Education bubble: Are you getting value for the money you’re spending for a college degree?
Everyone wants to go to the same top B-school or college, everyone wants to gain credibility through a system which has been feeding the previous generations.This has created the education bubbleeducation Updated: Oct 02, 2017 15:17 IST
Is higher education a bubble or do people realise the intrinsic value of going to college for higher studies, and see this as a step towards the future? Do we really have a future in mind while thinking of college? Think about it – how early do we start pushing this aspiration in the minds of our children? There are coaching institutions that have now started penetrating the market even when children are in classes 6 or 7. We have started turning the heat on our children way before they are mature enough to understand what will the future look like.
One of the characteristics of a bubble is that things cost more than they are worth and we definitely have a bubble in real estate. When it comes to education, one has to be concerned about the inability of the people to be imaginative enough to identify what alternative future can they choose to break the existing trends and patterns. Everyone wants to go to the same top B-school or college, everyone wants to gain credibility through a system which has been feeding the previous generations.This has created the education bubble, which is not only becoming bigger but getting heated up as well considering the price at which it comes. It has become common for students to pay more than Rs 1 crore for an international education without really trying to evaluate the inherent value of that education.
The absolute cost of higher education has gone up by 400% since the 1980’s (adjusted for inflation). I can justify a 1000% increase in the price of a machine if it helps me do the same job with 1/20th the cost of an old machine. I can justify an increase in the price of technology because with every generation of technological innovations, we are able to do more with less, and hence don’t mind paying more for it. However, I do not seem to understand the value of the innovative changes in the education system in the last 40 years. Is there real value in what we are getting from this system or has it been artificially created in the minds of the people who see education as their way of buying security?
If you look at the reality, the education system is largely decoupled from what actually exists in reality. I am referring to the growing number of new MBA programmes in the country, new medical colleges in various states, and various other new higher education institutions mushrooming in various suburbs of the major cities, and the ever growing domination of these institutions on the minds of the consumer. It is not surprising for a parent to start thinking about the higher education of a child when he or she begins Class 8 and is many years away from actually realising the true purpose of why he or she would need that higher education in the first place. I am not against education, and in fact I am a great proponent of people educating themselves. However, when you leave the rationale behind and start running behind a system without knowing why you want it or out of fear, I call it a bubble.
Let me compare the education and the real estate bubbles. A lot of people do not realise that real estate is a bubble and they bury themselves under loads of debt to possess an asset that does not have the inherent value to justify the amount of work and burden they would take on in the first place.
A lot of top institutions have a great power as they are strongly supported by endowments, and they will not let this system to change unless there is a push from the outside. Also, globally the thought of gaining credibility through higher education is deeply ingrained in the world’s social fabric as well. A lot of us get educated to buy a brand for ourselves instead of acquiring the actual transformational skills we really want to experience to add value to what the future has for us. These are the exact characteristics of a bubble. It is not forward looking and has more resources thrown at it because of a trend or a pattern that may not hold true for everyone. Think about it this way - we have experienced a bubble in medical sciences with plenty of colleges across the country willing to accept the masses not on the basis of merit but because of hefty fee they can pay for their studies. This fee is not needed as much to run the infrastructure of those institutions as to create a balance in supply and demand, and people are willing to pay for it.
What we need to focus on is research on how we are creating better educated professionals than we were four decades ago. With the current state of mind, it would be easy for some higher education institutes to continue with the blatant racket which dominates the minds of this generation.
The author is founder and CEO of PythaGURUS Education Pvt Ltd ( www.pythagurus.com), a higher education consulting service.