The US College Apocalypse
We discussed this in the past. It appears that we are witnessing things moving up a notch.
The United States college system turned into a scam. Most of the degrees that are being doled out are completely worthless. Kids are conned into believing this is the pathway to something better when they are ultimately saddled with huge amounts of student loan debt.
It is no longer about educating the youth of the country. Instead, it is simply a money grab with government sponsored loans that cannot be eliminated. bankruptcy laws do not apply.
So why is this an apocalypse?
The Decline of the US College System
Confidence institutions in general is declining. I have written about the collapse in confidence in government. This is extending in other directions.
Here is a chart of the surveys done regarding colleges.
In our February poll of 1,122 Americans, 31% reported having “a great deal” or “quite a lot” of confidence in colleges and universities, whereas 28% of the 1,309 Americans polled in May reported the same. While the percentage of those who reported “very little” confidence or “none at all” remained constant at 30%, there was a slight tick up in those who reported “none at all” from 7% in February to 10% in May.
The net effect is pretty clear.
Inevitably, when confidence in a product or service is lost, businesses go under. Make no mistake, we are dealing with businesses here.
Thus, it is no surprise what we are seeing:
About one university or college per week so far this year, on average, has announced that it will close or merge. That’s up from a little more than two a month last year, according to the State Higher Education Executive Officers Association, or SHEEO.
A school per week is closing on average. When the money starts to dry up, closure is the only option.
Demographics
There is a major issue that is confronting all these institutions.
Demographics are simply not working in their favor.
The fertility rate is down. This is something most developed countries are facing. Less kids means less spots needed for colleges. In the past, kids from other countries could make up the shortfall.
The problem is that other countries are facing the same situation.
This is a headwind that cannot be avoided. Much like retail store space, the United States simply has too much of it. When it comes to upper level classrooms, there are not enough bodies to fill them.
We are seeing the results now. With 1 closing per week, this will, over time, see a great deal of reduction.
Useless Degrees
The challenge is that education of this nature is a waste of time. Much of the education system is outdated.
It is a situation with degrees that have no value in the marketplace. Much of what these students learn can be found online.
Of course, there are exceptions.
When studying certain disciplines, such as medicine or the law, this path has some legitimacy. This is compounded when things such as labs are included. This pertains to the sciences as well as a few other fields.
Outside of that, it is a lot of money to drink, have sex, and basically party for 4 years.
It is also interesting to see that trade schools are not suffering the same fate. Perhaps life as a plumber or electrician is an avenue to pursue.
The Job Market
One of the biggest challenges for these institutions is the rapid pace of change in the job market. Can anyone tell me what careers will be around in 5 years?
There stands a good chance that robotics will not replace the trades in that time. We also are still going to need doctors, nurses, and lawyers. These industries are regulated and do not adapt quickly. While they will be around, new skills could be required.
Teachers seem like a protected profession but this is going to decline over time. They, too, are protected due to the government control over education. For this reason, many of the private schools will decline first. Those with large endowments or vast financial resources will stick around.
The rest, especially second or third tier schools, are done.
AI is going to change everything. One of the areas it could massive have an impact is with education. There will come a point in the future where personal AI teachers are available. This might be 5 years down the road, or a decade.
Either way, it is soming.
Consider how much $100K or $200K buys. This is the debt many leave school with.
That will, at some point, be a thing of the past. Information was democratizes. If that was the case, why is education still so expensive?
The longer technology is damned up, the more powerful the break.
Get ready for another apocalypse happening before your eyes.
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So glad my daughter saw the light and only did 1 year. She is looking at trade schools and such, but had to get there to see the scam in action herself, lol. The 'I told ya so' opportunity was pretty sweet, lol. She even say, 'Okay Dad, you can say it...' LOL.
Yeah. She is fortunate. Most do not see it. Instead, they go 4 years and have a boatload of debt to pay back while not being able to get a job.
