09/07/10 London, England – Wonder why university fees are so outrageously high? The question comes to us at least once a year. We’ve had at least one child in college for the last 14 years – often two. Year after year, tuition costs rise. A study reported in The Economist shows tuition rising at two to three times faster than household income over the last 40 years. For Ivy League schools the excess was 14 times income.
We haven’t noticed any increase in the quality of education. So why have costs gone up so?
Outside of government itself, America’s universities probably shelter more zombies than any other industry. Of course, there are the millions of students who spend some of the best years of their lives doing little or nothing useful – study loads have dropped from an average of 24 hours a week in the ’60s to just 14 hours now. The professors, administrators and hangers-on are even more zombified. The students eventually have to leave this sanctuary and go out into the real world – or the government. The employees stay zombified for life.
Harvard increased its administrative staff by 300% since 1993. And the typical professor at an Ivy League university now takes a sabbatical every three years, rather than every 7 as the word implies. And according to The Economist, 20 of Harvard’s 48 history professors are on leave this year.
Come to think of it, we don’t know why they bother to teach history at a university. Anyone can read it on his own. And if you want to know what the professor thinks, just buy his book. You can get it for…what, $29?
Which just goes to show what a zombie business higher education is. You could get a fine education in history, law, politics – or dozens of other specialties – just for the price of a library card. But the public library doesn’t give you a degree.
Take this Daily Reckoning challenge: drop out of college. Set up a reading and discussion group… Spend four hours a day, two hours reading…one hour writing a critique/opinion on what you have read…and one hour challenging each others’ thoughts. Do that for 4 years at negligible cost…or spend $160,000 and 4 years fulltime at Harvard.
Let us know how it works out.
Bill Bonner
for The Daily Reckoning
Bill Bonner
Since founding Agora Inc. in 1979, Bill Bonner has found success and garnered camaraderie in numerous communities and industries. A man of many talents, his entrepreneurial savvy, unique writings, philanthropic undertakings, and preservationist activities have all been recognized and awarded by some of America's most respected authorities. Along with Addison Wiggin, his friend and colleague, Bill has written two New York Times best-selling books, Financial Reckoning Day and Empire of Debt. Both works have been critically acclaimed internationally. With political journalist Lila Rajiva, he wrote his third New York Times best-selling book, Mobs, Messiahs and Markets, which offers concrete advice on how to avoid the public spectacle of modern finance. Since 1999, Bill has been a daily contributor and the driving force behind The Daily Reckoning. Dice Have No Memory: Big Bets & Bad Economics from Paris to the Pampas, the newest book from Bill Bonner, is the definitive compendium of Bill’s daily reckonings from more than a decade: 1999-2010.
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Just imagine that in Mexico University is almost free! One of the results of the revolution back in 1917 was free education for all mexicans. This way we now have trillozens of graduates in laws, accountance, engeniers, doctors, etc. But all of these youngsters are just looking for a title, so they can have a job. No real thinking process at all, just studing not to flunk the test and getting the degree. It is sad because the price of labor among profesionals is so down!
since i am taking courses now i have to jump on my soap box about what a vacuous imbecilic waste of time college is for many professions – particularly business oriented ones….
and before doing that i have to note that we are in a financial crisis of biblical proportions at the hands of the most educated generation in american history.
but back to college….so companies will not hire without a degree…when i was a hiring manager (software management) i interviewed only college graduates (because that is all the f-tarded recruiters sent – and recruiters are a dim lot)….the company for which i worked administered what amounted to iq tests which had to be passed at a certain level as a qualification for hiring….over 50% failed the test. we are talking baccalaureate, multiple baccalaureate, masters, phds and various combinations thereof….over 50% failed and i wanted to hire some of the faileds.
what this confirmed is that a college degree in many domains – is a pointless, useless, moronic credential. i finally told the recruiters to send over persons with act/sat scrore above a certain threshold – it helped quite a bit…
in many domains, however, a degree is a suitable and necessary step for professional practice / employment….for my profession i am learning the most rudimentary primitive knowledge which wouldn’t even satify most junior job openings yet for senior positions it’s a requirement. the ruling class is in firm control.
