I’ve been saying for some time that the higher education system in the United States is broken.  Rather than existing to educate young people and prepare them for jobs in the adult world, institutions of higher education have become money printing machines for the people and organizations that run them.  While the cost of an education goes up, the quality of the education goes down.  It’s a win win situation for schools on the gravy train, but it’s a lose lose situation for the victims students.  Consider reality:

  • A college degree is not an automatic ticket to a good paying job.
  • Big school debt equals big life-long problems when you owe $100,000, $150,000, $200,000 or more

    1.  It becomes harder to find somebody who will marry you.  A lot of people will not want to marry into that kind of debt.
    2.  It may not be possible to get a loan to buy a home.  School loan debts may replace home ownership as the big debt paid over thirty years.

  • The real estate market and the real estate industry will suffer because so many people will simply have too much debt to qualify for a home loan.
  • It is virtually impossible to discharge a school loan in a bankruptcy.

According to University of Tennessee law professor Glenn Reynolds who wrote the article in the Washington Times linked to below, the cost of a college education has gone up 439 percent since 1982.  Why?  The higher education bubble is about to burst.  Schools may set tuition at any amount and students will pay because they can borrow any amount necessary to finance higher education from an approved institution.  Consider these actual  tuition and total costs of school year numbers and ask why would anybody would spend the incredible amounts of money required to get a law degree in these difficult economic times.  Below are the annual tuition and total expenses for nine months of law school at the indicated schools.

  • California Western School of Law (a bottom tier U.S. News & World Report law school)- $40,680 tuition/year & $61,000/year total (estimated because the school doesn’t give prospective students a clue as to how much it will cost for room, board and incidentals in San Diego, California for nine months) = $183,000 for three years
  • Harvard Law School – $45,450 tuition/year & $70,100/year total = $210,300 for three years
  • University of California at Berkley– Boalt Hall:  nonresident $49,310 tuition/year & $71,274 total/year =$213,822 for three years
  • Yale Law School – $48,500 tuition/year & $76,650 / year total = $229,950 for three years

Washington Times:  “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.  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.”

For more on this topic see: