As I have written about whether or not the price of college is worth the reward, I have learned a lot. I have discovered that college is definitely not for everyone. For many people, the price of college is not worth the reward. While this did not surprise me, some of the reasons for this did surprise me. One of the reasons that surprised me was that only 29 percent of four year college graduates read at an advanced level. In writing this blog, I have learned not only what I hoped to learn, but more also.
Focusing on my topic in phases had some benefits and some drawbacks. One of the benefits was that I learned how to write a good summary and a good response before putting them together. By the time I needed to write a post including both of them, I had received input on how to improve my summaries and responses, and was able to apply this information. Another way that working through this topic in phases helped was that I was able to learn how to find better sources as I moved forward. If I had written this all at one time, my sources would probably have been pretty weak. One drawback was that I felt that some posts were incomplete. In the summary post for example, I would have loved to address some of what the author said in his article, but I was not able to. As a whole though, addressing the topic in phases did help me.
After this blog, I will change the way I learn about topics a little bit. While I probably will not approach them all in phases, I will apply some of what I learned by approaching this topic in phases. I will try to approach my topics in bite sized chunks, rather than trying to learn everything at once.
While this topic has made me more confident about my ability to discuss this topic with others, it has not changed my confidence level when it comes to discussing other topics. The main reason for this is that I already was fairly comfortable discussing topics with others. I enjoy hearing the other side of an argument and trying to respond to it.
The most valuable thing that I have learned about research while writing this blog is how to assess a sources credibility. Because of what I have learned about assessing a source's credibility, the papers I write moving forward will be meaningful. My papers will be able to use credible arguments and counter arguments, giving them weight. Not only have I gained knowledge about my topic writing this blog, I have gained knowledge regarding how to approach writing any topic.
Tuesday, October 9, 2012
Sunday, October 7, 2012
Summary and Response 2
In this post I will once again be summarizing and responding to an article. The article that I will be using is, The Value of A Degree, written by Jenna Ashley Robinson. The article can be found on the pope center's website, the specific URL being http://www.popecenter.org/commentaries/article.html?id=2517. There are several reasons that this is a credible source. The first is the website that it appears on. The Pope Center, is, according to its about us page, a nonprofit institute dedicated to improving higher education in North Carolina and the nation. They state that one of their goals is to encourage cost-effective administration and governance. Admittedly, they are talking about themselves so I do need to be careful about believing everything they say. However, there are strong signs of credibility. One is that they are in charge of writing the higher education section for the Carolina Journal. Another sign of credibility associated with the article is that the author embedded several of her sources in the article. While providing the links inside of the article is probably not the best method, at least she does provide them. Some final signs of credibility are associated with the author. One is that if you link to her name, she does provide her email so that you can contact her. Another is that she does have good credentials. She has a masters degree and Ph.D. in political science. While it is not as good as having a degree directly associated with economics, it does qualify her to talk about economic matters. This article is useful to me because it will help me address what a college degree is worth. It will also help me address who a college degree is useful to.
Jenna Robinson starts her article by mentioning the million dollar number. That is, the fact that college graduates make a million dollars more than non college graduates over the course of their career. Unfortunately a study conducted by Mark Schneider, vice president of the American Institutes for Research, offers a rude awakening. Schneider found that once you factor in forgone wages, and the cost of a college education, college is nowhere near being worth the fabled one million dollars. In actuality, college graduates only make 150,000 to 500,000 more than non college graduates over the course of their career. He found that these differences varied depending on the type of college the person graduated from. Those who graduated from the most selective private schools enjoyed an earnings advantage of, on average, 500,000. Those who graduated from a minimally selective private college, on the other hand, only garnered an earnings advantage of 150,000. Naturally, these numbers are hardly consistent. According to the Census Bureau's 2009 Current Population Survey, 20% of those making less than 20,000 a year, hold bachelor's or master's degrees. Also, recent graduates have a jobless rate of almost 10%. Even worse than all this, gains from college are not growing over time. In 1991 young workers with bachelor's degrees earned an average of 1.48 times what high school graduates earned. That number peaked in 2000 at 1.68 times, and by 2009, had fell back to 1.54 times. Over the same period of time, tuition increased 300%. Compounding the problem, students are not learning much in college. The National Assessment of Adult Literacy says that only 29% of four year college graduates read at an advanced level. According to a new book, Academically Adrift, nearly half of university students show no academic advancement by their sophomore year. Another study says that students today only study for 14 hours outside of class, as opposed to 24 hours in 1961. While a bachelors degree is still a good option for many students, future students should consider their options carefully before making their decision.
