The higher education bubble

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The Unquestioned Faith in the System

For decades, we’ve been told that education is the safest investment you can make — the key to success, respectability, and stability. But just like the housing bubble of 2008 or the dot-com frenzy of the 1990s, today’s education system is showing all the same warning signs of a classic economic bubble.

A bubble forms when something is both wildly overpriced and blindly believed. You had to own a house in 2005. You had to buy tech stocks in 1999. And now, apparently, you have to go to college — even if it costs you a lifetime of debt.

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The Debt Trap No One Warns You About

Here’s what makes the education bubble worse than housing: you can walk away from a house. You can’t walk away from student debt.

Once you sign those loan papers, you’re in for life. Even bankruptcy won’t save you. For too many families, what was sold as an “investment in your child’s future” has become a financial shackle that follows them for decades.

I’ve seen this in South Africa, China, and across the world. Parents pour savings into universities that promise transformation but deliver frustration. Graduates return home — jobless, anxious, and disillusioned — wondering where it all went wrong.

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When Education Became a Business

Education used to mean enlightenment — a process of shaping minds and cultivating wisdom. Today, it’s an industry. Universities have turned into corporations where marketing budgets rival academic ones. Students aren’t learners anymore — they’re customers.

We’ve replaced intellectual curiosity with career anxiety. Instead of nurturing thinkers, we’re producing debtors with degrees.

And the uncomfortable truth? Much of modern higher education is consumption disguised as investment — the academic version of buying a luxury car you can’t afford.

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The Numbers Don’t Lie

Look past the glossy brochures and you’ll see a harsh reality:
70 to 80 percent of U.S. colleges don’t produce a positive return on investment.

Even at the elite universities, the so-called ROI often comes from selecting the smartest people — not from actually educating them. Are Harvard and Oxford producing geniuses, or just filtering them out of the population early?

That’s the uncomfortable question no one in academia wants to confront.

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The Bubble Is About to Burst

The Great Recession of 2008 cracked the illusion. Parents invested everything, and their children came home jobless. COVID-19 finished what 2008 started — exposing how fragile and overpriced traditional education has become.

Now, technology is shifting the landscape faster than universities can adapt. Online learning, AI tutors, micro-credentials, and self-directed learning are redefining what it means to be educated.

The monopoly is over. The bubble is deflating.

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The Future Belongs to the Lifelong Learner

Real education isn’t about collecting degrees; it’s about developing skills and insights that make you useful, independent, and adaptable. Parents, professionals, and entrepreneurs are already discovering this.

They’re learning online, building projects, launching startups, and collaborating globally. They’re no longer buying the illusion that a four-year degree equals success.

The education bubble is bursting — and those who start learning differently today will be the ones shaping tomorrow.

source: The Economist Blog