Do You See an 'Education Bubble'?

Hmm, interesting, It brings to mind a comment i heard on the radio the other day from the University of California that apparently approximately 80% of the Engineering and Math majors attending college in California are non-US residents with VISAs. So I am guessing that the degrees US citizen are getting, such as history, teaching, business and sociology won't have the same degree of foreign competition in them (how many H1B visa do the grant a year for sociologists?). Though i guess those degrees have little direct relevent value in terms of value from which they can gain some direct financial return on their investment (admittedly in some cases their may be some indirect return from just attending a university and meeting the right people). One thing i do know, there will be no shortage of nurses unless we use their labor to compensate for the shortage of MDs.

"Or is education still the best personal investment anyone can make?"

Education is only a worthwhile investment if it can result in productive use.

Too many of our people are desperately investing in education for yesterday's jobs, jobs that no longer exist in the USA. The up side is that all of us will pick up the tab in the form of slow growing additional government debt. That's a short term solution. The down side is we will have a generation of indentured servants struggling to pay off their student loans with wages from low skilled service jobs. We might as well have loaned them money to buy new cars or entertainment. At least they would have gotten some enjoyment in return for their debt.

The really talented ones will do OK and get the jobs that they were educated for. So will the ones with the right "family" connections. But right below them will be some very unhappy losers in the contest to grab the scarce "brass rings". This is the layer of society where revolutions are born. And these folks have the right to keep and bear arms.

Perhaps a logical answer is widely available low cost legal electronic and chemical entertainment. .......Interesting forward look now that the "rapture bus" didn't arrive on schedule.

Ed Weldon

The night is still young in my neck of the woods....

"Or is education still the best personal investment anyone can make?"

Proper education or TRAINING IS the best personal investment!

Our (read US) education system is too strongly focused on college as the only viable track for education. The middle and secondary education systems diminish the value of trades, building skills. We no longer teach in our schools that there is a true validity in physical work. It also leaves the new graduates with an inflated sense of their worth. The graduated engineer diploma means that he/ she has been exposed to subject matter and a general understanding thereof, and hopefully, the capability of being trained. Not that their worth is $110k per year.

The dollar cost for my daughter's BS and MS will leave her in debt for years at an entry level job. Earned value is often hard to justify.

Off soap box.

bsf

Another bubble? Yea, let me get out my pins again.

Thiel is correct and when AH gets the pins to burst the bubble, it will be fact. So we should wonder where the hurt will be placed. When students graduate with no related job to look forward to they will default on loans. So First, is the student loan institutes. Second, will be the high cost education schools. These schools will be forced to lower costs to attract a student body. Who will want to buy high cost education just to flip burgers? It would seem that many schools of modest capability are trying to compare themselves to the elite schools and thus charge accordingly. Third, will be employees of the schools as the school tries to lower costs. Fourth, is the ripple effect economics.

The winners will be new students entering the school. Personal education will never be the creator of a loser. But, choosing a career path can be critical. Maybe parent's should send their kids to work for a year or two to sort out their path and to allow time for the bubble to burst on the financial side of education. The sooner the better. Some correction is needed.

Johnfotl -- GA!! I agree with everything you say and I thank you for a fine essay on the subject.

Your comment rings a bell with me: "I suspect that a good bit of the problem is due to our weird third-party public/private funding system (I think the same thing is driving up costs for the medical system)" .......... Avoiding the medical cost issue (let's not dilute this important discussion), I find myself uncharacteristically leaning hard to the right on government support of student loan supports and outright subsidies. There seems to a direct relationship between the wellspring of money and the education costs as suggested by some recent economic studies. I still think the Pell Grants are a good thing. But every other government incentive with respect to post grade 12 education or even job retraining is to me very suspect. There is way too much money flowing into questionable educational enterprises (my opinion here).

Bubble? I doubt it. There are too many dampening factors in the hypothesized education "bubble". More like a prolonged and painful outgassing. Like the sort of thing that drives you nuts when trying to maintain high vacuums above -6 torr.