We used to think that we knew what a college degree was worth. Studies showed people who graduated from college made a million dollars more than those who only graduated from high school, over the course of their career. However, more recent studies have showed that number to be flawed. As Mark Schneider, vice president of the American Institutes for Research, found, once forgone wages and the cost of college is factored in, college graduates only make 150,000 to 500,000 more than high school graduates. Schneider also divided that data up specifically, finding that what kind of school you graduated from also affected how much more you made. The information he found helps support my claim that college is not a wise choice for all people. He found that while those who graduated from a highly selective private college made, on average, 500,000 more than the average high school graduate, those who graduated from a minimally selective private school only made 150,000 more. That number, when considered over the course of an entire career, is relatively small. It is simply not worth it for a future plumber to spend four years in college amassing debt. There is nothing wrong with being a plumber. However, it makes more sense to gain on the job learning and experience, than to run up debt getting an unnecessary degree. While this may seem like common sense, the Census Bureau's 2009 report showed that 20% of individuals making less than $20,000 a year have bachelor's or master's degrees. It can be said, with a high degree of certainty, that those jobs do not require college degrees. Admittedly, many of those individuals are probably not employed in their dream job. However, that does show that they are not getting the job they went to college for. If going to college won't even get you the job you want, why would it make sense to go? Also, the gains that students are reaping from college, are going down. In 1991 college graduates made, on average, 1.48 times what high school graduates did. That number grew until 2000, when it peaked at 1.68 times. It then began to fall. In 2009, in was only 1.54 times. Not only that, over the same period of time, college tuition grew 300%. Students today are paying more, for less. It doesn't even stop there. College students are not learning much either. The National Assessment of Adult Literacy found that only 29% of college graduates read at an advanced level. Other studies have found that students show little to no academic progress by their sophomore year and that they only study outside of class for 14 hours a week. To put that number in context, college students studied outside of class for 24 hours a week in 1961. Like Jenna Robinson, I am unwilling to declare a college degree useless. However, students should carefully consider their options, in light of their career choice, before choosing college. If you are going to pay more, be sure that you are not one of those getting less for it.
Jenna Robinson starts her article by mentioning the million dollar number. That is, the fact that college graduates make a million dollars more than non college graduates over the course of their career. Unfortunately a study conducted by Mark Schneider, vice president of the American Institutes for Research, offers a rude awakening. Schneider found that once you factor in forgone wages, and the cost of a college education, college is nowhere near being worth the fabled one million dollars. In actuality, college graduates only make 150,000 to 500,000 more than non college graduates over the course of their career. He found that these differences varied depending on the type of college the person graduated from. Those who graduated from the most selective private schools enjoyed an earnings advantage of, on average, 500,000. Those who graduated from a minimally selective private college, on the other hand, only garnered an earnings advantage of 150,000. Naturally, these numbers are hardly consistent. According to the Census Bureau's 2009 Current Population Survey, 20% of those making less than 20,000 a year, hold bachelor's or master's degrees. Also, recent graduates have a jobless rate of almost 10%. Even worse than all this, gains from college are not growing over time. In 1991 young workers with bachelor's degrees earned an average of 1.48 times what high school graduates earned. That number peaked in 2000 at 1.68 times, and by 2009, had fell back to 1.54 times. Over the same period of time, tuition increased 300%. Compounding the problem, students are not learning much in college. The National Assessment of Adult Literacy says that only 29% of four year college graduates read at an advanced level. According to a new book, Academically Adrift, nearly half of university students show no academic advancement by their sophomore year. Another study says that students today only study for 14 hours outside of class, as opposed to 24 hours in 1961. While a bachelors degree is still a good option for many students, future students should consider their options carefully before making their decision.
