A Higher Education Bubble?

Sunday Night Journal — May 1, 2011

I spent most of the 1980s working in software development at a company that
built high-end computer graphics systems. Then as much as now the computer
industry was very fast-moving and competitive, with technological advances
happening at a head-spinning pace, companies appearing and disappearing like
mushrooms, and winners and losers shifting places constantly. In 1990 I left
the company and the industry, partly because I didn’t think I had the ability
and drive to keep up with the very demanding environment, and took a job doing
considerably less interesting, but also less difficult, work at a small
college.

That was a pretty striking change. I had not been around an academic
institution for a while (although I had once thought myself on the path to an
academic career) and after the intensity of a high-tech company I felt somewhat
as, I suppose, a New Yorker might feel on relocating to a small Midwestern or
Southern town. By the standards I had left, the technology was absurdly, in
fact shockingly, antiquated and unreliable. (It soon became clear that I was
only exchanging one sort of pressure for another—trying to do too much with too
little—but that’s another story.) Looking at the little school through the eyes
of someone who had been in the thick of technological ferment, I thought it
oddly isolated and unaware of the greater world. And I began to look at the
whole higher education environment from a perspective very different from that
of the student I had been years earlier, a perspective shaped by observation of
the business world.

I was struck by the fact that the college, and higher ed
in general, was a business—certainly not a thought that had ever crossed my
mind while I was a student—but a rather strange business, one that didn’t quite
admit that it was a business, and didn’t quite behave like one, but
nevertheless would ultimately live or die by its ability to sell its
“product”—a college degree—to its customers—students and parents. I remember
the surprise with which I realized that the admissions counselors, whom I first
regarded as gatekeepers, were actually salespeople.

After having observed not only the institution but the general landscape for
six months or a year or so, I came to the conclusion that if higher ed were a business like any other there would soon be a
“shakeout”—the disappearance of a number of less successful competitors, who
would either go out of business or be absorbed by larger institutions—among
colleges like the one I work for: small private liberal arts colleges of decent
but not first-rank reputation, without hundreds of millions of dollars in the
bank. There were just too many of them, competing, in the post-baby-boomer
world, for too few students.

I also saw, though, that the shakeout was not likely to happen, for a number
of reasons, the most important of which was probably the existence of the
federal financial aid system, which made possible the survival of institutions
which could not afford to operate on the tuition its students could afford to
pay. Private schools have to compete with those run by the state, and of course
there is no way that the private ones can match the low tuition rates of the
state ones, which are supported directly by government money and don’t have to
rely on tuition to cover the costs of running the place. It’s a bit like trying
to produce automobiles in competition with a state-run company that, can sell
them for less than it costs to build them, making up the difference with tax money. Government financial aid is
essential in bridging that gap—as if the government ran its own car company and
sold cars cheaply, but gave money to people who want to buy another brand. (A
crazy-sounding system, yes, but of course it wasn’t designed that way—as with
most such things, it just sort of grew.)

Well, it appears that the possibility of something like that shakeout is
looming into view. Everybody interested in the subject knows that college
tuition prices have risen faster than other prices over the past twenty years
or so, and that a year at a private college can now cost anywhere from $20,000
to $50,000. I have seen a number of discussions lately about the possibility
that we are in a higher-ed “bubble,” in which prices
have continued to rise because people think that the item—like tulips in Holland
in 1637, Internet
stocks in 1999, real estate in 2008—will continue to become more valuable.
Ordinarily “bubble” refers to speculation: people expect the price to continue
to rise, so even if what they’re paying now seems unreasonable, they expect to
be able to sell it for even more. A higher-ed bubble
isn’t exactly the same thing, but the willingness to pay these enormous costs
does, mostly, rest on the belief that the degree will enable the holder to earn
considerably more money than he or she would without it. But what if that
ceases to be the case? The possibility is beginning to seem very real.

