Higher Education: America's Problem That Isn't Being Solved

Tyler Durden's picture

Submitted by Charles Hugh-Smith of OfTwoMinds blog,

Once we accredit the student, not the institution, existing universities will compete directly with Nearly Free Universities not in issuing diplomas but in how much students actually learned and mastered.

One of the key insights from recent work in psychology is that humans tend to substitute easier problems rather than solve difficult problems. Daniel Kahneman explained this dynamic in his recent book Thinking, Fast and Slow.

To "solve" a difficult problem we are unfamiliar with, we substitute a lesser problem we already know the answer to, and then declare we've "solved" the original (often knotty, complex) problem.

The real problem then festers, unsolved and addressed, while the misguided "solution" only drains resources and exacerbates the real problem.

An excellent example of this dynamic is higher education: the real problems are soaring costs and sharply declining yields in actual learning and in the real-world value of a diploma.

Consider the study Academically Adrift: Limited Learning on College Campuses which concluded that "American higher education is characterized by limited or no learning for a large proportion of students."

These charts illustrate the costs and diminishing returns:

The yield (in earnings) on the increasingly unaffordable college degree is declining sharply:

The Status Quo has substituted two false "solutions" that completely ignore the real problems of soaring costs and diminishing returns: increasing student loans and hiring hundreds of thousands of non-teaching administrators.

While student loans have soared to over $1 trillion, with direct Federal loans ballooning from $115 billion to over $700 billion in a few short years, only 37% of freshmen at four-year colleges graduate in four years (58% finally graduate in six years), and 53% of recent college graduates under the age of 25 are unemployed or doing work they could have done without going to college.

New Analysis Shows Problematic Boom In Higher Ed Administrators:

In all, from 1987 until 2011-12--the most recent academic year for which comparable figures are available—universities and colleges collectively added 517,636 administrators and professional employees, according to the analysis by the New England Center for Investigative Reporting.

“There’s just a mind-boggling amount of money per student that’s being spent on administration,” said Andrew Gillen, a senior researcher at the institutes. “It raises a question of priorities.”

The ratio of nonacademic employees to faculty has also doubled. There are now two nonacademic employees at public and two and a half at private universities and colleges for every one full-time, tenure-track member of the faculty.

The number of employees in central system offices has increased six-fold since 1987, and the number of administrators in them by a factor of more than 34.

I have demonstrated in my book The Nearly Free University and The Emerging Economy: The Revolution in Higher Education that the tuition for a four-year bachelor's degree could (and should) cost $5,000, not $100,000 or $200,000.

The technology and tools already exist to accredit the student, not the institution and provide distributed courses, adaptive learning and real-world, workplace-based workshops for a tiny fraction of the ineffective, unaffordable system of higher education we are currently burdened with.

Once costs decline 95%, there is no need for student loans or the bloated bureaucracies currently overseeing the parasitic student-loan system.

Once we accredit the student, not the institution, existing universities will compete directly with Nearly Free Universities not in issuing diplomas but in how much students actually learned and mastered. If students can learn as much or more for $5,000 (including workshops in real-world workplaces) than they do for $160,000 in conventional universities, then the sectors of higher education that charge $160,000 for a 4-year degree will vanish.

In essence, technology has leapfrogged the existing higher education Status Quo, just as it has leapfrogged the banking sector.

Gordon T. Long and I discuss these issues in this 25-minute program:


Here is a taste of what we discuss:


  • Media and knowledge are no longer scarce—both are essentially free
  • Students no longer need to be congregated in classrooms to hear oral lectures; the lectures can be distributed at almost no cost via the Internet
  • The factory model of teaching the same texts and curriculum no longer makes sense; every digital device is a library and a display for oral lectures
  • Lessons and methodologies of learning can now be tailored to individual students (adaptive learning) via interactive software
  • The need for live oral lectures as the primary (and presumed to be best) mode of teaching has vanished
  • Students learn mastery in workshops held in real-world workplaces, not classrooms


  • Colleges must separate Research and Educational funding
  • Education versus Occupational Training
  • Internships versus Apprenticeships; why corporations are no longer training
  • "Time is the New Competitive Dimension;" the educational systems needs to understand what this means
  • The New Economy requires Soft Skills such as Collaboration, Lifetime Learning, Continual Innovation and the full spectrum of Entrepreneurial Skills


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max2205's picture

Teach them that the earth orbits the sun damn it!

LMAOLORI's picture



LOL even the finest education money can buy can't fix stupid.

Bastiat's picture

The finest education junk debt can fund.

kaiserhoff's picture

I labored in these vineyards for many moons.  In the age of affirmative action, A/B grading, and private schools (overpriced baby sitting) all degrees are suspect, and most credentials are meaningless.

