Higher Education Bubble Update: The Virginian Pilot Has Called for the Ouster of Helen Dragas … Which Means She Is Perfect for the Job.

The University of Virginia Board of Visitors ousted UVA’s president, Teresa Sullivan, recently which has caused an uproar in the establishment press and at UVA.  Like the passengers on the RMS Titanic just before its little accident, they were happy with her leadership.  Sullivan was busy re-arranging the deck chairs and that just wasn’t good enough for rector Dragas and the rest of the board, who were looking for a change in direction.

The issue facing higher education is that it is on the cusp of a bubble.  Decades of double digit price increases has impoverished the families who paid and the students who loaded up on student loans.  And for what?  The graduates of these prestigious universities are elbowing each other for jobs that require them to ask “would you like fries with that?”  And those are the lucky ones.  Others are moving back in with their parents offering to work as unpaid interns in hopes of getting the next job opening in the Obama economy. 

At one time a university education was a ticket to a professional career.  It was also affordable and was largely responsible for creating an expanding middle class.  But higher education, like the housing bubble, has become the next financial bubble.  Professors and administrators have replaced realtors and bankers as the villains of the Big Education drama. 

Inside the Ivory Tower nothing seems wrong.  New classes of fresh students enter to be fleeced with promises of outsized paychecks as “studies” classes and non-teaching administrators grow like kudzu.  Outside it’s becoming obvious that something’s seriously wrong as student loan debt – which cannot be discharged through bankruptcy – has grown to over a trillion dollars and graduates can’t find jobs.  Even worse, nearly 30% of students who take out loans don’t get degrees.  Law school graduates are being supported by their schools for a year after graduation because they can’t find jobs.  Big Education has become less and less about the students and more and more about the institution.

One of the reasons that Big Media doesn’t recognize the problem is because they don’t recognize their own problem.  They are lost in a technological time warp.  Newspapers are losing readers and TV is losing eyes because information and entertainment delivery doesn’t mean newsprint and TV shows any more.  Technology has made them obsolete; they’re dying and they are either in denial or don’t know what to do about it.  The old education model is literally hundreds of years old.  The idea that to get an education today requires moving to a campus for four or more years at a cost of a couple of hundred thousand dollars is ending.  Texas has set the goal of providing a bachelor’s degree for $10,000.  This will not require residence on a campus. And why should it in an age of instant total communication wherever you are?   Wisconsin has developed a self-paced, on-line degree program that measures competency instead of "seat time."   What a concept!  A couple of Stanford professors taught free web-based courses last year that reached over 100,000 students.

I suspect that one of the reasons Sullivan was fired is that she did not recognize the problem or believed it was not urgent.  And why should she?  Her salary and benefits exceed half-million dollars a year, even after losing her job as President.  Five UVA employees earn over $500,000, another eight earn over $400,000, another 24 earn over $300,000.  Of the above only 15 of the 38 actually teach, the rest “administer.”    

Dragas owns a construction company so she has experience with financial bubbles.  She recognizes that the University system as currently constituted is about to implode because it is financially unsustainable.  The faculty is happy with the system.  The press is happy with the system.  The only people getting the shaft are the students and their parents.  Big Education and Big Media are both dinosaurs desperate to keep the status quo.  Meet the dustbin of history fellows, you’ll have a lot of company.


UPDATE:  Thanks to a link by Glenn Reynolds, it has been asserted that the real problem with Teresa Sullivan is the issue of scientific fraud in a paper she co-authored with Elizabeth Warren who claimed minority status as 1/32^nd Indian.   I have read that at Legal Insurrection.  Whether that is THE reason for her dismissal is a fair question.  If that is the real story, I have a feeling that it will not be told for quite some time.  Nevertheless, my critique of academia stands and I believe that Dragas, along with everyone else in the construction industry, is acutely sensitive to bubbles of the kind academia is currently experiencing.  When you can take a course at Stanford via the Internet for free, you know that the brick and mortar model of higher education is in deep trouble. 

UPDATE 2:  From Inside Higher Ed: 

E-mail messages were flying among leaders of the Board of Visitors of the University of Virginia in the weeks leading up to the ouster of Teresa A. Sullivan as president of the university. The e-mail messages show that one reason board leaders wanted to move quickly was the belief that UVa needed to get involved in a serious way with online education.