We discussed this in the past. It appears that we are witnessing things moving up a notch.
The United States college system turned into a scam. Most of the degrees that are being doled out are completely worthless. Kids are conned into believing this is the pathway to something better when they are ultimately saddled with huge amounts of student loan debt.
It is no longer about educating the youth of the country. Instead, it is simply a money grab with government sponsored loans that cannot be eliminated. bankruptcy laws do not apply.
So why is this an apocalypse?
The Decline of the US College System
Confidence institutions in general is declining. I have written about the collapse in confidence in government. This is extending in other directions.
Here is a chart of the surveys done regarding colleges.
In our February poll of 1,122 Americans, 31% reported having “a great deal” or “quite a lot” of confidence in colleges and universities, whereas 28% of the 1,309 Americans polled in May reported the same. While the percentage of those who reported “very little” confidence or “none at all” remained constant at 30%, there was a slight tick up in those who reported “none at all” from 7% in February to 10% in May.
The net effect is pretty clear.
Inevitably, when confidence in a product or service is lost, businesses go under. Make no mistake, we are dealing with businesses here.
Thus, it is no surprise what we are seeing:
About one university or college per week so far this year, on average, has announced that it will close or merge. That’s up from a little more than two a month last year, according to the State Higher Education Executive Officers Association, or SHEEO.
A school per week is closing on average. When the money starts to dry up, closure is the only option.
Demographics
There is a major issue that is confronting all these institutions.
Demographics are simply not working in their favor.
The fertility rate is down. This is something most developed countries are facing. Less kids means less spots needed for colleges. In the past, kids from other countries could make up the shortfall.
The problem is that other countries are facing the same situation.
This is a headwind that cannot be avoided. Much like retail store space, the United States simply has too much of it. When it comes to upper level classrooms, there are not enough bodies to fill them.
We are seeing the results now. With 1 closing per week, this will, over time, see a great deal of reduction.
Useless Degrees
The challenge is that education of this nature is a waste of time. Much of the education system is outdated.
It is a situation with degrees that have no value in the marketplace. Much of what these students learn can be found online.
Of course, there are exceptions.
When studying certain disciplines, such as medicine or the law, this path has some legitimacy. This is compounded when things such as labs are included. This pertains to the sciences as well as a few other fields.
Outside of that, it is a lot of money to drink, have sex, and basically party for 4 years.
It is also interesting to see that trade schools are not suffering the same fate. Perhaps life as a plumber or electrician is an avenue to pursue.
The Job Market
One of the biggest challenges for these institutions is the rapid pace of change in the job market. Can anyone tell me what careers will be around in 5 years?
There stands a good chance that robotics will not replace the trades in that time. We also are still going to need doctors, nurses, and lawyers. These industries are regulated and do not adapt quickly. While they will be around, new skills could be required.
Teachers seem like a protected profession but this is going to decline over time. They, too, are protected due to the government control over education. For this reason, many of the private schools will decline first. Those with large endowments or vast financial resources will stick around.
The rest, especially second or third tier schools, are done.
AI is going to change everything. One of the areas it could massive have an impact is with education. There will come a point in the future where personal AI teachers are available. This might be 5 years down the road, or a decade.
Either way, it is soming.
Consider how much $100K or $200K buys. This is the debt many leave school with.
That will, at some point, be a thing of the past. Information was democratizes. If that was the case, why is education still so expensive?
The longer technology is damned up, the more powerful the break.
Get ready for another apocalypse happening before your eyes.
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