That’s all by way of introducing this
excellent treatment of the bubble
and, along the way, of the general
condition of higher education in general. I won’t try to summarize it; if you
are at all interested in this subject, you should read it. A couple of notes:

The idea of “college for (almost) everyone” is fundamentally flawed. If
higher education is to mean anything at all, it has to make demands on those
who are fairly gifted intellectually, which means it will be out of reach for
many. We have been trying to pretend that this is not true, but it is. The only
way to square that circle is to “dumb down” the work required, which we have
been doing for several decades now. This in turn is one of the things that may
produce the collapse of the bubble. “All have won, and all must have prizes” can
be enforced as an edict from the queen, but no one is fooled into believing
that all are equally capable: the prizes will be regarded as meaningless, and
other ways will be found of discovering and rewarding those of greater ability.
And if the prize must be bought at a pretty exorbitant price, but is worth
little or nothing, people will no longer want to pay for it.

Possibly worse is the implication that only “brain work” of the kind that
genuinely requires extended education is worth doing. There’s nothing wrong
with rewarding those who are more gifted (in whatever respect) and/or work
harder. There’s nothing wrong with some occupations being more rewarding
financially than others. Such hierarchies are natural and can only be eliminated by totalitarian means, if at all. But the disparities have to be reasonable, and those
at the lowest level can’t just be considered insignificant, if not useless, and
consigned to poverty. A decent society must do its best to provide a place for
everybody. I don’t think it’s wrong if the engineers make more than the people
who clean the building, and the CEO makes more than the engineers. But I do
think it’s wrong if the engineers are affluent, and the CEO makes tens of
millions every year, while those who clean the building struggle to
survive. If we care about preserving our democratic republic, this is not only
morally but pragmatically wrong.

On the one hand, there’s the dumbing down (which
of course starts at the earliest levels of schooling). On the other, a sort of attempted
smartening up, in which higher ed attempts to make
itself essential where it really does not belong, offering degrees in practical
fields with no appreciable abstract intellectual content (“recreation management,” etc.)
or any skill which could not be learned as well or better on the job.

And then there’s the distortion of the educational mission, well-described
here:

The university as an institution has historically
been defined by its allegiance to high principles such as the pursuit of truth,
the acquisition of knowledge as a basis for a free society, and the
transmission of the ideals of civilization. … Another way of accounting for
what has diverted higher education from its central task is that it has been
captured in the last half-century by interest groups that have a strong
commitment to using the university for various kinds of social transformation
that have thin connection to the foundational principles of the institution.

It strikes me that this was a sort of return of
the original mission of the university, which was very much bound up with
understanding, supporting, and advancing the Christian faith. The faith
supplied the foundational justification for the institution’s existence and
mission, and was the vision which united all its efforts. Now the faith is secular
progressivism, and as may or may not have been the case in the Middle Ages,
some believe while others pretend to believe and laugh behind the backs of the
pious (only tenured faculty members are likely to dissent openly).

I’m not even touching on the the whole question of
vocational vs. liberal education. That’s almost a lost cause. Many people in
higher ed, possibly most faculty, do not fully grasp
the hard-nosed and brutal economic calculation which brings most students to
the university. When that calculation begins to show a negative return on the
investment, trouble is coming. I’m not necessarily
predicting that the bubble will burst. But idea that a bubble exists is probably
one of the things that cause it to collapse, and in this case the idea is spreading.

28 responses to “A Higher Education Bubble?”

  1. Francesca

    I like this sentence from the piece
    What developed was a hybrid institution that presents itself to the general public as concerned about national economic priorities and practical preparation of students for the marketplace, but presents itself to faculty members and students as pursuing goals such as social justice, diversity, and sustainability.

  2. Cool that you picked that paragraph–I thought it was right on and had pasted it into the file in which I was writing this piece, though I ended up not using it as I was too long and rambly already.

  3. Francesca

    I found that sentence striking because it is almost as if the more highminded what academics think they are doing, the more their work is instrumentalized for low minded purposes. To put it another way, the more impractical they are, the more they are used.

  4. Louise

    “college for (almost) everyone”
    is really only warehousing young people (overgrown adolescents, really) and keeping them out of the unemployment stats. At least, here in Australia.

