The college bubble

Kevin Ryan | Thursday, 26 August 2010

As senior college administrators’ salaries go through the roof, graduates are left with the equivalent of sub-prime mortgages.

The “college bubble” appears to be on the verge of following the “real estate bubble” as the next twenty-first century dream buster. Picture the long faces of recent graduates dejectedly knocking on the doors of businesses this summer. Their brand new diplomas and puffed up resumes are finding few buyers. They need to be told that someone has taken the punch bowl away and that the party’s lights are dimmed.

Is there a message in the real estate collapse for education? It was just a few years ago received wisdom held that real estate is the investment. Its value only goes up. Join the “ownership society” before it is too late. Forget about the debt -- it will take care of itself. Today we are living amid the ruins: the broken dreams of millions and national economies brought to their knees.

It seems pretty clear that American society is entering a period of adjustment. The fat years we experienced after the Second World War were the product of an economic anomaly. The US came out of that war with its industries intact and geared up to provide an endless supply of goods for a broken Europe and an emerging Asia. It was all expand, grow, expand, grow. But that is over. The so-called Third World has caught up and now the US and many of its long time trading partners appear to be in the economic slow lane.

This raises the question, “Is higher education part of this general scenario?” Having followed a similar path of growth and expansion, can the decline of higher education be far behind?

This generation of young Americans have been fed an education-is-the-path-to-success diet since they were in Pampers. And why not? It has been the proverbial royal road for so many. Up until recently, college graduates had a lifetime earning potential almost twice that of their high school mates who did not attend college. All that seems to be changing fast.

In recent months there has been a rash of books and magazine articles suggesting that higher education is an over-built and disordered industry, one that is ripe for implosion. Two of the most recent titles encapsulate their critiques: Higher Education? :How Colleges Are Wasting Our Money and Failing Our Kids and What We Can Do About It; and The Five-Year Party: How Colleges Have Given Up on Educating Your Child and What You Can Do About It. Their shared thesis: high education has been serving the desires of the educators and arrogantly disregarding its student customers.

These new books are a feast of facts -- certainly enough to give college and university boards of trustees severe heartburn. For instance, over the last 30 years tuition and fees at private American colleges have risen 250 per cent and at public colleges 300 per cent. And that is in constant dollars. Professors’ salaries have outstripped their colleagues in other professions. At the same time, they have taught fewer students, leaving the “grunt work” to subsistence-waged teaching assistants. Currently 70 per cent of US undergraduates are taught, not by professors, but graduate assistants and adjunct professors. For their labors they receive one-sixth of what the professors they have replaced receive. It is ironic that a master-and-slave economy flourishes is one of the last bastions of Marxist ideology.

However, the true fiscal miracle is what has happened to the salaries of higher education administrators. While students and their families are running up hefty tuition debts, a dozen university presidents have broken into the million-plus a year category. For instance, during the sixteen year span from 1992 to 2008, New York University’s presidential salary rose three-fold, from $443,000 to $1,270.000. All this, while the market is turning sour on their “product”.

While there has been some softening in the demand for college entrance, there has yet to be a full-throated rebellion against the education extortion racket. As the books cited above suggest, it is coming. Families feeling the recession pinch are having second and third thoughts about the costs. Those who planned to go to a four year private college are now going to four year public universities. Those who were planning to go to the prestigious public university are now going to the state’s regional college. Those who would have gone to the four year regional university are going to the local community college.

As reflected politically in the Tea Party movement, “debt” is the new four-letter obscenity. And well it should be when thousands of debt-laden college grads are standing flummoxed and silent before the withering questions of profit-strapped employers: “What have you learned in college that will contribute to my bottom line? How has your four years of ease and independence prepared you to make money for my business?” “Okay. You were an environmental sociology major, but what can you do for me?”

Hard questions. Few answers.

Kevin Ryan founded the Center for the Advancement of Ethics and Character at Boston University, where he is professor emeritus. He has written and edited 20 books. He has appeared on CBS's "This Morning", ABC's "Good Morning America", "The O’Reilly Factor", CNN and the Public Broadcasting System speaking on character education. He can be reached at kryan@bu.edu.