Tuesday, December 31, 2013

USA Higher Education Bubble? What about Indian Higher Education Bubble?

Last updated on January 3rd 2014

The word bubble is a strong word. Is it proper to associate the word with Higher Education? A few days ago, I was not sure. But I recently came across some articles from reputed media organizations and a set of videos from a conference of scholars which makes me wonder whether it actually may be proper and correct, to use the word, bubble, to describe some, student-numbers-wise, significant parts of higher education.

Please note that towards the bottom of this post, the views of US university faculty and some US and European university presidents and research directors are given which argue against one of the suggestions of at least one US education researcher mentioned earlier in the post [separation of teaching and research duties (and so, faculty)], to improve the situation in higher education. The first comment to the post is also an interesting one (this paragraph is an update to the post).

Here's an August 2012 article from the Economist that uses the phrase 'higher education bubble', The college-cost calamity, http://www.economist.com/node/21559936.

Here's a September 2013 article on Forbes.com, Three Reasons Why College Bubble Will Burst, http://www.forbes.com/sites/johnwasik/2013/09/04/three-reasons-why-college-bubble-will-burst/.

I was also quite surprised to note that Wikipedia has a page on Higher education bubble, http://en.wikipedia.org/wiki/Higher_education_bubble. An extract from it: "The higher education bubble is a hypothesis that there is a speculative boom and bust phenomenon in the field of higher education, particularly in the United States, and that there is the risk of an economic bubble in higher education that could have repercussions in the broader economy. President Obama nearly doubled the federal Pell Grant Program, from $19 billion in 2009 to $36 billion for 2013. Enrollment at more than 40 percent of private colleges and universities declined last year, forcing the institutions to offer steep tuition discounts to fill seats.

According to the theory, while college tuition payments are rising, the rate of return of a college degree is decreasing, and the soundness of the student loan industry may be threatened by increasing default rates. College students who fail to find employment at the level needed to pay back their loans in a reasonable amount of time have been compared to the debtors under sub-prime mortgages whose homes are worth less than what is owed to the bank."

A few days ago, I came across a very interesting set of videos about a session in the (USA) National Association of Scholars (NAS) 2013 Conference on (USA) Higher Education Bubble.

[NAS stands for National Association of Scholars, http://www.nas.org/. From http://www.nas.org/about/overview, "NAS is a network of scholars and citizens united by our commitment to academic freedom, disinterested scholarship, and excellence in American higher education." From its wiki, http://en.wikipedia.org/wiki/National_Association_of_Scholars, 'The National Association of Scholars (NAS) is a non-profit organization in the United States that opposes multiculturalism and affirmative action and seeks to counter what it considers a "liberal bias" in academia. The NAS describes itself as "an independent membership association of academics working to foster intellectual freedom and to sustain the tradition of reasoned scholarship and civil debate in America’s colleges and universities." The NAS is generally viewed as politically conservative advocacy group, although it rejects the label.']

BTW I am quite sure Indian higher education also has at least some of these problems, and some more problems of its own. Studying such issues that USA higher education seems to have may allow us to understand problems of Indian higher education and explore ways to improve it. That is the intent of this post.

The first talk: Andrew Gillen, Session 3: The Higher Education Bubble, NAS 2013 Conference, http://www.youtube.com/watch?v=r34V6CogEGE, 15 min. 38 sec, published April 26th 2013.

[From http://www.educationsector.org/person/andrew-gillen, "Andrew Gillen is a senior researcher with Education Sector at American Institutes for Research. Gillen has a wealth of experience in researching and writing about higher education, focusing mostly on college costs and financial aid, accreditation, and the economics of higher education."]

The youtube page above has my lengthy notes from the talk (picked up from the transcript and edited) as a comment under my name, dated December 29th 2013. The notes may be convenient to quickly browse through or perhaps even study.

