First the car industry went bankrupt; next on the economic griddle — as argued in the Chronicle of Higher Education — is the rising astronomical cost of a university education that is about to burst a bloody mess upon us all.
With tuitions, fees, and room and board at dozens of colleges now reaching $50,000 a year, the ability to sustain private higher education for all but the very well-heeled is questionable. According to the National Center for Public Policy and Higher Education, over the past 25 years, average college tuition and fees have risen by 440 percent — more than four times the rate of inflation and almost twice the rate of medical care. Patrick M. Callan, the center’s president, has warned that low-income students will find college unaffordable.
Meanwhile, the middle class, which has paid for higher education in the past mainly by taking out loans, may now be precluded from doing so as the private student-loan market has all but dried up. In addition, endowment cushions that allowed colleges to engage in steep tuition discounting are gone. Declines in housing valuations are making it difficult for families to rely on home-equity loans for college financing. Even when the equity is there, parents are reluctant to further leverage themselves into a future where job security is uncertain.
Consumers who have questioned whether it is worth spending $1,000 a square foot for a home are now asking whether it is worth spending $1,000 a week to send their kids to college. There is a growing sense among the public that higher education might be overpriced and under-delivering.
If you weren’t born into wealth, one of the ways you could raise your relevant stake in society was to attend a private school or attend an Ivy League college in order to meet and network with the power elite.
You had to pay — tuition — to play.
Buying your way in to the upper university caste elite was always possible, but had prickly and dangerous underpinnings — the poor and disengaged local wisdom was always, “A dollar spent today pays tenfold in ten years.”
I’m not sure if that old chestnut still rings ripe today or not — especially with an entire generation of graduate students now holding advanced degrees with nowhere to go and a student loan debt cost piling to the ceiling: You educated yourself into a perpetual poorhouse with no way out.
Student loans are still an evil necessity if you hope to advance your life in society — but once you sign the loan paper and take the money, the university debt is forever yours — there’s no way to remove that burden unless you pay it off in full and so we all risk a pauper nation filled with really smart people who are really angry all their hard work and discipline are not being greeted and celebrated in the marketplace and when smart people are poor, hungry and angry, cultural revolution is not very far behind.