- Education and Science
Will the Education Bubble Burst?
Education, especially higher education, is getting more and more expensive, where the increase in tuition fees is greater than the increase of consumer purchasing power. Imagine what will happen to college students who are attending college now: after graduation, they will be faced with five figure college debt, at the same time where the job market is tight and unemployment rate in many developed countries is rising. Does it worth it to enter the college now notwithstanding the above-mentioned future that will await them? Education can be viewed as some sort of investment and is the price of education going to plunge in the next decade?
What causes the outrageous increase in tuition fees?
College degree is generally known as the necessary ticket for better future and everyone wants to get it and they are willing to pay a high price for this ticket. In some countries, degrees are looked very high upon and they may be the necessary prerequisite for getting job promotion or even just to get called for job interview. This means that higher education providers have more purchasing power and they can set the price higher. Add to this people's willingness to pay any amount of tuition fee as long as they can get the best education, which they hope can lead them to better future. Another factor that kicks in is the availability of student loan, which enabled the student to defer the payment after graduation.
Education only for the rich?
If the price of college degree keeps increasing at the current rate, they will only be available for the wealthy. How about the middle to lower-middle income household? They may think that it's better to find a job directly after high school or even to open up their own business rather than taking the risky option of taking huge amount of debt to finance their higher education, without any guarantee or security on the job market especially in the wake of the current global crisis. Less demand for higher education will hopefully drive the price down.
Outsourcing to other nation
In this globalized era, companies and enterprises always try to push down the costs of production. Even some jobs that can be done through long distance, such as programming, design, writing, data analysis, and even call centres are outsourced to developing nations. Remember that the college tuition fees in developing nations are nowhere near those of the developed nations. Why would a company bother to pay you high salary when they can get the job done with similar quality at lower price? This continuing trend will hurt the job market for developed countries and as a result, less employment available for graduating college students who just got shocked at the amount of his or her debt.
Large portion of irrelevant knowledge are taught in college.
It is quite common that only small portions of knowledge learned in college will be applied directly for the future job, and the rest of the knowledge just served to broaden our horizon as degree holder. The other advantage, of course, is for networking purpose. Both the horizon broadening and networking are very important to open our eye to this globalized world, but does it worth at such an exorbitant price? When you entered the job market, most of the time you'll get on-the-job training to prepare you for the job. Granted, you need some basic skills and knowledge taught in the college to better understand the material, but does it worth the price? Employer in the future may be more willing to get a high school graduate and train them the necessary skills and knowledge for doing the job. However, if they are willing to add a premium to the salary, they may tend to hire college graduates instead. Since in most cases the employer have more purchasing power than the employee, it seems that we still have to get a college degree regardless of the price and irrelevance. It may take few decades before people can realize that a degree certificate does not fully guarantee quality.
The collective results of increasing tuition fees in developed nations will mainly hurt the students. Education provider may retain their revenue because people are still willing to pay whatever amount it is to get a college degree. Employers have more purchasing power than these students when they enter the job market and they can also outsource the job offshore. How about the students? They are left speechless with huge amount of debt together with tight job market where employment is not guaranteed. Will the education bubble burst? It depends on whether both students and potential employer can change their perspective on higher education. But people are not easily changed; we may still have a long way to go before mindsets are changed and thus the current status quo may persist.