Higher Education Bubble

According to Eric Fry, the idea that college is "a one-way ticket to a high-paying job and a lofty socio-economic status" only stems from the fact that higher education was relatively rare a little over half a century ago. The fact that college is now perceived as a necessity has only served to create the "massive 'college bubble'" in America. This article presents...

Questioning whether or not there really is an education bubble, Jane Shaw delves into what a bubble actually consists of. Her findings point to the fact that the higher education industry is indeed headed for a bubble burst in the near future. She concludes her piece by arguing that "higher education will be healthier if schools both lower costs...

In this piece, David Frum notes that the rapidly rising college rates go hand in hand with the demand for a college education. As the supposed "need" for college grew in the last century, more middle class parents and students were willing to take out college loans. However, the recent...

As this article points out, it has become increasingly common for businesses to demand that their "bank tellers, telemarketers or salespeople" hold a B.A. degree. The authors argue that there is something inherently wrong with this...

"If American higher education is to thrive in the 21st century, colleges and universities, like Wall Street and Detroit, must be rigorously regulated and completely restructured. The long process to make higher learning more agile, adaptive and imaginative can begin with six major steps."

As the title implies, trying to obtain a job without a college degree in this day and age is very difficult. This article describes the plight of many middle age Americans who have lost their jobs in the current recession. According to the...

According to Glenn Reynolds, the higher education dilemma in America is following in the steps of the housing bubble because people believe college is necessary to get ahead in life. Although...

This article briefly traces the growth of higher education in America from its earliest years. The article includes information on the founding of Harvard, the expansion of college attendance through the GI Bill, and the current growth of online education.

Not surprisingly, Ellis Washington answers the title question of this piece with a resounding "no." According to Washington, the rise of college attendance in the last century does not prove its necessity. This piece describes some of the brilliant minds who existed...

This piece comments on a report published by the College Board on the merits of attending college. While the College Board report adamantly condemns the idea that not everyone should attend college, George Leef firmly believes that they are wrong. Leef claims that...

This brief article explains the inflation levels behind the tuition increases over the past several decades. It also predicts what a student can expect to pay for college in the next few years. Wadsworth believes that the dramatic increases in college tuition are directly attributable to the government’s involvement in the student loan process.

In this piece, Ramesh Ponnuru fights against the common perception that everyone should go to college. To back up his argument, Ponnuru points out that over a third of college attendees do not complete their degree within a reasonable time frame, and many students with a college degree work in jobs that do not demand higher education. Ponnuru...

This piece covers the drastic inflation rate of college tuition and its effects on students, universities, and the population in general. According to Donleavy, the rapid inflation has made it practically impossible for people to save for college. The author also opines that the rising cost...

According to this piece from TIME, a college degree does not mean as much as it used to. Kristi Oloffson reports that the abundance of college attendees has effectively driven down the value of higher...

College professor Sriram Khé makes several comparisons between the college degree explosion in America and the one in his native country of India. According to Khé, the push for college became so prominent in India, that it allowed many non-degree...

"In 2008, average debt of graduating seniors with student loans was $23,200—up 24 percent from $18,650 in 2004. ... The average price of one year of college—including tuition, fees, room, board, supplies, books, and transportation—is nearly $40,000 at private 4-year universities and more than $19,000 for in-state students at public 4-year universities."

"With tuition rising at an annual rate of about 5% and cash-strapped parents less able to help, the mean student-debt burden at graduation will reach nearly $18,000 this year, estimates Mark Kantrowitz, publisher of student-aid websites Fastweb.com and FinAid.org. Together with loans parents take on to finance their children’s college educations — loans that the students often pay themselves...

"As Chart 1 shows, despite the addition of as many as two years to the measurement window, institutions overall showed only modest increases in their graduation rate. Two-year institutions showed the greatest gains: Their graduation rate increased by 5.4 percentage points, going from 31.4 percent to 36.7 percent. Next, less-than two-year schools...

