"We’re in a Bubble and It’s Not the Internet. It’s Higher Education."

Discussion in 'General Distance Learning Discussions' started by Hadashi no Gen, Apr 11, 2011.

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  1. Hadashi no Gen

    Hadashi no Gen New Member

  2. NorCal

    NorCal Active Member

    I think it is fair to say that we are in a education bubble of sorts. I remember a time when you had to research a college, but now you can see ads for colleges running on cable television all day long. Couple that with the current state of the economy, the increase of the GI Bill and all the veterans returning home with huge amounts of cash to spend on college, the availability of federal loans (Title IV), the money and the interest is definitely there and appears to be peaking.
     
  3. SurfDoctor

    SurfDoctor Moderator

    I concur with Thiel. It is interesting that he is really saying something that some of us have been talking about on DI for a long time. Students are exhibiting blind faith in getting a university education and spending huge sums to do it, racking up well over $100K in debt to earn bachelor's degrees from high end schools and ending up without a lucrative job to pay back the loans. These loans may be with the student for their entire life and the degree serves to lower the quality of their life for a long time, possibly forever. Thiel is saying that a college degree is no longer the magic ticket for success that it once was. This argues for lower priced university alternatives.
     
  4. Abner

    Abner Well-Known Member


    Exactly!!!!!!


    Abner
     
  5. dlady

    dlady Active Member

    I think we are in an education bubble in the strictest of definitions, being high volume at higher than reasonable cost. Unlike many other bubbles though I don’t see the demand changing if this bubble pops, I think demand will continue to rise at an even higher rate.

    If only someone were able to provide a real quality education, balanced with academic research, peer review publications, excellent instructors, at incredible value (read low cost), with a flexible DL format, focused on real student success & learning, from a non-profit institution! Why is that so hard?

    HINT: Maybe it isn’t and someone is a few days away from a big announcement?

    Someone has to step up and do the right thing here.

    DEL:privateeye:
     
    Last edited by a moderator: Apr 12, 2011
  6. Lerner

    Lerner Well-Known Member

    I think education has value.
    Even if the bubble bursts and the degrees will become not as needed for some cycles because these things are cyclical. One will always benefit in one way or another from education they received.

    As to ROI, thats a different story. I'm one of the people who thinks that there is no price on education, and not all degrees are meant to provide ROI.

    We do live in competitive society, jobs are not guarantied.

    People in their 80's go to college to earn Bachelors, Masters and Doctoral degrees.

    As to providers of education, they may have an issue as usually bubble bursting can result in meaningful drop of enrolling students.
     
  7. SurfDoctor

    SurfDoctor Moderator

    This is a very good point. So many around here judge a degree strictly on the monetary return it will provide and, while that is a valid consideration, it is not the only consideration. How could an older person, especially a retired one, expect a good ROI? I'm sure that's not even a concern for many of them. There are many others who's goals involve other things than money.

    I, for example, would like to make some money with my future EdD, but it is not my primary motivation. I love learning and I love earning degrees. The intrinsic motivation is very strong in my case and the case of many others.
     
    Last edited by a moderator: Apr 12, 2011
  8. SurfDoctor

    SurfDoctor Moderator

    If there is a portion of the education bubble that will pop, it will involve the expensive schools funded by federal loans. I have been pointing out the similarities between this phenomenon and the housing bubble for quite a while, and many have agreed with me. I foresee this burst in federally funded, expensive education happening in the not so distant future.
     
    Last edited by a moderator: Apr 12, 2011
  9. NorCal

    NorCal Active Member

    I believe you called it one the head.
     
  10. RFValve

    RFValve Well-Known Member

    It is not longer a ticket to success but it is becoming mandatory for most jobs now. At least in IT, most jobs require a BS now even for technical support.

    The issue is that you don't need to spend 100K to get an education nowadays. In IT for example, a good BS from a school like Excelsior coupled with a couple of good certifications would do the job.

    The bubble will not burst for a general BS, the bubble will burst for graduate degrees that carry almost no value for industrial jobs. For example, I don't see people taking online doctorates in the future, these programs have demand now because expectations of higher earnings. However, once people realize that these degrees have almost no value to employers, they will have less demand for future.

