Politics/Economics

Public Education, The Student Loan Bubble, and the Market Solution

For a more thorough examination of the free market solution to the public education system, see the “Education” chapter in A Spontaneous Order

The Internet is most likely the greatest invention to date. Not only does it connect individuals all over the world, provide people with real-time news updates, expand market capability, and increase entertainment possibilities, it also makes learning and the sharing of data as simple as it has ever been. Right now, in your pocket lies a device that contains the vast majority of human knowledge, though most people don’t realize this. Even if they do, they aren’t sure what to learn and where to begin. The constant misuse of the Internet–specifically mindless YouTube videos, “entertainment news,” and the constant monitoring of social media–has many questioning whether this “Digital Age” is a blessing or a curse. In defense of the Internet, it is a relatively new creation, and its users still don’t fully understand its capabilities (and perhaps never may).

Given the Internet’s endless possibilities for self-education, it seems odd that individuals still feel compelled to spend tens of thousands of dollars on higher education each year. They do so only because college degrees are still regarded as the base requirement for high paying employment. Few agree on how to achieve affordable quality education, and the student loan crisis has everyone frantically trying to provide state-sanctioned solutions. Leftists promote universal higher education and progressive curriculums with the hopes of creating a more informed and culturally accepting society. Neoconservatives typically favor more pro-American content in primary education but don’t necessarily promote “free” higher education. The real problem is neither group is willing to give up the old institutions of education. They have both failed (and even now only some libertarians have failed to acknowledge this option) to harness the combined possibilities of the free market and internet to provide quality education at rates that don’t  even approach the cost of university tuitions.

The State of Contemporary Education

The failures of public education in primary schools and the ever-growing education bubble are finally shining through the American university system. Former President George W. Bush’s failed No Child Left Behind Act and its replacement, the Every Student Succeeds Act, have now effectively turned public schools into little more than glorified daycare system where students are taught to memorize information and regurgitate it for standardized tests. If students fail to perform up to par, teachers are forced to find ways to accommodate the students to ensure they have shuffled along to graduation. If teachers or schools fail to meet the required standards, schools could lose funding or even be closed. What results is public education is dumbed down to the lowest common denominator so that nearly anyone can succeed and rendering a majority of the students entering college ill prepared.

When rising freshman college students finally make it to these esteemed institutions of higher education, they are quickly shocked by the expectations of their professors. Many students can barely construct legible paragraphs, know how to take written exams, have the attention span to finish a book, or show any signs of critical thinking. The basic skills required to succeed in college, which students should have developed throughout the duration of primary schooling, must now be taught by college professors. Instead of failing students, who have no business being in college in the first place (not to say they never will), many professors are adapting to their student’s shortcomings. College, like primary public schools, is quickly becoming trivialized.

Why are Universities and professors allowing this to happen? Part of the answer is that they too, similar to public schools, are dependent on federal funding. A brief examination of the student loan bubble can explain the other portion of the answer. More and more people are going to college today because of an easy access to student loans. The result is more people have college degrees, making them more like low-value requirements (instead of emblems of intellect), and it’s harder for individuals to acquire a job and pay back their loans. Instead of facing the flooded job markets, many degree-wielding graduates choose to climb the ladders of academia. Like the rest of the job markets, the supply far outweighs the demand for academic scholars. Graduates with degrees from R1 (High Research Universities) schools are trickling down to small liberal arts colleges due to limited job opportunities. Sadly, many of these individuals are more concerned with getting published and climbing back up the food chain than educating their students. In a sense, the university is experiencing a form of trickle down elitism.

Just because the quality of education is deteriorating, does not mean that there aren’t students with a desire to learn (many people develop the desire to learn later in life). Nor does it imply that there aren’t any skilled and intellectual professors within the ranks of academia. There are numerous educators who are disappointed in the state of contemporary education. Many of them do, however, believe legislation or more federal funding is the answer. As libertarians, we recognize that regulation and government interference is precisely what got us in this situation. So what is the solution? As usual, it’s the market.

The Solution Already Exists

Libertarians are notoriously pessimistic about the shrinking of bureaucracy, but the Internet and its resulting education outlets have finally offered us a reason to be optimistic. Many of us are supporters of individuals, institutes, and organizations that provide educational opportunities, though not everyone capitalizes on these options. Tom Wood’s Liberty Classroom offers numerous courses on both American and European history, philosophy, and economics. The Mises Institute provides both live and recorded courses through the Mises Academy and also hosts an annual educational event Mises University. Dan Carlin’s Hardcore History podcast series is enjoyable to listen to and great resources.  Other educational outlets include The Ron Paul Homeschool Curriculum, Udemy, Codecademy, Khan Academy, Udacity, and even YouTube. If you want to learn something, there is most likely a resource on the Internet specifically designed to teach you just that.

Why, given that these fantastic education outlets exist, do people continue to go into debt and spend thousands on an education they can most likely receive for a fraction of the price? The short answer is the degree. Because most companies require at least a four-year degree to be considered for employment, the university system has monopolized both education and employment. Employers, however, are quickly learning that your college degree no longer guarantees that you will be a hardworking or critical thinking employee. Today your bachelor’s degree (with some obvious exceptions in STEM fields) in many ways is more equivalent to high school diploma than proof of intelligence. The market is the only way to break the cycle of modern education and the devaluation of education.

For the same reasons people are abandoning mainstream media for alternative outlets like Radical Capitalist, education is beginning to experience a similar shift. Higher education, like big business, lobbies Capitol Hill to ensure more students get access to loans, allowing them to raise prices. And why wouldn’t they support student loans and raise tuition prices if the government is willing to pick up the tab? People are tired of paying inflated prices for education only to receive biased opinions and to no longer stand out in the job market. This article is just as much a call for individuals to stop fueling the higher education bubble, as it is for more intellectuals to make content available on the Internet instead of in the classroom. Not only does market competition provide an incentive for educators to provide the cheapest and highest quality education possible, it also makes quality education available to anyone with Internet access. If everyone wants a well-educated public, as they frequently claim, there should be little objection to this argument.

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