The notes cover Gillen's views about USA Higher Education. He mentions that the defining characteristic of a bubble is unsustainable growth and that there are two bubbles in USA Higher Ed. - the enrollment bubble and the cost bubble. He provides some startling data for the enrollment bubble like:
  • Only 25% of high school students are prepared for college but 68% enroll.
  • 1/3rd of college students have to enroll in remedial courses. [Ravi: From the wiki, http://en.wikipedia.org/wiki/Remedial_education, "Remedial education (also known as developmental education, basic skills education, compensatory education, preparatory education, and academic upgrading) are course sequences designed to bring underprepared students to expected skill competency levels."]
  • Only 58% of college students graduate from 4 yr colleges. Only 30% graduate from 2 yr (community) colleges.
  • Between 40% to 48% of college graduates have jobs that do not require a college degree.
"When you combine (data what you get is) that for every 100 students who begin at a four year college only 58 manage to graduate within six years; four years later only 35 have managed to find jobs that required a degree. So in other words only about one-third of college entrants are able to complete and make use of their college education within 10 years of first enrollment. This immediately raises the question over whether the resources that are being spent on other two thirds could possibly be spent more wisely someplace else."

Students and parents and families are starting to realize that college isn't the safe investment that it once was. Wages for recent college graduates have been falling; a lot of them are struggling to find jobs and yet tuition keeps increasing.

Main threat to traditional college education from the cost front is MOOCs.

Proper and widely agreed measure of outcomes of colleges is not available; It is not clear what constitutes a high quality college. So colleges compete on reputation instead of value which is essentially quality divided by price; To boost reputation colleges indulge in flashy things unrelated to actual education of students.

Determining how students are learning is important to improve students' education. Measures like CLA -  http://en.wikipedia.org/wiki/Collegiate_Learning_Assessment, outside certification exams like CPA for accountants, bar exam for lawyers etc. may help in creating a measure of learning for college students.

Information about labor market outcomes could be useful for students to decide which degree to study.

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The next talk in the session conveys a very ruthless view of USA Higher Ed. So if you tend to get upset reading such views I think it would be best to skip the rest of the part of this post that covers this talk. The reason I am covering it in this post is that while some of the views may be rather strong, some views seem to have the ring of truth.

George Leef, Session 3: The Higher Education Bubble, NAS 2013 Conference, http://www.youtube.com/watch?v=fzMEaAjEunw, 19 min. 50 sec, published April 26th 2013. George Leef is director of research for the John William Pope Center for Higher Education Policy, http://www.popecenter.org/about/author.html?id=29.

I made a sort-of transcript of some parts of the talk and added it to the above youtube page as a comment (dated December 29th 2013). I have given below a summary of that notes-comment.

  • Bubbles are based on misperceptions of value that start to feed on themselves. People come to believe that some good or service is really more valuable than it actually is. 
  • Higher Ed. has people believing that a college degree is extraordinarily valuable and that it will add a million dollars to more to lifetime earnings as compared to people who do not have a college degree. [While the million dollars figure may be true as an average figure it does not apply to all streams and that aspect is not disclosed by Higher Ed. people.]
  • He talks about the Bennett hypothesis. [Ravi: New York Times Nov. 2013 interview with Bennet, "Catching Up on the Bennett Hypothesis", http://www.nytimes.com/2013/11/03/education/edlife/catching-up-on-the-bennett-hypothesis.html, New York Times op-ed by Bennet in 1987 when he was US Secretary of Education - http://www.nytimes.com/1987/02/18/opinion/our-greedy-colleges.html. Andrew Gillen's paper on it, "Introducing Bennett Hypothesis 2.0", http://centerforcollegeaffordability.org/research/studies/bennett-hypothesis-2.]
  • Problem of credential inflation: As labor market is full of people with college credentials employers prefer to hire people with college credentials (even though that may not be necessary for the job in question).
  • Strong parallels between housing bubble and higher education bubble. Govt. policy was making housing artificially cheap and encouraging people to buy houses as a national good. The same is being done with higher education by making it artificially cheap with government financing (student aid loans) and the argument that college degree was very good for the individual and the country.
  • Some consequences of the Higher Ed. bubble - many young people with an education only in name, many young people not getting jobs commensurate with their supposed education, enormous misallocation of resources, credential inflation resulting in good job paths being closed to (capable) people with high school education (or community college education).
  • People are realizing that the value perception about college (million dollars more if you have any college degree) is mistaken.
  • The college degree credential system is going to be replaced (in future) by a system where what people have learned and what they can do will be looked at (instead of only the college degree credential).
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The third talk of the session, Michael Poliakoff, Session 3: The Higher Education Bubble, NAS 2013 Conference, http://www.youtube.com/watch?v=LlJqIxur00I, 21 min 29 sec, published April 26, 2013, is from a senior person from ACTA, American Council of Trustees and Alumni. Here's Poliakoff's page on the ACTA website, http://www.goacta.org/staff/michael_b_poliakoff.

