Читать книгу The Education Apocalypse - Glenn Harlan Reynolds - Страница 9
ОглавлениеTHE PROBLEM IN A NUTSHELL
If something cannot go on forever, it will stop.
ECONOMIST HERBERT STEIN
In other words, something that can’t go on forever, won’t. It’s a story of an industry that may sound familiar.
The buyers think what they’re buying will appreciate in value, making them rich in the future. The product grows more and more elaborate, and more and more expensive, but the expense is offset by cheap credit provided by sellers eager to encourage buyers to buy.
Buyers see that everyone else is taking on mounds of debt, and so they are more comfortable when they do so themselves; besides, for a generation, the value of what they’re buying has gone up steadily. What could go wrong? Everything continues smoothly until, at some point, it doesn’t anymore.
Yes, this sounds like the housing bubble, but I’m afraid it’s also sounding a lot like a still-inflating higher education bubble. And despite (or because of) the fact that my day job involves higher education, I think it’s better for us to face up to what’s going on before the bubble bursts too messily. Because that’s what’s likely to happen.
No one disputes that college has gotten a lot more expensive. A recent Money magazine report notes, “After adjusting for financial aid, the amount families pay for college has skyrocketed 439% since 1982. . . . Normal supply and demand can’t begin to explain cost increases of this magnitude.”1
Consumers would balk, except for two things.
First – as with the housing bubble – cheap and readily available credit has let people borrow to finance education. They’re willing to do so because of (1) consumer ignorance, as students (and, often, their parents) don’t fully grasp just how harsh the impact of student-loan payments will be after graduation; and (2) a belief that, whatever the cost, a college education is a necessary ticket to future prosperity. Second, there’s a belief that college is an essential entry ticket to the middle class, regardless of whatever actual value it might provide.
Bubbles form when too many people expect values to go up forever. Bubbles burst when there are no longer enough excessively optimistic and ignorant folks to fuel them. And there are signs that this is beginning to happen already where education is concerned.
A 2010 New York Times profile described Cortney Munna, then a 26-year-old graduate of New York University with nearly $100,000 in student-loan debt – debt that her degree in religious and women’s studies did not equip her to repay. Payments on the debt are about $700 per month, equivalent to a respectable house payment, and a major bite on her monthly income of $2,300 as a photographer’s assistant earning an hourly wage.
And, unlike a bad mortgage on an underwater house, Munna can’t simply walk away from her student loans, which cannot be expunged in a bankruptcy. She’s stuck in a financial trap.
Some might say that she deserves it. Who borrows $100,000 to finance a degree in religious and women’s studies that won’t make you any money? She should have wised up, and others should learn from her mistake instead of learning too late as she did: “I don’t want to spend the rest of my life slaving away to pay for an education I got for four years and would happily give back.”2 But Munna is not the only one. Many recent grads are in the same boat.
Another appalling New York Times profile demonstrated even worse problems in the graduate school world, telling the story of veterinarian Hayley Schafer, who graduated from veterinary school with over $312,000 in student-loan debt. Veterinary practice had been her “dream job” since the age of 5, and she made it, but at a price. Nor is she alone:
They don’t teach much at veterinary school about bears, particularly the figurative kind, although debt as large and scary as any grizzly shadows most vet school grads, usually for decades. Nor is there much in the curriculum about the prospects for graduates or the current state of the profession. Neither, say many professors and doctors, looks very promising. The problem is a boom in supply (that is, vets) and a decline in demand (namely, veterinary services). Class sizes have been rising at nearly every school, in some cases by as much as 20 percent in recent years. And the cost of vet school has far outpaced the rate of inflation. It has risen to a median of $63,000 a year for out-of-state tuition, fees and living expenses, according to the Association of American Veterinary Medical Colleges, up 35 percent in the last decade.
This would seem less alarming if vets made more money. But starting salaries have sunk by about 13 percent during the same 10-year period, in inflation-adjusted terms, to $45,575 a year, according to the American Veterinary Medical Association. 3
Unfortunately, a lot of students, in a lot of fields, are facing a similar problem to greater or lesser degrees. Concern over high student-loan debt and poor job prospects was a major theme in the Occupy protests as well:
When graduation day passes without a decent job offer, frustration builds. It continues building as recent grads move back in with their parents, work unpaid internships, settle for a job they might have gotten without a degree – and continue to pay their student loan bills each month.
That frustration is often at the heart of Occupy Wall Street protests in New York’s financial districts and cities across the country. Although the leaderless revolution does not have any stated objectives, many participants are calling for student loan forgiveness. . . . Student loans are mentioned over and over in handwritten stories posted on the Tumblr account “We are the 99 Percent.” One student wrote: “When I graduate I will have (over) $100K in student loans, as will much of my generation.” Another wrote: “I am a freshman in college with 12K + in student loan debts ALREADY.” A man wrote: “I am 42 years old . . . I owe $40,000 in student loans.”4
In discussing the Occupy demonstrations, Professor Kenneth Anderson notes the role of declining returns on education and the struggles between the upper and lower tiers of the “New Class,” the educated managerial elite that has dominated U.S. society since World War II:
The upper tier is still doing pretty well. But the lower tier of the New Class – the machine by which universities trained young people to become minor regulators and then delivered them into white collar positions on the basis of credentials in history, political science, literature, ethnic and women’s studies – with or without the benefit of law school – has broken down. The supply is uninterrupted, but the demand has dried up. The agony of the students getting dumped at the far end of the supply chain is in large part the OWS. As Above the Law points out, here is “John,” who got out of undergrad, spent a year unemployed and living at home, and is now apparently at University of Vermont law school, with its top ranked environmental law program – John wants to work at a “nonprofit.”
Even more frightening is the young woman who graduated from UC Berkeley, wanting to work in “sustainable conservation.” She is now raising chickens at home, dying wool and knitting knick-knacks to sell at craft fairs. Her husband has been studying criminal justice and EMT – i.e., preparing to work for government in some of California’s hitherto most lucrative positions – but as those work possibilities have dried up, he is hedging with a (sensible) apprenticeship as an electrician. These young people are looking at serious downward mobility, in income as well as status. The prospects of the lower tier New Class semi-professionals are dissolving at an alarming rate. Student-loan debt is a large part of its problems, but that’s essentially a cost question accompanying a loss of demand for these professionals’ services.