"The...chart illustrates a much, much bigger bubble than the real estate bubble—the 'higher education bubble'—based on an annual comparison of consumer prices, median new home prices, and the Consumer Price Index series for 'College Tuition and Fees'....

Note that the housing bubble illustrated in...[this] chart...shows home...

"In 2008, the average cost of educating a full‑time student ranged from $10,400 at public two‑year colleges to $34,330 at private doctoral universities.

At public two-year colleges, expenditures per student were 3% higher in 2008 than in 2002, after adjusting for inflation. This represents an average annual growth rate of 0.5%.

At both public doctoral universities and private...

"Graduation odds are especially low for students who are African American, Hispanic, older, or poor."

"Take a typical public research university that charges in-state tuition of $10,000 per student (see Table 3 for a list of such schools and their prices) and receives a state subsidy of $12,000 per student. The difference between out-of-state and in-state tuition is a good proxy for the subsidy for instate students."

"Released in January 2006 by the American Institutes for Research, the study assessed the literacy of 1,827 graduating seniors from 80 randomly-selected 2- and 4-year colleges and universities. Students were tested for three types of literacy:  

'Prose' (comprehending and using information from texts such as news...

"During the 1960s, enrollment in postsecondary educational institutions rose by 120 percent (see Figure VI-1). In 1969, college enrollment represented 35 percent of the 18- to 24-year-old population. From 1970 to 1979, postsecondary enrollment grew by 34 percent—from 9.6 million to 12.9 million."

"As itemized in Table 1, the average private undergraduate college has net tuition revenues—sticker-price tuition and academic fees minus tuition discounts (often called institutional scholarships)—of $13,515 per student per year, plus $7,292 per student per year in donations and endowment income. ... Based on tuition revenues alone, the average private undergraduate school makes about $5,500...

"On average, students in a typical semester spend only between 12 and 14 hours per week studying (approximately 50 percent less time than full-time college students did a few decades ago, according to recent research by labor economists Phillip Babcock and Mindy Marks published in the Review of Economics and Statistics). Combining the hours spent studying...

"Today, more than 25% of Americans hold a bachelor’s degree – five times more than in 1950. But guess what? A bachelor’s degree ain’t what it used to be. The Law of Diminishing Returns is having its way.

According to the National Association of Colleges and Employers, more than half of all 2007 college graduates who had applied...

"What are the constituent parts of the total, and how did they change over time? The trend lines for all components are laid out in Figure 2."

"Figure 5 shows that as loan aid increases, so does tuition at four-year schools, especially public schools. Both federal loan aid and tuition at public schools experienced rapid increases from 2001 to 2004. Federal loan aid began increasing rapidly in 2001 and roughly plateaued in real dollars from 2004 to 2006. (The data to calculate aid per student for 2006 is...

This piece traces the factors contributing to the housing bubble from the last decade and then draws a variety of comparisons to today's college tuition scenario. After examining the evidence, Gillen believes that college tuition is indeed headed toward a bubble situation. According to the author, "[t]he main argument in this report is that lax lending standards...

"In the fall of 2001, nearly 1.2 million freshmen began college at a four-year institution of higher education somewhere in the United States. Nearly all of them expected to earn a bachelor's degree. As a rule, college students do not pack their belongings into the back of a minivan in early September wondering if they will get a diploma--only when.

This piece encourages college attendance by explaining the many financial, physical, and emotional benefits of a higher education. The authors note that "questions have intensified about whether going to college is worthwhile and whether it is appropriate to encourage young people who are on the fence about continuing their education after high school to attend...

"The Department of Education spends about $30 billion a year on subsidies for higher education. The bulk of that funding goes toward student aid programs, with the balance going toward grants to educational institutions. In 2008, grants to institutions cost $2.3 billion and aid programs cost $27.6 billion, which included $17.4 billion for student grants, $9.6...

"Politicians, policymakers, and private foundations have united in recent years around achieving a common goal: college for all. As President Barack Obama pledged in his first speech to a joint session of Congress in February 2009: 'We will provide the support necessary for you to complete college and meet a new goal: by 2020, America will once again have the highest proportion of college...

