Monday, November 1, 2010

27. The academic bubble may burst.

When considering devoting your life—or at least a large portion of it—to academe, it is worth considering the big picture and the future of higher education. For decades, tuition has been rising higher and higher, with either parents or students (incurring more and more debt) expected to shoulder the burden. As the Economist recently pointed out:
College fees have for decades risen faster than Americans’ ability to pay them. Median household income has grown by a factor of 6.5 in the past 40 years, but the cost of attending a state college has increased by a factor of 15 for in-state students and 24 for out-of-state students. The cost of attending a private college has increased by a factor of more than 13 (a year in the Ivy League will set you back $38,000, excluding bed and board). Academic inflation makes medical inflation look modest by comparison.
According to the Chronicle of Higher Education, average college tuition and fees have risen by 440 percent over the last 25 years. Obviously, college costs cannot continue to devour a larger and larger share of middle class income indefinitely. Eventually, a point will be reached when people conclude that a college education is no longer worth the exorbitant ticket price. When a large enough share of the population believes that it has reached that point, colleges that are used to yearly increases in tuition income will be forced to make substantial changes. All colleges are vulnerable to changing economic conditions. Now that the consequences of the real estate bubble have become painfully apparent, more and more people are using "bubble" to describe the unsustainable growth in higher education. There are already too few jobs in academe for those seeking them (see Reasons 8 and 13). What will the situation be like if the bubble bursts?


  1. "(a year in the Ivy League will set you back $38,000, excluding bed and board)."

    Not necessarily. Harvard is now cheap or free for students who - or whose families - make under a certain amount per year (and it's a fairly high number - I think $60,000) and pretty generous aid is offered for those with a median income or whose families have a median income of $100,000/yr or less.

    Ivy League schools, if you're smart enough to earn a scholarship, are pretty generous with scholarship money you never have to pay back. Far more generous than non-Ivy private schools at least.

    That said, I'm still not in grad school because I can't afford it. Hah.

    1. I am from a working class family (father is a taxidermist and mother is a homemaker and assists with our business behind the scenes). I went to Cornell and my sister to Dartmouth both about as close to free as you can get. It actually came out slightly cheaper than the state flagship with maxed out merit scholarships. Neither of us met a single person who received anything close to us in financial aid. The vast majority of people I met were from middle & upper middle class families but by no means rich. Think parents who were professors, K12 teachers, scientists, engineers, architects, accountants, doctors, lawyers, middle management, etc. These people generally paid less than the sticker price, but still ended up with huge debts.

      While I am grateful that I received my education at an affordable price, I feel extremely sorry for my peers who weren't as lucky or perhaps went to that state flagship to avoid the huge debts. There are either zero or epsilon merit scholarships in the ivy league at the undergraduate level. Terminal masters and professional degrees have basically zero aid and PhD's vary widely but I can say physics and engineering give 100% funding and a decent stipend to all students as far as I know, even if industry would pay them double. So outside of the PhD, the rise of generous need-based financial aid is taking from the middle class and giving to the lower class while the few stereotypical rich people I met are so unaffected they actually wanted tuition to go up so we could get nicer stuff.

  2. Of course, I am talking about undergrad, not graduate school, but as undergrad was mentioned in the post, I figured it was a relevant point.

  3. Two years after I left my undergrad, tuition had increased seven percentage - a huge increase for a college that already had relatively high tuition. With the economic meltdown, I'm sure their endowment lost quite a bit, so I expect the tuition is astronomic at this point.

    Yet, I think people still see value in higher education. The question is who will they get it from? The trend seems to be toward community colleges, which is a generally good alternative to avoid high tuition costs at public universities. I'm more concerned about for-profits beginning to pull from an even larger groups than they currently do, including traditional undergrads. Will it be long before PhDs are fighting over those jobs?

  4. Think the bubble's already burst for those doing the teaching -- the sales pitch is for those putting money into the system, not those supporting it with slave (or at least martyr) labor. PhDs are already fighting tooth and nail for any jobs that will have them.

    I'm all for community colleges, by the way; that's how most of my relatives went to college at all. It's just that, being on the other end of it, I don't believe in killing yourself (i.e. teaching well) for a pittance. It just feeds you into an exploitative system and encourages people to pay teachers no money for their "vocation".

  5. I graduated over 2 years ago with just my BA, and I've payed off maybe 25% of my college loans. After entering the job market (not in the field I studied in college, since there are NO jobs for a man with a BA in history) I've been able to pay off the interest on my loans each month, but barely chip away at the actual bulk of the thing. I considered grad school upon graduating, and I am sooo glad I didn't enter, because I would have racked up even more debt and would have payed $0 towards what I already have.

    Would I recommend grad school? No, and ONLY because of the cost involved. Especially when the humanities are concerned, there is just no way to pay it off, with no guarantee of a job upon graduation.

  6. We're already starting to see the effects of a bursting bubble with the cutting of foreign language (French, Russian, Italian, and classics) and theater departments at SUNY Albany. Those departments were already relying heavily on adjuncts, but now, "Ten tenured faculty members in language programs were told Friday that they would have two years of employment in which to help current students finish their degrees, but that they would then be out of their jobs" .

    Even tenure doesn't buy you job security anymore. What happens when administrators decide English, history, and philosophy are next? You won't have to worry about the choice of whether or not to go to graduate school, because there won't be any but a few elite programs left for the people for whom money is no object.

