The Education of Millionaires - Michael Ellsberg [124]
In the last year, a number of commentators have picked up the analogy between the housing bubble and the current state of higher education. One of the most strident of these has been Mark Taylor, chair of the Department of Religion at Columbia. In a commentary on the New York Times site, entitled “The Education Bubble,” he writes, “The next bubble to burst will be the education bubble. Make no mistake about it, education is big business, and like other big business, it is in big trouble.”2
In a New York Times op-ed entitled “End the University as We Know It,” Taylor makes a comparison between higher education and yet another dying, debt-drowned industry: “Graduate education is the Detroit of higher learning. Most graduate programs in American universities produce a product for which there is no market (candidates for teaching positions that do not exist) and develop skills for which there is diminishing demand (research in subfields within subfields and publication in journals read by no one other than a few like-minded colleagues), all at a rapidly rising cost (sometimes well over $100,000 in student loans).”3
In the Washington Examiner, Glenn Reynolds writes, “It’s a story of an industry that may sound familiar. The buyers think what they’re buying will appreciate in value, making them rich in the future. The product grows more and more elaborate, and more and more expensive, but the expense is offset by cheap credit provided by sellers eager to encourage buyers to buy.
“Buyers see that everyone else is taking on mounds of debt, and so are more comfortable when they do so themselves; besides, for a generation, the value of what they’re buying has gone up steadily. What could go wrong? Everything continues smoothly until, at some point, it doesn’t.
“Yes, this sounds like the housing bubble, but I’m afraid it’s also sounding a lot like a still-inflating higher education bubble.... I think it’s better for us to face up to what’s going on before the bubble bursts messily.”4
As stories mount of recent college, professional, and graduate students gaining diplomas with mountains of debt and few prospects of paying it off, it’s more and more difficult to avoid thinking that we’re heading toward some kind of cataclysmic national reckoning around higher education. Even the field of law, long considered the safest of the safe choices among professions, is feeling massive earthquake tremors. Toward the end of my time writing this book, in January 2011, an article in the New York Times appeared, with a Web link leading to it that read, “For Law School Graduates, Debts If Not Job Offers.” The article, by David Segal, tells the story of Michael Wallerstein, who has amassed around a quarter of a million dollars in debt by age twenty-seven to attend bottom-tier Thomas Jefferson Law School.
“Mr. Wallerstein, who can’t afford to pay down interest and thus watches the outstanding loan balance grow, is in roughly the same financial hell as people who bought more home than they could afford during the real estate boom. But creditors can’t foreclose on him because he didn’t spend the money on a house. He spent it on a law degree. And from every angle, this now looks like a catastrophic investment.”5
Wallerstein did everything society told him to do to be successful: go to college, get a degree, go to law school, get a law degree. At the time of this writing, he had recently taken a $10-per-hour job as a legal temp.
WHEN ARE WE GOING TO START GIVING OUR YOUNG PEOPLE