Reynolds, G. H. (2012). The higher education bubble. New York: Encounter books (Broadside #29).
This brief book (“broadside”) is a sobering account of the rising costs of higher education, and the heights reached by student educational indebtedness. Reynolds describes this as an unsustainable “bubble” similar to the recent housing bubble (and equally likely to crash). There is a similar history of “readily available credit” (notably via student loans) and a culture of using it to finance higher education. Unfortunately, most students (and parents) do not realize the full financial burden of student loan payments (and failure to make them), and they believe a college education is a “ticket to future prosperity”.
The assumption that college degrees should be “economically productive” (and other degrees are bad investments) is illustrated by an example of a woman who accrued nearly $100,000 in student debt to finance a degree in Religious and Women’s Studies that “won’t make [her] any money” (p. 4).
The argument is of course flawed by the equation of “education” with “future prosperity” (i.e. gainful employment), which is quite contrary to a Catholic philosophy of education (education to gain knowledge and understanding, to become a “better person” and contribute to society). However, the economic argument is very prevalent, as are the reality of student debt and the mentality of “paying for a degree” to get a good job – and an argument that education should focus on “fostering economic value” (p.6).
Reynolds’ point is that a university education does not necessarily lead to a high-paying job, and even when it does, the extra money is typically outweighed by the debt repayments (especially interest payments) – so the economic argument is essentially flawed. He likens student debt to a form of “debt slavery”, and also notes that the need to earn enough to make the payments often limit their career choices in ways they had not foreseen (p. 15).
Explaining the high cost of education, Reynolds states that “higher education has been living high on the hog” (p. 19) He cites faculty salaries as a factor, but the “dramatic” increases have been in administrative salaries and building costs (often buildings such as recreation centers designed to attract potential students). Cuts in government funding for education (a trend that has increased markedly since this book) resulted in ever-increasing tuition and/or institutional borrowing. To deal with this problem of the “bursting bubble”, Reynolds predicts cost-cutting (“administration … will be cut last; actual teaching will be cut first”), mergers and even closings of “schools that can no longer operate” (p. 21). He expects “schools at the top of the food chain” such as the Ivy League universities to survive, but “private schools with modest reputations” limited endowments and high tuition will be vulnerable to collapse.
Reynolds’ advice to students is not to go to colleges that require then to borrow a lot of money to attend, or don’t go to college at all (he predicts the fastest growing jobs in the future will focus on “on-the-job training” p. 28). He similarly advises universities not to borrow, but to “cut costs while simultaneously increasing quality” (p. 31). By “quality” he means “learning useful things” (and he is in favor of on-line education to save money). However, a telling point in this otherwise depressing argument is that education should become “more rigorous”, although he does not say how.
Another argument is that employers as well as students should stop using a college degree as a “credentialing requirement” and find alternatives (unspecified, but “filling that need will make someone rich”, p. 41).
Reynolds complains about the cost of senior (faculty) salaries and “perks”, but also notes that the common response of reducing full-time faculty and using term hires and adjuncts to teach large introductory courses will result in “a hollowed out university” (p.43). He notes that
“The higher education bubble is not bursting because of a shortage of money. It is bursting because of a shortage of value. The solution is to improve the product, not to increase the subsidy” (p. 46).
Questions
- How sound is Reynolds’ economic argument, particularly the argument that many students attend college unnecessarily?
- Does this argument necessarily lead to higher education being restricted to a privileged few? And/or more “vocational” colleges (providing “useful” degrees) than traditional universities? (what would be the consequences of this?)
- Reynolds is a big advocate for online courses, but can we reconcile these with a Catholic philosophy of education?
- How might we interpret Reynolds’ remark about improving value? He likely means value in economic terms, but are there are other ways to read this?