The Popping Of The Education Bubble

With all that took place of late, what is "normal".

We hear a lot about the "new normal" and how things will not go back to how they were before. This is an idea that is easy to agree with.

Anyone who follows technology realizes that what took place the last year only accelerated ongoing trends that were in place for a number of years. Since there was a slight shift in things, few realized what was already taking place. Nevertheless, we are now seeing the impact as the lockdowns have seriously altered things.

One such area is in the area of education, upper level to be more specific.

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Many have stated there is an education bubble in the United States waiting to pop. The average yearly cost at a public school is $25K while a private college will run $50K. That means people are spending between $100K-$200K for an undergraduate degree.

Since much of this is financed, kids are walking out of school with a huge debt load. This is something they cannot pay back especially since many were misled into believing their degree has some value in the marketplace. It is only after job interviews do these kids realize that having a degree in ancient Irish history or modern philosophical studies from a liberal arts college is meaningless.

Yet the debt still remains.

The university system is adept at churning people out all while increasing rates. Is this about to come to an end?

To start, like the fall semester, schools are finding enrollment down for the Spring semester.

Following the declines reported in the fall, undergraduate enrollment for the spring semester is once again down 4.5% compared with last year. The early data — which found approximately 6.7 million students had enrolled for the spring semester at roughly 43% of institutions as of February 11 — reveals that community colleges especially, as well as four-year universities, are getting hammered by the pandemic.

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The above link to the article breaks down the demographics and how city community colleges were affected the most.

What is important to take away is that there are far less kids attending these schools than were a year ago. While the pandemic has a lot to do with it, could this be the start of a much larger trend?

In other words, is the education bubble about to pop?

Many companies have done away with their college degree requirement. This includes such notable companies as Google and Amazon. In fact, much of the tech sector is tossing this requirement out the window.

The reason for this is stuff is changing too quickly. These companies found that what kids learn is school is outdated by the time they are hired. So why even bother with the college degree? The company is going to have to train them anyway, why not grab them earlier?

Getting back to what is now normal, is a question for these institutions to confront. According the the article, the administration across the board believes enrollment levels will return to normal in the fall. This could happen. Or it might not.

Certainly, people might feel more comfortable about the overall situation by the Fall. However, like anything, a shift in behavior might spring an entirely new direction. This is something that is likely being overlooked by the colleges.

If we see a continued reduction in the student body, this will force a lot of schools to close. It will take a couple of years but it will happen. The funds these institutions have allows them to stay in business for a few years but will start to taper off. Since expenses tend to be high, there is little chance to reduce costs.

Of course, none of this takes into account online education. With more companies offering online education, why does one need to attend university? Outside partying and going to football games, most of the curriculum could be online. Sure, there are some things where physical attendance is required, perhaps in the sciences. However, for most of the "worthless" degrees, that can be done online for a fraction of the cost.

Then, for those who are looking ahead 10-15 years, if we do achieve Brain-to-Computer Interfaces, why would we need any of these institutions at all. Being able to tap into the world's knowledge base instantly, directly with our brain, means that we know as much as the world does. Thus, sitting in a classroom listening to some professor just doesn't make sense.

While this last part might be far-fetched (not if Musk has anything to say about it), the other points hold. Are kids starting to learn the reality of the upper level educational system? After all, does one really need a college degree in Greek Poetry along with massive debt to tend bar or work as a cashier, jobs which many of them hold?

Obviously not.

The educational system went from being one to help people get ahead to hindering then with a lot of debt and still lacking the skills to get a job that can cover that debt. Hence it is time for the bubble to burst.

Below video that is a bit misleading with the title but does cover the situation well in about 15 minutes.