The New Criterion posts:
Last month in this space, we noted some of the trends affecting the future of higher education in this country. One trend is the explosion in tuition and fees over the last several decades, an explosion matched by the hypertrophy of college administrators, as more and more “deans of diversity” and programs in non-subjects like women’s studies batten on the economic lifeblood of an institution. At many top-rated institutions today, the total yearly tab exceeds $60,000. Where is that money coming from? And—the question of questions—what do you get for it? . . .
A new report from Moody’s Investors Service about the financial outlook for higher education prompts us to return to the economic side of the equation. As a report from Inside Higher Ed noted, the Moody’s report “outlines how every traditional revenue stream for colleges and universities is facing some sort of pressure, a finding Moody’s uses as grounds for giving the whole sector a negative outlook.”
The column quotes Brooklyn College professor KC Johnson:
“[T]he vision behind the student life bureaucracy sees the student as a consumer rather than a learner, someone who needs to be accommodated lest he take his finances elsewhere by transferring.” . . . There is, as Johnson points out, this wrinkle: “Student life bureaucracies rarely work this way, of course; most often, they focus on enhancing ‘diversity’ by championing policies to ensure that certain groups of students never feel uncomfortable on campus.” . . . The continuing financial contraction will exacerbate the fear of losing students, which in turn “will enhance the internal power of student life bureaucracies, who will argue that student retention (and preserving scarce tuition dollars) requires more student life bureaucrats.”
Of course, the source of funding is still the big question. Those student life bureaucracies can only be sustained if students keep buying what they sell. And students can only keep buying what they sell if they have that $60, 000 annually. Since the vast majority of these ridiculous “educations” are funded by federally-backed student loan programs, this means that parents and/or students will continue to run into deep debts for valueless degrees. This will only continue because certain student loan agencies keep making loans.
So the question is, how long will such loans be available? In a free market, valueless degrees means no jobs afterward and thus no way to pay back. The loans would dry up quickly. But if the government is somehow involved in the loans . . . ahah. But even this may not continue indefinitely.
So long story short: high cost for worthless product and no return = risky loan. This coupled with the rise of cheap online means of higher ed spells disaster for bricks and mortar institution. No wonder Moody’s is downgrading the entire sector.