Glenn Reynolds has been writing lately about the cost of higher education, which he believes will be the next bubble to burst. I think he’s right. A simple, inexorable law holds that if something can’t go on forever, it won’t. Collective forgetting of that law is what leads to bubbles. In today’s Examiner, Glenn writes:
Assume that I’m right, and that higher education – both undergraduate and graduate, and including professional education like the law schools in which I teach – is heading for a major correction. What will that mean? What should people do?
Well, advice number one – good for pretty much all bubbles, in fact – is this: Don’t go into debt. In bubbles, people borrow heavily because they expect the value of what they’re borrowing against to increase. …
Right now, people are still borrowing heavily to pay the steadily increasing tuitions levied by higher education. But that borrowing is based on the expectation that students will earn enough to pay off their loans with a portion of the extra income their educations generate. Once people doubt that, the bubble will burst.
So my advice to students faced with choosing colleges (and graduate schools, and law schools) this coming year is simple: Don’t go to colleges or schools that will require you to borrow a lot of money to attend. There’s a good chance you’ll find yourself deep in debt to no purpose. And maybe you should rethink college entirely.
Seems like sound advice. I think Glenn is right; as the father of four, I only wish the bubble had burst a little sooner!