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Author: sykesix Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 58870  
Subject: Re: The Coming Twilight Of The Four-Year College Date: 12/15/2012 5:28 PM
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Double whammy of employers unwillingness to pay adequate wages & soaring inflation of the cost of higher education that does not prepare the student with the proper skills. Sounds like a failure of a business model to me.

I always thought that Prudent Bear guys weren't particularly sharp, and that article didn't change my mind.

My wife works in higher education and these the types of problems she deals with every day. However, there seems to be a great deal of confusion on a number of points. Tuition costs indeed are rising rapidly. However, public higher education spending per student has actually been going down in recent years. Obviously, costs are being shifted from the public to private sectors, mostly to the students themselves. By contrast, private college spending per student has been going up.

Also worth noting is labor is a major portion of educational costs. Wage inflation is a higher than regular inflation, so you would expect educational costs to rise faster than the CPI. Basically, a not a useful comparison.

The skills gap mention in the article is real. So how do you fill it? Colleges need to shift focus of curriculum. That requires is recruiting new, qualified staff, developing curriculum in conjunction with community partners etc. Now try doing that if your budget is cut 10% every year--which has happened each of the last three years here in Washington State, even though enrollment is going up. Adding new programs is very difficult in even in the best of times, and is almost impossible right now. And just for grins, try to hire some instructors from private industry when the state doesn't even give cost of living wage increases.

Hutchinson's solution of course is that if you cut the budget some more, all those problems go away. Sure they do.

The article mentioned there should be shift to community colleges. Great idea, however there already is a shift to community colleges. Even thought the population is growing, university enrollment has been flat the last few years while community college enrollment is exploding. There are a lot of reasons for that, but the main one is that it is cheaper for everyone and that has been a major policy of the Obama administration.

Just for fun, I checked to see the Prudent Bear funds were doing, and the still stuck. No surprise given they hire great thinkers like this guy.
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