This is a good blog entry from Bill Hicks about the continuing escalating costs of a college education. He sources an article from an Indiana newspaper that actually isn't that bad in listing some of the causes, from reduced state funding to higher raises for administrators and professors. It also gives some knockout statistics, specifically that in the past 22 years, while the Consumer Price Index has risen by 81.9 percent, college tuitions in the state of Indiana have spiked by at least 300 percent. Mr. Hicks then raises an important point that the newspaper excises, and that is the role of the student loan industry. Since they are protected by the federal government, and students with debt typically can't file for bankruptcy, market forces that would push tuition prices down are disabled.
How people are still buying into the dream of a college education, 3 years after the financial collapse (and even before then, it was starting to look more than a little wobbly), I cannot comprehend. I guess that dreams of a better life and a good job die hard, and can persist even in the face of significant events to the contrary. From my own personal experience, a college education has provided diminishing returns over time. I graduated with my B.A. in 2006, and started applying for jobs. Even then, my phone wasn't ringing off the hook, but at least I was picking up interviews now and again. After deciding I needed a more refined vision of what I wanted to do, I went back for a one year program in Paralegal Studies. I got the certificate in 2009, and have not had one job interview in three years. So, with a deeper resume and with an additional certification under my belt, I have seen far less action in terms of job offers or interest than I did with just a Bachelor's Degree in 2006/07.
I think this culture of higher education has had many unintended consequences. A real tragedy is that due to the gutting of our manufacturing industry, most high school graduates have little choice but to go to college, even if they are not cut out for it. I would say that, based on my experiences in school, three-fourths of the students I went to school with should have been nowhere near the place. And I'm not saying that to denigrate them or to question their intelligence. Not everyone is cut out for taking tests and reading long, tedious textbooks. But that's the hole many have been crammed into since good-paying factory jobs are no longer available.
Student loan debt is now higher than credit card debt in this country; assuming that the general economy does not collapse first (and judging from the action on Wall Street and the grim news in the business pages, that is a mighty big "if"), I strongly believe that higher education will be the next bubble to burst. I find it to be in a similar vein to real estate. As a result of the gutting of our manufacturing industry, more & more people applied to colleges, and the budgets of these schools soared to accommodate them all. With no market forces to impede them (thanks to loan programs backed by the protection of the federal government), prices soared out of control, and with no basis in economic reality, far outpacing inflation in other areas.