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Then there is the Q&A, Session 3: The Higher Education Bubble, NAS 2013 Conference, http://www.youtube.com/watch?v=iCfIiBADwbE, 27 min 59 sec, published April 25th 2013.

I found the last question to be very interesting and have put the edited transcript of the question and answers from all three speakers as a comment on the above youtube page. I have tried to summarize this Q&A below:

Q: So, what is the post bubble world (post Higher Education bubble burst world) likely to look like?

George Leef's view is that unbundling of education will be the big change. Students will shop around for courses (across educational institutions), pick a course here and a course there. They will go for what is good and what satisfies their needs.

Michael Poliakoff's view is that good quality online courses (some of which is already available) will democratize high-quality higher education (will save cost and provide high-quality education).

Andrew Gillen thinks that the universities will have to unbundle research and teaching duties and other things done by universities to be competitive with others who offer only the teaching aspect. Big endowment institutions like Harvard will not be affected. Tuition driven higher-ed. institutions will see a big change. From student's perspective the unbundling process will allow them to go for (courses offering) very specific skillsets especially in rapidly-changing fields.

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Can some sectors of Indian Higher Education also be said to be facing a bubble problem?

Let me first look at Andhra Pradesh, the state where I live.
Here's an NDTV (national TV media) article dated September 19th 2013, No takers for engineering courses: Andhra Pradesh's problem of plenty, http://www.ndtv.com/article/south/no-takers-for-engineering-courses-andhra-pradesh-s-problem-of-plenty-421048. Some points from the article:

After first phase of admissions this year (2013) over one hundred thousand (one lakh) seats in Andhra Pradesh (AP) engineering colleges are vacant (out of a total of two hundred and thirty five thousand seats). [Political unrest in the state may have had some effect for this situation.]

75% of passed out graduates from AP engineering colleges have reported that they have not got jobs!

Experts view is that technical jobs are available but these graduates are not knowledgeable enough and do not have requisite social skills to bag these jobs.

Here's a Times of India (mainstream national newspaper) article dated August 31st 2013 on similar lines, Engineering colleges in Andhra Pradesh facing bleak future, http://articles.timesofindia.indiatimes.com/2013-08-31/news/41641666_1_nine-colleges-eamcet-certificate-verification.

Here's a Hindu Business Line (mainstream national business newspaper) article dated September 2011 by the Director, Centre for Telecom Management & Studies (for more about the technical credentials of the article author see http://drthchowdary.net/), which gives his harsh view of many of these "degree shop" Andhra Pradesh engineering colleges, "Farce of an education in engineering", http://www.thehindubusinessline.com/opinion/farce-of-an-education-in-engineering/article2447570.ece.

Now let me move to neighbouring state of Tamil Nadu.
Here's an article from Times of India, dated April 12th 2013, Engineering colleges up 'for sale' in Tamil Nadu, http://articles.timesofindia.indiatimes.com/2013-04-12/news/38490500_1_few-engineering-colleges-many-college-owners-arts-and-science-colleges, which gives a bleak picture. It quotes a leading former academic administrator that at least 100 colleges of engineering and other disciplines are up for sale.

Here's an article again from the Times of India, dated July 27th 2013, More than 80,000 engineering seats remain vacant in Tamil Nadu, http://articles.timesofindia.indiatimes.com/2013-07-27/education/40832525_1_five-colleges-seats-c-thangaraj.

From the above articles, it seems to me that at least in some parts of Higher Education in India, not only has there been a bubble (some of the articles above show the growth in student seats over the past few years) but the bubble has even burst (in some parts, I repeat).

Therefore it may be very valuable for Indian higher education policy makers and administrators to study the article and video links this post has provided about USA higher education bubble.

I felt it appropriate to repeat some of the suggestions to deal with this bubble problem and some predictions from the USA conference session:

Proper and widely agreed measure of outcomes of colleges is not available; It is not clear what constitutes a high quality college. So colleges compete on reputation instead of value which is essentially quality divided by price; To boost reputation colleges indulge in flashy things unrelated to actual education of students.

Determining how students are learning is important to improve students' education. Measures like CLA -  http://en.wikipedia.org/wiki/Collegiate_Learning_Assessment, outside certification exams like CPA for accountants, bar exam for lawyers etc. may help in creating a measure of learning for college students.