If the bankers can figure out a way to lend money on something, you can count on the price of that “something” rising.
Too many colleges, too little value in their overpriced product. Just another banker-created bubble. The end won’t be pretty — probably mergers and gov’t bailouts.
Dead on accurate. And he didn’t even mention how it is that 19-22 year olds can take on six figures of loan debt without ever having an income. Just another case of “bribes and boondoggles” brought to you by your friendly government supported banks and university financial aid offices.
thank you for putting this article in print ! i have been trying to tell people this for 7 years !!
The problem with the study group idea is that all of the professions are in collusion with the university–in order to gain entree to a profession you need that specific masters degree. Even to get a job as a public librarian starting at $35K per year, requires a MLS. Grad school is like a study group; the professors really do very little teaching, and it isn’t worth the high cost and the years of loans–but you need that degree.
So the answer to the challenge is: 4 years at Harvard and $200K in debt works out better. Universities have had to increase administration because of the complexity of a lot of the research that they do. Government grants have a lot of guidelines, and administering them requires a great deal of support staff. The universities charge “indirect costs” to their grants in order to support this. Another big cost is all of the vice presidents at a major university. You can’t throw a stone on campus without hitting a VP.
Ivy League University education is more about making contacts then education. It’s the good old boys looking out for one another. Who you know gets your further ahead then what you know. I look at many of the CEO’s in the Fortune 500, and come to the conclusion that these are very ordinary men and women who have no concept on how to produce real sustainable grow with their corporation, only on how to extract wealth from it, for their own personal gain.
Having wasted my youth at a prestigious graduate school, I can personally testify that Mr. Bonner is 100% correct.
Regarding the professors’ books that you can purchase for $29, realize first that there is a difference between a textbook and, say, a monograph or other scholarly work. A textbook is not designed to be willfully bought by students; the game is to write a book that helps some other professor avoid doing the work of teaching, in the process causing him to force his students to buy the textbook.
And whatever you do, be careful if you read a professor’s paper in some journal. Those vaunted “peer-reviewed” articles all have the following characteristic: the professor had to have his institution pay the publisher “page charges” in order to get it published. That’s because hardly anyone would part with a dime to buy any such journal.
And who actually pays the page charges? You do, Mr. Taxpayer. That’s right. You can read all about it in the Federal government’s infamous “A101″ procurement regulations. The regulations provide not only for taxpayer funding of professors’ page charges, but they also provide payments to the professors in order to buy their own copies of the journals.
The bubble in higher education, caused first and foremost by access to easy credit from governments desperate to stimulate their way out of the inevitable, will be among the cruellest when it bursts because it the burden is foisted on the youngest, ~brightest and most motivated in our societies.
I tell smart and motivated high-schoolers now to imagine what other outcomes that much time and money might achieve. Far better to start your own small business and learn to fend for yourself.
If everyone followed your advice, unemployment would be about 30% !
Response to DEAN
unemployment would only increase in the number of professors without work
Dean, more likely managers would find people on the street with skills they were looking for and completely ignore their HR department. Paper on the wall is nothing but advertising and bling any more. No child left behind has extended into colleges, I’ve worked with these people that have phds and multiple bachelors and they can barely manage walking and chewing gum at the same time.
All the ISO programs are similar as well, it does little for overall quality, it’s just more documentation and administrative overhead. Kanban is basically material tracking for dummies, it’s like training wheels if you don’t have a system in place already. Replacing a working system with this is completely idiotic, inefficient and a waste of time and money.
The countless certification programs for nearly every skilled profession, nothing but a cash cow for those conducting the testing. I’d trust work done by someone with 10 years experience and no certifications over someone who bought them all. I’ve taken those tests, they are easier than written drivers license tests, the only thing they test is familiarity with a profession’s acronyms and lingo.
