Imagine that you have a product whose price tag for decades rises faster than inflation. But people keep buying it because they’re told that it will make them wealthier in the long run. Then, suddenly, they find it doesn’t. Prices fall sharply, bankruptcies ensue, great institutions disappear.
Sound like the housing market? Yes, but it also sounds like what Glenn Reynolds, creator of instapundit.com, writing in The Washington Examiner, has called “the higher education bubble.”
Government-subsidized loans have injected money into higher education, as they did into housing, causing prices to balloon. But at some point people figure out they’re not getting their money’s worth, and the bubble bursts.
Some think this would be a good thing. My American Enterprise Institute colleague Charles Murray has called for the abolition of college for almost all students. Save it for genuine scholars, he says, and let others qualify for jobs by standardized national tests, as accountants already do.
“Is our students learning?” George W. Bush once asked, and the evidence for colleges points to no. The National Center for Education Statistics found that most college graduates are below proficiency in verbal and quantitative literacy. (Source: Real Clear Politics)
Interesting argument that the next bubble burst will be higher education. What do you think?
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