We used to think that we knew what a college degree was worth. Studies showed people who graduated from college made a million dollars more than those who only graduated from high school, over the course of their career. However, more recent studies have showed that number to be flawed. As Mark Schneider, vice president of the American Institutes for Research, found, once forgone wages and the cost of college is factored in, college graduates only make 150,000 to 500,000 more than high school graduates. Schneider also divided that data up specifically, finding that what kind of school you graduated from also affected how much more you made. The information he found helps support my claim that college is not a wise choice for all people. He found that while those who graduated from a highly selective private college made, on average, 500,000 more than the average high school graduate, those who graduated from a minimally selective private school only made 150,000 more. That number, when considered over the course of an entire career, is relatively small. It is simply not worth it for a future plumber to spend four years in college amassing debt. There is nothing wrong with being a plumber. However, it makes more sense to gain on the job learning and experience, than to run up debt getting an unnecessary degree. While this may seem like common sense, the Census Bureau's 2009 report showed that 20% of individuals making less than $20,000 a year have bachelor's or master's degrees. It can be said, with a high degree of certainty, that those jobs do not require college degrees. Admittedly, many of those individuals are probably not employed in their dream job. However, that does show that they are not getting the job they went to college for. If going to college won't even get you the job you want, why would it make sense to go? Also, the gains that students are reaping from college, are going down. In 1991 college graduates made, on average, 1.48 times what high school graduates did. That number grew until 2000, when it peaked at 1.68 times. It then began to fall. In 2009, in was only 1.54 times. Not only that, over the same period of time, college tuition grew 300%. Students today are paying more, for less. It doesn't even stop there. College students are not learning much either. The National Assessment of Adult Literacy found that only 29% of college graduates read at an advanced level. Other studies have found that students show little to no academic progress by their sophomore year and that they only study outside of class for 14 hours a week. To put that number in context, college students studied outside of class for 24 hours a week in 1961. Like Jenna Robinson, I am unwilling to declare a college degree useless. However, students should carefully consider their options, in light of their career choice, before choosing college. If you are going to pay more, be sure that you are not one of those getting less for it.
Monday, October 1, 2012
Summary and Response
In this post I will be summarizing part of an article and then responding to the article. The article that I will be using is, Over Invested and Over Priced, American Higher Education Today. It can be found on the center for college affordability's website. The direct link is http://www.centerforcollegeaffordability.org/uploads/Over_Invested_Final.pdf. There are a few good signs of credibility in this article. One sign of credibility is the author. Richard Vedder is the director at the center for college affordability and productivity, as well as being a distinguished professor of economics at Ohio university. Richard Vedder is also a published author on the subject of college costs. Another sign of credibility is that his article appears on the site of a not for profit research center devoted to researching rising costs and the issue of stagnating efficiency in higher education. The final reason that I am using this article is that it contains current information. While I could not find the actual date that the article was written it cites surveys from within the past six or seven years frequently. I will only be using part of this article due to its length and depth. I will be using the sections entitled, Why are universities overpriced?, and, What should we do?. I am using these two sections because they are closest to my focus. These sections help answer my questions about whether or not colleges really are overpriced, and, if they are, what we should do.
One reason colleges are overpriced is that they are using more resources to produce graduates as time goes on. In most fields, the amount of resources being used is dropping due to technology, but not in college. University proponents will cite the Baumol effect as the reason for this. The Baumol effect is that in the fine arts the productivity of employees can not be increased, so the relative cost rises. The question is, is this a legitimate argument when it comes to college professors? After all, they are in many ways similar to an actor. They stand in front of a class and deliver their lesson, much as an actor delivers his lines. Couldn't the productivity be increased by using technology? By, for example, taping lectures to be used again. Even though these methods have been shown to have promise, colleges are still reluctant to use them. A final reason that colleges are overpriced is that the non-teaching staff has increased. Colleges are now hiring more people to do the same jobs, which causes a rise in price. What then should we do? According to Charles Koch "Market based management" needs to be introduced to colleges and universities. Part of this would be limiting government aid to colleges. Some useful reforms would be to increase the teaching loads on professors, eliminate low enrollment costly graduate programs, and use technology to lower costs. Unless costs are contained, our return on investment will drop.