Where do we go from here? America needs to take a hard and pragmatic look at education. We're not doing that yet. That's another topic. I have my opinions. Others will have theirs'. What's important is that we have an objective discussion. That's not happening yet on the national level. Maybe we ought to have more such discussions on CR-4.

Ed Weldon

I'm personally not ready to join in a lurch to the 'right' on education, but I certainly understand the appeal and don't have much ammunition to counter that argument. Maybe it's a question of how you calibrate the left/right scale.[p]

I just checked on worldwide figures for education achievement (don't know the methodology) and don't see a clear pattern that I can relate to political orientation. Actually the only clear pattern is that small East Asian countries dominate the top of the chart. My gut tells me we that the important factors are more cultural than political.[p]

http://www.realonlinedegrees.com/education-rankings-by-country/

My gut also tells me that the root of many of our problems is our penchant for trying to view all important issues through the lenses of outdated, imported (European) ideologies (Marxism v Capitalism). This country used to be (I like to think) about Pragmatism. Left v Right thinking requires a check list mentality. Pragmatism requires knowledge and understanding, two things that are in short supply these days[p]

Cleaning my garage last weekend I ran into a couple of my dad's college math textbooks, one on college algebra and one on analytic geometry. These books would fit in your pocket. My sons' new and improved math textbooks would pretty much fill a briefcase. I'm not aware of any great advances in algebra and conic sections in the last 60 years or so. I would assume the publishers of the new books have lovely offices...[p]

But cutting back on education spending without reforming the process will necessarily mean fewer students. My concern is that many of our greatest and most productive thinkers were rather mediocre students (Einstein, Edison) who were what we now call 'late bloomers'. If we tighten enrollment in our universities would their modern day counterparts make the cut?

In some European countries (Germany & Denmark that I am sure of) they have a lot more technical training available in place of the US high schools - for many this would be more beneficial.

Well except Finland and Sweden typically are at the top of the educational rating charts. Try looking with reference to a different issue, homogeneity of populations for ethnic, languages used, religious backgrounds, etc.. You may start to see some commonality. There may be an issue that different special interests groups have different expectations of education, and this conflict (and competition between groups for more resources at the expense of other groups) leads to a lot more problems. I suspect that more diverse cultural differences within a system have a tendency to lead to political conflicts in that system. More commonality probably leads to more time and resources devoted to teaching essentials to some standard of practice. Plus I suspect that language is a huge issue, as teaching in our country tends to be to the lowest common denominator, no child left behind which means the whole system stalls in an attempt to catch those children who are falling behind back up while losing the attention of the others.

'as teaching in our country tends to be to the lowest common denominator'

Same as it was in the 50's and early 60's. That used to irritate me as I wanted to learn and some dunce was the holdup.

Except now the schools have to be tested based on that LCD and if they aren't up to par with the numbers passing, they will be taken over by the State to re-organize. Of course, I have never seen a school district taken over by the State that didn't need some serious re-organization, but every person working for the schools is imperiled potentially by a failure of law enforcement and human services to force proper attndance to schools. In many schools the failure is just bad teachers (Oakland school disctricts being a good example) in others it is because of cultural issues where some parents remove children from school to go back to other countries, such as mexico for 3 months to celebrate Christmas, or don't bother to work at all with their children in any way (such as those parents whose social lives bear great import than their childrens education) and then bring them back expecting their children should be on par with the others. Maybe to press for better education a distribution curve of expectations for testing should be applied, such that school should exceed a distribution curve, the 95%, 90%, 75% and 50%, by some rate as well as the minimum expectation. This would then force schools to cater to at least average children and better also, and not just to getting the bottom 10% up to passing level.

Having children entering their college years makes me keenly aware of the costs.

I have also recently visited campuses in the region with my up and coming. What is MOST troubling to me is the feeling that those who run colleges and universities seem to feel that cost is no object when they build and expand these institutions. The opulence is staggering. There are few parallels in the business world where making a dollar is the priority.

No wonder why tuition rates far, far outstrip the pace of inflation. I have to believe the system is going to crash when people finally realize that the panache of the top-rank ($$$) school doesn't make sufficient return on their massive "investment".