Colleges seem to be functioning like a man who has just been shot twice by police, but is too high on PCP to notice.
The first bullet was the internet. Knowledge is now free, why pay for it? You can learn more using the internet than you ever could in a classroom, except, the internet is free, and the classroom costs thousands. I can’t think of another market inefficiency that’s this inefficient.
The second bullet is called student loan debt. The student loan bubble is now $620 billion higher than the nation’s credit card debt. 70% of college students graduate with college debt, and the average debt of a college graduate is said to be $35,000.
Many of these kids- they’ve just gotten their degree in something like economics, (I actually wanted a degree in economics), and they get out into the real world only to find that economics is not a highly marketable skill. Businesses don’t frequently hire economists, and if they do, it’s not the kid who just got his degree, it’s academics, or people with experience in that industry. They forgot that simply having a degree does not create job openings; they thought they could cheat the supply and demand for labor. They’ll be forced to settle for a lesser job, after all, they have no real work experience, and paying for these loans will be difficult, if not impossible.
So this is a giant bubble, and everyone basically knows that. Most bubbles are rather difficult to spot, but this one is right there in the open; we’re just waiting for it to burst. We’re just waiting for this guy, with two holes in his chest, to drop.
But people have survived worse wounds. I don’t think that college will disappear, but it will certainly have to restructure. Their prices are currently way too high, only kept in place by easy loans from the federal government. Once this bubble pops, the government will be forced to rethink its policies, and colleges will be forced to restructure in tandem. Tuition rates must go down, these prices are not sustainable.
How best to restructure? Well, colleges have been investing into so much real estate that you could mistake them for a resort. Never have colleges been such a great place to party. But I think these are actually good investments. Keep the massive gyms, keep the swimming pools, keep the hockey rinks, the lounge areas, keep all of the social amenities.
Get rid of the classrooms.
Sell all of the classrooms, sell the vast majority of the teaching equipment, and hire on more website designers.
I picture college, 10–20 years from now, as a vast resort for the young, with all the tools in the world to relax, immense sporting opportunities, and comfy dorms that they return to… to take their online classes. The internet has become the most effective way to teach, and it’s much more practical than a classroom. The internet is now capable of effectively teaching people of every learning style, and it allows the professor to give special attention to every student. And very few students, if any, actually enjoy waking up early to attend a lecture. Why not stay in bed? After all, it’s the current year!