According to the US Bureau of Labor Statistics, in the last 40 years, the US CPI-based overall inflation was 285%, while the cost of higher education increased by 1246% (12.46 times higher, about 4.4 times higher after inflation adjustment).
From a financial point of view, higher education is clearly a broken system.
But there’s more to this, pointing to even worse problems.
First, it is a wealth redistribution problem, as Steven Herzberg pointed out:
“It’s merely a way to reallocate wealth to university endowments. It’s accomplished by US Gov’t guaranteeing student loans so these students can pay higher fees that results in profits that pass through to University endowment funds. Rather than the US Gov’t forgiving student loan debt, perhaps we should force academic institutions to pay those student loan debts from the endowments that wered created through this debt scheme.”
Steven Herzberg , comment on LinkedIn
That is very true, but still just a part of the problem. University endowment funds are huge but still just a leftover and a deposit of an even much greater consumption and production system, which is the higher education system itself.
College is increasingly a waste of time.
The truth is that, with the decentralization of information, an increasingly greater percentage of higher education is unnecessary.
I would say a minimum of 50% of the college education today is a waste, and we are approaching even higher percentages quickly, perhaps even to a point where over 90% will be a waste soon.
No, I’m not saying people should stop educating themselves after high school, but quite the opposite.
Nor am I saying that we don’t need teachers. The teacher-student relationship is the very basic element of the entire human knowledge system, and teaching by individuals who possess knowledge will not only be necessary but will always be a critical and honorable part of human society.
But, college has proven itself to be an extremely inefficient way to learn. Not only is the classroom teaching and the learning itself inefficient, but more importantly, most programs and information offered in colleges are useless, failing to produce more knowledgeable, more productive, and healthier individuals.
An even worse problem
But even that is not the biggest problem with today’s colleges and universities.
The modern higher education system is far worse than being just an inefficient knowledge transmission system, but rather an extremely biased kind that filters human knowledge through a special filter such that just a certain type of knowledge (biases really) is distilled to achieve a concentration in universities many times higher than that in the society at large.
The higher education system is therefore far worse than a straight financial problem, worse than even a much deeper wealth redistribution problem, but rather a systemic information pathway problem that profoundly impacts the very substance of humanity.
If looked from the perspective of the above latter (i.e., the systemic information pathway problem), the out-of-control education cost inflation is actually a good thing in a painful way because it is showing an obvious (both visible and easily felt) symptom of an otherwise hidden cancer, to wake people up to find a cure earlier. The worst kind of cancer is the type that doesn’t show any symptoms until it is too late.
In this sense, the government cancellation of student loans works as a painkiller to mask the symptoms and make the problem much bigger than necessary to call for a cure.
There is no market equilibrium in higher education. You cannot find a more distorted market than this. And the hands of the government magnify the distortion.
A different kind of education system and teaching is necessary.
A solution is emerging
Yet a real solution is silently emerging from the free market. The free market based on human ingenuity always has a surprise to offer.
It is a different kind of learning and teaching. It is far more decentralized, compatible with the decentralization of information itself. See more: the New Internet.
Fundamentally, education is a system that passes knowledge down the timeline of humanity. Far more efficient pathways are becoming available today, making the traditional college education less and less necessary. All information one can learn in college and beyond can be found outside the traditional classrooms and, in most cases, with the highest quality. It is not only the Internet that contributes to this, but also the fact that more and more institutional knowledge is digitized and easily accessible to participating individuals. And with the form of employment itself being decentralized, economic participation is no longer limited to full-time employees or even traditional contractors.
Learning can be done in such a flexible way that one does not need to separate several years of his life into a place called ‘college’ to learn, but may engage in various purpose-driven learning programs, small or large, part-time or full-time, all depending on actual needs and learning dynamics.
And this is already happening without even proper financial incentives for better production and marketing.
The obstacles that the new form of education must overcome
Decentralized education is natural, and is increasingly made visible with new technologies. But there are existing obstacles to overcome.
- Social psychology. Unfortunately, the ‘free’ Internet has conditioned people’s minds into a freemium data economy that society is unwilling to pay for valuable information.
Paradoxically, people are willing to, being forced to really, pay hundreds of thousands of dollars for a few years of college. It is an indication of a need, not a proof of a solution.
But just imagine how much better it would be with the right kind of decentralized education with the right incentive economics.
2. Motivation and learning habits. The strongest argument for today’s classroom education is that students are more motivated by the classroom and peer environment. Few students today are self-motivators who can find their learning path without any peer stimulation or pressure.
But this is just a superficial effect of the current system. Decentralized learning does not mean a student will do that all by himself. Proper decentralized learning is compatible with a healthy group and peer environment. It is just a matter of how individuals are organized and connected. The technology is ripe to form effective content and social networking learning environments.
3. The credential system. Our society lacks an effective and objective method to assess a person’s skills and knowledge. Currently, it almost completely relies on credentials issued by a school system. An employer has only about half an hour to a few hours to do a hands-on assessment, and most of that is limited to interpersonal presentations of the candidates rather than substantive knowledge and skills.
Serving as a default assessment standard is perhaps the biggest reason the current education system has its place. Unless an effective and objective assessment system is developed along with decentralized education, this will remain the biggest obstacle to people who desire to explore decentralized education.
However, the temporary lack of such an assessment system in decentralized education does not mean it cannot be developed. In fact, with the emerging truth-based data paradigm anchored on a public blockchain that has unbounded scalability and is integrated at the TCP/IP base layer of the Internet, the new kind of assessment system may emerge, and may even be far more effective and objective than the existing one.
4. Equipment and facilities. Not all knowledge and skills can be acquired by just absorbing information. Some require equipment and facilities. From basic science labs to advanced clinical training, much equipment and facilities are required.
That’s true, but decentralized education does not mean eliminating all the services that today’s schools can provide. It just requires a different mode of service providing. Science labs can be provided by dedicated service providers. Alternatively, existing schools would be reformed into more specialized service providers. Training can be integrated with society at large, including businesses and employers. This is like going back to the traditional apprenticeship, only with the support of better technology and conducted in a more decentralized manner.
Education is never going to be free. Nor should it be. It is about efficiency measured by input and output. The current system is so inefficient that it really does not have a high bar to surpass. All the obstacles are historical artifacts.
Given the current reality, it’s hard to predict when the higher education system will collapse to give place to a better system. The inertia of a large, lifeless corpus can be huge, but it can be much worse when it is motivated by human nature and reinforced by ignorance.
The self-reinforcing accreditation, assessment, and social acceptance of the current system has a long life ahead.
But the force of innovation is unstoppable. More and more people will start thinking out of the box and soon find a solution already there. Some will do it because they are brave, but more will do it because it is necessary. And society, in the form of employers and social circles, will also start to understand the true meaning of education and find ways to assess and accept real knowledge and skills more objectively. A reality is found even under a bubble like the higher education system. And the reality always prevails.