The Popping Of The Education Bubble

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(Edited)

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.


If you found this article informative, please give an upvote and rehive.

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15 comments
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Education is a debt trap, they have been trying to move away from government funded positions in Australia for years but to failure of any government that attempts it.

Purely for the information you provide, in Australia we have some of the most educated and over qualified coffee barista's in the world.

Many with degrees and debt that they can not or ever will pay back. We have an income ratio where you only pay the debt back once you earn x amount. But growing numbers with offshoring industries to China and India are proving challenging.

Governments need to do more to attract companies and retain them in their countries to stop them running off to 3rd world countries. Tax cuts is one but so is investment.

Build things locally, develop tech, provide seed funding.

Great post mate 👍🏾

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Bang, I did it again... I just rehived your post!
Week 48 of my contest just started...you can now check the winners of the previous week!
!BEER
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When everything requires a degree, they don't provide value. Its comical looking at job posting, since everyone has a degree, now they want MBA, or other certification or school to prove you are smart or can afford the debt load.

I think people are starting to realize the cost benefit of college has really gone the other direction for most degrees - and they can do much better in life going different avenues. Independent certifications like the CPA or CFA carry a lot more weight than a college degree, when combined with a portfolio of work could be the direction we move in the future.

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That's very true. I've been working in project management for almost 10 years now and the amount of different certifications that are offered in this field is impressive!

I'm not against the idea of certifications per see, but I've looked into many of them and, while a few can actually help you become a better professional, a lot of them are just money-making machines.

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I think the biggest issue is that a college degree in the past is different from a college degree now. In the past, the job pool had plenty of room but the change in technology has essentially removed the need for some of these people and there are more people added to the pool than there are jobs available. This means the people with the degree are more likely to not find a high paying enough job due to competition and the decreasing job pool.

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why does one need to attend university?

In my country , University certificate is a must to enter a profesional job market. Only few companies that employ skilled employees not from universities. That is the problem that is why the need to enter university is very high. Though, the tuition fee to university seem rises every year. It is worse that our government now do not subsidize 100% some state universities so that the university management charges all the students high tuition fees. That is not good situation. Though, you are expert in a certain field, you will fail to enter job market in my country without university certificate.

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It's always been obvious that some humanities degrees are of very little value in the job market. But what's interesting is that degrees in information technology are that to an increasing degree. Some of what is taught there such as the math will never be obsolete. But some of it changes fast.

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For most places nowadays, the only thing a degree signifies is that you were able to commit to a long term goal and achieve it. The actual knowledge gained is almost completely irrelevant unless you're talking the sciences. As you say, they have to train you anyway. So, is $100,000 of debt worth that little checkmark on your resume? Considering how they basically brainwash you in these schools while ostensibly "teaching" you, I'd say probably not. The same characteristics that make you successful in school would probably serve you equally as well in the real world.

College DOES expose you to many different walks of life however. And if you're at all social, you will be able to meet a lot of people in your same position. Those relationships can bear fruit later as well. But yeah, until they stop giving the administrators all the money and make the costs reasonable, you're better off taking 4 years of life figuring out what you want to do and how you can do it and NOT being six figures in debt than the other way. Just my opinion....

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I totally agree, education will face strong changes over the next years. One thing that these institutions can leverage is the community they are building over generations of students. That might be a strong asset for the years to come if brought to the new times imho.

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(Edited)

I was and am amazed about the US education system which seems to be focussed on private schools. While years ago, one would receive many job offers - almost guaranteed - when having the papers of some ivy league school or university, I think the future will look totally different. Take MIT: costs 100k+$ a year? While all the big tech were handing out jobs to the graduates in the past, in about 10 to 30 years this will be totally different. You already mentioned the brain/computer interface. Maybe far fetched. But what about AI taking away not only the low-level labour-intensive jobs (through robots) but also the jobs of the creators of tech and software? Already today, we have software available writing software without coders required. When we reach Singularity (this will be sooner than later), AI will more than exponentially grow in its capabilities taking away all jobs.

On a positive note, when we all don't have a job anymore, we can enjoy 24x7 time for ourselves. Obviously, we need to have transformed our financial systems such that some sort of UBI is implemented so we all can at least have a roof over our head and food on our tables.

Very few seem to realise the power of AI. Very few seem to understand that the industrial revolution (the 4th) we are at the start of, will have such a huge impact on our societies, an impact we've never ever seen before. We have a few decades to transform and adjust. When we don't transform in time, who knows what will happen. For me, it's clear: No transformation means either total chaos, or total control by a collection of private entities owing all the tech, AI and everything. Through our growing dependency on tech, these private entities will have full control over all humans in ways we don't want.

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How could you possibly say that a degree in ancient Irish history is meaningless.

Without my extensive knowledge of the ancient Irish gods, Dagda, Danu and Mile how could I have ever ran a retail outfit?
Vital information on how the tuatha de danann conquered leinster and why we hate their rugby team for it. 😁

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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.

and when they finally find out the truth then it becomes too late,that is why we need to start promoting posts like yours and ensure that people see it and inform others about the dangers ahead,having a degree does not automatically lead to success or makes one successful,we need to let people know that spending alot of education with less returns will create a kind of debt,and the higher the debts the more problems for the future of the kids...

great post from you sir @taskmaster4450le

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(Edited)

The whole education thing is out of control in the States, I mean public schools should be as close to free as possible. I wouldn't have went through college if I lived in the States because obtaining a useful diploma is stressful enough but thinking about paying all that debt would have crushed my soul

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I tend to agree. Today there are better ways to gain knowledge and expertise than through university education. Even in countries with socialised higher education when young people, at least in theory, don't have to bankrupt their families in order to gain degree.

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