Saturday, January 26, 2013

The Sound of a Bubble Popping?

Every time there's a speculative "bubble" in any field or industry, lots of people write books and articles afterwards about how obvious and easily-preventable it all was.

To the credit of many, though, the concept of a Higher Ed bubble in the United States has been brought out in many forums.  There are lots of different, passionate opinions...and the only opinions that I truly cannot and will not respect are those hypocritical ones held by people like Peter Thiel -- someone who took an education he was very fortunate to get and then made many millions of dollars as a result -- but who go around telling other people not to bother with college.

So are we in a bubble?  My take is that there is no Bachelor's degree bubble.  However, I do believe there's a societal idea that "more learning is more better" which leads people to just kinda sorta pursue advanced degrees that don't always have a clear return on investment.

Two articles I saw this week made me think about the bubble and where we could be headed.

One appeared in the Wall Street Journal, and it was about the University of Wisconsin granting Bachelor's Degrees to people not for taking courses, but just for passing subject matter tests.  This is an intriguing idea.  Of course, it has its problems, but it could be morphed into something that works out the kinks while driving college costs down for a segment of the population that might currently be constrained by availability of time or money.

The other article is one I caught on my Facebook news feed (thanks Renee Aste!).  It's this article from CNN Money about people whose Master's degrees weren't "worth it."  If there's any sort of bubble that I see (assuming we're defining that as people paying higher and higher prices for something that is overvalued) it has to with the post-graduate stuff.  Getting an advanced degree has to be a very conscious, adult decision and it shouldn't be made "just because."  If people are getting terminal Master's degrees in the Humanities, Social Sciences, etc. and thinking there's going to be some huge reward at the end, then there is an expectations problem that needs to be addressed.

Am I hypocrite for writing that?  After all, I'm 32 and list my full-time occupation as "student."  I am partially under-written by Uncle Sam but am also borrowing by the wheelbarrow-full (part of which is a conscious strategy to build a large cash reserve in order to bootstrap a start-up).

I would say that as long as I don't go around complaining about "Where's mine?" if and when I struggle to pay that debt back, I'm okay.  No one promised me anything when I signed all the FAFSA paperwork, so that one's on me.  As for the people out there going for their nth Master's Degree but not sure how to answer the question "Why?" I'd say that there could be a bubble out there that's ripe to be popped.  


C R Krieger said...

I think it is possible that the Bubble extends down into undergraduate institutions.  But, I have to finish the book (booklet) I am currently reading to comment further.  In the mean time, I was surprised to read that the growth in "administrative" staff, vice teaching staff, has been much steeper.  That is not good.

Regards  —  Cliff

Renee said...

How many individuals went into a grad program just to obtain health insurance?

As long as their profession doesn't need a degree for a license though, motivation seems to be everything.

The New Englander said...

The "admin bloat" thing is true, and it's helping drive those costs up.

I'm with Renee on the motivation thing. I need to be careful not to tread anywhere near the Peter Thiel sort of hypocrisy that I called out in my post (as I type this while sitting in a classroom, working towards a Master's Degree). But back to Renee's point -- if people are pursuing degrees because they're needed for professional licensure (i.e. teachers in Mass.) or because they're a required ticket to punch for professional advancement, then I'm not hearing bubble.

But if it's about nebulous reasons centered around "more is better" or self-esteem/bragging rights, then I think the bubble label can be fairly applied...

C R Krieger said...

I think I want to go sideways on this.  Education for the sake of education is not a bad thing.  Expands the brain, or at least keeps it fit.  But, it has to be affordable, in a cost trade-off sort of way.  I love the idea of life-long learning, but that hope can easily be priced out of the small market for it.

And, people change.  There is a server at the Longhorn with a masters in social work who is tired of taking away other peoples' kids and is now studying to be an RN.  Makes sense to me.

Regards  —  Cliff