Sail's Pedagogy

Sail's posts about her class, classes she is taking, and education.

The Higher Education Bubble

on November 8, 2009


The definition of an economic bubble is, according to Wikipedia, “trade in high volumes at prices that are considerably at variance with intrinsic values”. Another way to describe it is: trade in products or assets with inflated values. Universities and colleges have inflated values disproportionate to their value.

Clark Aldrich wrote “that colleges are becoming more like cruise ships than educational institutions.” Colleges are not going to help new college graduates to get jobs, they are not preparing them for workplace….they are creating unrealistic expectations.

Financial institutions did not focus on core business drivers, they ventured into exotic loans schemes. Students are not graduating with high priced jobs. Many are graduating into the unemployment lines with huge debt. College tuition has increased by more than three times the rate of inflation for the last 20 years, despite U.S. wages flat-lining since 2000.

Schools have often found that raising tuition attracts more applicants because families tend to equate high price with quality.

The time is coming very soon where the investment (the loan) will not be worth the degree (jobs and pay).


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