A recent New York Times article outlined some of the reasons why colleges and universities are going broke. The article says that “colleges have been on a borrowing spree as well, nearly doubling the amount of debt they’ve taken on in the last decade to fix aging campuses, keep up with competitors and lure students with lavish amenities.”
The article pointed to the fact that Moody’s recently downgraded the ratings of 22 colleges and universities and put a “negative outlook” on the entire higher education system in general. The Times argues that the poor economy has decreased endowments and created an environment in which schools can’t raise their prices to make up for the discrepancy. But the economic situation is not only a disincentive to spend money on college; it has created a new reality that the entire higher education system must face if they are going to survive. Colleges and universities provide a service to their customers, and the customers expect a tangible result of that service.
As Lewis Black prophetically screams in the movie Accepted, “There’s only one reason that kids wanna go to school — to get a good job with a good starting salary.” Some kids to go college to expand their intellectual horizons. Some go to learn how to save the world. Most go so they don’t have to live with their parents for the rest of their lives, and nowadays you need at least a Bachelors degree to get a decent job.
But, as the recent law school downfall has brought to light in the most extreme way, colleges and universities teach you how to think, not how to get and do a real job in the real world.
So, the suppliers aren’t selling what the consumers want to buy. And the consumers are no longer willing to pay higher and higher prices for no promise of a substantial return. While I completely disagree with most of what Penelope Trunk writes in her article, “The Strongest Careers Are Non-Linear,” she has a point when she suggests that people should prioritize their time on internships and not school. Internships certainly prepare one for a real job more than sitting in a classroom.
One of the dirty little secrets about higher education is that most scholarships given by individual institutions are paid with the tuition of students who can afford it. So wealthy students subsidize the education of poorer students. And that’s great, except when the paying customers aren’t getting what they want to be purchasing. In addition, the possible increase in the interest rate of federal Stafford loans and the uncertainty of that rate in the future has also created a disincentive for people to take out loans to pay for an education that won’t train them to repay said loans.
The real issue is that higher education institutions need to realize that with the horrible economy and increased post-grad unemployment rate, they have to provide the tangible good of training their students to get a good job after college, not just how to think existentially about getting a good job. Until that happens, schools will continue the cycle of going broke because they’re spending diminishing funds on grander projects instead of reevaluating how they serve their paying customers.