Is College the Latest Bubble to Burst?

The title of our entry is the question that was posed in the Economist.  The analogy the author used in 2010 was that higher education was like the car companies of the 1950's "on top of the world and ready for a fall."  This, of course was met by many a professional educator and administrator as not good thinking.  Now, in 2011, Mr. Schumpeter has found a fellow cohort in his thinking, Peter Theil who is the co founder of PayPal, and seems to be a predictor of bursting bubbles.  


"Mr Thiel believes that higher education fills all the criteria for a bubble: tuition costs are too high, debt loads are too onerous, and there is mounting evidence that the rewards are over-rated."

Well, few in academia can argue against that.  Cornell, in its own journal noted that tuition, room, board, books is $55,000 a year.  A quick calculation of a four year degree...Whoops!  No one can graduate in four years now, but for amusement sake, lets use four, is well over $200,000.  So if we account for scholarships, loans, work study, summer jobs, great gifts from parents, the average undergraduate student leaves college around (wild estimate from a whole lot of statistics)  $24,000 in debt.  Professions that require an advanced degree (like most) will accumulate more since there is less Pell or other funding available.

We can shake a finger at students who borrow too much rather than choosing less expensive schools, taking loans out to pay for cars and social lives, and, not calculated in the debt, using too many credit cards.  Then at the administrators that kept college costs rising as Pell and other grants started upping their limit under the era of irresponsible lending.  And then there are the curriculum committees and states that load up courses students have to take and then not be able to offer them every semester.  And, then at the educational planners that believe all students need a four year college curriculum to get a job and downsize and down play applied degrees.

Back to the car analogies, higher education is big business, and like Detroit, many small rural or inner city communities' economies revolve around the college that bring in tens of millions to hundreds of millions of  dollars from grants, government guaranteed (if they default who cares?) loans, scholarships, tuition, and more. States with more educated workforces have more economic security. 

The current economic conditions are putting even more stress on the system.  What is needed?  For every stakeholder to start thinking:

1.  What does a student need to prepare themselves for the workforce?