After reading Mark Cuban's "Is Your College Going out of Business?," I've been thinking: What is it about the coming collapse of America's higher education system that someone like Cuban gets, but those who are in it--and the students who are caught in its toils--don't?
Bain and Co. did a study last year of 1,700 private and public colleges, and found that one-third were on an "unsustainable financial path," including Princeton, Cornell, and even dear old Hahvad. Another 28 percent are in danger of slipping onto the same path.
Meanwhile, 53 percent of recent college grads are either unemployed or severely underemployed, while, of those working, 47 percent (according to a new study by the Center for College Affordability and Productivity) hold jobs that don't require a B.A. or a B.S., like taxi driver and Starbucks barista. And for the 19 million young people expected to graduate from college by 2020, there'll be fewer than 7 million jobs.
Yet tuitions continue to shoot through the roof (by an inflation-adjusted rate of 72 percent at public institutions since 2000) and colleges and universities continue to spend on administration and infrastructure as if nothing's happening (Princeton just finished a new $30 million dining facility).
Why is everyone so happily oblivious? Then I had the answer: the federal government. Washington has steadily turned our institutions of "higher learning" (I use that term very loosely) into adjuncts of the welfare state--and a generation of college students into its debt peons.
The numbers tell the story.
Federal aid to colleges and universities tripled between 2000 and 2008 -- making it one of the biggest and fastest growing discretionary spending sprees in the history of the budget.
In 2011 alone the Education Department handed out $157 billion in student loans -- while Obama has grown the go-to-college-free Pell grant program from $14 billion in 2008 to about $40 billion in 2012.
No wonder college and university administrators can ignore fiscal reality. Their customers' costs are largely underwritten by taxpayers- and they are themselves tax exempt.
For the customer and their families, of course, that freedom from reality comes with a massive burden of debt: debt they can't escape through normal bankruptcy and which cripples their earning power in their first years out of college -- assuming they can even get a job.
At some point they're going to catch on, and realize that the degrees they've been indenturing themselves to get are barely worth the parchment they're printed on -- and then someone will demand the architects of this house of cards pay for the lives, and the system of education, they've ruined.