HIGHER EDUCATION BUBBLE UPDATE: Megan Mcardle: It Shouldn’t Be So Easy to Go to Grad School: Universities are milking the huge loan sums from grad students to subsidize the cost of undergraduate degrees. This system is broken.
There is a limit, of course, to how sorry we should feel for people who borrowed lots of money for a graduate degree, and found that it wasn’t a surefire ticket to easy prosperity. I am sympathetic to those people; indeed, I am one of those people. But people with graduate degrees, even not-very-useful-ones, are more affluent, more educated and more skilled than the general population. We should not exaggerate the tragedy of their fate simply because they are more like most of the readers of this article than is an unemployed welder in Flint.
We should, however, be concerned because the cost is spreading. Having finally reached the limits of American parents to bear ever-increasing bills for undergraduate tuition, struggling colleges are now turning to graduate programs to fund their operations. Indeed, schools often encourage graduate students’ naïve faith, painting a rosy picture of future employment prospects that is, to say the very least, highly selective.
It’s bad enough that schools do this; it’s worse still that the American taxpayer is helping them. For it is hard not to suspect that the proliferation of master’s degrees programs has less to do with exploding employer demand for advanced degrees in Jewish studies or public history, and more to do with the availability of student loans to fund those degrees. The government caps the amount that undergraduates can borrow, but offers graduate students considerably more rope with which to hang themselves.
We should either abolish student loans, or put universities on the hook when graduates can’t pay them. Skin in the game.