The College Education Bubble

Everyone who reads this blog knows where I stand on higher education. For the vast majority of people, it’s a waste of time. Higher education in America flourished under a totally different economic system where we had no competition from foreigners. Unfortunately, foreigners are now not only educated, but they demand lower wages. We first saw menial labor getting outsourced, which of course gutted our manufacturing jobs. In the near future, you should see a strong trend towards finance-oriented tasks being outsourced. This trend will go hand in hand with China becoming the new financial capital of the world.

Now don’t get me wrong, the higher education system can definitely help some people. But why can’t we have an apprenticeship system alongside the public education system? Did John D. Rockefeller go to a top business school to attain the knowledge that allowed him to become an oil magnate? No. He did something a lot more revolutionary. He learned under a successful businessman and then (gasp) went into business for himself. He didn’t go to business school and do case studies so he could work for a U.S. corporation that is behind the times. In the new economy, large corporations have been notoriously slow to react to trends. You saw it in the music industry. You saw it in media. You saw it in retail. Out with the old, in with the new. If you want to know where the world is headed, ask your 15 year old son who’s on his computer all day- he knows a whole lot more about the future than college-educated executives who view things based on the old model. These are exciting times, but only for those who see these monumental shifts developing.

The way I see it, top talent will start to bypass college since it has clearly become an unjustifiable investment, especially when you factor in opportunity costs. Unfortunately, there will also be legions of college-educated students with 50k debt loads who can’t find a job. The “safe” route is actually proving to be the exact opposite for a lot of college grads. While I am one of the lucky ones who has paid off all their student debt, trust me, I know what recent grads are going through. I too went to an expensive college, and every time I had to pay off my debt, I cursed the gods above. It was not fun. If I could take it all back, I probably would just travel the world for 4 years and learn Chinese instead of going to college. All this knowledge I share with you on this blog I picked up on my own from reading. And even all the things I “learned” in college I learned on my own from reading the textbook. I’m sure most of my college-educated brethren can relate.

Anyway, I came across this video on the scam that is higher education, and I highly recommend it. There are a lot of good points in this video, including the fact that the government, in classic form, has effectively raised the costs of education by attempting to make it more affordable. Does this sound familiar? Oh yea, it was called subprime. Massive student loan defaults are on the horizon, but rest assured, the burden of the inevitable bailout will fall on you, the U.S. taxpayer.