The (coming) higher education bubble

I blog about K-12 education, because that’s where I work and that’s what I know best, but as the wife of a university professor and as a parent who has written tuition checks for three college students, I’ve been paying attention to the growing number of economists who suggest that “higher education” will be the next bubble to burst.
Certainly the comparison with rising housing prices is striking. From the New Yorker “financial pages” column: “Since the late nineteen-seventies, annual costs at four-year colleges have risen three times as fast as inflation, and, with savings rates dropping and state aid to colleges being cut, students have been forced to take on ever more debt in order to pay for school. The past decade has seen a student-loan binge, so that today Americans owe well over six hundred billion dollars in college debt. That’s a burden that’s hard to carry at a time when more than two million college graduates are unemployed and millions more are underemployed.”

But what really got me thinking about this issue were a couple of articles about a conference on the future of higher education held this month at the New School (actually a university) in New York City. A lot of the time seems to have been spent bemoaning budget cuts and trying to figure out ways to find more money from somewhere – state legislatures, private sources, wealthy parents, etc. In other words, it sounds like a lot of conversations about K-12 education . . . focused on preserving the status quo, rather than adapting to fiscal reality.

There was SOME talk of how colleges and universities could use the resources they had more intelligently. But, as the Chronicle of Higher Education reports, “in general, the visions of innovation offered up by panelists—more online learning, greater engagement with public schools, new forms of financial aid—were far from revolutionary and frequently short on specifics. During Thursday night’s keynote talk, the panelists, all academic heavy hitters, were pressed by a questioner from the audience to give one example of transformative change they would like to see enacted. Most of the panelists demurred, with Mr. Bharucha finally volunteering, “More vibrant, multidisciplinary projects for students and faculty.

Hmm. That’ll sure cut costs dramatically. What about slowing the growth of administrative costs? According to one widely-cited study: “The number of full-time administrators per 100 students at America’s leading universities grew by 39 percent, while the number of employees engaged in teaching, research or service only grew by 18 percent. Inflation-adjusted spending on administration per student increased by 61 percent during the same period, while instructional spending per student rose 39 percent.” And as the same report notes, administrator salaries are also significantly higher than salaries of most teaching faculty. Sound familiar, K-12 educators?

Inside Higher Ed’s report on the same conference focused a little more on the need to cut costs. From the article: “‘Cost increase and direction is unsustainable,'” said Jamshed Bharucha, president of the Cooper Union. “Universities are getting too expensive too fast. I just don’t see how that can be sustained, except perhaps by a few of the most wealthy private universities.”
The article continues: “While many of the cost-savings initiatives talked about at the conference revolved around technology, panelists threw out some other ideas as well. Changing the academic calendar to make better use of university facilities, ending the arms race in student services and amenities, and rethinking how faculty members are hired and retained were all discussed as issues colleges and universities should consider when examining costs, but panelists did not delve into specifics.”

I think it’s time educators at every level delve – no, dive – into the specifics.

Here is the link:

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