This is where the cost of college is really pronounced. In 1980 the typical California household would be able to finance 17 bachelor’s degrees at a UC with one year of household income. In 2000 that number had dropped to 5. Today it is only enough to purchase one bachelor’s degree at the UC system. Now keep in mind we are looking at the cheaper public option partially backed by the state of California. You have other institutions in SoCal like USC that charge over $50,000 per year. Without a doubt higher education is in a bubble more so in the private sector.
Part of the reason for the bubble is similar to what we saw in the housing market. Banks and their government backed supporters work in cahoots to increase liquidity in these markets which helps to create a casino like environment. Initially this starts out slow and ends with option ARMs that have no way of being paid back even though they are made on large ticket items. We now know how the bubble pops with housing but how does it look when it bursts in higher education? The option ARM or subprime equivalent in higher education is the for profit institutions. I’m sure you can find a handful that are strong but many simply operate as a clean setup to extract as much government and private loans from students without producing any measurable results. I know many will say that education is more than just the amount of money you will earn once you graduate. I agree. However, you do not need a multi-million dollar football team to help you read Cicero, Dostoevsky, Kafka, or even Hemingway. You can do that for free at your public library. College in many cases is about making solid contacts and working in a stimulating environment while learning to think critically. What has changed from 1980 to 2011 that has made it so much more expensive? Are professors 20 times better at teaching calculus or derivatives in 2011 than they were in 2008?
The New Testament Documents
15 years ago