Niagara Gazette

Bob Confer

May 28, 2013

CONFER: Bursting college bubble could help economy

Niagara Gazette — EDITOR'S NOTE: This is the second part of a two-part series of columns. The first part ran this past week and can be found on our website.

Like the housing bubble and the internet bubble that preceded it, the higher education bubble will see its false prosperity come to an end in the coming years. Unlike them, it won’t pop with violence that will send the economy into a deadly tailspin. Instead, it will crack and its contents will escape gradually, having a collection of harmful — and even helpful — effects on the economy.

This can be said with confidence because we are dealing with an entirely different animal.

The housing and internet bubbles popped so powerfully because there were no controls in place — the bubbles behaved as they should have in a free market.

The student loan industry, on the other hand, is no longer a free or mixed market. Since nearly all loans are issued by the government, it used its power to change the game and protect its interests in 1998 by making it law that student loan borrowers could not declare bankruptcy and absolve themselves of their financial obligation unless they could make a case for undue hardship. This is quite unlike the housing crash when hundreds of thousands of mortgage holders declared bankruptcy and left financial intuitions and taxpayers on the hook for trillions of dollars. So, gone is the possibility of freefall that made the Great Recession so horrific.

Even so, there will be significant financial and fiscal repercussions in the long-term … 18 years down the road to be exact.

Today’s students are participating in an outsized educational marketplace fraught with bloated price tags that has started to produce minimal return on investment. A significant portion of the under-35 workforce is claiming underemployment (citing a weak economy), when in reality, they are victims of over-competition (too many college educated workers), and a mix of over-qualification and under-qualification (too many degrees that don’t fit the needs of the economy).

Text Only | Photo Reprints
Bob Confer
  • NIA Confer, Bob Mug CONFER: Property rights and the Clean Water Act The United States of America was founded on the premise of natural rights, succinctly dictated as the unalienable rights of "life, liberty, and the pursuit of happiness."

    April 22, 2014 1 Photo

  • NIA Confer, Bob Mug CONFER: Don't go soft on teenage criminals New York is one of two states â€" North Carolina being the other â€" that automatically prosecute 16- and 17-year-olds as adults in misdemeanor and felony cases. Other states do so only on a conditional basis at the whim of the presiding judge.

    April 14, 2014 1 Photo

  • NIA Confer, Bob Mug 040214 CONFER: Tax refunds are no reason to be happy A strange thing tends to happen this time of year: taxpayers who should be damning the government end up praising it. These brainwashed souls, numbering in the millions, feel rewarded by what appears to be government benevolence in the form of a tax refund, failing to realize that they are getting back only a little of the money that was rightfully theirs to begin with.

    April 1, 2014 1 Photo

  • NIA Confer, Bob Mug CONFER: Russia on the right side of Crimea issue I don't like Russia. Never have. Probably never will.

    March 24, 2014 1 Photo

  • NIA Confer, Bob Mug CONFER: State's foot-dragging aggravates our energy woes I don't have to tell you that it's been a miserable winter in the northeast. We've been battered by an array of winter storms, from Polar Vortices to blizzards, and a seemingly endless barrage of below-average temperatures.

    March 17, 2014 1 Photo

  • NIA Confer, Bob Mug CONFER: Veterans tax exemptions making school boards uneasy School boards eyeing the new, optional veterans tax exemption in New York State face perilous choices: Who do you please? Who do you offend? Veterans or the majority of taxpayers?

    March 3, 2014 1 Photo

  • NIA Confer Mug [Duplicate] CONFER: The importance of Boy Scouts in America What do Gerald Ford, Neil Armstrong, and William DeVries have in common?

    February 25, 2014 1 Photo

  • • Confer, Bob mug CONFER: Move New York's primaries to June In 2009, the federal government passed the Military and Overseas Voter Empowerment (MOVE) Act, which mandated that the states have federal absentee ballots in the hands of overseas military personnel at least 45 days before an election, to ensure that their completed ballots could be received by local boards of elections in a timely fashion.

    February 17, 2014 1 Photo

  • NIA Confer Mug CONFER: New York state could soon tax the scouts These are interesting times in New York, as we have a governor and a state legislature touting various reform packages that are expected to drop some tax rates after years of steady tax growth. It comes at a time when those same parties are testing the waters for even more public services such as universal pre-kindergarten.

    February 3, 2014 1 Photo

  • NIA Confer Mug CONFER: State bill would mandate parenting classes S142-2013, under review by the state Senate education committee now, would require parents of elementary school age children to attend parent support programs and workshops, including one concerning abuse in its various forms. If they didn't, their kids wouldn't be allowed to enter seventh grade.

    January 27, 2014 1 Photo

Featured Ads
House Ads
AP Video
Opinion
House Ads
Night & Day
Twitter News
Follow us on twitter
Hyperlocal Search
Premier Guide
Find a business

Walking Fingers
Maps, Menus, Store hours, Coupons, and more...
Premier Guide
Front page