HIGHER EDUCATION BUBBLE UPDATE: It’s Not Just For-Profit Schools That Operate For Profit.
Medical students still borrow a lot of money, and the scandal of law-school debt continues. But some of biggest increases came in fields that nobody associates with wealth and fortune. The median debt for master’s degrees in education, for example, grew from $33,910 to $50,879 in four years. Public-school teachers didn’t exactly make out like bandits after the recession. Many took pay cuts or lost their jobs. University-based schools of education appear to be diverting the automatic raises that most teachers receive upon earning a master’s degree into their own coffers.
Median debt for people in the broad fields that grant master-of-arts degrees grew from $43,247 to nearly $59,000. Do you know any recent M.A. graduates with lots of money to burn? Similar numbers appear in the catch-all category of “other” master’s degrees. Many of these have—just like “office management”—weak ties to established professions. Medical schools and history-Ph.D. programs are accountable to the communities of doctors and historians. A one-year master’s program in something like “government” is accountable to no one.
Colleges with selective undergraduate admissions can monetize that prestige by running expensive “professional” master’s programs with lenient admission criteria that are hidden from the public eye. And because there are no hard limits on how much graduate students can borrow from the federal government, the sky’s the limit when it comes to price.
So if you’re a college president overseeing a portfolio of lucrative, heavily marketed, largely unaccountable terminal master’s-degree programs that offer little or no financial aid and charge market prices financed by debt, congratulations: You, too, own a for-profit college! And, unlike your peers at the University of Phoenix, you don’t have to pay taxes on your earnings.
But you get looser regulation, perhaps because the traditional higher education sector ranks at the top of Obama’s donor base, as well as being a source of foot-soldiers and message-echoers.