If the college bubble is going to burst, who will do the pinprick?

Now that speculation about the higher education bubble is percolating throughout the blogosphere, it's time to ask questions that may have broad relevance.

What, exactly, is the college bubble?

It's the inflation in student tuition and fee payments resulting from the penchant of politicians to approve any new scheme that allows them to pose as champions of education at election time. New student aid programs. Relaxation of repayment schedules for student loans. Pell grants.

Politicians will vote for anything that promises more help for more students.

Once the generous new laws have been enacted, colleges and universities raise their tuition and fee schedules, raking off much of the new booty for salary and benefit increases for faculty and administrators.

Any new money that's left is used to hire more professors of postmodern studies, who will identify new classes of societal victims whose damaged psyches must be repaired by more years of higher education.

This script has been followed for decades, resulting in more and more students pursuing more and more screwball majors on more and more dumbed-down campuses.

What, exactly, is going to blow up this tried and true formula?

In the subprime housing bubble, it was actual defaults on real mortgages that triggered collapse.

In Holland, in the 1630s, tulipmania flourished because it took seven years to grow a blossom from seed. At the height of the bubble, farms changed hands for a single tulip bulb.

Eventually, the greater fool principle asserted itself. One day, the greater fool failed to show up at the tulip market, and the last fools were stuck with the hugely overpriced bulbs.

In higher education, it's hard to find a plausible trigger for collapse, but there are some candidates.

Corporations and institutions could adjust their specifications and look for new hires in other locales. They also could drop their demand for degrees and settle for proof of competence by examination.

My bet is that the humble community colleges, which supply solid education at modest cost without the marxist indoctrination, will score a slow, grinding knockout.

The elite colleges will endure a sputtering shrinkage that will produce a new crop of victims for liberal educators and the Democrat Party to celebrate: twenty-somethings who were deprived of elite education by an evil ruling class that cares only about its own excessive profits.

This is an unacceptable outcome because it leaves little to write about.

Bring on the bursting of the college bubble; it'll be a great show

My take:

The idea that we are about to experience a bursting of the college bubble, first broached, as I understand it, by Glenn Reynolds, promises to be far more entertaining than earlier bubble bursts.

Here's why. Almost everyone acknowledges that the traditional college curriculum has been debased even as the cost of college has multiplied, driven up by politicians eager to demonstrate their support. As student aid programs have grown, the colleges have grabbed much of the new money by raising tuition.

As traditional course offerings have fallen by the wayside, they have been replaced by courses with baffling names, such as "postmodern studies." Each of these names reflects a segment of the ever-growing, self-identified "victim" class.

Whether by coincidence or design, as the colleges and universities catered more and more to self-identified victims, the Democrat Party became essentially a gathering of "victims," all demanding government sustenance for the wicked behavior to which they had been subjected.

There has been some pushback by a fed-up under-educated public. A few years ago, voters in Michigan banned affirmative action in college admissions. A defiant president of the University of Michigan promptly promised to continue practicing affirmative action.

The self-designated victims will also put up a fight when their professional victimhood preparations are challenged.

So, unlike earlier bubble bursts, this one is going to be a good show. Students who already saw themselves as victims, even while receiving subsidies to study ephemeral matters that no one outside the institution cares about, will have still another reason to shout that they are being victimized.

Michael Barone:

Imagine that you have a product whose price tag for decades rises faster than inflation. But people keep buying it because they're told that it will make them wealthier in the long run. Then suddenly they find it doesn't. Prices fall sharply, bankruptcies ensue, great institutions disappear.

Sound like the housing market? Yes, but it also sounds like what Glenn Reynolds, creator of instapundit.com, writing in The Examiner, has called "the higher education bubble."

Government-subsidized loans have injected money into higher education, as they did into housing, causing prices to balloon. But at some point people figure out they're not getting their money's worth, and the bubble bursts.

Some think this would be a good thing. My American Enterprise Institute colleague Charles Murray has called for the abolition of college for almost all students. Save it for genuine scholars, he says, and let others qualify for jobs by standardized national tests, as accountants already do.

"Is our students learning?" George W. Bush once asked, and the evidence for colleges points to no. The National Center for Education Statistics found that most college graduates are below proficiency in verbal and quantitative literacy. University of California scholars Philip Babcock and Mindy Marks report that students these days study an average of 14 hours a week, down from 24 hours in 1961.

The American Council of Alumni and Trustees concluded, after a survey of 714 colleges and universities, "by and large, higher education has abandoned a coherent content-rich general education curriculum."

They aren't taught the basics of literature, history or science. ACTA reports that most schools don't require a foreign language, hardly any require economics, American history and government "are badly neglected" and schools "have much to do" on math and science.

College bubble: universities expanding as affordability wanes

WITH the academic year about to begin, colleges and universities, as well as students and their parents, are facing an unprecedented financial crisis. What we’ve seen with California’s distinguished state university system — huge cutbacks in spending and a 32 percent rise in tuition — is likely to become the norm at public and private colleges. Government support is being slashed, endowments and charitable giving are down, debts are piling up, expenses are rising and some schools are selling their product for two-thirds of what it costs to produce it. You don’t need an M.B.A. to know this situation is unsustainable.

Columbia UniversityWith unemployment soaring, higher education has never been more important to society or more widely desired. But the collapse of our public education system and the skyrocketing cost of private education threaten to make college unaffordable for millions of young people. If recent trends continue, four years at a top-tier school will cost $330,000 in 2020, $525,000 in 2028 and $785,000 in 2035.

Yet most faculty and administrators refuse to acknowledge this crisis. Consider what is taking place here in New York City. Rather than learning to live within their means, Columbia University, where I teach, and New York University are engaged in a fierce competition to expand as widely and quickly as possible. Last spring, N.Y.U. announced plans to increase its physical plant by 40 percent over the next 20 years; this summer Columbia secured approval for its $6.3 billion expansion in Upper Manhattan. N.Y.U. is also opening a new campus in Abu Dhabi this fall.

The financial arrangements for these projects remain obscure, but it is clear that they will not be completed without increasing the universities’ already significant and perhaps unsustainable levels of debt. Last year Columbia reported $1.4 billion in outstanding debt against a $5.89 billion endowment. N.Y.U. had a staggering $2.22 billion debt with a relatively modest $2.2 billion endowment — one that had shrunk by more than 11 percent over the previous fiscal year. For universities, as for banks, the question is not only the value of current and projected assets but also the availability of liquidity so they can pay off interim debt obligations during a time of financial instability.

There is a similarity between the debt crisis on Wall Street and what threatens higher education. Just as investors borrowed more and increased their leverage in volatile markets, many colleges and universities are borrowing more and betting on an expanding market in higher education at the precise moment their product is becoming affordable for fewer people.