TeeJaw Blog

Is Higher Education A Bubble That is About To Burst?

Posted in Culture, Economic Theory, Government and Politics by TeeJaw on Tuesday, June 15, 2010, 11: 58 AM

A lawyer called a plumber to fix a broken water pipe. The lawyer asked the plumber what his hourly rate was, and the plumber replied that it was $250 an hour. Astounded, the lawyer replied, “Good grief, I’m a lawyer and I can’t charge that much!” The plumber replied, “Yeah I know. When I was a lawyer I couldn’t charge that much either.”

That used to be good joke, back when plumbers were expensive but still made less than lawyers. With newly minted lawyers carrying upwards of $100,000 of debt in student loans (which cannot be discharged in bankruptcy) and poor job prospects, it’s still funny but now also just might be true.

It may be true for other professional and white collar jobs as well. It is becoming increasingly difficult to justify the high cost of a college education in terms of increased earning capacity after graduation. More people are facing the reality that between the lost earning years spent in college, the enormous burden of re-paying student loans, along with the difficulty of finding a job that’s any better than could be had without a college degree, it just may not be worth it to spend four years getting a college diploma. Especially if one’s major is in the social sciences or other fields that do not readily translate into any marketable skills.

The Washington Post reports that More college-educated jump tracks to become skilled manual laborers the thesis of which is that trade schools are more and more being seen as a better bet to a rewarding career and colleges and universities are losing their status as a gateway to success.

Another reality check for colleges and universities may be on the horizon. Glenn Reynolds says The Higher Education Bubble Is About to Burst. Reynolds holds that the higher education bubble is similar to the housing bubble in that it is fueled by east credit in the form of student loans to people who will not be able to pay them back because the education they are getting for the money they are borrowing will not lead to jobs that pay enough. Just as the housing bubble burst when millions of mortgages went into default the same thing is about to start happening to the student loan debt many new graduates are carrying.

Maybe this will lead to more sales of a book I read a few months ago: Shop Class as Soul Craft: An Inquiry Into the Value of Work. It’s the value of work one does with one’s hands that it being looked into here. The finding is that is it rewarding both financially and spiritually.

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