The Corner

Education

The College Bubble Begins to Deflate

Not so long ago, the conventional wisdom in America was that just about everyone needed a college degree. Never mind that many students learned little of value and racked up big debts — unless you got a “college education,” your life would be nothing but drudgery.

And then reality started to catch up on that conventional wisdom. Americans started doubting that college was such a great investment as they saw lots of people with degrees doing low-skill work and realized that the high cost of college could exceed the benefits by a wide margin. The upward march of college enrollments leveled off and began to decline. Since 2011, they’re down 9 percent.

In today’s Martin Center article, Jane Shaw looks at this development.

We have seen an uptick in college closures, she writes:

Closures in the past couple of years include Burlington College in Burlington, Vermont; Saint Joseph’s College in Rensselaer, Indiana; St. Gregory’s in Shawnee, Oklahoma; Concordia Alabama in Selma, Alabama; and Atlantic Union College in Lancaster, Massachusetts. Mount Ida College in Newton, Massachusetts attempted to merge with Lasell College, also in Newton, but closed abruptly this spring instead.

The financial community has taken notice of this. Shaw writes, “In December 2017, Moody’s turned its forecast for higher education to negative because higher education revenues were going up only 3.5 percent, compared to a 4 percent increase in expenses. ‘Net tuition revenue growth will be affected by affordability concerns and limited enrollment growth over the [next 12 to 18 months],’ it said.”

This situation is like a stock that rose much too high on hype and is now in the process of market correction.

Shaw contends that some of the decline is due to a culture shift, as some Americans swing back toward older attitudes about work, no longer disdaining blue-collar jobs as so many had. Also, fewer international students are coming to the U.S.

Shaw concludes,

If the decline continues, the anxiety of college admissions officers and presidents will build. Perhaps that is why higher education associations are combating the proposed reform of the Higher Education Act, which would put some limits on student loans. They don’t want any other reason for potential students to say no.

It looks as though another part of Obama’s vision for America — having the highest percentage of people with college degrees in the world — is floundering.

George Leef is the director of research for the John William Pope Center for Higher Education Policy.

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