The student loan bubble isn’t likely to end by government decree. Much like other failed lending programs, it’s likely to stop working as soon as demand for the loans abates significantly, whereas the trend over the last several years has been an enormous expansion in the demand for those loans.
The end will come due to selection effects. The people who focus on developing real job skills — and even the creative skills that college is sometimes supposed to inculcate — will continue to trounce many of the people who have shelled out for enormously expensive educations, even from some of the most prestigious universities. Parents who themselves went to college and have sent their own children through the system will continue to see that the system has degraded both in terms of the experience that it provides to students and in terms of the results that it fails to provide.
It’s not likely that any one thing — like internet college-level courses — will provide a replacement for the vast, mosty useless American education complex. Instead, institutions which have relied on ever increasing numbers of eager borrowers will begin to fail. The maintenance costs on extravagant campuses will not be able to bear decreasing enrollments. The huge payrolls of administrative staffs will not be supportable given even a dip in the overall increase in the interest in higher education.
The reversal isn’t that likely to be dramatic and sudden throughout the entire system. What’s more likely are local failures throughout the system, which will eventually cascade into a larger and more obvious failure. What the government might do in response to that is anyone’s guess. The record of the last 40 years suggests that the state will just try to lower the standards even further, increase enrollment even more, and reward failure with more enormous sums of money.
The changes in popular opinion over the last 10 years, though, while difficult to quantify, suggests that there’s more likely to be a contraction, but the stupidity of the bureaucratic left has been known to surprise.
None of this is particularly a problem for us or likely any of you. The more relevant question is what can pick up the shift in demand. The pat answer might be that ‘more people will go into the trades,’ but those trades can only absorb so many of the enormous numbers of largely useless graduates.
Rather than try to come up with a solution that works for the country as a whole — which would be impossible — it’s better to think more in terms of what you would do to increase the chances of your children succeeding. Historically, in times of serious resource restriction, a couple ways to handle that were:
- Strict gender roles
- Sending your children off to work for already established people
Some combination of both works well for people of all potentials, levels of intelligence, and most levels of scrupulousness. There’s no need to get more complex or institutionally-minded than that. There’s no grand proposal that can end the widespread middle class norms of extended ‘adolescence’ — but we can promote norms of early adult responsibility to counteract the errors of the last century.
Good stuff. The implosion will be here in short order, but this newest generation of leftist SJW credentialists is too stupid to realize that the very things they agitate for (access to higher ed for all, complete gender parity, the ability to assume debt to finance degrees in Transgender Methodologies) will be the very same things that destroy the system that they’re so hell bent on rejiggering.
Latin words on a paper won’t help the economically worthless them in the face of a protracted economic meltdown, in spite of what they might like to believe. Sensible kids will avoid the higher ed trap, but the silly ones will continue to go into thousands of dollars of debt just to be stamped with the seal of “intellectualism” no matter how bad the bargain.
America is a land of many golden geese, all of which are starting to look mighty nervous these days. Our education system, like our financial system, was once the envy of the world, but both have been brought low by one scam after another reverberating through them. As Fred Reed noted, is there *anything* left in American life that is not some elaborate species of swindle? I can think of very little, to be honest. The Millennials are, if nothing else, the most credulous generation in history – they believe *everything* the Establishment tells them. When they find that they’ve been taken for a ride, it won’t be pretty.
The economic repercussions of the student loan bubble will be considerable. If you measure parallels with the 2008 downturn, the economic cost generated by college loans will have a comparable nightmare scenario – namely, being interest rates taking the hit, banks will not be loaning money nor earning interest. Consumer index in all sectors will shrink, as will prices and the inevitable downward slope will begin its decline.
Of course it’s great we have inflation to finance these inevitable corrections while print money to give to banks to loan to more of these cattle. We pay interest on top of interest on top of interest to finance these Gandhi worshippers through graduation, thus beginning their lifelong crusades for social justice and socialism. Teetering on low interest rates is a fun way of avoiding those bread lines meanwhile propping up those who would be the first to be sacrificed to the bread lines. Keep your powder dry.