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Higher Education Reaches for the Moon on Price October 29, 2011

Posted by Peter Varhol in Technology and Culture, Uncategorized.
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I’m a big supporter of higher education.  In my own case, I believe that my formal education has paid off well.  I have degrees and substantial coursework that I’ve never really used, and much of my career has been shaped by things outside of formal education.  But I have a good memory, and the things from my education that I remember have made me better and more engaging at what I do.

In the aggregate, I believe that more education makes us as a society able to do a wider variety of things.  It may also make us more versatile.  If I’m undereducated, it’s difficult to aspire to be a doctor or engineer.  If you’re well-educated, you can still choose to pick crops (although it seems like few of us do).  My brother-in-law, with a BS in economics, chooses to drive a delivery truck (and it was a career choice, not a necessity).

That said, I am every bit as big a criticizer of the cost of higher education.  The cost part of higher education is really screwed up.  For example, in my time in academia, circa mid-1990s, my institution made the decision to raise tuition by 18 percent.  Not because they needed the money, but because apparently there is a direct perception correlation between price and quality, and my institution wanted to be thought of as having significantly (18%, I guess) higher quality than the previous year.

Crazy?  Not in the twisted world of higher education.

Further, I don’t get the general acceptance of society at large of the clockwork-like increases in the cost of higher education.  We don’t view cost and value in the same way as we do other purchases in our life.  Our natural reaction toward education is that it cost what it cost, and that it is the role of government (at least at the state and federal levels) to make education more affordable.

Many respond that the list price doesn’t correspond to what the average person pays.  True, but that simply means that higher education effectively obfuscates its prices.  And the price, whatever it may be, includes a heavy dollop of loans, which are becoming increasingly larger as that list price increases.

Education as a practice hasn’t changed very much in the last fifty years or so (or much longer).  It still involves a teacher in front of a (usually smallish) room of students, on at least a weekly basis.  It’s odd, no, inconceivable that the practice of education hasn’t changed and become more efficient, as everything else around us has.

Online education has made this basic process somewhat more efficient, but it hasn’t prevented colleges from continuing to raise prices.

Kid Dynamite has said that the cost of education is a bubble that will burst sooner or later, just like housing.  I would like to agree, if only to see academia adapt to the world around it, but I don’t know what will push costs over the edge.

My own personal experience places the blame for the unending and unreasonable cost increases on a hidebound culture that sincerely but unreasonably believes it is immune from the forces of the rest of society.  I acknowledge that my own experience may not be generalizable, but at the very least the cause can be at least partially attributed to the wacky incentives created by the complex myriad of financial aid offices and offers.  But higher education costs must come down, and it won’t be through continually rising costs and increasing government financial aid, and it won’t be pretty.

I am not the 1%, to use a term in popular vernacular.  However, it appears as though I am around the 89th or 90th percentile, in terms of annual income (while growing up in a household considerably closer to poverty).  It’s a nice neighborhood in which to reside, and I credit my education in part for having the opportunity to attain that level.  But while my education provided some information and a modicum of tools that helped enable me to reach that neighborhood, it’s by no means a guarantee.  The onus remains on me to make the most of all of my strengths to achieve professional and a small amount of financial success.

Further, my education didn’t include networking with alumni and fellow students.  Even if I had the social skills to do so at the time (or even now), I didn’t go to those types of institutions where it played a big part in educational or career development.

The lesson here is that unless you go to one of the top schools (Harvard, Dartmouth, Stanford, and a handful of others) with the intent of making and leveraging those contacts throughout your career, you should shop around for the best deal in higher education.  The deal shouldn’t include loans offered; those defer the cost, not make it less expensive.  And look for innovative steps intended to control costs.  In 99 percent of the real world, no one is going to care where you went to college.  Really.

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