees and professional degrees, where a BA might have sufficed a generation ago. I don’t see any decline in the willingness of parents to sacrifice for their kids.
There are sure to be changes — but that is something that higher education has been good at since the first institutions were founded. From Jefferson and Franklin to Harper and Bush, innovators in higher education have responded to the needs of society. At some times slowly and almost always on the margins initially, but success is emulated quickly.