  5. I hadn’t thought of it that way–I would have said that in the current situation the using goes the other way: academics of a missionary bent using the institution for their purposes. Which is true, but I guess it works the other way, too. And I think you’re not talking only about the current situation?

  6. And about the warehousing, Louise (last was replying to Francesca): that, too, touches on a whole ‘nother aspect of the situation. College here has been described, accurately for a large number of students, as “summer camp with alcohol, sex, drugs, and no grownups.”

  7. In one of his letters, Tolkien quotes a cynical academic exclaiming that a university is “a factory for making fees”. There’s an element of that in it, but it’s much more up-front in vocational institutions.

  8. College here has been described, accurately for a large number of students, as “summer camp with alcohol, sex, drugs, and no grownups.”
    I have to take issue with that. I understand what you mean, but I would rephrase as “accurately for a minority of students.”
    I attended a big party school, and sure, there was a ton of that, but those that graduated got educations — they didn’t just drift through without learning anything. Some do, yes — but not a large number. In fact, I would say most graduating students end up serious about their lives, at least to some degree. Those that really only party tend not to graduate.
    That’s of course separate from the question of the worth/relevance/etc. of what they studied, which was what most of your main post was about, and with which I mostly agreed.

  9. Oh by the way, another comment. I think most people seeing the declining value of a 4-year degree are opting to continue on to get advanced degrees of various stripes, most frequently masters. This has been going on for a long time, and I’m sure it will continue.

  10. Well, “a large number” and “a minority” aren’t necessarily different quantities. Anyway, I didn’t mean that’s all it is even for those–the ones who do nothing else flunk out pretty quickly, obviously. I don’t think it’s an unfair generalization about weekends on a typical college campus, though.

  11. Interesting Tolkien quote–and Randall Jarrell was making fun of the physical education major in a poem from the ’40s or ’50s. Yeah, this stuff is not new, it’s just progressed quite a bit.

  12. Louise

    I attended a big party school, and sure, there was a ton of that, but those that graduated got educations — they didn’t just drift through without learning anything. Some do, yes — but not a large number. In fact, I would say most graduating students end up serious about their lives, at least to some degree. Those that really only party tend not to graduate.
    Oh certainly, some people manage to grow up eventually. I wasn’t referring largely to the partying, I was referring largely to the fact that most young people are encouraged to go to university who really should be gaining apprenticeships and the like and not b/c they’re “not smart.” In the first place, I’m not convinced that everyone who goes to uni is smart (even if they manage to graduate) and I’m not at all convinced that the education they get is even an education worth having. This is not the kind of education universities were first offering when they began. It’s not classical learning in wisdom, it’s just techno stuff. As someone with a civil engineering degree, I’d say that there’s nothing essentially wrong with techno stuff, but it’s not really on the same plane as philosophy and theology.

  13. “I’m not convinced that everyone who goes to uni is smart…”
    Really?!?! Another illusion shattered! 🙂
    Of course “smart” is a pretty broad term, and the level of smartness required varies hugely across the curriculum. I doubt there are many schools, maybe none, where you can get a degree in the sciences (not counting “social sciences”) without being pretty smart by any reasonable standard. But there are a lot of subjects where you don’t have to be very smart, in the sense of being good at abstract intellectual work, to pass. Not to mention the dumbing-down. In the US, standards vary widely, but for the past 30 years or so some universities have been admitting people who are functionally illiterate. And I’m pretty sure some of them graduate.

  14. Also, Jesse, re “…most people seeing the declining value of a 4-year degree are opting to continue on to get advanced degrees of various stripes, most frequently masters.”:
    That only applies in some fields, e.g. yours & mine. For humanities majors, advanced degrees are mostly useful for advancing to a PhD and a college teaching job, but as the latter are very hard to come by, that path isn’t viable for most. For an English major, for instance, a Master’s degree alone, i.e. as a terminal degree is, to use a favorite phrase of a farm-raised co-worker of mine, as useful as tits on a boar. If you’re a public school teacher a Master’s is worth a few thousand more dollars a year. Apart from that circumstance, it doesn’t matter much. E.g. if you were hoping to use your English degree to get a job in corporate communications or something of that sort, and you couldn’t find a job with your BA, an MA is probably not going to help.
    I hadn’t really thought about why that’s true until just now, but it makes sense: if you have a BS and an MS in computer science or electrical engineering, you know significantly more and may well have exhibited more aptitude than someone who only has a BS. And what you know is directly relevant to the jobs you’re looking for. Not so with English vis-a-vis the business world: if you have a BA in English and you’re trying to sell yourself to the business world for your general knowledge, aptitude, and language skills, an MA doesn’t add to that. It adds to your specific knowledge of literature, but it would be a rare job apart from teaching where that’s useful.