I agree with much, but not all, of what Richard Vedder says. I think that he makes a very good point when he talks about the amount of resources being used to educate college students. Often colleges are investing in resources not even directly related to their students education, non-instructional staff for example. Not only does hiring more non-instructional staff drive the cost of college up, it could be taking away from student job opportunities. Also, while Richard Vedder does not say so directly, the same thinking could be applied to the extra amenities that colleges are now providing. Just as extra non-instructional staff is often not necessary, climbing walls, gyms, and over sized dorms are not necessary. I think that Richard Vedder brings up some interesting questions when he addresses technology in the classroom. I do not believe however, that you could replace professors with advanced technology. For certain lectures in certain classes it would be possible to use a taped lecture, but certainly not in all situations. While technology could help decrease costs in certain areas, I do not believe that the classroom is one of them. It can be a helpful teaching aid, but it could not replace a teacher. I think that Dr. Vedder also brings up a few good points when addressing what we should do. The amount of government aid provided to students is often too much. Students easily receive aid, which increases enrollment, which in turn continues to drive the price up. If we limit government aid, we will find the students that really want to be at college. It will decrease enrollment, and, in theory, limit the cost of college. I think that Dr. Vedder also suggests some good reforms. While not all college professors are only teaching one or two classes, some are. It would make sense to eliminate the teaching assistants in these cases, and have the professor teach the classes himself. Another reform that I think makes a lot of sense would be to eliminate a program that has a low enrollment rate. This would result in colleges with more specialized focuses, as well as driving the price down. It would then be possible to have professors more devoted to their subject, which would result in a better education, as well as a cheaper one. In closing, I definitely agree with Dr. Vedder that many colleges are overpriced. He identifies some of what we are really paying for, which is an important consideration when thinking about college. While I believe that college will never be for everyone, if some of these reforms are enacted, it could become a sensible option for more people.
One reason colleges are overpriced is that they are using more resources to produce graduates as time goes on. In most fields, the amount of resources being used is dropping due to technology, but not in college. University proponents will cite the Baumol effect as the reason for this. The Baumol effect is that in the fine arts the productivity of employees can not be increased, so the relative cost rises. The question is, is this a legitimate argument when it comes to college professors? After all, they are in many ways similar to an actor. They stand in front of a class and deliver their lesson, much as an actor delivers his lines. Couldn't the productivity be increased by using technology? By, for example, taping lectures to be used again. Even though these methods have been shown to have promise, colleges are still reluctant to use them. A final reason that colleges are overpriced is that the non-teaching staff has increased. Colleges are now hiring more people to do the same jobs, which causes a rise in price. What then should we do? According to Charles Koch "Market based management" needs to be introduced to colleges and universities. Part of this would be limiting government aid to colleges. Some useful reforms would be to increase the teaching loads on professors, eliminate low enrollment costly graduate programs, and use technology to lower costs. Unless costs are contained, our return on investment will drop.
I agree with much, but not all, of what Richard Vedder says. I think that he makes a very good point when he talks about the amount of resources being used to educate college students. Often colleges are investing in resources not even directly related to their students education, non-instructional staff for example. Not only does hiring more non-instructional staff drive the cost of college up, it could be taking away from student job opportunities. Also, while Richard Vedder does not say so directly, the same thinking could be applied to the extra amenities that colleges are now providing. Just as extra non-instructional staff is often not necessary, climbing walls, gyms, and over sized dorms are not necessary. I think that Richard Vedder brings up some interesting questions when he addresses technology in the classroom. I do not believe however, that you could replace professors with advanced technology. For certain lectures in certain classes it would be possible to use a taped lecture, but certainly not in all situations. While technology could help decrease costs in certain areas, I do not believe that the classroom is one of them. It can be a helpful teaching aid, but it could not replace a teacher. I think that Dr. Vedder also brings up a few good points when addressing what we should do. The amount of government aid provided to students is often too much. Students easily receive aid, which increases enrollment, which in turn continues to drive the price up. If we limit government aid, we will find the students that really want to be at college. It will decrease enrollment, and, in theory, limit the cost of college. I think that Dr. Vedder also suggests some good reforms. While not all college professors are only teaching one or two classes, some are. It would make sense to eliminate the teaching assistants in these cases, and have the professor teach the classes himself. Another reform that I think makes a lot of sense would be to eliminate a program that has a low enrollment rate. This would result in colleges with more specialized focuses, as well as driving the price down. It would then be possible to have professors more devoted to their subject, which would result in a better education, as well as a cheaper one. In closing, I definitely agree with Dr. Vedder that many colleges are overpriced. He identifies some of what we are really paying for, which is an important consideration when thinking about college. While I believe that college will never be for everyone, if some of these reforms are enacted, it could become a sensible option for more people.
