The “higher education bubble”-ready to burst?

More and more it is becoming clear that a college education isn’t all it was cracked up to be in terms of guaranteeing a better lifestyle.  So is it worth the money and the debt?  Some are wondering:

The Project On Student Debt estimates that the average college senior in 2009 graduated with $24,000 in outstanding loans. Last August, student loans surpassed credit cards as the nation’s largest single largest source of debt, edging ever closer to $1 trillion. Yet for all the moralizing about American consumer debt by both parties, no one dares call higher education a bad investment. The nearly axiomatic good of a university degree in American society has allowed a higher education bubble to expand to the point of bursting.

Since 1978, the price of tuition at US colleges has increased over 900 percent, 600 points above inflation. To put that in number in perspective, housing prices, the bubble that nearly burst the US economy,  then the global one, increased only fifty points above the Consumer Price Index during those years. But while college applicants’ faith in the value of higher education has only increased, employers’ has declined. According to Richard Rothstein at The Economic Policy Institute, wages for college-educated workers outside of the inflated finance industry have stagnated or diminished. Unemployment has hit recent graduates especially hard, nearly doubling in the post-2007 recession. The result is that the most indebted generation in history is without the dependable jobs it needs to escape debt.

I was struck by the 900% increase since 1978.  I’ve certainly not seen anything in particular from our college grads – as opposed to those who graduated in 1978 – that would make what they received as a degree worth 900% more than it was in ‘78, have you?  And certainly nothing worth 600% above the inflation rate.

Frankly, the institutions of higher education have been scamming Americans for quite some time.  And this is just my opinion, but many of the colleges and universities in this country are a bit like some college sports teams – they don’t care if you graduate, they just want you to play well for them for 3 or 4 years.  Change “play” to “pay” and you describe many of the schools I’m talking about.  They really don’t give a rip about graduation rates.