In the higher education arena, reality is often outrunning parody. A recent feature article on satirical website The Onion highlighted the plight of a fictional student called Patrick Moorhouse who, after paying the interest on his student loans, tuition costs and losing four years of income while attending university, ended up earning $11 more than he would have if he never went to college.
In fact, fictional Patrick should feel rather good about his situation. There are many university graduates out there who, instead of being $11 ahead, are thousands or even hundreds of thousands of dollars behind.
The higher-education bubble of the past couple of decades has been largely driven by credit, leaving droves of students deeply in debt without significantly enhancing their job opportunities.
To make going to college a viable option again, today’s students and their parents need to be critical, demanding and perhaps above all, frugal. There is not a single solution to mend the ailing American higher education system, but changes are starting to come forward that could totally transform the system and place higher education firmly back on the table as a sustainable option.
Although the GI Bill transformed higher education from a privilege for the children of the rich to a basic right for middle-income earners, the higher education bubble started developing as far back as the 1970s. With student numbers on the decline, the government came to the rescue with student loans and federally funded programs like Pell Grants.
This led universities and colleges to start increasing tuition costs to absorb the increased funding available to students. Professor Mark Perry of the University of Michigan calculates that between 1978 and 2011, universities in the United States increased their tuition fees at an average yearly rate of 7.45 percent.
To see this in perspective, during the same period, health care costs escalated at only 5.8 percent per year and housing costs went up by an average of only 4.3 percent per year.
This crisis has firmly established online education as a viable alternative. One of the major benefits of online courses is that they allow the student to earn an income while studying. The cost of these programs is also very competitive when compared to their offline counterparts.
The fact that the student can immediately apply his or her knowledge in the workplace is a further bonus, both to the student and the employer.