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The Plight of the Education Bubble

January 18th, 2011 | 2 min read

By Andrew Walker

My friend Christopher Benson sent me this article the other day and it begs a wide reading. Foreboding as it is, “The Disposable Academic: Why Doing a PhD is Often a Waste of Time” is both clarifying and sobering. I’ll let interested readers scan the article for the statistics it cites, but the article is largely a jeremiad against the PhD degree—its difficulty, its expense, its orientation towards the arcane and absurd, and worse, its liability both professionally and financially.

As the article indicates, countless PhD students spend years dedicated towards research that will perhaps never posit an actual job in their field. Supply is greater than demand as the article suggets. The futre seems depressingly bleak then for doctoral students: They are treated as indentured servants by their superiors. They spend meaningful years that could have been put towards savings, retirement, and even more important—nurturing families.

But please, do not read this as a carte blanche dismissal of doctoral degrees. America needs her PhD’s, and we need them badly. If you have a PhD, be proud…you should be.

What  lurks behind this article, in a spate of interpretive license, is the increasing dissatisfaction with the American education culture; what I would call the coming education bubble.

We’re all now long familiar with the 2008 “Housing Bubble” which contributed greatly to the “Great Recession” which were still mired in. In short, housing prices plummeted and people owed more money than their houses were worth. Additionally, individuals purchased houses they could not afford and in turn, when these payments defaulted, the houses became toxic assets. [I’m aware that trained economists will probably cringe at that brief summary.]

What the housing bubble has in common with the education bubble is that both elements have an increasingly depreciative value. Home ownership became expected, and likewise, a college education has come to be expected. Like owners who owed more money on their homes than they were worth, many degrees from American universities demand egregious tuitions that aren’t worth the salt that went to pay for them. In many instances, college degrees that now cost $80,000-$120,000 loom with diminishing return. They are their own toxic asset as 22 year old students embark on the world straddled with burdensome debt. Sadly, it only compounds the debt mentality.

Education, today, is an unsustainable venture at present. When it is flatly impossible for students to work themselves through college (even public universities), the culture itself will collapse. And the economic ruin that follows will only highlight the inflationary hope we put in professionalized education. If my statistics are correct, education outpaces the increased cost of even healthcare when adjusted for inflation.

Brick and mortar institutions will always exist. Yale, Harvard, and Princeton aren’t going anywhere. At the same time, their alternatives in the form of distance education degrees aren’t worth the convenience that their marketed towards, either. These can too easily devolve into diploma mills.

The questions arises: If the educational culture in America is unsustainable, what’s the next step forward? When will the bubble burst and what will follow as a result?