The education balloon

[nairiporter.livejournal.com]

Source: http://www.washingtonpost.com/blogs/wonkblog/post/chart-of-the-day-college-tuition-is-out-of-control/2011/10/27/gIQABi4sMM_blog.html

In a nutshell, the tuition fees in the US universities have increased 4 times for the last quarter of a century, and the student loans have surpassed $1 trillion:



Much could be said about the curse of higher education: as soon as the student has graduated, he or she already has piled mountains of debt. The young educated Americans need more and more time to pay back to their creditors. And many of them never manage, and they sink down into a debt spiral.

The university tuition in the US has passed the 1 billion mark, which is more than all the debt on credit cards for all Americans. There are thousands, if not millions of personal stories of students who are paying hundreds of dollars every month, just to cover the interest on their loans. It is like paying a mortgage on an imaginary house that doesn't even exist in the material sense. Still, at least they have supposedly received something in return for their indebtedness - either education at Berkeley, or Harvard, or some of the other, more or less prestigious education institutions in the country. All financed through a private loan. Some of them even come back to teach in colleges or universities. And the wheel keeps turning.

Still, for each of those who manage to pay it all back, there are dozens who never find a proper job after graduation. And their number keeps growing. As well as the number of those who fail to serve their debts that they have piled during their studies. The share of 90+ day delinquency has increased from 9% to 11% for 2012.



The economists are warning of a danger for a new "balloon" coming up, one that could plunge the country in a new crisis. The education balloon could have much graver consequences than the real estate balloon, because, unlike the owners of real estate, students cannot just "return" their education. And whoever has interrupted their studies or has chosen a discipline that has yet to assert its place at the labour market, would virtually remain empty-handed.

More and more university graduates work as waiters and janitors. Some of them never even finish university - about 40% of them interrupt their studies. One-third of the debtors are over 40 years of age, and one in four households consisting of 35-45 year old high-education graduates are still paying back their student loans.

The average US student with a bachelor degree leaves the university with $ 27,000 of debt (if they manage to graduate at all). And those who study medicine, law, or who have chosen some elite private university, could end up with a 6-digit debt.

The problem is that the salary growth rates simply lag way behind the growth rate of student loans. The Economist reports that in 2007 the US university graduates earned salaries comparable to the 1979 levels, while in the meantime their education expenses have risen exponentially.

This is a disturbing trend, and sounds like financial enslavement of vast proportions. It is an enormous hindrance to the well-being of an entire society, because as we know, education and the youth potential is essential for the long-term growth of an economy, and hence the prosperity of a nation. And while many people are so focused and invested in other issues and seem to believe that the worst of the economic crisis is behind their backs, this mine field keeps getting wider and denser. And it is bound to explode at some point. And this time the consequences will be very profound.

I wish I had a solution to this problem. But, as I am obviously lacking the insights an American would have, I guess I am stuck at the "raising the issue" stage at this point.

Comments

[sealwhiskers.livejournal.com]

If you, as I suspected, want to completely and blindly follow the economist and the ARWU, you should be aware of some fairly large flaws and biases in this system. I'm going to at large pass by The Economist and its opinion article, because most of what the Economist writes up as "problems" can according to the same be solved by deregulation and privatization. Just try it, read some more articles and look for "the solution". It's a fairly large 1-2 trick pony largely consisting of UK bank share holders and Oxford graduates.

But looking at the pure research behind the ARWU, it is only focusing on money. The universities with the most corporate investors have more research done on their facilities as well as bigger grad and PHD programs (hence more papers written). This all looks swell, but it doesn't say anything about the level or quality of education, nor for that matter size of classes. There are many European schools that have small class sizes compared to US schools, mine is one of them, but it is not an exception. What would have been valid research statistics done on University ranking would be undergrad and grad scores on actual knowledge after finishing degrees in their respective fields, along with what research was made statistically per capita (measured by country population).

As it is, it was also shown in this research study (http://link.springer.com/article/10.1007%2Fs11192-012-0674-0) in Scientometrics, which specializes in testing research methods, that the ARWU and specifically the I-distance method didn't hold up at all with the data the ARWU provided. Basically the scientists in scientometrics used the same scientific method and the results didn't show the same. It was actually a pretty big controversy last year in academic ranks, but of course may not have reached pop-science, pop economics and journalism. It probably will though.
You should read that article. You may be able to access it for free through a library or university. I strongly recommend it.

