Like housing and medical care, higher education was also swept up in our 3-decade-long credit bubble. Prices were able to escalate wildly for the same reason as medical and house prices.
This is why the adjustment from a credit bubble collapse is so wrenching -- relative prices for especially valued goods like medical care, education and housing move seriously out of alignment with median incomes during periods of very easy credit.
There is no easy way to fix that. It is wrenching. It will entail many job losses, pay cuts, closings in the bubble industries, or...massive government subsidy which costs the broader economy over time.
Higher education is a special case, in that it is significantly subsidized by the states.
I was struck by this paragraph:
Mark Yudof, president of the system, said the University of California now received only half as much support from the state, per student, as it did in 1990. Even with the higher student fees, the system needs a $913 million increase in state financing next year to avoid further cuts. If that extra money is not provided, next year’s freshman enrollment will most likely be cut.
I'd like to raise a broader point, so let's leave aside for now the obvious -- a 32% tuition increase will cut the freshman enrollment in a rather large way.
Let's look at this from another angle.
Presumably some efficiencies are already in place. Witness auditorium-sized classes.
So...some classes that can be combined into larger classes are already combined.
But...that doesn't imply the next step is to drop students.
After all, more students bring more tuition revenue.
The only way fewer students could help the total system budget is if many classes are dropped, and even some schools or colleges closed.
It might make more sense for individual colleges and universities to have significant campus-wide pay cuts, layoff a portion of professors, administration and staff, combine more class together even when it's difficult and requires some creativity and new curricula, and try to hold onto every student possible.
Of course, that would place the valuing of education itself above the short-term interests of some employees.
But if we choose to value education itself as the top priority, more options would become available.
I think one academic tendency is to overvalue course variety. This is one of several academic problems in education that have to do with too much teaching and not enough independent study and creativity among students.
For instance, a creative alternative for some graduate-level courses would be self-study using existing course materials. There is stimulation, and then there is grad school, which at times is definitely an overload. If a student doesn't have what it takes to do self-study, they don't belong in graduate school.
This is a great time to think about real education reform.