  15. The way the Seven Liberal Arts were taught at medieval universities included a fair amount of basic vocational skills (record-keeping, accountancy, surveying, communications), which is what most undergraduates not planning to do higher degrees would have wanted. What I really don’t understand is the proliferation of bogus “studies”, which provide neither practical application nor cultural breadth. (I teach Translation, but I’ve heard there are people that teach “Translation Studies”).

  16. Sometime–I can only narrow that down to the past 35 years or so, although I think it was more than 10 years ago–I heard a talk on the medieval university which made the case that there was actually a pretty strong vocational component in the education it provided. Which fits with what you’re saying.
    In general, if an academic field has the word “science” in it, the claim bears close inspection.* I think they’ve quit saying, for instance, “library science.” As someone pointed out a long time ago, you don’t have to say “physics science.” I’d say the word “studies” is similar. Some of the “studies” are strongly and pretty unapologetically aligned (to say the least) with specific political agendas. So the quote I pulled from the piece I linked to is your key to understanding the reason for their existence. But I don’t know why “translation studies” and not just “translation.”
    *I speak as someone who has a degree in “computer science”. That’s not a very good term, either, but I can see why it came into existence: much of what’s taught in the field could just be named “computer programming”, but there are upper reaches where it becomes quite abstract and math-like. Not enough oxygen up there for the likes of me.

  17. Well, “a large number” and “a minority” aren’t necessarily different quantities.
    Meh. Of course I meant that I think the number of students for whom college consists almost solely of partying is small. And no, I don’t mean small like 10^-800.
    Anyway, I didn’t mean that’s all it is even for those–the ones who do nothing else flunk out pretty quickly, obviously. I don’t think it’s an unfair generalization about weekends on a typical college campus, though.
    Well, you said “college” — no time boundaries given, like the weekends you mention here. [And anyway, doesn’t that describe weekends for a lot more people than college students? Ever hang out with lawyers?]
    And you said “accurately.” How else could I take it? Unless you were joking, in which case I apologize for completely missing it. 🙂
    Louise, no argument from me with what you said, except I do think that engineering is not by definition less noble of a pursuit than philosophy. But that’s another topic.
    Mac, about the masters thing. I was basically trying to say that in terms of monetary value to be extracted post-degree, the MA is the new BA. I think the humanities comparisons are beside the point, as long as the argument is about money. In the past, if someone got a BS in say, mechanical engineering, it carried some weight. Nowadays, as you guys have been saying, and I agree, it’s more like a trade degree. For a mechanical engineer to distinguish himself, he must now have a masters.
    This I think holds for many fields, not just sci/tech fields. Witness the MBA, for example. Even in the arts — artists with an MFA are far more likely to be able to get a job doing art or art-related stuff than someone with a BA. Same for music.
    This question of “value” — I’m taking that to mean a pretty purely monetary thing, as that seemed to be what a large part of the post was about. In terms of wisdom, maturity, and so forth — yeah, that’s very much related but a little different & not what I meant to address.

  18. Janet

    Ever hang out with lawyers? I’m trying to picture Maclin hanging out with lawyers.
    AMDG

  19. Janet

    Why do I do this?