Monday, September 24, 2012
Article Response
In this post I will be responding to an article written by Peter Wood. This article, entitled, The Bubble: Higher Education’s Precarious Hold on Consumer Confidence, can be found on the National Association of Scholars' website, www.nas.org. It's specific link is http://www.nas.org/articles/The_Bubble_Higher_Educations_Precarious_Hold_on_Consumer_Confidence
This article was published on September 13'th, 2010, which means that the information is current. Another sign of credibility is the website on which it appears. According to NAS's website they present daily opinion and commentary on developments and trends in higher education. Also, according to their website, they are linked on several major publications. While all this does need to be taken with a grain of salt, because they are talking about themselves, there are enough positives and evidences of positives, to make this a good sign of credibility. A final sign of credibility is the author's credentials. Peter Wood is the executive director of the National Association of Scholars. He won the Caldwell award for leadership in higher education from the John Locke Foundation and his articles have appeared in several other scholarly journals. I will only be responding to the first three sections of his article, the introduction, section 1, and section 2. I am doing this because these three sections most pertain to my focus on this topic.
I need to start by defining what the college bubble is. Any kind of economic bubble happens when the price of some asset is driven up past its value. The bubble will burst when people realize that the asset is way overvalued, and seek cheaper options. The college bubble has occurred because the price of college has consistently climbed over the past few years, while the resulting education has not significantly improved. Eventually people will realize that they are paying too much for too little and will seek other options. It is when this happens, that the bubble will burst, and, the price of college will drop. In short, I completely agree with Peter Wood's definition of the college bubble. While he does not address the reason for the price of college rising, he does give a sufficient definition of the bubble, which is all that is necessary for my current purposes. In the first section of his article, Peter Wood addresses the statement that, the high price of college is warranted. One of the most important ideas that I can take away from this section is that, a large reason for the rising cost of college is that many colleges are focusing on the amenities. They are selling themselves as the best because, they have the best gym, the best dormitories, the best campus activities, instead of, the best education. As we consider a college, we must consider what it is that college is selling. Are we buying the best campus climbing wall in the midwest, or are we buying the best education in the midwest. These are crucial factors to consider when you are deciding whether or not college is for you. If you are more concerned with the amenities than the education, you may want to rethink whether or not it is wise for you to go to college. In the second section of his article Peter Wood responds to the statement that, A college degree is still the best investment. What really stood out to me from this section was what he said about career earnings. While it is true that a college student, on average, will make more than over the course of his lifetime, this does need to be weighed against some important factors. One of those factors is the debt that many students amass while in college. Those higher career earnings do not mean much if most or all of them go towards paying off your college debt. Another factor to consider is opportunity loss. If you go to school for a major that has nothing to do with your career, you probably would have been better of gaining experience on the job for the four years you were in college. The result is that you are probably in debt and probably making less than you would be if it was your fifth year on the job. However, this is certainly not the case for everybody. There are people who get benefits out of college that they could not have received any other way. My point is simply that a four year spree at a high priced college, is not the best route for everybody. Finally, I want to point out that there are viable options other than college. A community college is one of those. Another option would be a trade school. If you are going to be an electrician, spending four years getting an ancient history major will not do you much good. Spending two years at a trade school, on the other hand, may be one of the best investments you could ever make. Not only is it cheaper, it also increases your value on the job market. What I can take away from this article, as a whole, is that, a college degree is often not the best investment. As it becomes increasingly overpriced, it becomes less and less worth it to spend the money on a degree that often has very little to do with your career.
