A reckoning is coming. The housing market crashed sometime in 2008, but the path to the crash was set in motion long before the actual crash happened. The overvaluation of homes, the ballooning of home loan debt, the borrowing of material things against imaginary home equity, and then the inability to pay those loans triggered the biggest depression since The Great Depression. The crash of the housing market led to negative effects on the job market, the price of gas skyrocketed, and the price of food even went up. But the housing market is back, the stock market is back, and the price of gas is under $3 per gallon. Life is good. Except that there is another bubble that has yet to burst and has yet to be realized. It soon will be.
The bubble that has yet to burst is what I call the “education bubble.” The education bubble is more pernicious than the housing bubble and more dynamic. This bubble isn’t just about student loan debt; it’s about the other problems that arise from an educated public that can’t find equivalent work. Student loan debt is a known problem – there are people getting useless humanities degrees and are leaving school with $50,000 or more in debt. That’s preposterous.
Student loan debt is certainly one major dimension of the education bubble. Not only is student loan debt a major debt source in the U.S., perhaps greater than any form of consumer credit, it is also the kind that sticks with you. Student loan debt can’t be eliminated through bankruptcy and most of us won’t have our loans paid by a trust fund or a rich uncle. The amounts that each individual is carrying in student loan debt for college is unsustainable. It is a burden that makes college not worth it. Students walking out with $20,000, $50,000, or even $100,000 for a four year degree in worthless topics, like Philosophy, English, or Environmental Studies is so wrong, it should be impossible to rack up such numbers.
It’s not that these degrees aren’t worthwhile – they make better people. But in making better people, do we really need to spend five digits to get there? Should better people be saddled with unsustainable amounts of debt? What is the purpose of making better people when they can’t get jobs that will pay enough to live in adequate housing, own an adequate car, eat food, and pay off their student debt? The average job for the non-engineer appears to be $28,000-$40,000 per year. That’s great, but at that wage, deduct almost 20% for taxes, then take another 10% for retirement and medical coverage. After student loan payments, rent, food, gas, and necessary entertainment, there's nothing left.
But the education bubble isn’t about student debt – that’s a known issue and one that will haunt my generation for many more years. The education bubble lies in the production of too many big brains and not enough places to put them. Sure, big brains are great in all positions – whether working on cars, engineering the next bridge, or even serving beer at the local pub. But for those who aren’t engineering the next bridge or technology, the jobs out there are hard to get and don’t pay well. There aren’t enough of these jobs to serve all of the English Literature, Environmental Studies, Evolutionary Biology, and Germanic Language degrees that are coming out of the institution.
Instead, we tell children and teens to “go to college so you can get a good job.” What’s a good job, anyway? Is it one where you make enough to pay back your student debt? Is it one that matches your degree and line of study? Or is it one that you could have gotten without going through all that schooling, anyway? I think a “good job” is one that matches one’s training in a degree path, or at least utilizes one’s critical thinking skills gained from a degree path. I think it’s a job that pays well enough to justify the educational investment. Which isn’t most of the jobs out there today.
The cost of education is effectively a business investment. It is the cost to buy in. And it is an opportunity cost. For $20,000, $50,000, or even $100,000, what else could be done to build better people and better lives? For those working retail jobs after college, jobs that do not require any college education, was the opportunity cost of college worthwhile? Or did it become a burden; a failed investment?
The reckoning is coming. The education bubble is upon us. There will be a backlash toward institutions and the promise of higher ed in the near future. Mark my idiotic words. The education bubble isn’t just about ballooning student loan debt; It’s about the psychological harm that comes from spending time and money on an education for the promise of a “good job,” only to find that there are too many well-educated and not enough “good jobs.” Or that the education being offered no longer fits the markets that graduates enter after school. The education bubble is the high cost and debt to potential income ratio that we all face upon graduation. And the education bubble is the over-production of big thinkers, leaders, and the lack of places to put them. It is the creation of too many queens and not enough soldiers. We need soldiers. Finally, it is the fundamentally twisted way in which we define what a “good job” is and the inequitable process it takes to get a good job – the way we determine someone’s value and earning ability by proximity, pedigree, and luck. We have created a new class; the educated poor. We are also creating entirely new forms of social justice issues in our education system that have yet to be realized.
Higher ed is headed for a reckoning. It is already here. And it is about to burst. Hold onto your butts.
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