Higher education could be the next bubble to burst, many commentators have observed. It has all the symptoms of the housing bubble, and once enough people realize they are paying too much for too little, they'll go elsewhere, and the giant college industry will collapse. But some say this won't happen. In a new article, "The Bubble: Higher Education's Precarious Hold on Consumer Confidence," Peter Wood responds to four arguments defending the status quo. Here's a condensed version of his arguments: 1. The High Prices Are Warranted Response: The add-ons are the product of a system that has grown estranged from its basic mission of educating students. 2. A College Degree is Still the Best Investment Response: All it would take for higher education’s bubble to pop would be a significant increase in the percent of students defecting to community colleges or online programs. 3. National Interest Requires We Maintain the System Response: There are more ways to educate people than the advocates of our current system realize. 4. This is a Temporary Situation; Higher Ed Will Adjust Response: Campuses have enormous sunk costs and debts. Changing their ways now will not wipe out those burdens. The biggest reason so many students still go to college is custom, Peter writes. "Can the power of custom, the desire for status, and the fear of ridicule keep the vast majority of Americans on the treadmill, paying lofty sums for an education that typically is more fantasy than fact?" Perhaps for now, but the tipping point is coming.
- September 14, 2010