On a purely personal level, my university did okay on the ARWU ranking, it was well into the top 100, but still under the University of Boulder, which my degree was certified by and where I took tests and where my classes were evaluated. This was a very detailed and in depth evaluation (because it was used to give me a government job), and the level of depth and the scope of my education was scored very high (higher than the education CU Boulder itself provided), and I scored top on the certification tests. That is not because I'm super awesome, I had decent grades but not all top grades from my university, but because the level, depth and width of my education was just that good. And remember, I scored like that in a *foreign* country. Such results as these (which I was told by staff at CU Boulder were not uncommon from certain foreign universities), are not at all taken into consideration by the ARWU, for instance.

I'm just so tired of pop science and the herd following it. I mean for heaven's sake, that shitty Economist article mentions programs, such as The Erasmus program as "too little too late", it's been around for FUCKING 25 years in Europe.

[mikeyxw.livejournal.com]

I don't blindly follow either. I do believe The Economist when they say that "European countries spend only 1.1% of their GDP on higher education, compared with 2.7% in the United States". I also think this is pretty significant and why I included that point. If you can find something contrary, please let me know. If not, attacking the source is kinda silly.

The ARWU is indeed flawed, as are all university rankings and all ranking in general, thanks for the link BTW. This does not mean they are not useful. I mentioned the ARWU because it wasn't from the US or UK as the other major ranking are. All of them pretty much show the same thing however, universities that charge tuition are overrepresented in the listings of great and really good universities. If you can come up with something showing a bunch of Spanish, Italian, French, and German universities out performing the ones in the US, I'd be very interested. Saying there are flaws with the method and offering an anecdote in exchange isn't all that convincing... although I've certainly got no reason to believe that Scandinavian countries have managed to build quality Universities that don't charge tuition.

[sealwhiskers.livejournal.com]

And why do you believe that? I don't see any links in the article, do you?
They are completely off track in the article about the Erasmus program, which is easy enough to check, and this passage is too utter bullshit:

"The British government has led continental Europe in reforming its universities. It has established a system of student loans, and has crossed an important threshold in conceding the principle of “variable fees”. But the sort of managed market it has created, in which the government regulates what universities can sell and how much they can charge for it, is an unsatisfactory half-way house. It should now set the universities free."

I'll for sure look up some other sources about this than this article, but just from *knowing* about the Erasmus program and the Bologna process and the role of the UK in this, why should I not take a skeptical stance and "attack" the source on other subjects?

I also presented a scientific study specifically testing the ARWU and showing huge problems with their very method where other scientists applying the method to the same study found big discrepancies and reporting them, wondering how the ARWU came to those specific results when it didn't correlate with their method. This I think was the main point, not that my personal anecdote didn't correlate with the ARWU either. I'm surprised that wasn't obvious from my answer.

[mikeyxw.livejournal.com]

Fine, fine, remove the reference to the economist and replace it with one of the following or any of the other dozen sources that are easily available with a quick search:

"In 2001, total (public and private) spending on higher education in EU25 accounted for barely 1.3% of GDP, against 3.3% in the US. In other words, every year Europe spends 2% of GDP less than the US. In terms of expenditure per student, the contrast is starker still, with an annual spending of €8,700 in EU25 versus €36,500 in the US." source (http://www.voxeu.org/article/more-money-more-autonomy-better-european-universities)

"Total public and private spending on higher education in the European Union accounts for 1.3 per cent of GDP, compared to 3.3 per cent in the United States, according to EU figures cited in a 2008 report by the Brussels-based Bruegel think tank."
Source (http://www.nzherald.co.nz/world/news/article.cfm?c_id=2&objectid=10858619)

I checked the Scientometrics study, it shows differences but they didn't look substantial. They agreed with ARWU on 9 of the top 10 and 24 of the top 25. In both cases, the one they disagreed on was pretty close (12th and 27th). Those are certainly discrepancies, but they don't seem that big and it really does nothing to really change that the US universities make up a huge number of the list of great and really good universities. It does seem that you get what you pay for.

Are you seriously arguing that universities are better funded in Europe and that pretty much every ranking, including the one from Scientometrics, is incorrect in ranking US universities very well?

[sealwhiskers.livejournal.com]

No, I'm actually saying what I said in my first response, that focusing purely on the money is a flawed analysis when it comes to quality of education.

