Speaking in Providence, RI not too long ago, the post-speech conversation turned to college education. The word was that Brown University’s tuition alone had risen above $50,000 per year.
The above number is staggering. For the most part college students tune out during their four years on campus; that, or they memorize what’s needed to get As on the tests. Why then would any parent pay the sky-high tuition, and then barring parental help, what 18-year old would take on that kind of debt in order to be the recipient of lots of largely useless information?
Brown is course not alone in this regard. Whether at public or private schools, college tuition over the years has skyrocketed. One factor, though it’s certainly not as big as analysts presume, is the federal government’s growing role in the financing of education.
With the above entity increasingly the only market for college loans, and with that same entity rather generous with the money of others, colleges and universities have very little incentive to do anything but raise tuition. Since our federal government is price insensitive, tuition can keep rising.
Happily, and arguably thanks to the Bush/Obama economic disasters, there’s growing skepticism with government and its promiscuous benevolence with money not its own. With the electorate casting a more jaundiced eye toward federal spending, the argument is that student loans will be clipped ahead of the tuition ‘bubble’ popping. Fair point? Read on.
Beyond that, it’s hard to read a famous person’s memoir today, or to read about a famous person, without learning about how much of a non-factor education was in their success. For this writer the most recent read was the autobiography of Academy Award-winning director William Friedkin, The Friedkin Connection. In it, the much garlanded director noted that "My formal education ended in 1953, when I graduated from Senn High School on the North Side." Friedkin learned to make films by doing. First at a local Chicago television station, then as a documentary filmmaker for David Wolper, and ultimately for big studios such that he can claim a Best Director Oscar statuette for The French Connection.
Friedkin’s not alone in this regard. Though he’s arguably the most successful filmmaker in the profession’s history, Steven Spielberg wasn’t accepted into USC’s film school; the latter widely thought of as the best. Academy Award-winning director Quentin Tarantino didn’t even graduate from high school. He did, however, get a job at now-defunct Video Archives where he learned by watching. As he once explained, "When people ask me if I went to film school, I tell them, ‘no, I went to films.’" Billionaire music and film impresario David Geffen entertainingly told his bosses at William Morris that he went to UCLA, except that he didn’t.
Moving to technology, Microsoft MSFT -0.59%’s Bill Gates famously dropped out of Harvard, as did Facebook’s Mark Zuckerberg nearly thirty years later. Michael Dell dropped out of the University of Texas after started up his eponymous computer company in his dorm room, not to mention that the late Steve Jobs had no time for the educational experience at Reed College; a class on calligraphy that he audited after dropping out seemingly the exception.
The list is long of superior American achievers who didn’t have time for school, and it’s fair to say that their stories are yet another signal of a university-tuition bubble set to burst. If what’s learned in college is irrelevant to what’s done in the real world, aren’t sky-high college costs set to plummet?
No, they’re not. Though skyrocketing tuition and a growing anti-government tide are seemingly swimming against traditional university education, the true educational bubble forming is in the online space.
Yet to hear and read the pundits, online education is set to transform how we learn. Thanks to technology and the internet, kids anywhere in the world can be instructed by the world’s best professors. To buy all the giddy commentary is to believe that traditional college education will meet its maker thanks to crushing cost pressures from the online world. To put it plainly, why pay $50,000+ annually for undergraduate business instruction at Vanderbilt or SMU if for a fraction of the cost you can learn equities from Jeremy Siegel at Pennsylvania’s Wharton School? How about political science classes taught by Bill Clinton?
It all sounds so good and promising, until we realize that college is not about learning much as we might wish it were. Online education would erase traditional schooling if learning were truly the purpose of attending Princeton, or if employers cared what was learned at Princeton.
But when parents spend a fortune on their children’s schooling they’re not buying education; rather they’re buying the ‘right’ friends for them, the right contacts for the future, access to the right husbands and wives, not to mention buying their own ("Our son goes to Williams College") status. The same is true for students taking out loans.
With university education jaw-droppingly expensive, it’s often asked what in terms of instruction kids are getting in return for the huge cost. Of course that’s a false question. Parents and kids once again aren’t buying education despite their protests to the contrary. Going to college is a status thing, not a learning thing. Kids go to college for the experience, not for what’s taught.
And that’s why there’s no ‘bubble’ forming in the university world. There isn’t one not because Yale and Stanford students learn anything of real world value, but because each school is a door opener. Attendance at either university properly signals to employers that the graduate (or dropout for that matter) is smart, probably hard working for having been accepted, and in possession of one or both of the attributes, that the individual can likely learn the skills necessary to achieve on the job.
Online education would bring with it real economic value if employers actually cared about the knowledge gained on campus. The problem is that they don’t. Education has little value no matter the school.
The obvious answer to the above is that not everyone is Steve Jobs or Bill Gates. That’s true, and that’s why there’s no college ‘bubble’ forming. Indeed, if we were all like Jobs or Gates, it’s fair to assume that the ‘bubble’ would have already popped. But since we’re not, since very few of us have the entrepreneurial gene, most of us will work for someone else coming out of college.
Because we will, education matters. It matters once again not because of what we’re taught, but because where we go says a lot about how smart we are. College tuition is the price paid by parents and ambitious teens to slot them for future employment. Even without government subsidies, tuition for the name schools would still be high simply because parents and kids will pay enormous amounts for something scarce in the form of an elite degree that carries weight with employers. On the other hand, online education, precisely because it represents the opposite of scarce means it brings with it very little job-attaining value.
There’s no college-education ‘bubble’ forming simply because teens go to college with an eye on a fun four years, after which they hope the school they attend will open doors for a good job. Online education only offers learning that the markets don’t desire, and because it does, its presumed merits are greatly oversold. There’s your ‘bubble.’