Yeah, she started seeing that early and was like, nah. So she is just going to work and her and her boyfriend are looking for a place and getting life started. He's in mechanic school, so she is looking up the trade alley as well.
AI isnt going to replace that stuff. Will need people to fix stuff for a long time.
Oh for sure.
It's all about what you want to do. It's a bad idea to go to college without a plan.
But let's put the question another way. What jobs that have traditionally required a college education (i.e. specific degrees) are going away? It seems to me like the core things are still going to be around for a while. Medicine, law, engineering, teaching, a multitude of sciences, and a variety of others.
Yes, there is a LOT of fluff in college. Tons of absolutely useless degrees. There have been for a long time. But if you are spending $100K plus for a degree in underwater basket weaving with the expectation of landing a great job when you graduate then you clearly haven't thought things through.
Also, learning things on your own is nothing new. The Internet has made it somewhat more convenient but there have always been books and if you happen to live near a college you can attend lectures for free. Getting a degree is like getting a certification. It's a way to prove to a prospective employer that you have some base amount of knowledge in the areas that you need. Obviously that requires that you are actually getting education in areas that are needed.
The biggest challenge is whether companies move away from the degree requirement. This was something that was present for along time.
Certainly, the fields you listed do require excessive schooling and that will not change. They are also immune, to a degree, from AI, at least in the near term.
However, when you look at the number of schools, the fields you cited are not going to fill them. Here is the problem.
As far as jobs that don't have specific degree requirements, it's a good question. I think it depends on how competitive the job market is. If a company is hiring an entry level employee with one being straight out of high school and the other having a college degree, it seems they would still be more likely to pick the one with the college degree even if it isn't technically a requirement for the job. There may be a third option in some cases (specific training or whatever) but I don't think that will be true most of the time.
Having said that, every degree isn't worth the same. If you are a liberal arts major, you probably shouldn't be spending six figures in the vast majority of cases. The good news is that you don't have to. Many former "Community Colleges" have converted to four year colleges and they are relatively cheap (at least where I live). Certainly nowhere near six figures for a four year degree. Even state universities are well below that number and are in fact often effectively free if you have good grades in high school. Most people spending six figures are doing so because they are attending private schools or out of state schools and have less than the required GPA/test scores for commonly available scholarships.
I'm not sure what schools have closed but i don't think most major ones are at risk anytime soon. At least where i live (Florida) the major state universities have to turn away a lot of people every year. At the University of Florida (using it as an example because it is my alma mater), the acceptance rate is only 30%.
In a list of 571 colleges, only three have 100% acceptance rates: Luther Rice University & Seminary, Brigham Young, and Midwives College of Utah: https://www.oedb.org/rankings/acceptance-rate/page/6/#table-rankings
University of Florida is in the top 100 in terms of acceptance rate so maybe that's not the best typical example. Back when I went, acceptance rate was closer to 60% so it has gotten much harder, not easier which is what you would expect if there were a downtrend in applicants. Picking a university in the middle of the list, University of Illinois at Urbana-Champaign has an acceptance rate of 66%. I suppose as you get further down the list, schools are more at risk in the case of a large drop off in applicants.
At any rate, i don't think there will be a college apocalypse. More like a much needed correction as those considering college make wiser choices about both where to go and for what. Then we'll see how elastic those tuition costs really are.
I think AI and robotics really threw a big wrench on the possible careers for a lot of students. A decade ago, IT was all the rage. Computer Science, Programming, Computer Engineering, etc were in high demand. A lot of IT demand are declining the past few years. The advancements of technology, and AI are certainly doing its part. Apart from things like Law, Medicine, and Business, where there are advantages in Universities [facilities, and connections], community colleges and trade schools are looking like better alternatives.
The last 18 months showed how vulnerable a lot of professions are. We are seeing some incredible, albeit basic technologies rolling out in regards to AI. This is only going to get better.
Even though some people still think that the developed countries does not need any aspect to work upon but I don't see it to be true