America is facing a higher education bubble. Like the housing bubble, it is the product of cheap credit coupled with popular expectations of ever-increasing returns on investment, and as with housing prices, the cheap credit has caused college tuitions to vastly outpace inflation and family incomes. Now this bubble is bursting.
In this Broadside, Glenn Harlan Reynolds explains the causes and effects of this bubble and the steps colleges and universities must take to ensure their survival. Many graduates are unable to secure employment sufficient to pay off their loans, which are usually not dischargeable in bankruptcy. As students become less willing to incur debt for education, colleges and universities will have to adapt to a new world of cost pressures and declining public support.
Glenn Harlan Reynolds
Most Helpful Customer Reviews
In the first decade of the new millennium we saw the dot-com bubble and housing bubble end badly. In this concise 48-page booklet, University of Tennessee law professor Glenn Harlan Reynolds explains why higher education will be the next bubble to burst. "Bubbles burst when there are no longer enough excessively optimistic and ignorant folks to fuel them."
Just as the housing bubble was fueled by loose lending practices, the higher education bubble is enabled by government subsidies and guaranteed student loans. "As with any subsidized product, prices rose to absorb the subsidy."
People talk about education being invaluable, but "when the investment runs well into the six figures, students would be crazy not to worry about the return." Reynolds points out that if there's no reasonable expectation of return on investment, then tuition is an expensive consumption item rather than an investment.
Students presumably go to college to enable a higher...
This is more of an essay than a book. With that said Reynolds makes some pretty solid arguments predicting an Education Bubble bursting similar to the Tech and Housing Bubbles that eventually burst. The information is compelling, but is a bit slanted to a more conservative/republican point of view. Reynolds makes no bones about his feelings about diversity programs in university. In fact, he blames them to a large extent for the bloat in many universities today. In fairness he mentions the exorbitant spending on gyms and stadiums, but definitely not to the same extent he discusses diversity programs. Beyond that I believe a lot of what says is spot on in regards to soaring expense of college and how less and less return is being received by the students. Especially if a student is not majoring in a field that will get him/her employed fairly quickly. On the whole this is a very good essay that does not have quite enough content for a book (hence 4 stars instead of 5), but is a...
This short and effortless read, The Higher Education Bubble by Glenn Harlan Reynolds, was packed full of practical and powerful insight into the sustainability or future existence of many higher education institutions. "Courageous" could describe Reynolds in regards to his convictions and straight shooting message conveyed in this book. Reynolds makes a valid case in his writings that higher education is destined to experience the same failures as the housing market, which ended with the bursting of the housing bubble. Reynolds explains in simple terms what caused the education bubble and why it is ready to burst. Reynolds challenges an individual to critique the existing system of higher education and to consider the consequence of past actions, which is causing the higher education bubble to burst. Reynolds (2012) states that, "The higher education bubble isn't bursting because of shortage of money. It is bursting because of a shortage of value. The solution is to improve...
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