The Higher Ed Sky is Falling

| May 5, 2010

Have you Googled “higher education” news recently? Create a RSS feed about the topic and prepare to be bombarded with articles about budget gaps, funding cuts, degree devaluation and the generally dismal future of higher education.

The list below touches upon some of the major themes emerging in the higher education sector.

  • Staggering Debt: Students are graduating with mountains of debt and it is affecting their happiness. A recent study of post-graduate students in Australia suggests debt is the cause for reports of low well-being after graduation. American students are experiencing similar issues with debt. Over the past several decades there has been “a steady shifting of the cost of public higher education from the general taxpayer to the student and family.” According to a recent report, this trend is occurring because colleges are simply passing the costs onto students rather than try to reduce operational costs. The cost of higher education is rising twice as fast as the median family income, and 10 times as fast as other consumer economic indexes.
  • For-Profit Schools: For-profit schools, especially those that confer online degrees, are on the rise. The University of Pheonix, for example, netted $4 billion last year. The FRONTLINE special College, Inc. explores how these profits come with a cost. Students of for-profit schools are less likely to complete their degrees, more likely to have debts in excess of $40,000, more likely to default on federal loans and run the risk being unqualified for the job they are seeking. There  has been so much growth in the for-profit arena that it has drawn the interest of the Obama administration. The President is proposing a new set of regulations to cap tuition increases and “to require for-profit institutions to show that their graduates earn enough money to pay off their student loans. If for-profit colleges can’t meet the standard, they could lose federal financial aid, which typically makes up three-quarters of their revenue.”
  • State Funding Cuts: States are feeling the economic crunch right now and are looking to save money by cutting higher education funding. New Jersey, for example, is considering ending the NJ STAR program, which provides funding for middle-income students with a certain GPA to attend community colleges. A number of other states, such as Michigan, are viewing higher education cuts as the easiest way to resolve state budget issues.

Is it possible that higher education, in its current form, cannot sustain itself? (Or, more accurately, be sustained by student debt?) Online degrees have not yet gained enough prestige to compete with most traditional institutions, so what are some alternate solutions? Bob Samuels of the Huffington Post has a few ideas, but it is clear it will take a massive overhaul of the entire system to keep it afloat.