Bubble, bubble, toil and trouble

Since the day when the Mayflower first docked in Plymouth Harbor, the United States (as it came to be known) has always been thought of as the land of opportunity. For John Winthrop and his fellow Puritans, it was a city on the hill; a beacon for mankind. For the framers of our government, it was a place where government could be the guardian of the people’s rights. For the hundreds of thousands of immigrants who have come here over the years, it has been a place in which one can start over and where the impossible can finally become possible.

This has not changed in the 21st century. America is still seen as a place of refuge and opportunity where the American dream is more than a catch phrase and where children can grow up to live better lives than their parents. That dream promised Americans the right to have a free mind and a prosperous life. Over the past two-and-a-half centuries, opportunity has taken different manifestations. It has shown itself in freedom of religion, free land, a booming industrial age and refuge from oppression. Today education is the means to this good life.

In this century most well-paying jobs can be attained only by people with some kind of degree from higher education whether it be technical, vocational or in the liberal arts. A college like Middlebury both nourishes the soul and guarantees a distinguished place in American society.  Thus, most people who wish to have satisfying lives and successful careers spend thousands and thousands of dollars and several years attempting to make sure that they can have a piece of the American dream. However, like any investment, buying education is a gamble. We are all betting that the two hundred thousand dollars we spend to go to this school for four years will be more than paid back by future job and salary possibilities. But it is possible that this investment in the future will not pay off, both in an educated mind and a secure social status in American society.

As I am sure you have all noticed from your last tuition payment, higher education is becoming more and more expensive, and increasingly this education is not enough to secure a prosperous future. Many people major in studies which, by themselves, are not profitable. More people are deciding to go on to institutions of even higher education in order to secure a job in the tighter and tighter market that is a product of the less than vibrant American economy. They continue to increase their debts in order to do so.

As Glenn Reynolds comments in the Washington Examiner, the higher education bubble and the housing bubble have much in common. For many years the housing market only continued to go up, causing people to feel confident taking out substantial loans in order to buy houses with the understanding that their property would increase in value as they paid off their loan, thereby increasing their wealth. A house with a large mortgage was a foolproof investment. This investment, combined with the liberality with which loans were awarded, became problematic when people were unable to repay their loans and their properties started to lose rather than to gain value. Suddenly the investment was like a bad play at the poker table.

If jobs remain as rare as they are today and people continue to take out loans in order to educate themselves, America risks the education bubble bursting just as the housing bubble did, leaving students unable to pay back their loans or gain employment. For those of us still paying for education or looking into the rather inscrutable job market, we may find ourselves on the wrong end of an education bubble: large debts and no income.

However, there is a big difference between buying an education and buying a house. While a house can be foreclosed on, the knowledge that we gained in the four or more years we spend in higher education can never be taken away from us. And in some ways this is an opportunity in and of itself for which we should be grateful. Knowledge and understanding is a good beyond its market value. Education creates a better life for the individual and for the society in which he or she lives. However that does not mean that this is a problem that should be ignored.

In economic terms we will be in the same predicament as the house owners. We will have spent an enormous amount of money on something which has a market value far less than what we paid for it. It would be a sad commencement to life after college if we resent the education needed to make us free. This is a problem exaggerated by the less than robust nature of the American economy and the enormous debt which America has accrued. Thus, to make America a land of opportunity both in theory and practice we must all save more so that we can make it possible for not only ourselves but for our children to be a part of the history of opportunity. And colleges must be aware that since a liberal arts education is a human good, freedom of the mind should not be priced so that it forces those seeking it to place themselves in bondage.