Higher-education bubble could burst next

Higher-education bubble could burst next

news.bostonherald.com

Two prominent higher-education experts are warning that the financial structure of colleges and universities may be the next “bubble” to burst in America.

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The result could be mergers, closures and even bankruptcies of smaller colleges that have spent too much and taken on too much debt based on a shaky system of student loans paying for ever-rising tuitions, say Joseph Marr Cronin, former secretary of education in Massachusetts, and Howard E. Horton, president of Boston’s New England College of Business and Finance.

The duo raised a stir within academic circles last week when they penned a joint opinion piece in the Chronicle of Higher Education entitled “Will Higher Education Be the Next Bubble to Burst?”

Their answer to their own question: Yes.

The problem is colleges - funded by a seemingly unending stream of student-loan money, backed largely by the U.S. government - have kept raising tuitions at rates far ahead of inflation and then spent every nickel they got.

I've been on this forum for quite some time now and have often seen Americans criticizing the EU for being a social wealth fare community. As much as people like to bash the European countries, one thing cannot be denied: education is affordable. In most European countries, students don't end up with huge debts, taking years to pay off.

I've just graduated in the Netherlands, paying an annual tuition fee of E 1500,-. I'm now going to one of the Nordic countries for an additional master program, paying E 0,- tuition fee.

While the European model is far from perfect, but the American model is worse and according to the author, could now be the next bubble.





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Hopefully, if it does collapse, it won't take long for a better system to emerge. College tuition is outrageous these days and the job market simply doesn't support it. It is tough to take on the amount of debt required to get a degree to end up jobless or barely getting above the poverty line.