Business books written by real business owners(that have actually prospered for years) are much more conservative in strategy than anything they teach in business schools. Business schools tell you write overly long and precise (yet totally fictitious BS) business proposals and finance 200% of your startup so you don’t run out of capital plus secure lines of credit. Real business owners advise to assume as little debt as possible, cut corners, recycle, reuse and be flexible and open to opportunities that present themselves that you are familiar with the risks. Business school teaches you to follow your business plan to the very end, revising as little as possible because your plan is what you sold.
HR departments are still hiring based on paper, personality and credit scores, this does not bode well for the economy. My view is that if an employee is generating monster profits, I don’t care if I have to drag him through the building bound up like Hannibal Lecter and place him in a cage to prevent other employees harm while he works, he’s staying.
So long as these disconnects persist, things will get worse. The longer the government insists on funding them, the longer they will be around.
This is the most ill-informed article I’ve read in the CSM in years.
First, top universities, like Harvard, are about research, not education. Those professors are on sabbatical writing new books and articles…because if they don’t, then they get fired.
Second, education at universities is not about reading books. It’s about feedback from experts in the form of discussions, essays, and active learning exercises. Like therapy or consulting, these are each very human capital intensive, and therefore very expensive.
You want cheap, then go to a public school, where they have 100-300 person lecture halls and multiple choice tests. No wonder employers and graduate schools value ivy league degrees more.
ikant314
Ivy League schools don’t provide the education they used to, plus it’s no guarantee that the individual is actually a competent, intelligent individual. Bush, after all, went to Yale.
I went to a state college and the classrooms were small and very few multiple choice tests.
Also, if you look at the “article” you’ll see that this is a blog post that CSM, merely linked to.
Unsupported claims and assumptions. Is this the type of critical thinking that an Ivy League school taught you? (I’m assuming you went to an IL school given your emotional defense of it)
Oops. The comment page goes to the website. This was linked as guest blogger. Still, not an article, but opinion.
Weird, my comments aren’t showing. If they show up eventually, I apologize for the repetition.
I do think a compromise would be in order. How about an opportunity for self study and to test out of classes and still be able to apply the credits towards the final degree?
Many schools already do this.
BTW I went to a State College. Small classrooms, very few multiple choice tests. And generating a six figure debt in student loans, not one of the smarter things to do.
This is easily one of the silliest posts I’ve ever read. Harvard is not the typical university. Most professors don’t get sabbatical frequently, if at all. And few departments can support almost half of their faculty being gone at any given time. For the most part, getting a tenure track position is getting harder, not easier. The real problem is the proliferation of adjuncts in the classroom, not too many lazy professors who can’t “make it in the real world”. Teaching is a real world job. And it is a demanding job with comparatively low pay. I can promise you, it’s not the professors’ salaries that are driving up the cost of education.
I agree with you. However, institutions of higher learning are not in the business to educate. They are in the business to profit from a paper commodity almost more valuable than the greenback itself. The college degree. In order to even have a resume reviewed these days, you must have a college degree. Why? Because it implies one is educated? Intelligent? Valuable? No! It’s because it is one more way to whittle down the stack of resumes so there are fewer to sort through. Oh, and it’s also defensive for people with college degrees to only hire others with college degrees regardless of need. This creates another caste system, because as I said at the beginning, colleges are in the business of selling degrees, not educations.
Yeah, it’s true that one of the only differences between reading and going to college is the degree. Unfortunately, in our society it’s the degree that matters, and hardly ever the knowledge. (Yes, some professions take exception, but for the most part.) As my mom always says, employers don’t hire college graduates because of the knowledge or skills they learned, they hire them because they’ve proven they can finish something. It may seem like a weird justification, but there’s something to it. Finishing a college degree takes work and dedication, and that’s what employers want to see. Skills and knowledge can be learned in any number of ways (as this article points out) but the discipline required to finish a degree is kind of its own thing.
The price is definitely inflated, though. I’m just saying that dropping out and reading books isn’t necessarily the best approach.