Where is higher ed going?

Here’s another recent NYT Your Money post, “Placing the Blame as Students Are Buried in Debt,” that follows the depressing story of one Cortney Munna, who’s struggling to pay back 100k in student loans for her women’s studies / religious studies degree from NYU. (To be fair, it was a fairly rigorous liberal arts program, and she stands up to defend it in a follow-up written by Cortney herself. ) The original article attracted well over 600 comments, mostly from jaded readers who were quick to question her choices of degree, school, and financing.

My two cents made it into the featured comments digest (Sweet! Do I get a cookie??). Here is part of what I wrote:

The future will find fewer students living on-campus for the entire four years. There will be more transfer students from community colleges. Large lecture classes will be conducted with online collaborative learning tools (BlackBoard and video conferencing products like Wimba). The trend of hiring adjuncts to cover introductory classes will probably continue.

As the past 5 pages of commenters have demonstrated, there is a huge general pressure to turn university majors into career preparatory programs. This is an understandable sentiment, especially considering the present cost (in real dollars) of a four year degree. But with the exception of certain positive-growth fields like nursing, colleges will resist this pressure because it virtually precludes arts and humanities, fields that have been unwaveringly taught for years despite their obvious indifference to economics.

The compromise here would be to allow four-year universities to deflate and offload the pressure to two-year schools; technical schools and community college are where industry-specific programs belong. This is, of course, how CCs have operated for years, but the sheer volume of students willing to take on easy debt, multiplied by the breakneck velocity of the subprime years, plus the consequent degree-inflation feedback loop, have made them into an invisible, if not stigmatized, option.

After all, imagine you’re a middle-class suburban highschooler who’s finally hearing back from colleges: do you aim for a generic Associates from the CC down the block, or do you trade what effectively looks like Monopoly money to be whisked away to New York, where the dorms all have free wi-fi, the lap pool is open 24-hours, and the dining commons has an omelette bar on Sundays? If you’re a parent who naturally wants the best for your child, how can you resist feeling proud when they make it into an expensive school?

We place such a high cultural value on the college rite that we are unlikely to see the correction happen overnight. But colleges will adapt, and so will the culture that feeds them. In five or ten years, we’ll look back on stories like this and recognize the era for what it was: the stagnant bubble bath of late capitalism.

On a final note: when reading stories like this, look for the inevitable citation that college graduates still enjoy a higher earning potential than their high-school-educated peers. Isn’t it telling that the most obvious justification for attending college is framed as a wager?

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  1. I’ve been following the recent articles in the NY Times related to the overall cost of a 4 year degree. What I think is the “predatory” part about the lending to undergraduates is that neither the universities or the lenders think about the degree the undergraduate is receiving NOR do they think about the accumulative GPA of a student.

    Point of fact: Receivers of different 4 year degrees earn a different average income both immediately after graduation and throughout their lives. Traditionally, a degree in history will earn you the least amount of money and a degree in engineering or a “hard science” will get you a lot more money.

    Point of fact: If you are a history major and plan on going to law school, you’re not going to get into any law school with a crappy GPA.

    I do think that public universities do their job w/r/t financial aid, but I think they could do better as far as steering students to degrees that are more in line with what they are looking to earn, on average, in the job market. Or, at the very least, being upfront with students to the market value of their 4 year degree.

    And I do think private lenders are evil scumbags. Really, there shouldn’t be any reason for anyone in the U.S. to have to take on a private loan to fund a four year degree. Four year degrees are practically free in Europe and (I’m pretty sure) Asia. Government loans have a cap that, if you go to a school in your state, generally covers your tuition and books. That should be all you need.

    Many students that are spending a bundle going to a private university made that choice because of some “prestige” the private university sold them on… but let’s be honest, most private colleges aren’t really all that “prestigious.” Private universities, like private lenders, are in it for the money. Unless you’re in the Ivy League, in which case it would make some sense to carry a larger-than-average student loan debt, it’s dumb dumb dumb, financially speaking, to go to a private college over a good in state university.

    At the high school level, prospective college students really should read stuff like the ARWU rankings (http://www.arwu.org/ARWU2009.jsp) and the US News (http://colleges.usnews.rankingsandreviews.com/best-colleges/national-universities-rankings) to see what how the “real world” rates their university.

    Me? I’m partial to the ARWU just because it has the U of Washington rated at number 16 in the world :) US News has it at 42 in the U.S.

    If you’re in state, the cost of going to the UW is $7,692. Compare that to Seattle Pacific University at $36,838 a year… add financial cost to the “prestige” (by this, I mean the fact that I can’t even find SPU on the world rankings or U.S. rankings) and, well, I think if you’re reading this you get the point.

    The chances are that, if you were admitted to a place like SPU, that you would have been admitted to another, publicly funded, university. If not the UW, then WWU or CWU or EWU.

    In the future, public universities will tighten their figurative belts (it would be nice to see some of those administrators earning a bit less), but they are publicly backed and often have large endowments and can withstand costs going up, et cetera. But many private universities don’t have the public funds or the endowments to fall back on. They prey on high school students that don’t know any better.

    Sincerely, I hope that private universities are scaled back. Private universities represent the naked “capitalist” structure of education where predatory lenders look and greed blinds goodwill. Education is something that shouldn’t ever be subject to the whims of the market. It’s like the fire department, police, postal service and every other good thing this country has ever thought of.

    Imagine this: There are students spending upwards of $100,000 on a degree that is going to let them earn about 19k on average after graduation. How are you going to pay back the cost 100k in loans making less than 20k a year, before taxes.

    That’s a bad equation any way you look at it.

  2. Funny. I wrote this on the 3rd and than on the 4th, voila, this popped up in the NY Times:

    http://www.nytimes.com/2010/06/05/your-money/student-loans/05money.html?hp

  3. Dude. I have to add this to the thread:

    “Until recently I thought that there would never again be an opportunity to be involved with an industry as socially destructive and morally bankrupt as the subprime mortgage industry,” said Mr. Eisman, of FrontPoint Partners, a unit of Morgan Stanley. “I was wrong. The for-profit education industry has proven equal to the task.”

    It’s from the NY Times http://www.nytimes.com/2010/06/06/education/06gain.html?ref=us

  4. Ugh.

    The list of for-profit colleges is populated by suspicious names like the University of Phoenix, DeVry, Argosy, Art Institute of Wherever, ITT Tech, and so on. (Apologies to anybody I know who works at Kendall).

    God, that article gives me really mixed feelings. When I read sentences like “… the Obama administration’s goal of having the world’s best-educated work force by 2020” I get excited, but then when I read “The association criticizes almost every element of the regulations… [including] the underlying idea that high debt loads lead to loan default,” I get sad again.

    I’m just going to keep posting articles on this subject as they come along. I’m convinced there will be major changes in higher ed over the next few years, and this is where the narrative starts: student debt.

  5. I think when you are quoting that bit about the “association” criticizing most of the reform, that the “association” is the group that is lobbying Congress right now, if I remember correctly. And I don’t get sad at them thinking that the administration’s reform is flawed. Of course they think that. They are making a crap top of money right now from private universities, private lenders and, our government, most of all.

    I hope we can make them rethink this system.

    Debt should be addressed first and foremost. However, as there is more info coming out about private schools, I really hope students start reading the rankings and maybe even checking out something like Kiplinger’s “best value” ranking (http://www.kiplinger.com/magazine/archives/best-values-in-public-colleges-200910.html)

    … and eventually, it’s my hope most (if not all) of these privates schools go out of business. Their business isn’t education. Their business is making money.

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