Friday, October 8, 2010


Western Washington University student Sara Allen marches with fellow students through campus after a rally to protest school budget cuts Oct. 7, 2010. The WWU board of trustees will be voting on budget cuts Friday. Philip A. Dwyer | The Bellingham Herald

Some days I think of what I will write. Other days, random thoughts pop into my head. Today's topic was the latter, although I've contemplated it for quite some time.

It involves higher education, and how the present model in this country is entirely unsustainable. Consider it another victim of easy credit. For years, lax lending, subsidized and guaranteed by our government (not entirely a bad thing), has contributed to a bubble - by any measurement or definition - of our higher education system. And for many years, colleges have enjoyed a robust capitalization that allows them to build gymnasiums, add headcount, and many other things that will soon fall by the wayside.

From a recent article: A Money magazine report notes: "After adjusting for financial aid, the amount families pay for college has skyrocketed 439 percent since 1982. ... Normal supply and demand can't begin to explain cost increases of this magnitude."

Once a highly lucrative industry, its gravy train days are over. Its model is overpriced relative to what the market can bear, especially after increased privatization of the student loan industry in which lenders have tightened credit while increasing the cost of capital.

Hundreds of schools (like our beloved Western) will see significant downsizings as demographics and other market conditions warrant a significant decrease in the number of colleges. Just another rosy economic catastrophe looming on the horizon. These poor kids' march is unfortunately futile and a bellwether of what's to come.

No comments: