Monday, May 5, 2014

How The Free Market Will Soon Destroy The College Bubble

We are in the very early stages of the college education bubble popping, and the snowflake that ultimately causes the avalanche will likely be the free market doing its job. From Bloomberg this afternoon: "The $10,000 Bachelor's Degree Arrives"

Today in Washington, the disruption of higher ed will take another step with the announcement of the first nationally available $10,000 bachelor’s degree. That’s $10,000 for the whole degree, not per year. It will be offered by College for America, an online operation of Southern New Hampshire University. The college keeps its costs down by offering classes online.

College for America doesn’t teach courses with credit hours. It teaches competencies, and it tests them using projects that resemble work that employees would be called on to do in their real lives. The first bachelor’s degrees to be offered are in health-care management and communications.

The school’s online degree won’t solve the problem of college costs for everyone, but the trend toward teaching practical skills may well trickle up. Says LeBlanc: “There are a lot of these programs coming. There are already a fair number of competency-based programs in existence, thirtyish. There are 130 in development and hundreds being discussed. This is a wave. This is coming.”

This will start as a trickle and turn into a tsunami. There will be big money made shorting anything and everything involved with the current higher education structure. That includes student housing, student loans or the salary of your local college professor. It's going to be a massacre.

If you have a child about to enter college I would think long and hard about writing that $100,000 check. You may get a 70% off discount by waiting just a few years.