Educational Sustainability: Another Housing Crash in the Making?

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Mark Cuban is never afraid to be controversial. However, his latest verbal diatribe aligns with other recent articles which are expressing concerns about the shrinking middle class and the value of higher education.

In a recent article he notes,

“For years the federal government has been subsidizing loans, much like they did with houses ahead of the 2008 crash. This has led to increased tuition costs and lending to individuals who will more than likely never be able to pay back their student loans. The end result, according to Mark Cuban, will be a bursting of the debt bubble, a significant drop in college income, and an outright collapse of America’s institution of higher learning. We saw a collapse in the price of housing and we’re going to see the same collapse in the price of student tuition and that’s going to lead to colleges going out of business.”

In a post earlier this month I noted the trend of the rise of the shrinking middle class (Five Forecasts for ’15). It highlighted that the top one percent of Americans enjoyed 95 percent of all income gains between 2009 and 2012. When we combine the trends of increasingly accessible loans and a less affluent middle-class, we have some of the ingredients required for a perfect storm.

This doesn’t mean that college education is not worthwhile. However, it likely means that every college education is not worthwhile! Future hot job projections, financial awards and alumni employment statistics are going to become the metrics which will increasingly be used measure educational return on investment

While both Cuban and the journalistic source of this article lean towards sensationalism, I believe that there is still truth to mine related to student debt. Debt is rising and at some point the risk versus reward ratio will be a negative one for higher education.

According to Cuban, it already is!


 

Jeff SuHead Shotderman is a futurist, professor and consultant who works in the field of organizational development. He works with clients to improve leadership, teamwork, organizational alignment, strategy and organizational FutureReadiness. He resides in Palm Desert, California. Twitter: @jlsuderman
Slavo, Mark (Dec. 28, 2014). Billionaire Mark Cuban Warns Of Massive Crash That Will Wipe Out America’s Colleges: “You’re Going To See A Repeat Of What We Saw In The Housing Market”. D.C. Clothesline,  Retrieved from http://www.dcclothesline.com/2014/12/28/billionaire-mark-cuban-warns-massive-crash-will-wipe-americas-colleges-youre-going-see-repeat-saw-housing-market/

Article image from http://www.democracynow.org/2013/7/3/failure_to_stop_doubling_of_student

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  1. Pingback: The Changing Face of Higher Education – Part II | Jeff Suderman

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