Interviewer: You’re saying the problem begins when people are being told, “You get a degree from this school and you’ll be able to get a job with no problem.” Is that what you mean?
A. Campbell: There’s one study that states people who go to college will on average earn a $1 million over their lifetimes than people who don’t go to college, but that study was based upon people who went to Ivy League schools. Most people don’t go to Ivy League schools, let’s face it.
Are Colleges and Universities in the U.S. Being Practical or Realistic in Substantially Increasing Their Tuition?
I think it’s a big part of the problem here is that colleges and universities are, at the worst possible time, expanding their tuition rates and they don’t realize that the Internet is going to transform higher education and the majority of those tuition increases are related to hard costs.
Virtual Learning: The Internet Will Change the Way Education Is Delivered to Students
They’re related to increases in cost of building and renovating buildings and land. The physical presence of universities is really going to be a lot less important because a lot of the educational services will be delivered over the Internet and you don’t have to have a physical presence.
Interviewer: How can these colleges and universities justify their actions?
A. Campbell: It just shows they’re not being very intelligent about the future of education. They’re fixed in this old mindset that somehow, if they build a better looking building in bigger facilities that’s going to attract better talent in being professors and students. It might raise the profile of the program.
Virtual Learning Was Introduced as a Concept Almost 20 Years Ago; Many Institutions Did Not Factor in the Impact It Can Have on Higher Education
That’s frankly silly because since 1995, right when the Internet became commercialized, if you looked ahead you would have seen that virtual learning was a concept that could become a reality.
You know what happens when any product or service that can be sold and delivered over the Internet or sold and delivered by mail cheaply, every single service product has become commoditized, every single one. I can’t name one that hasn’t.
You don’t see record stores much anymore, right? There are some out there in narrow niches. You don’t see many of bookstores anymore. I see the same thing happening to education frankly, and I think it’s going to take a lot longer to impact them, but the result’s going to be the same.
The Rising Cost of Tuition
Interviewer: Has college costs gone up? What is it now on average versus ten years ago?
Some Private College Tuition May Have Doubled in Less Than 15 Years
A. Campbell: That’s a good question. I think a lot of programs have increased. Compared to the rate of inflation, they’ve gone up two or three times.
Interviewer: I can give you one data point. I graduated in ’98 and it looks to me, just a brief two second look that it’s doubled for private college.
A. Campbell: That does apply to private colleges and I’m mainly speaking of just public education because that’s where I received my education for the most part.
Interviewer: Have State schools doubled or tripled now?
Wages Have Not Risen in Relation to the Cost of Living
A. Campbell: State schools are having the same issues. It’s not simply private colleges.
The value just isn’t there and here’s the worst part. It’s not simply the school side. Before 1979, there was a direct positive correlation between increasing wages and increasing productivity. That meant if your productivity rose, your wages rose; but since 1979, and this caused a lot of the mortgage bubble issues too, as productivity continued to increase, but wages didn’t.
The Overwhelming Majority of the Country’s Wealth Is Concentrated among Too Few of the Population and Is Not Used to Drive the Economy
Students coming out of school are making the same money that they would have in the 1980s when adjusted for inflation, but they’re fixed costs are dramatically higher. That is the number one cause of the Occupy Movement. That’s the number one cause of a lot of political problems, but no one is addressing those issues because there’s not a good answer. The only answer that people don’t want to hear is basically, is that wealth has become simply too concentrated.
It’s become too concentrated among too few. So basically, it’s similar to right after the Great Depression.
That’s causing a real problem because when money’s in the hands of consumers it gets spent. It gets directed back into the economy. When it’s in the hands of the very, very wealthy, it doesn’t get spent the same way.
Interviewer: That’s because one person can only eat, let’s say three times a day, but if that same amount of money was in the hands of 100 people they would eat 300 times a day.
A. Campbell: Exactly, that money gets circulated within a community.