  20. The summer camp thing was not a joke exactly but it was not meant to be taken perfectly literally, either. “accurately” is not the best word–I meant that it’s “accurate” in the sense of being an appropriate metaphor. Let me put it more straightforwardly: most colleges and universities now provide an environment in which young people are thrown together at close quarters and left free to indulge themselves in alcohol, sex, and to a lesser extent drugs with no meaningful external restraint. And a great many of them do so, a lot. This doesn’t really seem disputable to me, although I’m not going to try to dig up statistics to support it. Any college that tries to put a serious damper on it meets with massive resistance.
    Depending on what they’re studying and how demanding the school is in general, they have a greater or lesser amount of time they can spend drinking etc. while still maintaining whatever grades they consider acceptable, and most of them still manage to do enough studying to graduate. But then it’s also well know that academic standards are, in general, declining, and there’s probably at least some connection between the two phenomena.
    Partying with lawyers–that brings up a whole ‘nother development, which is the extended quasi-adolescence of a lot of people through their 20s. Many people do now continue college-type partying much further into adulthood than was the case 50 or more years ago. It used to be that the typical person in his mid-20s was married with children, and that usually limits the partying considerably. Since my generation reached adulthood the tendency has been to postpone those things longer and longer. People who are married with children (lawyers, whatever) mostly don’t “party” (that’s kind of a strange term we’ve latched onto) like college students. Children are the big domesticator–I don’t think marriage alone has nearly the same effect.
    I saw a big change in all this between the mid ’60s and the early-to-mid ’70s. It seemed like almost overnight that the people who used to binge on weekends were now starting on Thursday night or even Wednesday night. And of course all the rules keeping the boys and girls out of each other’s bedrooms went out the window then.

  21. Actually, Janet, my grandfather was a lawyer. But we didn’t exactly hang out. I also have a niece who’s a lawyer, but we don’t hang out, either.

  22. Jesse, my experience in the Dayton, OH area is that an MS Eng is not much more valuable than a BS. Only a few companies here actively prefer an MS. It can earn you a few kilobucks more early in your career, but after 10 or 15 years, pay for engineers who still do real engineering hit the same ceiling regardless of degree.
    But I do think that outside of engineering, nursing, and a few other areas, it is very difficult to develop a livelihood with only four years at college.
    Our boy really, really got his butt kicked by calc in this, his first year at a private college. Wow. He worked hard too.
    This Saturday, our eldest graduates from a public school with a marketing degree and a part-time, rather interesting, job. When I was in college it was the business majors that started their binge weekends on Wed afternoon, but Michela had to work very hard for her degree and she is no slouch (1300 SAT). She claims that everyone around her is completely debauched.
    In spite of my kids’ experiences, I do think academic standards are slipping steadily.
    Most of my peers want their kids to have a ‘good college experience’. I can’t exactly blame them because my own experience was terrific, but I think most of my peers take it way too far. OTOH, we are paying far too much for the boy’s private college, but we are willing to in part because he has matured immensely (and has started dating a nice Catholic girl too).
    Also, I will fully admit that I have the engineer’s typical bias that the return-on-investment has to come out reasonable for any college.
    (pls excuse the rambling and rather disjointed thoughts – hope y’all are well)

  23. Janet — hilarious!
    Mac:
    I’m not disputing that it happens, I just don’t think it’s as pervasive as you seem to think. You make it sound like college campuses (or more broadly college experiences) are like islands of debauchery where anything goes, where if one were to take a tour of a college campus on a typical Friday night, one would see people running completely wild, engaging openly in unspeakable acts, abusing all kinds of drugs, and so forth. I don’t think I’m being naive in saying that I don’t think that’s an accurate picture — I’ve had experience now at 4 different giant state schools, spread across the country, and have yet to see anything like what you describe.
    Again, just to be clear — I’m not saying that level of debauchery is not there, I’m just saying that in my experience it’s confined to particular segments of the student population. Also, this kind of thing may be a LOT more pervasive than it was 50 years ago — I don’t know much about what colleges looked like in 1960. From your perspective, by way of comparison to 1960, perhaps colleges do look like what I said above.
    I’m also quite skeptical of the idea that a school’s exclusivity has anything to do with the amount of substance abuse etc. on campus. I’ve heard pretty crazy stories coming out of MIT, Rice, Reed, and the like. I wouldn’t be the least bit surprised if “partying” were in fact much more pervasive per capita on those campuses than on big state school campuses. [Plus, you should see the graduate students in my [top-ranked] department here — sheesh, can they drink!!!]
    I agree that “party” is kind of a dumb word. I certainly feel silly writing it…but for this discussion, maybe it’s useful as shorthand.
    Dave:
    Good point about experience. I’ve spent a lot of time in academia, and only recently became aware that for companies experience is typically (I think) valued far more than a degree. But it does help in that early part of a career.
    Also…you seemed to be making a point about relative standards between public and private schools. I think that’s probably true comparing colleges that attract similar types of students (i.e., excluding smaller private schools that attract a more regional student population, and which may not actually be very exclusive). In my experience, and comparing my experience with friends who went to smaller, more exclusive private schools, it was all about the quality of the students. At my state school, I was typically 1 of 4 or 5 students doing good work in a class of, say, 20 (for my junior/senior level classes). My friends at those other schools were 1 of 20 — in a class of 20 — doing good work. I still got my butt kicked by school, but I still got good grades because the average standard was a bit lower.