Universities should not be gate keepers.  Impartial exams should be.  You want to be a lawyer, pass the bar, a doctor, pass the med boards, a CPA, well suffer for three days if you must.  No one should care how or when you acquired the knowledge.  Education should be a la carte, as it was for centuries.  Combine that with minimal apprenticeships, when necessary and the bloat will die a swift and natural death.

PS.  My tuition at Illinois was $267/semester, and the faculty were well compensated.  Ed administrators are like tits on a boar.

Skateboarder's picture

It used to cost a finger or few, but now it costs both arms and legs, just to come out on the other side to see that you have been taught no useful skills, jobs are not as plenty as they seem, and that you're generally outcompeted by middle-aged people who need to keep their jobs.

In a recent conversation I had with one of my sister's friends in college, dude said he was an electrical engineer. So I ask him what kinda shit he wants to do when he graduates, and he says... *drumroll*... "management." So I started telling him about how the yutes out of college pop out fresh and want to 'manage' already, without any significant groundwork in a field. WTF!? What are you going to manage, fool? You don't know shit!

johnQpublic's picture

ooo ooo ooo

i know this one

we have substituted global warming for all the real threats to the planet

we know exactly how to solve it




if it fails we do more of the same

but ultimately it doesnt matter what we do

because it aint real!!!!

gmrpeabody's picture

The average kid knew more 30 years ago coming out of junior high than the average college grad knows today...


If we would only give the teachers and administrators a raise... <sarc>

kaiserhoff's picture

Sad but true, Peabody.

The Junior high kids used to want to grow up, be independent, and take on the world.

Where do we see that now?

666's picture

The standards to graduate keep getting lowered each year, and the quality of the teachers is steadily declining. Some of these college graduates become teachers, but they know less and less each year and their students know less and less. It's a race to the bottom, with each generation getting dumber.

One of my favorite pastimes is handing out exact change to the person working the register in a store. More and more often, these high school graduates swirl it around in their hand with a pained expression on their face, and finally ask me how much it is. I guess that helps makes the USSA a world superpower and gives us the knowledge to solve other nation's problems as we continually intervene.

Debt Slave's picture

Wanna have some fun? Next time you buy something and the bill is a figure like $8.32, hand him a ten, a nickel, and two pennies.


gmrpeabody's picture

They couldn't handle it..., period!

shitco.in's picture

Amazing, I do this all the time. 

Canoe Driver's picture

CHS is doing precisely the thing he admonishes, he is substituting a problem he finds tractable for one which he seems unable to grasp. Discourse on 'student accreditation' and learning is irrelevant because the dynamic of higher education, particularly in the US, is something else entirely. The student, and usually his/her family, seek to purchase the accreditation of the university, and thereby arrogate it to themselves. This arrogation is then placed on the resume in an attempt to get a salary. That is all, and by-and-large there is zero interest in learning and in personal accreditation. Put another way, it is all a matter of branding.

Further, employers prefer the branding and commodification of education, because it simplifies hiring practices. No one can begin to imagine hiring under the system proposed here by CHS, because no one can fathom the complexities of discerning talent when everyone's brand is personal and unique.

Now, if the only people who went to college were the ones who wanted to learn, well then, my friends, our problems here would be over in a very short time, indeed. 

RaceToTheBottom's picture

Least he was getting a ENGR degree and not the underwater basket weaving or even worse a poli-sci degree.

malek's picture

Good one.

And who is hosting the impartial (cough, cough) exams then? Government bureaucrats?

mrpxsytin's picture

Nice in theory. However, once you reduce the barriers to entry you make corruption and nepotism that much easier. If just a matter of passing the bar or the med board then why not get your Attorney General or surgeon daddy to have a word to the examiners for you?? 

At least going through a formal learning process demands that the student pass multiple examinations. Sure some students will always be able to game the system but it makes it much harder, and more expensive for daddy...

lordylord's picture

From personal experience, 75% of the people in college should not be there. 

Offthebeach's picture

I wouldn't of been able to identify my nefarious Zionist, racist, and white privilege without college. I would of been unconscious of my race crimes, and but another patriarchal misogynistic racist and SS like soldier to big oil, Koch and Israel. And enviromental dispoiler. That too. Now I walk in tire sandals of my North Korean brothers, hemp clothes and live in communal Victorian in Burlington, Vt as part of The Free Tibet Action Army. In my off time I volunteer at a no kill cat shelter.


666's picture

"From personal experience, 75% of the people in college should not be there."

Only 75%?