This is what I said: "But looking at the pure research behind the ARWU, it is only focusing on money. The universities with the most corporate investors have more research done on their facilities as well as bigger grad and PHD programs (hence more papers written). This all looks swell, but it doesn't say anything about the level or quality of education, nor for that matter size of classes. There are many European schools that have small class sizes compared to US schools, mine is one of them, but it is not an exception. What would have been valid research statistics done on University ranking would be undergrad and grad scores on actual knowledge after finishing degrees in their respective fields, along with what research was made statistically per capita (measured by country population)."

And in even saying that I'm disagreeing with the Economist's self aggrandizing analysis of the British (and American) Education system. I frankly think that a US system would be nightmarish in Europe and widen debt and societal gaps to a horrific point that most Europeans don't even realize exists in the US. Corporate investment in University research is also a double edged sword. Mostly by economic rags like the economist, that see the solution to everything in deregulation and privatization, Corporate money is awesome for research and education, but there is rarely any analysis on all research that actually is produced, and what a large percentage of it contains. Research and quality research are two different things, and a school isn't "great" because it becomes an article and phd producing factory. Famous schools with a lot of money get masturbatory attention from peer review publication, investors and media, it is quite often a masturbatory circle, but not the same as giving "better quality" education than other schools. That would be as intelligent as saying that rich people are smarter than less rich people, because they were born to money.

Personally I'd like to see investors being encouraged to invest in other research facilities, and still at large keep education at a low to no cost. I'm not terribly interested in the type of class societies that the US and the UK has.

[mikeyxw.livejournal.com]

I'd certainly agree that you can't measure the quality of education just by looking at funding. There are three large surveys that evaluate universities world wide, two from the UK and one from China. All are flawed in their own ways but all have pretty similar results. I picked the ARWU because it was the least likely to be slanted towards US universities, if you'd prefer another, that's fine, they all have similar results. If you have another that shows European universities leaving their counterparts in the US and UK behind, by all means please share it. BTW, the ARWU doesn't just look at money, I'd say that their weakness is really an overreliance on Nobel prizes and research as a measure of education, not money. Then again, the purpose of the survey was to help China develop top research universities, citations and Nobel prizes seem to be as good of a way of detecting those as any.

It may be that the US system would not do well in Europe, I wasn't arguing for that it should be replicated. I was originally arguing that the European system should not be applied in the US in response to the post above suggesting, "Another way is to subsidize education entirely, removing the need for loans altogether!". I would expect that this would lead to underfunded universities in the US. It may work well in Scandinavia, but the US is a whole different country.

[sealwhiskers.livejournal.com]

But what I'm perhaps not phrasing very well is that research is about money. The schools with the most research (and Nobel Prize winners) are the schools with the largest corporate investors. No matter the fees, these schools would come nowhere without investments.

This is how the deregulated, corporate run universities mostly work. Old money investments and fees as starter-up capital, some state investments in the "modern era", and here schools are usually divided by a crossroad that either focuses on regulation or on corporate money and accelerated fees. In the second case, the schools become very rich and get a lot of publicity and reputation, and attract researchers through fat paychecks. But quite often a large percentage of the research is of a particular type and highly vulnerable to the decisions of the sponsors.

This is why such a small country as Sweden actually *has* made a mark in research at all, because it had done research that sometimes is unusual, and had breakthroughs in it.

As for surveys and measuring methods, I find it pretty uninteresting to compare them, when they focus on number of publications, money and prize winners, these aspects all have to do with money, money and again money. Like I said, when surveys actually measure *knowledge* in undergrads and grad students (not that hard really), applicability to get them into the working force market and finally type of research conducted and measured per capita in the country, then I'd say that there would be some ability to actually rank the schools by anything close to actual quality.

As for the US "system" and how it would do in Europe and vice versa is a fairly complicated question, but i think the criticism given to the expensive colleges in the US is valid in that they are vastly over-charging in comparison to what they give, remember that the main chunk of the fees do not go to research - that is funded by corporate and state money and grants. The Universities of the US have become almost corporate entities in themselves, making the money circulate and getting addicted to accumulating more - widening already existing class gaps and actually in many cases creating poverty.

On the other hand, it is not a bad thing if some European universities could attract more private corporate money for research, which would produce interesting results. However, these results are not necessarily as closely related to "good education" as your study and article want to claim.