One of the mailing lists I follow posted this the other day, a blog entry from Michael Feldstein (who is a “Principal Product Manager for Academic Enterprise Solutions at Oracle”), “DIY U: Is There a Bubble in the Higher Education Market?” He’s making reference here to a book called DIY U, which is basically about various open-source solutions and non-institutional alternatives to higher education. Feldstein writes:
An economic bubble is what happens when the price of an asset class rises dramatically and well out of proportion with the rise in its intrinsic value. So the first question you ask when looking for a bubble is whether there has been an outrageous price spike. Has there been an alarming spike in the price of a college degree?
He then goes on to provide several charts, graphs, and numbers-oriented arguments about how higher ed is indeed headed for a bursting bubble, sort of like the real estate market.
Now, I’m not sure if the comparison between real estate and higher education really works. For one thing, while it is (well, was) possible make money from a house by “flipping” it to another buyer, that doesn’t work with a college degree. I also think that Feldstein has some rather expensive universities in mind. Still, in this 0/0/0% climate, I thought this was interesting.
It’s an interesting argument, and a good discussion to have, but I think Feldstein makes the argument in a sloppy fashion.
First, he shows three data points from a single school (Rensselaer Polytechnic Institute: 1950, 1980, and 2009 tuition as a percentage of US median income). Then he gives “Average Published Tuition, Fee, Room, and Board”, which is correctly enrollment-weighted, but does not appear to be inflation-adjusted. This confirms what we all know, that the cost of college has gone up over the last 30 years, but doesn’t tell us how much the cost of college has increased compared to inflation.
I could go on, but you get the point. Personally, I do think there’s been a bit of a bubble in higher education, but Feldstein does a poor job in making the argument.
I think Seth Godin’s post today does a much better job of making this argument:
The coming melt-down in higher education (as seen by a marketer)
I agree that Godin’s argument is better, though with this and other articles that proclaim the downfall of higher education, I always like to remember a couple of key observations that many of these critics seem to forget:
* Higher Education has not stood still, at least not completely, in the midst of the web 2.0 or whatever you want to call it world. I will concede that a lot of my colleagues across disciplines teach the same way now that they did 30 or more years ago. However, there is also a lot of innovation going on in college classrooms and often in surprising places.
* Godin et al can write all they want about the value of alternatives to a traditional college degree, but we still are in a society in which the undergraduate and graduate credential matters a great deal. I don’t see that changing anytime soon. You can go out and study accounting, pedagogy, nursing, teaching, marketing, or whatever “on your own” and through the experiences of life, especially in a time in which getting online access to texts and experts is easy to do. But studying accounting this way will never get you to be a Certified Public Accountant or a Registered Nurse or public school teacher. Without those official and university-provided credentials, good luck getting that sort of job.
* At the turn of the 19th and 20th centuries in the US, I think the percentage of Americans who attended any college or university was in the single digits– certainly less than 20%. Today, something like 60% of Americans attend at least some college, and something like 25-30% have at least a bachelor’s degree. Furthermore, all kinds of experts argue that the future of the U.S. in all sorts of ways depends on education.
So, given these trends and the arguments about the importance of more (not less) education, what kind of sense does it make to say that higher education is “melting down?” Odd.
To a certain extent, high college attendance rates have devalued college education. When less than 10% of Americans attended college, a college degree meant something. In some cases it meant that you were smart, in some cases it meant you worked hard, in some cases it meant that your parents had money, but it always signified something. With a majority of Americans now attending college, it has lost much of that meaning. Or, to put it another way: “Everyone can be super! And when everyone’s super– [chuckles evilly] –no one will be.”
You’re right, of course, about credentials, and in some fields and at some companies they matter. But if your goal is to get a teacher certification and be a public school teacher, for example, why would you pay 50% more to go to UM rather than EMU? That also doesn’t account for the massess of undeclared students who don’t know what they want to do. Credentials matter, but they matter after the decision is already made. In terms of enrollment, it is more of a marketing and branding issue; students chose colleges based on perception of the school’s brand and how the student associates him/herself with that brand.
I don’t think formal higher education is going away any time soon, but I do think that the current business model is unsustainable for many of the reasons that Godin and Feldstein mentioned. There will be significant changes both in how higher education operates and in how people view it.
I think you’re right here, cmadler. I don’t know if this is the case or not, but I have had a number of graduate students tell me that they see the MA now as being a lot like the BA a couple generations ago: that is, “everyone” has a bachelors degree, so the way you distinguish yourself from other applicants for various jobs is to have a graduate degree.
I also do think that students chose places based on costs and programs and not just “prestige,” which is a fuzzy thing to measure anyway. And I think a lot of it has to do with what it is you want to do with a degree, what’s important to you, what kind of person are you, and what sort of money you have to work with. But I think those undeclared students ought to go to places like WCC, which are cheaper still than places like EMU, especially if those students aren’t going to live in the dorms and/or go full-time.