Is There a `College Bubble’ Developing in America?

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Oct. 28 (Bloomberg) –- The John William Pope Center for Higher Education Policy’s George Leef discusses the cost of higher education. He speaks with Mark Crumpton on Bloomberg Television's "Bottom Line." (Source: Bloomberg)

My job entails looking at trends in higher education.

About four years ago, it seemed to me clear that we were creating a higher education bubble here then as i -- education bubble.

Then as i thought about the higher education bubble and the housing bubble, it seems to me that the reasons for both is very similar, strong parallels here.

What we have had is an enormous misperception of value in housing that was brought about by government policy with people pushed into mortgages with the idea that house ownership was a surefire investment and then it turned out to be false.

But we have been doing much the same thing with regards to higher education.

We have been telling students that getting a college degree, any degree from any place at any cost, will be a great investment because there is a big boost to get in your earnings just for having a college degree.

But we have also found out that that's not true.

So we created a bubble and both the -- of course, the housing bubble has burst, but in housing -- but in higher education, the bubble is starting to inflate.

David coleman told reporters last week that "a college education is one of the best investments that students and their families can make." your argument against that is not taken it -- is not educational, but economical.

Is there no educational way to return on a college investment?

Not necessarily.

We have huge numbers of young people who have graduated in recent years and sometimes even pretty good students, but they cannot find any job that will pay them enough to service their loans, much less lead a good life sow.

We bought into this notion come again, a political notion, that the more people who get college degrees, the more good jobs there will be.

And we know that that is just not true.

There are huge numbers of young people who are working as baristas and janitors who have college degrees.

Whether they learned anything in college or not, they are struggling.

The problem is that we diminish the standards in college to the point where people can slide through without any gain in human capital for what they had when they went into college.

That me ask you -- back in july, massachusetts senator elizabeth warren addressed generation progress and national conference in washington and said, "it's time to help former students deal with $1 trillion in existing student loan debt by helping them refinance their loans at fair and reasonable prices." millions of borrowers with more ages been able to refinance.

Why not those holding student loan debt to do the same?

That simply keeps the bubble going longer.

What we need to do is stop encouraging people to borrow lots of money for degrees that they will never pay off.

As for the students that already have them, the best thing we can do going forward is say, look, you will have to pay these off or the people will have to help you pay them off.

But to bail them out is a -- is just to prolong the agony of the college bubble we have built.

I guess the bottom line from your perspective is that college just is not for everyone.

College is not for one, just like buying a house was not for everyone.

Even in the midst of the housing bubble.

Buying a house was a good idea for some people, but not for lots of people at the margin.

What we have done in higher education is very much the same thing.

Higher education is a great learning opportunity for some students.

But a lot of students coming to college with minimal interest, minimal academic skills, they just go through the motions, pile up lots of debt and are hurting themselves.

Our conversation to be continued.

Sorry for the truncated time.

But this is fascinating and i would like to talk about this some more.

George leaf is with the john

This text has been automatically generated. It may not be 100% accurate.

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