Housing Bubble
Beginning: Decision makers in our Federal Government decided that housing needed to be cheap enough so that anyone could afford a home. They took steps to make/keep interest rates low and made mortgages easy to access.
Result: A huge buildup of new homes and many people were able to take out bigger mortgages than they otherwise could have or would have.
Problem: Eventually a day came when families started to face difficulty making their mortgage payment and the value of houses and the homebuilding industry came to a rather screeching halt.
Education Bubble
Beginning: Decision makers in our Federal Government decided that education needed to be cheap enough so that anyone could go to college. They took steps to keep student loan interest rates low and made students loans and financial aid easy to access.
Result: Large increases in college attendance, colleges across the nation expand admission, and people who would otherwise not have gone to college for a Bachelor's degree were able to. At the same time student loan debt skyrockets and people who otherwise would not have taken on debt at the age of 18-25 end up saddling themselves with tens of thousands of dollars in obligations.
Problem: The value of the Bachelor's degree has fallen immensely. It's become a requirement, not a luxury, and a graduate degree or some professional certification is required to stand out in many fields and industries. In a slow economy, many students are not rewarded for their educations and end up un- or under-employed after graduation.
Several articles in the Wall Street Journal, among other places, have pointed to a worrisome shortage of skilled, experienced labor. Hiring recruiters for licensed electricians and other similar trade workers are having trouble filling any or all of certain positions. These are jobs that won't be shipped overseas, like electricians, plumbers, train engineers, high-precision manufacturing operators, among many others.
Is it possible that the costs of post-secondary education has fallen so much, and enough young men and women have chosen college instead of trade school or the job market, that it's created a vacuum of talent in these skilled labor industries?
If student loans and financial aid were more difficult to obtain, it would raise the cost of college and make the prospect of skilled labor more attractive. The other, and more likely, option to create an adequate supply of qualified men and women for skilled labor positions is that the compensation for these jobs increases so much that the opportunity outweighs the benefits of going to college.
Is college too cheap?