Are $10,000 Degrees The Answer To The Higher Education Bubble?
The cost of a degree has exploded over the last several decades, growing faster than even problem areas like the cost of medical care. Student loan debt, as a result, has also ballooned even as the value of a four-year degree has flat lined.
Obviously, we’re doing something very wrong with the way we do higher education.
In the New York Times, Arthur Brooks writes that one solution to this problem may be something called the $10,000 degree:
MUCH is being written about the preposterously high cost of college. The median inflation-adjusted household income fell by 7 percent between 2006 and 2011, while the average real tuition at public four-year colleges increased over that period by over 18 percent. Meanwhile, the average tuition for just one year at a four-year private university in 2011 was almost $33,000, according to the National Center for Education Statistics. College tuition has increased at twice the rate of health care costs over the past 25 years.
Ballooning student loan debt, an impending college bubble, and a return on the bachelor’s degree that is flat or falling: all these things scream out for entrepreneurial solutions.
One idea gaining currency is the $10,000 college degree — the so-called 10K-B.A. — which apparently was inspired by a challenge to educators from Bill Gates, and has recently led to efforts to make it a reality by governors in Texas, Florida and Wisconsin, as well as by a state assemblyman in California.
Most 10K-B.A. proposals rethink the costliest part of higher education — the traditional classroom teaching. Predictably, this means a reliance on online and distance-learning alternatives. And just as predictably, this has stimulated antibodies to unconventional modes of learning. Some critics see it as an invitation to charlatans and diploma mills. Even supporters often suggest that this is just an idea to give poor people marginally better life opportunities.
There is plenty of fat to cut from the higher education curriculum. Too often Americans get sold on the idea of the “college experience,” which ends up meaning kids having a good time drifting through six years of college to get a four-year degree. They got an experience alright, and they pay dearly for it. The debt hangover is enormous.
Students would be served a lot better if the “college experience” were stripped down to the bare essentials, but I don’t think that’s going to happen on any grand scale until we address the fundamental problem of tuition subsidies. One reason why a protracted matriculation became the norm on American campuses is because we enabled it with subsidies through government-backed student loans and grants. For the same reason why Americans were spending far more on houses than they could afford during the housing bubble of a few years ago, American students are paying far more on educations because the higher education market is heavily distorted with subsidies.
Remove those subsidies and watch as universities strip out the frivolities and get back to a focus on efficient education.