"As Congress debates the reauthorization of the Higher Education Act, it should heed Friedrich Hayek’s warning that democracy is 'peculiarly liable, if not guided by accepted common principles, to produce over-all results that nobody wanted.' One result of the federal government’s student financial aid programs is higher tuition costs at our nation’s colleges and...

"President Obama’s FY 2013 budget request includes another major spending increase for the Department of Education—2.5 percent more than last year—to nearly $70 billion. American taxpayers are calling for spending restraint in Washington, yet President Obama's proposals would exacerbate the existing bureaucratic maze of federal programs and further remove educational decision-making authority...

The National Defense Education Act of 1958 was originally initiated as an attempt to keep pace with the Soviets in the areas of science and technology. The Act offered loans and debt forgiveness programs to students who were financially unable to gain access to...

According to this piece, the college attendance explosion of the last half century or so is not simply an American phenomenon. Schofer and Meyer demonstrate that many countries worldwide have experienced extensive collegiate growth since the end of World War...

"The recession has pushed large numbers of people who would otherwise be working full-time at secure jobs into postsecondary education. Some are going to college for the first time, some are returning to complete credentials they began years ago, and some are seeking training for new careers. Colleges and universities are attempting to cut their budgets to fit the constraints of decreased...

"It's no secret more Americans are relying on food stamps, but host Michel Martin looks at why those applying for government aid with master's and Ph.D degrees have more than doubled in recent years. Martin speaks with Stacey Patton, a reporter with The Chronicle of Higher Education, and Tony Yang, who is unemployed and holds a doctorate degree."

"Richard Vedder, Chris Matgouranis, Michael Koslen and Jordan Shirkman discuss the likelihood of a Tuition Bubble in higher education."

"Everyone knows that people who graduate from college earn more than those who don't. It's also widely understood that technology drives economic growth, and university research drives technology. Finally, it seems clear that in a rapidly evolving world workers will need to transform their skills, and higher education provides the means to do so. In light of all...

"President Barack Obama has declared that his administration aims to make college affordable to everyone by greatly expanding government aid to middle class families. The Washington Post says that Obama's higher education proposals, which include creating a brand new Pell Grant entitlement, 'could transform the financial aid landscape for millions of students while...

"Tuition keeps rising and student loans are crippling the future of so many young Americans. What is going on here? Student loans for college are largely a creature of federal intervention. Decades ago, politicians decided that it would be good to have more people go to college, and they created a system of grants and subsidized loans to make that possible."

In retrospect, the GI Bill was one of the main instigators of the higher education bubble America is facing today. This document provides the transcript of President Roosevelt's speech at the signing of the GI Bill. According to Roosevelt, the GI Bill "gives servicemen and...

This document contains President Roosevelt's proposal to provide education to service members after World War II. Roosevelt argued that Americans were obliged to provide services such as education options to ease the transition from military service to civilian life in...

The Higher Education Act of 1965 was an outgrowth of Lyndon B. Johnson's "Great Society" efforts and sought to provide federal funds for lower income Americans to attend college. This document contains the speech President Johnson gave at the signing...

"Updated and expanded, Choosing the Right College 2012-13 features incisive essays, telling statistics, and revealing sidebars on 140 schools—Ivy League institutions, state universities, liberal arts colleges, religious schools, military academies, and lesser-known schools worth a careful look.

Here you’ll discover information you can’t get anywhere else about the intellectual...

DIY U explains the background behind the college movement and also gives readers ideas on how to go against the grain and gain a solid education through alternative routes. According to the author's introduction:

"This book is...

“As the book’s title implies, the author primarily addresses the most well-known of academia’s chronic problems, skyrocketing tuition. In the process, though, he deals with a slew of academia’s maladies, including, but hardly limited to, professors’ falling productivity; increasingly bloated college staffs; and the rise of 'celebrity' professors who cost a lot, but teach very little. He also...

"Since World War II, support from all levels of government has constituted...