This article was published on September 13'th, 2010, which means that the information is current. Another sign of credibility is the website on which it appears. According to NAS's website they present daily opinion and commentary on developments and trends in higher education. Also, according to their website, they are linked on several major publications. While all this does need to be taken with a grain of salt, because they are talking about themselves, there are enough positives and evidences of positives, to make this a good sign of credibility. A final sign of credibility is the author's credentials. Peter Wood is the executive director of the National Association of Scholars. He won the Caldwell award for leadership in higher education from the John Locke Foundation and his articles have appeared in several other scholarly journals. I will only be responding to the first three sections of his article, the introduction, section 1, and section 2. I am doing this because these three sections most pertain to my focus on this topic.
I need to start by defining what the college bubble is. Any kind of economic bubble happens when the price of some asset is driven up past its value. The bubble will burst when people realize that the asset is way overvalued, and seek cheaper options. The college bubble has occurred because the price of college has consistently climbed over the past few years, while the resulting education has not significantly improved. Eventually people will realize that they are paying too much for too little and will seek other options. It is when this happens, that the bubble will burst, and, the price of college will drop. In short, I completely agree with Peter Wood's definition of the college bubble. While he does not address the reason for the price of college rising, he does give a sufficient definition of the bubble, which is all that is necessary for my current purposes. In the first section of his article, Peter Wood addresses the statement that, the high price of college is warranted. One of the most important ideas that I can take away from this section is that, a large reason for the rising cost of college is that many colleges are focusing on the amenities. They are selling themselves as the best because, they have the best gym, the best dormitories, the best campus activities, instead of, the best education. As we consider a college, we must consider what it is that college is selling. Are we buying the best campus climbing wall in the midwest, or are we buying the best education in the midwest. These are crucial factors to consider when you are deciding whether or not college is for you. If you are more concerned with the amenities than the education, you may want to rethink whether or not it is wise for you to go to college. In the second section of his article Peter Wood responds to the statement that, A college degree is still the best investment. What really stood out to me from this section was what he said about career earnings. While it is true that a college student, on average, will make more than over the course of his lifetime, this does need to be weighed against some important factors. One of those factors is the debt that many students amass while in college. Those higher career earnings do not mean much if most or all of them go towards paying off your college debt. Another factor to consider is opportunity loss. If you go to school for a major that has nothing to do with your career, you probably would have been better of gaining experience on the job for the four years you were in college. The result is that you are probably in debt and probably making less than you would be if it was your fifth year on the job. However, this is certainly not the case for everybody. There are people who get benefits out of college that they could not have received any other way. My point is simply that a four year spree at a high priced college, is not the best route for everybody. Finally, I want to point out that there are viable options other than college. A community college is one of those. Another option would be a trade school. If you are going to be an electrician, spending four years getting an ancient history major will not do you much good. Spending two years at a trade school, on the other hand, may be one of the best investments you could ever make. Not only is it cheaper, it also increases your value on the job market. What I can take away from this article, as a whole, is that, a college degree is often not the best investment. As it becomes increasingly overpriced, it becomes less and less worth it to spend the money on a degree that often has very little to do with your career.
Tuesday, September 18, 2012
Credible source summary
In this post I am going to share another credible source, as well as a summary of the article. The article, written by Steven Horwitz, is titled, Bubbles, Malinvestment, and Higher Education. It's home site is www.thefreemanonline.org. The specific address is http://www.thefreemanonline.org/headline/bubbles-malinvestment-and-higher-education/.
Once again, there are several reasons that this is a credible source. One is the author. Steven Horwitz is a professor of Economics at St. Lawrence University. He has degrees in economics from George Mason and the University of Michigan, and has also authored two books on economics. Another sign of credibility is that this article appears on a scholarly journal's website. The Freeman, a publication of the Foundation for Economic Education, has been in print for over 50 years. One final sign of credibility is that the author provides a way to contact him on the site.
This site is useful to me for a couple of reasons. One is it's currency. This article was posted on May 17'th, 2012. Another reason that it is useful is that he directly addresses some of the questions I have, such as, What is driving this process and what consequences does it have for students? This process, refers to the college costs outpacing the inflation rate.
