April 22, 2013

HIGHER EDUCATION BUBBLE UPDATE: Measuring College Prestige vs. Cost Of Enrollment. “In these decisions, though, emotion often wins out, and it can lead to the slippery slope of excessive borrowing. . . . In two much-discussed studies about the value of a degree from an elite college — one with people who graduated in the 1970s and the other with more recent graduates — Alan B. Krueger, then an economist at Princeton University, and Stacy Berg Dale, a senior researcher at Mathematica Policy Research, found that equally smart students had about the same earnings whether or not they went to top-tier colleges.”

Plus, underscoring something Peter Thiel said a while back — the higher education bubble isn’t about excessive optimism, but about fear: “Prestige has always been part of the equation, but he said he had expected parents to start looking for value in colleges after the 2008 financial collapse. Instead, parents have come to see the elite universities as the only way to give their children a chance at success. They feel jobs are hard to come by and companies are only going to look to hire at the elite universities.”

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