By Holly A. Bell
Some economists are expecting student loan debt to be the next big economic bubble as an increasing number of people seek degrees. Enrollment at colleges and universities tends to rise substantially during difficult economic times as the opportunity costs of education decrease. This recession has been no exception. The opportunity costs I am referring to are the wages individuals would have earned by working rather than by going to school. As many people are unable to find jobs, the opportunity cost of work is essentially zero as there is nothing to give up.
While opportunity costs are low, there are some real costs associated with attending school. The big cost, of course, is tuition. I read a short article this morning about jobs that require advanced degrees, but don’t pay particularly well. The examples the author cited were law librarians and social workers. I would argue college professors also fall into this category as we are required to have terminal degrees. Often these types of jobs are careers people have a passion for, but the educational expense to salary ratio is very high.
So what’s the solution? Some of the usual suggestions could be used here: Go to state schools, find an employer with tuition reimbursement benefits, get mom and dad to help, or don’t major in low paying fields.
But are there other options? For example, should tuition rates be based on anticipated earnings for a graduate in the field of study? Could certificates through free education programs like MITx be substituted for advanced degrees?
I’m interested in your thoughts. If you wish to leave a reply either through the link at the very end of this post or the comment link in the “bubble” in the upper right of the post, but don’t want to post your name, simply put in your initials. We’re ok with privacy here.
One of the things I’m curious about is why positions requiring advanced degrees don’t demand “symmetric” compensation. Is there a glut of supply that is driving down the pay? Is demand not high enough? Do these positions service economies that don’t have the available money (for lack of a better term) to compensate accordingly?
Personally, one of the biggest reasons I’ve refused exhortations to pursue higher academic training is the so what factor. I get a higher degree. So what? I spend a lot of time, acquire more debt, and subsequently I likely saddle my family with a lower standard of living. There are practical realities that one must address when it comes to the advanced degree market situation. Personal situation aside, I’m keenly interested in why the advanced degree low pay situation is what it is.
Peter-I guess the love of learning is always a potential motivating factor.
Fair enough, however, with the accessibility through the roof to more knowledge even before, the university is less necessary for learning than it has been historically.
Personally, I think that the university should be a primary source of learning. One of the key differentiators is access to advisors who can guide and assist in developing a learning path; individuals who can tell a student when they’re pursuing a rabbit trail.
The consequences of access to free and ready technical information and perhaps even its replacement of a formal education could be reflected in a conversation I had a CIO of a major Alaskan corporation a few months ago. He said that he has no lack of qualified technical professionals to hire from but there is a massive dearth of qualified IT managers in Alaska, up to and including CIOs. Maybe that’s what we’ll see more of, technical certifications over formal educations.
I agree. This is why there will be continued growth in community campuses and programs like MIT’s
I forgot to mention, one question that remains unanswered for me is whether this education will come primarily from the public sector (i.e. state schools) or the private sector (i.e. private and for-profit schools)?