  24. “…if one were to take a tour of a college campus on a typical Friday night, one would see people running completely wild, engaging openly in unspeakable acts, abusing all kinds of drugs…”
    Well, that’s an exaggeration, of course. But I think we’re nit-picking here. Suffice to say that a LOT of “partying” goes on, and it’s a lot more pervasive than it was before my generation broke down the barriers. There are plenty of students who hold themselves apart from this, but still: the figures for alcoholism, drug problems, STDs, unwanted pregnancies, abortions, etc., have all gone way through the roof since then. I hate to pull the “you’re too young to remember” gambit, but it’s true that the big change took place around the time you were born. For instance, what to do when your roommate is having sex with somebody seems to be a question that arises fairly often nowadays. It was mentioned by the young lady who gave us a tour of one of the dorms at UA a few years ago (she didn’t bring it up, but a parent was quizzing her about the rules in the co-ed dorm). That was all but inconceivable in 1966 (in dormitories) because males and females weren’t allowed any further than the lobby of the dorms.
    I gotta go–probably won’t be back till Sunday.

  25. Jesse: Because I only have 3 data points (mine, my daughter’s, and my son’s), I do not presume to make a point about public v. private in general. My three data points don’t exactly match up to the generally held opinions on these matters.
    For regular joes like me who go to one college, graduate, and leave that environment – we have no means to compare various schools. I don’t know what to conclude. Moreover, that is the experience of most students.
    I am inclined to agree with you re the prevalence of debaucher. Sadly, my daughter would not.
    I have always hated ‘party’ as a verb. So sophomoric.

  26. Louise

    Louise, no argument from me with what you said, except I do think that engineering is not by definition less noble of a pursuit than philosophy. But that’s another topic.
    I don’t have the wisdom to be able to tell you why but I’m inclined to think that engineering, while noble enough, is probably not as noble as philosophy. It could certainly be studied on the job and with night school (as it used to be).

  27. “A true bubble is when something is overvalued and intensely believed,” he told Techcrunch. “Education may be the only thing people still believe in in the United States. To question education is really dangerous. It is the absolute taboo. It’s like telling the world there’s no Santa Claus.”
    PayPal Co-Founder Hands Out $100,000 Fellowships To Not Go To College: http://www.npr.org/blogs/thetwo-way/2011/05/25/136646918/paypal-co-founder-hands-out-100-000-fellowships-to-not-go-to-college?sc=fb&cc=fp

  28. I have the TechCrunch article to which the NPR story refers bookmarked, intending to get back to this topic.
    On the one hand you have people like Thiel, on the other the Obama administration and many allies (guess where a lot of them work) who think the solution is for more people to go to college. There’s a circular thing going on: the college-for-all people point out that more and more jobs require a college degree, but the degree isn’t “required” in the sense that the knowledge is required; it’s only made a prerequisite because there are plenty of college grads out there who will be happy to get the job, and requiring the degree is a useful way of weeding out a lot of unsuitable applicants. Which in turn also has to do with the decline in the worth of a high school degree.

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