Talk of the “higher education bubble” has been around for a while, but two news items today make me think it is starting to pop—and remember, bubbles usually don’t pop instantaneously. The housing crash of 2008 was signaled by visibly deteriorating conditions in the summer of 2007. Likewise, the higher ed bubble is going to resemble the old line about how some rich person went bankrupt—first slowly, then all at once.
Item 1, from the Wall Street Journal:
Nearly 5 Million Americans in Default on Student Loans: Number surges in recent years despite strengthening economy
The number of Americans severely behind on payments on federal student loans reached roughly 4.6 million in the third quarter, a doubling from four years ago, despite a historically long stretch of U.S. job creation and steady economic growth. . .
The total number of defaulted borrowers represents about 22% of the Americans who were required to be paying down their federal student loans as of Sept. 30. That figure has increased from 17% four years earlier.
The money they owe is becoming a bigger share of total outstanding student debt in repayment.
Item 2, news from Oberlin College, scene of a lot of leftist nonsense in recent years:
According to a report in Inside Higher Ed, leaders at Ohio’s Oberlin College are struggling to close a multi-million dollar budget deficit following a dip in enrollment this year.
The liberal college’s newspaper, The Oberlin Review, published a letter written by two faculty members criticizing a salary freeze. The letter, published Friday, said faculty found it depressing that neither the college board nor administrators could come up with a better way to address the revenue shortfall other than by eliminated raises.
The salary freeze is the latest in a string of moves by Oberlin to close the structural budget gap.
I wonder if there’s a connection between these two stories? I wonder why Oberlin suffered “a dip in enrollment”? I wonder how long it will be before Oberlin concludes it has to start laying off some of the many deanlets they’ve hired for diversity programs? I’m sure Oberlin is like other universities, where the growth of highly paid administrators has vastly outstripped faculty hiring, not to mention faculty salaries. Faculty of the world unite! You have nothing to lose but your 403(b)s!
Chaser: The figure (and the spelling) in this meme is not accurate, but the larger point is—