After the collapse of thedot.com and housing markets, will the next irrationally inflated bubble to burst be higher education?
Educators Joseph Marr Cronin and Howard E. Horton think it might. With tuition, fees, and room and board at dozens of private institutions now topping $50,000 a year, some parents are questioning whether it is worth $1,000 a week to send their kids to college. The middle class has traditionally paid for higher education through loans, but home equity has withered and jobs are at risk. Congress recently raised the Pell grant limit from $4,731 to $5,350 a year. Potentially a big deal for the federal budget, the increase doesn’t even cover an extra week at some private universities.
College tuition and fees have increased 440 percent over the last quarter-century, more than four times the rate of inflation. And even demographics are conspiring against the current college finance model. The “baby-boom echo” that flooded so many colleges over the past few years crested with this year’s high school senior class. From here on, enrollment is downhill for the foreseeable future. The state of Vermont expects to turn out 20 percent fewer potential college freshmen by 2020, report Cronin, former Massachusetts secretary of educational affairs, and Horton, president of New England College of Business and Finance.
Cheaper alternatives to traditional higher education are increasingly available. The University of Phoenix now teaches upward of 300,000 students a year, half of them online. Applications to community colleges and other public institutions have already risen dramatically. Some former college presidents are proposing year-round school so that expensive facilities get used 52 weeks a year, instead of only about 30, and others are calling for three-year degrees.
Critics have highlighted the mounting costs of higher education for 30 years without having much impact. Maybe, the authors say, the economy is now in dire enough shape that the warnings will take.
THE SOURCE: “Will Higher Education Be the Next Bubble to Burst?” by Joseph Marr Cronin and Howard E. Horton, in The Chronicle of Higher Education, May 22, 2009.
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