Steven Horwitz begins his article by addressing the topic. Many people are wondering if the next bubble to burst will be the debt that many former college students have acquired. College costs have outpaced inflation. Why is that, and what are the consequences are for students? One factor in the rising cost is the government provision of student loans at very low interest rates. This encourages too much borrowing, resulting in many people spending much too long in college. Essentially, people are investing in general human capital, rather than specific human capital. They are opting for the general knowledge and skills that come with a college education, rather than, the specific experience and worksite training that come from entering the workforce immediately. Even if everybody has that knowledge and skill, which is what would happen if everybody went to college, we would still have basic workforce labor that needed to be done. This would result in an unsustainable structure of human capital that would not meet the demands of the market. When that happens, graduates do not get jobs. When graduates do not get jobs, they cannot pay off their debts. That is when, as Steven Horwitz says, boom will go bust. Another factor is that, with cheap loans, comes more money for the students to spend at college. This leads to an increased demand, which in turn, leads to higher tuition. Schools also have started to offer more, and better than necessary, amenities, to attract students. This also leads to a hike in tuition. While forgiving student loans seems like a tempting option to solve the boom, it really is not. The problem is, if the government forgives these debts, it sets a precedent that will result in more and more poor decisions. To get out of this boom there are two things that need to happen. First, replace low interest government loans with market-driven loans and interest rates. This will draw out those that really value higher education. Second, provide real competition. This will drive down costs, and hopefully, stop the boom before the bust gets worse.
Once again, there are several reasons that this is a credible source. One is the author. Steven Horwitz is a professor of Economics at St. Lawrence University. He has degrees in economics from George Mason and the University of Michigan, and has also authored two books on economics. Another sign of credibility is that this article appears on a scholarly journal's website. The Freeman, a publication of the Foundation for Economic Education, has been in print for over 50 years. One final sign of credibility is that the author provides a way to contact him on the site.
This site is useful to me for a couple of reasons. One is it's currency. This article was posted on May 17'th, 2012. Another reason that it is useful is that he directly addresses some of the questions I have, such as, What is driving this process and what consequences does it have for students? This process, refers to the college costs outpacing the inflation rate.
Steven Horwitz begins his article by addressing the topic. Many people are wondering if the next bubble to burst will be the debt that many former college students have acquired. College costs have outpaced inflation. Why is that, and what are the consequences are for students? One factor in the rising cost is the government provision of student loans at very low interest rates. This encourages too much borrowing, resulting in many people spending much too long in college. Essentially, people are investing in general human capital, rather than specific human capital. They are opting for the general knowledge and skills that come with a college education, rather than, the specific experience and worksite training that come from entering the workforce immediately. Even if everybody has that knowledge and skill, which is what would happen if everybody went to college, we would still have basic workforce labor that needed to be done. This would result in an unsustainable structure of human capital that would not meet the demands of the market. When that happens, graduates do not get jobs. When graduates do not get jobs, they cannot pay off their debts. That is when, as Steven Horwitz says, boom will go bust. Another factor is that, with cheap loans, comes more money for the students to spend at college. This leads to an increased demand, which in turn, leads to higher tuition. Schools also have started to offer more, and better than necessary, amenities, to attract students. This also leads to a hike in tuition. While forgiving student loans seems like a tempting option to solve the boom, it really is not. The problem is, if the government forgives these debts, it sets a precedent that will result in more and more poor decisions. To get out of this boom there are two things that need to happen. First, replace low interest government loans with market-driven loans and interest rates. This will draw out those that really value higher education. Second, provide real competition. This will drive down costs, and hopefully, stop the boom before the bust gets worse.
Thursday, September 13, 2012
Credible Sources
In this post I will provide you with two sources that I believe are useful. I will also begin to narrow my topic down a little bit.
The first source that I want to share with you is an article by Megan McArdle. This article was published in this week's edition of Newsweek as well as being posted on The Daily Beast's website. http://www.thedailybeast.com/newsweek/2012/09/09/megan-mcardle-on-the-coming-burst-of-the-college-bubble.html. There are a couple of reasons that this article is a credible source. One is the author's credentials. Megan McArdle used to be the business and economics editor for The Atlantic. She has also been featured in The Economist, The New York Sun, The New York Post, and other publications. Currently she is a special correspondent for Newsweek and The Daily Beast, covering business, economics, and public policy. Another good sign that this is a credible source is that it appeared in print.
