The American dream follows a well-worn road. K-12, then to college, then you get the job, and a house in the suburbs, or city if you’re a millennial. We all know that dream ended decades ago, most of us are just realizing it since we’re surrounded by people with huge amounts of debt, no jobs, and no hope.
Place the blame where blame is due, first start in the mirror, then look at the government, corporations,and finally the paper mills we call universities. The U.S. university system is like a parasite that has sucked its host dry. Students enter, learn nothing useful, then leave to join a job market that doesn’t exist. In the process they shoulder insanely high amounts of debt. U.S. students, current and former, now shoulder $1trillion in debt according to the Department of Education’s latest figures. Most of the money that sustains this bubble comes from the government. Loans backed by the Federal government which have to be repaid under penalty of law, but even if they’re not, the lenders will get a bail-out from the feds. That is not sustainable, but most don’t have a choice.
It is standard now that even starter level positions require some kind of degree. Competence be darned, if you have a piece of paper that officially says “degree” then you’ll get promoted over more experienced peers. Who doesn’t know the person working in the service sector, or somewhere else, that has been passed over for promotion because they didn’t have a degree. No degree? Sorry, no entry!
Online education, private universities, and poorly run public universities make this environment worse. All are paper mills. Following the law of supply and demand they’ve devalued the paper by overproducing unqualified candidates. We’ve gone along for the ride by insisting that people should have a right to go to college! People should have a right to get educated, but why do we consistently choose the most expensive way to do it? Traditional higher education in the U.S. gave equal due to the skilled trades, early apprenticeships, and school-to-work programs. What happened to all of these things? They were cut because someone decided that a 4 year “liberal arts” program was better suited to training a nations workforce.
The government is starting to respond. President Obama’s program is a good start, two years of free community colleges, the last refuge of skilled trades. No doubt soon to be corrupted by the same parasitic financiers that profit from all other programs that get government funding. The intentions are good, but the execution is lacking. The country urgently needs more people willing to retrain in skilled trades, but we no longer have the money to retool our entire higher education system.
The current system is about to die, it killed itself by killing its host. Enrollment rates have been dropping since 2008, and after the next economic crisis (like the ones that have been happening every decade for the past 40, give or take a couple of years) we’ll see the enrollment rate drop even more. No sane family is going to shoulder a debt burden that only guarantees a piece of paper.
But why should dropping enrollment rates destroy universities when the ever reliable foreign students exist? The public university system depends on two very unreliable sources for their funding: the state/federal government, and large endowments that can only pay out if the market is good. Wisconsin recently cut $300 million from the states university funding when the economy is considered to be in recovery. The next financial meltdown is not that far away, again they’ve been happening with frightening regularity for the past 40 years. The endowment funds are vulnerable because they are invested only in the parts of the market that give high rates of return. They were heavily invested in sub-prime mortgages, and lost billions when that bubble burst. During the 2008 bail-outs the high education system asked for $40 billion to help ailing universities. Right now there is only one part of the market giving the same returns as housing 9 years ago, the energy market. As of 2012 about 2.1% of college endowments were invested into oil and gas. Hints are emerging that college endowments are invested in the shale gas boom, which started its downward spiral last October. How big is this bubble going to be, and to what degree will our university system be effected? We’ll only know that once the dust has settled.
The universities will have only one logical response, print paper faster than the federal reserve. Call it quantitative easing for universities. Expect to see every university try to stay afloat by increasing online enrollment, throwing the gates open to foreign students with Internet connections. Expect to see fewer full-time professors, fewer student services, less quality and more quantity. Basically what is already happening but faster.
Add it up. The $1 trillion debt bubble, combined with surplus of workers with degrees, and lack of funding for universities means only one thing – the end of a very large percentage of institutionalized higher education. What’s our government going to do? Nothing, they’re broke and have foreign wars to fund.