Kayman's picture

' 75% of the people in college should not be there. '

If you mean students, faculty and administrators then I agree.

Blammo's picture

I agree too, especially some of the dumbass " tenure track" faculty types. I love the lip service paid to critical thinking and the jackboots applied to anyone who dares to try some on for size.

Stuck on Zero's picture

The solution has been there all along.  From the chart it looks like the auto manufacturers have done an excellent job at keeping prices controlled and for better and better products.  Medicine and Universities are plum crazy.  I suggest everyone look at Kettering University for a shining example (http://www.kettering.edu/).

Kettering University used to be the General Motors Institute and is one of the best STEM campuses anywhere.  Their tuition is very reasonable and their graduates are highly employable. 



bh2's picture

This is an astonishing example showing why no amount of money can fix stupid, particularly when it's institutional:


It must be one of the great achievements of the American public education system that even well established historical fact may be regarded as only a matter of opinion.

superflex's picture

Heliocentrism is so 16th century, Copernicus.


libertus's picture

Lots of people are working to solve it...including a really interesting company called Oplerno.com (open learning organization.) They have a great incentive based market solution to debt and student loans---low costs for students and high faculty pay for great teaching. Check them out.

Andre's picture

We can't do that! Some sociologist somewhere some day said that would impair their self-esteem!

lordylord's picture

1.  Government creates a problem. 

2.  Government "tries" to "fix" the "problem". 

                      3.  Problem becomes worse. 

                      Note: steps 2 and 3 make up an infinite do-loop.

TBT or not TBT's picture

Big education employees vote 97% for big government.

TBT or not TBT's picture

Big government provides 97% of student loans to funnel money to big education.

random shots's picture

Did I miss the memo where ZH turned into an aggregator of financial doom blogs?  They use to show "Guest Post" in the headline so I could skip the BS stories needed to keep the ZH servers running. Now i can't tell what kind of story will show when I click through. 

Spastica Rex's picture

Who's going to do the accediting?

I want that job.

kaiserhoff's picture

As a friend from Maryland likes to point out, the Universities themselves simply seized that power and got away with it, as part of the peer review process.  A more incestuous and meaningless set of criteria would be hard to find.

therover's picture

If we use economics 101, just stop sending kids to college. Less demand SHOULD lower cost.

 Problem is, the subsidies and the illusion that a college education is mandatory.

 Little by little, parents will begin to see the farce.

Duc888's picture



Higher Education: America's Problem That Isn't Being Solved


Nonsense, it is doing exactly what it was designed to do, dumb people down and turn them into debt slaves.

22winmag's picture

Truer words were never spoken.


Fuck you teachers unions. Fuck you Prussian style education.

Debt Slave's picture

And Adlous Huxley said they would come to love their servitude.

kaiserhoff's picture

Add the cost of government to that top chart, and you have a wonderful short summary of what ales Amerika, and much of the world.

lewietheparrot's picture

Off topic, but has anything on this been seen here at ZH?

Operation American Spring (OAS) - May 16th, 2014 Wash D.C.

What is the story on this, anyone here following it?



Implicit simplicit's picture

The majority of principle and interest will not be paid especially by the parents; they will die before they ever finsh paying the Parent Direct Lloans that Sallie Mae offers. They are forgiven by death of the parent who is the primary cosigner, so watch your back around your kids:+)

kaiserhoff's picture

Disability also works.

Oh, my back!

Implicit simplicit's picture

Yeah, also certain qualifying income programs require low payments that can be extended out 25 years, and then the debt is forgiven

therover's picture

My buddy would tell me, you holler "My back, my neck, my FUCKING BACK !"

He said to emphasize back because they can never really tell what's wrong with your back.

Loophole's picture

What is it they say? Those who can, do. Those who can't, teach.

if you aren't worth a crap at anything, you get a govt job and start governing, regulating, and generally exploiting everyone who is.

Become a public school teacher. Hate everyone in the real world who is successful and the free country that makes such success possible. Become a Democrat. Join the teacher's union and the Occupy Wall Street crowd.

And spend the rest of your life teaching your students to be a life-hating, envy-driven loser like you are.

The most destructive institution in American history has been the public school system, including the so-called private schools that essentially live off of public money.

If you have a socialistic (public) school system, what the hell else are they going to be doing with the kids?

Teaching them to be freedom oriented and capitalistic?

lordylord's picture

And that shithead asshole Deblasio wants universal pre-k AKA day care for the FSA.  What a moron.  NYC should sink into the Atlantic.

Grinder74's picture

Not yet! I'm still stuck here from last week's storms.

lordylord's picture

Then you better hurry and find 10 righteous people in the city.