Addressing the Higher Education Bubble
The following was written by Former State Representative and AFP-Ohio Policy Director Seth Morgan. It addresses the looming higher education “bubble” and explains how the free market is adapting to find solutions.
Instability in the financial markets, declining real estate markets, and the Washington political elite are contributing to the uncertainty of our times. However, another bubble looms on the horizon and over the heads of Ohio families.
Our higher education system across this country is generally failing to produce the expected return on family and student investment. Prices continue to climb in some cases out of hand while what you get in return for your investment job placement metrics are not acceptable. We are paying more and getting less.
A result of this phenomenon has been the explosion of for-profit and independent career colleges, technical schools, and universities. These schools are answering a growing cry of the market for student output and financial return on investment or more bang for the buck. These schools are seeking to fill a market need.
In Ohio and throughout the nation, you will find schools such as ITT Technical Institute, Kaplan Career Institute, Cleveland Institute of Electronics, Miami Jacobs, and DeVry University Ohio just to name a few. As with any industry and the public college market, some are better than others. But the American consumer ethic has always been an educated consumer practicing “buyer beware.”
It is no wonder, just as in primary and secondary education, some would rather manipulate markets artificially to benefit political allies. Through their actions, they exasperate problems by putting schools in the crosshairs of excessive regulation and ridiculous rhetoric.
Bureaucratic state and federal agencies, public unions, and some of the elite among traditional higher education faculty contribute to the growing frenzy as they recognize the growth in career college enrollment has almost doubled in recent years. According to the Imagine American Foundation and U.S. Department of Education IPEDS Enrollment Surveys, among annual enrollment in all Title IV-eligible institutions annual enrollment in career colleges was 7% in 2004 -2005 and 12% in 2008 2009. What once was a largely captive market for the elite is now slipping away as Americans become more focused on return on investment and not just the traditional path of education.
Once again, just as in the primary and secondary markets, the career colleges enrollment represent a disproportionate share of those who are from less successful socioeconomic groups and those who are older, first generation college students, and financially independent. These groups are largely underserved by traditional four-year universities, making the role of career colleges all that important, especially in Ohio.
These groups and even more traditional students are seeking out answers to what is increasingly being recognized as too little value for the cost incurred through the traditional route of education. Statistics suggest that students who obtain their education through these non-traditional, less expensive sources are basically equally satisfied to that of their public and traditional private counterparts.
But alas, what could the market know that our elitist friends do not? Once again, President Obamas administration and some here in Ohio, including State Representative Clayton Luckie, have taken aim at this market solution we know is curbing the cost of higher education.
These people cant seem to face that American ingenuity and free markets have solved much tougher challenges than the growing cost of higher education and given the opportunity, will do so again. Or do they have ulterior motives?
Things are never as complicated as they seem they only become complicated when those who benefit from outdated systems cant adapt. It gets worse when we give power to political elites who believe they know better than you, the consumer.
I say to the political elite those who always seem to think they know better while they cant handle their own budgets get your hands off competition and choice in education!
Seth Morgan, CPA is a former State Representative from Dayton, Ohio and served as the Ranking Member of the Primary and Secondary Education Subcommittee. He also serves as the State Policy Director for Americans for Prosperity (AFP) OH, a grassroots organization that encourages citizens to support restraining state and federal government growth and return to its constitutional rights.
Seth Morgan completed a four year degree in 2 ½ years from Park College earning a Bachelor of Science in Management / Accounting while working full time. He went on to take and pass the Certified Public Accountant exam and earn a Masters of Business Administration from the University of Dayton while working full time.