Information about labor market outcomes could be useful for students to decide which degree to study.

...

The college degree credential system is going to be replaced (in future) by a system where what people have learned and what they can do will be looked at (instead of only the college degree credential).

...

Andrew Gillen thinks that the universities will have to unbundle research and teaching duties and other things done by universities to be competitive with others who offer only the teaching aspect. Big endowment institutions like Harvard will not be affected. Tuition driven higher-ed. institutions will see a big change. From student's perspective the unbundling process will allow them to go for (courses offering) very specific skillsets especially in rapidly-changing fields.

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I feel it is appropriate to also share the view of related matters from USA university professors. Some of these views (on teaching-only appointments) are related to the topic of unbundling teaching and research duties and are quite opposed to it. This is a document, dated October 2009 (draft version), which gives the American Assocation of University Professors' view on Tenure and Teaching-Intensive Appointments, http://www.aaup.org/report/tenure-and-teaching-intensive-appointments.

Endnotes 3 and 4 of this document state that in 1969, among full-time faculty, the ratio of teaching-intensive faculty (nine or more hours of teaching per week) to research-intensive faculty (six or fewer hours of teaching per week) in US academia was 1.5:1. But by 1998 the ratio had become 2:1 largely due to "teaching-only" appointments. It refers to data from Jack H. Schuster and Martin J. Finkelstein, The American Faculty: The Restructuring of Academic Work and Careers (Baltimore: Johns Hopkins University Press, 2006).

The article states that the majority of teaching-intensive positions have been shunted out of the tenure system and that 'has in most cases meant a dramatic shift from “teaching-intensive” appointments to “teaching- only” appointments, featuring a faculty with attenuated relationships to campus and disciplinary peers. This seismic shift from “teaching-intensive” faculty within the big tent of tenure to “teaching-only” faculty outside of it has had severe consequences for students as well as faculty themselves, producing lower levels of campus engagement across the board and a rising service burden for the shrinking core of tenurable faculty.'

[From http://en.wikipedia.org/wiki/Tenure_(academic), "Tenure is a senior academic's contractual right not to have his or her position terminated without just cause." Ravi: In other words, tenure gives a permanent and protected position.]

Here is a very interesting European Molecular Biology Organization interview, dated September 2007 of leading research and administrative lights of academia and industry on the topic, "The future of research universities. Is the model of research-intensive universities still valid at the beginning of the twenty-first century?", http://www.ncbi.nlm.nih.gov/pmc/articles/PMC1973958/. The interviewees include presidents/chancellor of universities, and present/former directors of research departments/institutions of US & Europe, and a Japanese professor emeritus.

Some significant points from the interview.

*) Advanced nations need scientific research and a trained workforce for the knowledge-based economy they are deeply involved with.

*) New pressures on universities to produce trained workforce (graduates) as well as generate new knowledge (research).

*) One interviewee mentions that private sector research labs. were at the forefront of research some decades earlier which heavily contributed to today's knowledge economy. But now the private sector research labs. play a much smaller role with (in the case of the US) long-range research (basic research) responsibility shifting to US research universities, and their work may drive a big part of tomorrow's (US and perhaps other countries') knowledge economy.

*) A specific question is asked of these leading lights, "ER: Do you see a trend away from universities in which both teaching and research are combined, towards universities specializing in one or the other—and is this desirable?" Some of the interviewees do see such a trend (in one case, notes a reversal of the trend) and almost all of them specifically say that it is undesirable.

---------- end interview points ------------

The above material quite strongly argues against separating teaching and research in universities.

Please note that the Creative Commons Attribution (CC-BY) license does not apply to this post.

3 comments:

  1. A veteran Indian Computer Science academic and industry researcher who has had long stints in Western academia had the following to say on the separation of teaching and research duties in universities part of the blog post (towards the bottom of the post):

    This is a hard one. There are some outstanding researchers who make really lousy teachers and some (like Richard Feynman) who have inspired scores of students through their classes. There are outstanding teachers who have few research aspirations and are wonderful in their teaching.

    Universities make a mistake when they separate teachers and researchers and treat one as inferior to the other. Teachers will not land massive research grants, which is what a university wants most, and will not win Nobel prizes. Yet, but for them, students will not be prepared well for their degrees and fewer will have the background and knowledge to aspire for research. Departments make a mistake when they dismiss 'teaching fellows' (or whatever they call them) as of little consequence.

