Okay, maybe it's time to worry about the cost of higher education. The number of students taking the Graduate Record Examination or GRE, the test that's required for most grad school programs, will decline in 2008 according to Inside Higher Ed. Apparently this is the first time that's ever happened during an economic downturn. Uh-oh.
Ordinarily students flock to graduate schools when the jobs market stinks, but we know these aren't ordinary times. The article reporting the decline in test-takers offers some theories for why it's happening: it's harder to get student loans, people with jobs don't want to leave them for graduate school, less financial aid from Universities, and the possibility that we will still see a spike in graduate school applications and enrollments that just hasn't happened yet.
All of those theories seem plausible. What confuses me is that while the number of students taking the GRE will decline from 2007 to 2008, more students are taking the Graduate Management Admission Test, which is required for M.B.A. programs. I would've thought that with the end of Wall Street as we know it, fewer people would want to go to Business School.
That leads me to believe it's all about the money, or lack thereof.
We know universities across the country are cutting back on their operating budgets, and I'm sure at a lot of places that means less money going to stipends for graduate students. This is why I railed at Harvard for acting like a hedge fund and not spending its endowment on running the school. Hiding in grad school during a big, bad recession makes a lot more sense if that school is giving you a generous stipend just to study there. Throw in the fact that the student loan market is half-dead, and you can see why history isn't repeating itself when it comes to grad students and our flatlining economy.
This is a serious problem that the new administration needs to address. We don't need more people with Business degrees because a lot of those jobs are just gone, never to come back. We do need more people getting other graduate degrees, so that we can have a highly- skilled, highly-paid labor force.
All Barack Obama has to do is funnel money toward paying for graduate school. The Fed and Treasury have already started to make student loans more available, by guaranteeing student-loan backed bonds.
Let's subsidize that even more. We're talking about 621,000 new students this year, let's throw them a few billion dollars to help cover the cost of schooling. That should attract more students. Not only will we eventually get a more educated workforce, in the meantime it will also take all of these grad students out of the labor market for the next two or three odd years. Boom, less unemployment!
They say you can't solve problems just by throwing money at them. In this case, I think they're wrong.
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