Why does Amazon.com thrive while brick and mortar book store chains across the country are struggling to find a viable business model? It’s because Amazon is efficient and doesn’t have the overhead expenses of maintaining a brick and mortar store in every community, which means they can offer consumers a lower price. In case you weren’t aware, consumers have shown an amazing dedication to paying less rather than more when given the option.
Are colleges in their current format, as brick and mortar edifices of learning, becoming about as useful as the square wheel? Here’s what’s been happening in the real world. There was one part of the American economy that actually saw prices increase in the wake of the recent recession – college tuition. While stock market and real estate prices tumbled left and right, Americans ran for the shelter of higher education, hoping to arm themselves with the proper tools to land a job upon graduation.
It turns out that education at ANY price might not be all it’s cracked up to be. Private, four-year colleges have averaged a 5.6 percent tuition increase each year over the last six, and the government has been more than willing to allow students to pile up mountains
of loans to keep pace. Now these poor souls who greatly overpaid for their education are graduating to find there still are no jobs to be found. It’s enough to make one think that the current business model of higher education is unsustainable. We have an education bubble in the United States!
Why can’t colleges go to the Amazon model? With high speed Internet a functional reality in almost all of America, is there any real reason to continue the charade that it’s necessary to relocate to a different physical location and sit in a room with thirty other sweaty young adults to be bored out of their mind by a droning professor? Actually there is no reason to continue this arrangement and the smart schools are already figuring it out. With most states forced to cut college funding as they grapple with serious budget issues, the schools themselves have no better solution than to raise rates while prices are falling all around, or maybe encourage campus police to write a few million extra parking violations.
There comes a point when you have to say, “This isn’t working. Let’s try something else.” We agree. It IS time to try something else.
The Young Wealth Team
Flickr / cooljinny