Higher Education Needs Reform
March 28, 2013
In the college industry, prices have gone up and buyers (students) have flocked to the inflated degrees, encouraged by a flood of seemingly cheap student loans. As tuition has outpaced inflation significantly, the value of a college education has decreased with the recession and a mismatch in skills. A higher education bubble looms in the future as the value of college has declined and online education is poised to address the imbalances, say policy experts Glenn Reynolds, Richard Vedder, Lisa Snell, Naomi Schaefer Riley, Nick Gillespie, Zachary Gochenour, Michael Gibson and Alex Tabarrok.
- Tuition has risen at an annual growth rate of 7.45 percent, which has burdened American graduates with more than $1 trillion in student loan debt, more than total credit card debt or total auto loan debt.
- Many students of private and public universities alike are graduating with more than $100,000 in debt, and applications have now plummeted as the costs appear to outweigh the benefits.
- More than 700 colleges have virtually no admissions requirements and students today study 50 percent less than they did a few decades ago yet receive higher grades, meaning that students finish with degrees but are less prepared for the job market and know little more than they did as freshmen.
The government has played a significant role in rising costs and attendance. An abundance of available school loans leads to higher tuition fees as colleges raise their prices to take advantage of students' increased ability to pay.
- For schools, increased tuition income has led to enormous school bureaucracies that employ far too many administrators and professors.
- The number of instructors who teach four hours or less per week has doubled since 2000.
- The quality of students entering higher education from America's K-12 schools has barely increased since 1970.
Today's service-based economy focuses more on hard skills like computer science and less on liberal arts, partly because humanities and social science degrees lack the necessary rigor. Finishing college is an important method of signaling to employers but the "traditional path" to success through college is no longer a sure thing.
Increasingly, online education is a game changer for universities who now have the ability to design meaningful interactive online courses. The education institution must make these necessary adjustments to make U.S. students competitive globally.
Source: Glenn Reynolds et al., "Where Higher Education Went Wrong," Reason Magazine, March 19, 2013.
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