    Yes, good research does need the time and opportunity to work at length on a topic and a heavy teaching load can make that very difficult. Moreover, it's hard to teach well if your attention is focussed on the research problem that's keeping you awake at night. Some researchers are loners and some are gregarious and need the company of many others to push them to be more productive.

    Finally, it is not the job of a university to train anyone for anything. Training means providing skills to perform some task efficiently: a university's role is to educate minds in a way that no company can ever do. Training is also a short term measure, providing skills that will soon become outdated. Education lasts a lifetime. Companies start talking about training in universities because they feel that they use public money and this should be directed for what they consider to be public good (such as improving productivity). They say that far less about private universities like Stanford and Harvard.

    Consider how JC Bose, SN Bose, Meghnad Saha and CV Raman all worked with no government support at all and yet produced science of the highest quality (the Higgs boson is one of many bosons described by Bose-Einstein statistics). [Ravi-edited sentence: Post-independence Indian science does not seem to have anything comparable, despite the enormous financial support from the government.] There must be a lesson there.

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  2. Here's an Oct. 2013 Forbes.com article by George Leef, A Tale of Two Bubbles -- Housing and College. I added the following comment to the page:

    Thank you for this very thought-provoking article. I think it is vital that students and parents know the truth about academia today. I live in India and I think some of the issues you raise for the US educational system apply to the Indian educational system too. In my opinion, the Indian educational system in general (there are notable exceptions), suffers from low teaching standards, grade inflation and credential inflation. The net result is that society has a lot of concern about the knowledge and skills that graduates and post-graduates passing out of most Indian educational institutions have.

    I think the solution lies in making students earn their university degrees by hard work and proving that they have acquired requisite knowledge. External learning assessment exams both in general areas and domain specific areas as a measure of student learning outcome may be very useful in ensuring that the students do so and that their teachers focus on students achieving appropriate learning outcomes.
    --- end comment ---

    And here's a more recent, Nov. 2013, Forbes.com article by George Leef again, The College Bubble is Popping, ....

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  3. A friend provided the following comments in the Indian context (slightly edited mostly to provide background info.):

    1. The bottom of the pyramid is really wide in Indian student community. These are the youth who go for highly subsidized (often free) education in governmental colleges and universities. They are majorly from rural areas. They join these because they have nothing to lose, nothing else to do, get accommodation in hostels, can involve in politics, hang around with friends ;), and keep trying for jobs. Many do multiple degrees just to bid time.

    2. Most of the above category aim exclusively for government jobs, motivated majorly by reservations. So, demand for courses is based on the mass recruitment policies of Public Service Commissions, District service commissions etc. For instance this year, there were no takers for BEd (Bachelor of Education) courses in AP (Andhra Pradesh - an Indian state), whereas there is heavy demand for DEd (Diploma in Education) courses. Its because government released vacancies for primary level teachers in government schools and higher school vacancies are frozen.

    3. The upper layers of the pyramid consists of merit students without reservations, majorly urban students. They study to work in non governmental industries including IT. Current trend in AP is exclusive degree colleges which in parallel train students for CA or Civil Services. Engineering and MBA are passe, unless it is an IIT or BITS.

    4. Huge demand for NET (National Entrance Test for PhD and Asst. Prof. positions) and SLET (State Level Entrance Test for PhD and Asst. Prof. positions) which give them opportunity for PhD courses with stipend, though not many do it seriously.

    5. Teaching jobs were always a motivation for doing higher studies. But now this sector is saturated. Some private engineering colleges are not able pay salaries to the staff, due to fall in intake!

    6. Tip of the pyramid are those affluent classes who do higher education only to be eligible to go abroad, what with social compulsions and peer pressure to do so. They are ready to pay high fees and join premier private institutions who prepare them for this.

    To sum up, unlike US higher education bubble which is linked with funding/fees/economy, India higher education has three layers: The large solid bottom layer of highly subsidised low quality education in government universities and colleges who aim to join government jobs, the sizable fluid middle layer from the great Indian middle class who flow with the trends in public services and MNCs, and the small stratified top layer who look for high quality education that sends them abroad. As usual, it is the great Indian middle class...that is the middle layer...which creates and busts bubbles. But they are never known to rock the boat! And of course, there are no foreign students...only domestic consumers...so government can always step in to save the day.

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