Educational negative equity?
Most of us working in universities have seen, over the last couple of years, a significant increase in demand for student places. This is natural enough during a time of recession, when governments are anxious to move people, and young people in particular, out of unemployment, and when people are in any case anxious to maximise their opportunities by securing the best possible qualifications.
But how useful are those qualifications? According to some theories, this will depend in particular on how much it has cost you to get them. If you have had to pay a high tuition fee, and if the salary that the degree secures for you is not high enough, then the debts you may have incurred could overwhelm your capacity to repay. This phenomenon has become known as the ‘education bubble’, where an increasing number of graduates fail to pay back their loans. Depending on who carries the risk of default, the resulting burden may either affect the graduate or the state; but either way, the expected social and economic benefit of higher education is called into question. It is a phenomenon not totally unlike the growth of negative equity in property markets.
Just as public neglect of the emerging property bubble produced ultimate disaster, so a temptation to ignore the education bubble could have dramatic consequences for universities. The issues raised by the education bubble include the methods and levels of university funding, the optimum levels of participation in higher education, and planning for learning methods and the reform of pedagogy. If there is indeed an education bubble, then it may call into question most of the public policy assumptions that have governed higher education strategy over recent years. That would be a chilling thought.