    Most people will need a BS to get a regular job in the knowledge economy. People looking for high end managerial positions or academic jobs would need to go to top schools that will limit incomes to small numbers to keep the job prospects high. Any other graduate degree from a low tier school will have almost no value for employment purposes but only for those looking to learn and personal development (small market).
     
  11. RFValve

    RFValve Well-Known Member

    I agree 100% with you, there is no point to spend 100K for a degree if you can do one under 10K at a school like Excelsior. At some point, the government will figure it out and cut funding for these programs.
     
    Last edited by a moderator: Apr 13, 2011
  12. emissary

    emissary New Member

    Well, count me as one who has just now been told that he is, in fact, in the middle of a forest. That explains why there were always so many trees around.

    I know this is probably a blinding flash of the obvious to most already on this thread, but to me, this is a completely different context in which this discussion can be framed.

    So, in theory, if this bubble "pops," there will be a mass exodus from the industry, dead weight will be shed, and then the market will become more attractive to consumers. BUT what if the same thing happens here that happened in finance; that is, dead weight was shed, but suddenly the market was completely inaccessible to a large portion of the previous consumers. Such a trend would completely go against our philosophy of accessibility.

    Oh hell, I don't even have time to think this all the way through; I've got to get back on a research paper. Y'all will have to figure this one out, unless I can get back and the discussion still drags on tomorrow.

    Interesting topic, though. Thanks!
     
  13. SurfDoctor

    SurfDoctor Moderator

    You could be right about the issue of inaccessibility. Once the government curtails the indiscriminate financing of degrees, it might become more difficult to finance even a good program.
     
  14. BrandeX

    BrandeX New Member

    Federally set maximum tuition perhaps? (Imagine something like Federal minimum wage law), school that were charging over this set amount would have incremental reductions in the amount of financial aid eligible to students who attended there (perhaps "none" at the highest levels). So, schools wouldn't raise tuition solely for the reason of getting more gov. financial aid dollars per student.
     
  15. NorCal

    NorCal Active Member

    You mean there isn't a cap already??? Wow, I didn't know that . . .
     
  16. Anthony Pina

    Anthony Pina Active Member

    Certainly, Steve Eisman agrees with you.

    Why are you limiting the burst to education funded by federal tax dollars, more of your/our pocketbook goes to state and local tax subsidies for education than federal subsidies. Unfortunately, we are already seeing the bubble burst at numerous state-run universities and community colleges. Three former institutions of mine (Cal State San Bernardino, College of the Desert and Northeastern Illinois University) have had to make some very uncomfortable cuts in programs and personnel.
     
  17. Anthony Pina

    Anthony Pina Active Member

    That would be a fascinating idea. The 100 most expensive schools are all non-profit private universities (except for, I believe, two public universities). They would likely have to dig into their endowments.

    The ironic part of this discussion (and one that rarely gets mentioned) is that schools do not set the amounts of financial aid that students receive--the government does that. The feds determine the amount of pell grants and student loans for which students may qualify and they tell the schools (not vice-versa).
     
  18. SteveFoerster

    SteveFoerster Resident Gadfly Staff Member

    It's the free flow of federal student aid that lets schools be so expensive. While the feds have no place telling universities how much they can charge, dramatically lowering the amount available through Title IV is another matter. Many schools already have a lower rate for military personnel, because they want to be able to market their programs as zero out of pocket to them. They're not being patriotic, they're still making plenty on each military student, suggesting if Title IV were down to that level, or even lower, they'd have to lower their tuition rates to remain competitive.

    -=Steve=-
     
  19. Anthony Pina

    Anthony Pina Active Member

    Lowering the amount of available cash could, indeed, have the effect that you state. It would appear that the for-profits would be in a much better position to respond to market shifts than public colleges and universities or even the smaller private colleges.

    Student loans and grants are used by many student for purposes "peripheral" to their studies. For example, I have known students who have used their funds to purchase automobiles. If students in these instances were to default on their car loans, I wonder if the government would go after the automobile dealerships for "overselling" to their customers...just a thought.
     
  20. friendorfoe

    friendorfoe Active Member

    I'm going to have to agree with Steve, there is no compelling reason that TitleIV funds should exceed the maximums available through the GI Bill. Would cutting funding force schools to cut the fat? Some, yes but I do not think that's a bad thing especially given the economic challenges our country is going to face for the next decade or more. I also think it would force students to actually spend the money on school instead of everything else.
     

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