A higher ed quandary

A university finance professor asked which of his students were paying for college with student loans. Most were. “And what is the collateral on those loans?” he asked.

After a moment of awkward silence, one courageous soul spoke up: “Our textbooks?”

With graduation season upon us, let’s examine the state of higher education and the system that finances much of it.

Reportedly, student loans are about to surpass credit cards in aggregate debt outstanding. According to the Consumer Financial Protection Bureau, Americans now owe approximately $1 trillion in student loans.

I’ll spare you the statistics of how dramatically college tuition costs have risen. Suffice it to say the increases are as big as the Lifetime Fitness-like student centers popping up on many college campuses.

But are the exponential tuition increases driving greater student loan debt or has the widespread availability of student loans spiked demand that inflates tuition?

It’s tough to say. It’s not tough to say the plight of today’s average college graduate:

He has low to mid five figure debt. He holds a general degree in a “soft skill” (e.g., marketing, communications, English). He is entering a weak job market that makes him consider even more education (and even more student loan debt). He may accept some form of underemployment.

I’ve noticed an extra piece of jewelry recently on the fingers of some grocery store cashiers: Texas A&M class rings. That’s not an Aggie joke. That’s a sign of the times.

It’s true that there is no better indicator of earning power than the possession of a college degree. But I wonder if that is a trailing, not a leading, indicator.

I wonder if the expensive degrees conferred in recent years will burden – either by their cost or by their disutility – more than they will elevate.

I’m not alone. It’s why San Antonio Mayor Julian Castro pushed for an Alamo Colleges degree that costs less than $10,000 – that’s total, not annual.

It’s why 22 per cent of U.S. families making $100,000 or more chose community colleges in 2010-11, up from 12 per cent the year before (source: Sallie Mae).

And it’s why debt doomsdayers like Dave Ramsey advocate only pay as you go educational strategies.

Many educated people predict a tectonic shift in the economics of higher education. Think newspaper publishing industry.

Ivy League-caliber schools are already offering their courses for audit free of charge online. The Internet, of course, is making more and more content more and more of a commodity.

And fewer and fewer employers are concerned about a diploma on the wall so long as an employee can do a job.

Inevitably, there will be low-cost, “build your own” degrees from the universities and including the classes of one’s own choosing. The oligopolies of learning will be disrupted, the keepers of the knowledge keys displaced. The assistant vice provosts of institutional advancement will enter the same job market their graduates have faced.

If I had it to do over again, I would find a less burdensome way to finance my education. In retrospect, the student loan dollars came too easily.

If this were an advice column for high school graduates, it might end like this: Congratulations on being accepted into that prestigious university. Now, don’t go.

Kevin Thompson writes weekly for The Boerne Star in the Texas hill country. Follow him at http://www.kwt.info.

2 Responses to “A higher ed quandary”

  1. 1 David Gibson May 25, 2012 at 10:35

    Good thoughts, Kevin. Thanks for sharing them.

  2. 2 Len Driskell May 25, 2012 at 14:03

    “as big as the Lifetime Fitness-like student centers popping up on many college campuses”

    You’ve been back to your Alma Mater recently! As have I, and the fitness center blew me away.

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