Glenn Reynolds, who blogs at Instapundit, greatly expands on the problem. He gave a speech about the Higher Education Bubble. He has given a lot of thought about this problem. His speech is about 50 minutes and then he does some Q&A.
Here are some of the highlights:
Several times he says "When something can't go on forever, it won't."
The relative value of a college degree is declining. The average wages of college graduates has actually declined when adjusted for inflation. This means the return for a college education is going down.
Because of several factors, like the current recession, the ability to borrow and finance a college education is going down.
College graduates are entering the job force with more debt, which makes it harder to buy a house.
The single best hedge for avoiding a bubble is to avoid debt.
He sees three general reasons for and individual to college:
1) To be more productive
2) To be able to network
3) To get the "college experience"
The only real benefit to society for a college is the first reason.
At about minute 44 he references Bob Samuels of UCLS as reporting on research that the direct teaching costs for public school is about $1456 per student per year at a public school, and a little over $2500 per student per year at private schools. When the bubble bursts, many schools will have to get rid of the superfluous expenses like three story rock climbing walls and tuition will be much closer to what it really costs for the education.
I loved his observation: "You don't get deferred gratification and self discipline from government subsidies.
I great enjoyed the talk and think it is worth watching.
Update I - 15 Nov 2010. Glenn has a column up: Higher education's bubble is about to burst.
Update II - 20 Nov 2010. Some clarification on the expenses of college.