The second source that I want to share with you is an article written by Radhika Miller. http://www.usnews.com/education/blogs/student-loan-ranger/2012/09/12/finding-the-value-in-a-college-degree. Once again this article makes a good source because of the author's credentials. Radhika Miller is a program manager for Educational Debt Relief and Outreach at Equal Justice Works. She has also served on student loan committees in the Department of Education's negotiated rulemaking focusing on the College Cost Reduction and Acces Act as well as other debt relief initiatives. Another good sign of credibility is that her article appears on the website of a recognized news and research source.
Megan McArdle's article is useful to me for several reasons. One is that she provides statistics on the jobs that people graduating with a bachelor's degree end up with. This helps me answer the question, Is the reward worth the price? Another reason Megan McArdle's article is useful to me is that she discusses why the price is going up and what the consequences will be. Radhika Miller's article is useful to me because it presents the other side of the argument. She argues, among other things, that a college degree is worth the cost because it provides job security. This is useful to me because it will help me balance what I write, as well as helping me decide what topics to address. Both articles are useful to me because of their currency. They both address current aspects of the argument, which is necessary for me to provide useful information.
As I continue to write I will be focusing mainly on whether or not the price of going to college is worth the reward. As I write some of the other topics will be addressed. However, they will not be addressed to the same depth as my main topic.
The first source that I want to share with you is an article by Megan McArdle. This article was published in this week's edition of Newsweek as well as being posted on The Daily Beast's website. http://www.thedailybeast.com/newsweek/2012/09/09/megan-mcardle-on-the-coming-burst-of-the-college-bubble.html. There are a couple of reasons that this article is a credible source. One is the author's credentials. Megan McArdle used to be the business and economics editor for The Atlantic. She has also been featured in The Economist, The New York Sun, The New York Post, and other publications. Currently she is a special correspondent for Newsweek and The Daily Beast, covering business, economics, and public policy. Another good sign that this is a credible source is that it appeared in print.
The second source that I want to share with you is an article written by Radhika Miller. http://www.usnews.com/education/blogs/student-loan-ranger/2012/09/12/finding-the-value-in-a-college-degree. Once again this article makes a good source because of the author's credentials. Radhika Miller is a program manager for Educational Debt Relief and Outreach at Equal Justice Works. She has also served on student loan committees in the Department of Education's negotiated rulemaking focusing on the College Cost Reduction and Acces Act as well as other debt relief initiatives. Another good sign of credibility is that her article appears on the website of a recognized news and research source.
Megan McArdle's article is useful to me for several reasons. One is that she provides statistics on the jobs that people graduating with a bachelor's degree end up with. This helps me answer the question, Is the reward worth the price? Another reason Megan McArdle's article is useful to me is that she discusses why the price is going up and what the consequences will be. Radhika Miller's article is useful to me because it presents the other side of the argument. She argues, among other things, that a college degree is worth the cost because it provides job security. This is useful to me because it will help me balance what I write, as well as helping me decide what topics to address. Both articles are useful to me because of their currency. They both address current aspects of the argument, which is necessary for me to provide useful information.
As I continue to write I will be focusing mainly on whether or not the price of going to college is worth the reward. As I write some of the other topics will be addressed. However, they will not be addressed to the same depth as my main topic.
Monday, September 10, 2012
My Subject
For the next month and a half or so I will be blogging about the college price bubble. If you are wondering what this is, good, maybe you will keep reading. The main reason I will be writing about this is because it pertains to me. I am looking at going to college next year, but I have to consider, among other things, is it worth it? Is the price worth the reward? Currently I do not know much about this topic. What I do know is that the price of college keeps going up. What I will be learning is why does the price keep going up, is a college degree worth the price, will the price ever go down, if it does, when and why will that be, and are there other viable options. As I learn about these topics I will share what I learn with you, my audience. Speaking of my audience, the ideal audience for this blog will be those who are considering college. I will not claim to be an expert of any kind, but I will attempt to compile meaningful, credible, information into something easy to read.
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