  7. Here's the story about SUNY Albany, if you haven't seen it yet (sorry, I don't know how to embed links here:

  8. to me, "the bubble will burst" argument isn't a very good one. when the bubble bursts, there will still be an oversupply of individuals with post-bac degrees. there was once a time when all that was required to get a good job was a high school diploma. that time is long gone, and now even a bachelor's degree in most fields isn't going to provide for much into the middle class. so when the bubble bursts, those with a degree will be able to get what jobs exist while those without one will not. that's just the way the cookie crumbles.

    1. I have a graduate degree and I haven't found anything but unskilled labor. In fact, I've given up on finding anything related to either my college degree or my graduate degree, or anything else I've studied.

      Frankly I've been jacked around for 25 years now and I have had enough.

  9. I agree with other posters that a college education will remain important--after all, employers seem to be gradually requiring more education rather than less. But the "college experience"--moving away from home at age 18 and living at university for 4 years--may very well become obsolete. People are starting to realize that going into debt for a meal plan, dorm rent, tuition at a 4-year-university, etc. isn't always a great investment. As a result, I think we'll see increased interest in community colleges, online education (either at for-profit or nonprofit universities), part-time education, and commuting to campus rather than living there.

    The problem is that PhD programs still train their students to teach at a traditional four-year, "R1" university. Hyper-specialization is encouraged, even though that matters less when teaching at a community college (where most professors teach broad introductory courses). Professors in graduate school devote about 99% of their time to honing students' research, and very little time helping them become better teachers. Whenever professors deign to give practical advice on teaching, they assume you'll be speaking to an audience of full-time, traditional-age college students in a bricks-and-mortar classroom . . . not, say, 16-year-olds taking dual enrollment courses at community college, or students with full-time jobs who take night classes and can't attend daytime office hours, or a distant audience of students who only see you over Skype. So most of us are poorly trained to cope with a changing environment.

    Also, keep in mind that a changing academic structure will change the academic job market, and not always in a good way. Online teaching often pays less (and can be outsourced); for-profit schools often don't offer tenure. Employment prospects are already dim thanks to increasing reliance on adjuncts, but I think they may very well get worse.

  10. "Ivy League schools, if you're smart enough to earn a scholarship, are pretty generous with scholarship money you never have to pay back. Far more generous than non-Ivy private schools at least."

    Nope. At the Ivy I'm about to graduate from (undergrad), there is no such thing as a merit-based scholarship. My family was deemed to be too well-off to merit (haha) any financial aid. The vast majority of my family's income comes from my dad, and guess what? He's a professor!

  11. Another perspective on the bubble is that productivity gains have not come close to keeping pace with salaries for academics that teach. And in fields where there is no identifiable economic benefit to the research done by them, there isn't anything to justify salary increases. I think that we are at or near the breaking point, and when that happens, lower-tier private universities will be in big trouble first, and once they start CUTTING prices, there will be tremendous deflationary pressure on all but the most prestigious schools. Also, the salary disparities between professors bringing in research money and those not doing so will only increase (just as surgeons on university faculty have long made more because they bring in business to the hospitals). And as long as there is a glut of academics in these non-revenue-producing fields, even the tenured faculty will have trouble getting raises. It's going to get ugly...

  12. Thanks so much for this informative blog. I gave up on higher education after barely surviving (psychologically) through undergrad in the Ivy League. I am therefore finding great catharsis from reading this blog and seeing that there is a significant number of other people out there who have similar opinions on the general issue of higher education. In addition, your blog is also alleviating my angst in having decided NOT to go to graduate school. Finally, I am using the information and comment from this blog as part of my research project : Student Loan Resistance of America which is a poltical activism project which explores the crisis in the ENTIRE educational system in America (ex. primary, secondary, tertiary and graduate levels). Luckily I found a well-to-do gentleman who believes in the cause and has employed me with an adequate living wage to be able to pursue this research and share it with a growing community of others who have been (or potentially will be) effected by this issue.

    One of the key aspects which I think people need to seriously consider is the QUALITY of the education. At the end of the day the investment in education is purchase like any other. As the economy continues to tank people are (by necessity) starting to wake up to the hard reality that the good times are generaly over (for a growing portion of the population) and you thus need to be get smart about how you spend your money.

    The disturbing trend that my research is showing is that the American economic-political system is basically DEVOLVING back into that which the founders of the republic were reacting against in setting up our system of government. That is, the overall trend in history has always been for those who had the means (generally the "moneyed class") to have the ability to attain an education while the majority of the population was too busy spending their time/effort working and surviving to be able to dedicate the funds/time/effort to completing an education. The American system has been (since its inception) an effort to move AWAY from this aristocratic system into a more democratic one. HOWEVER, such democracy is not free and in my opinion the only thing that has really made democratic education possible is the generally high productivity/wealth level of the nation as a whole.

    For most of the past two centuries (and especialy following WWII) America was in high productivity/growth mode (with the exception of a few select periods (ex. The Great Depression)). However, in the past several decades the economy has been on the downswing, with globalization playing an important role in this transition.

    The bottom line is that the productivity which made democratic education possible is no longer there. As a result, we are not watching the system devolve BACK into the system which existed before it. That is, the middle class is losing its ability to access higher education and the modern-day aristocracy of moneyed people are gradually become the select group which is able to afford and complete a proper education.

    The same thing is playing out in the graduate school system. Those graduate students who are wealthy enough before entering school tend to fare much better than those of lesser means who then get caught up in the exploitative system of work-study and the insurmountable student loan debt trap.

    This is part of my general analysis of the situation as it stands at this point in time. The aggregate student loan debt has passed $1 trillion this year and the social/economic effects of this crisis are absolutely horrible.

    It's a complex issue, but the bottom line is that people need to start waking up and thinking more critically and practically about education, the REAL value of that education, and what they are willing to sacrifice to attain it.