Is the college bubble bursting?

As states scramble to pay their obligations, they're taking a hard look at the cost of their colleges and universities. The Wall Street Journal reports:

States spend about 11% of their general-fund budgets subsidizing higher education. That totaled more than $78 billion in fiscal year 2008, according to the National Association of State Budget Officers. 

And yet:

Just over half of all freshmen entering four-year public colleges will earn a degree from that institution within six years, according to the U.S. Department of Education.



And among those with diplomas, just 31% could pass the most recent national prose literacy test, given in 2003; that's down from 40% a decade earlier, the department says.

James Joyner describes the growth of this industry in one state.

Many if not most states have too many universities, too many overlapping programs and departments, and are generally run as if it were still the 1940s.   Certainly, this was the case in the state of Alabama, where I earned my three degrees. Fifteen public four-year universities is about ten too many for a relatively small state with only 4.3 million people.

And that actually understates the number, since many of these schools have satellite campuses in other parts of the state.  Troy University, where I used to teach and Steven Taylor still does, has major campuses in Troy, Dothan, and Montgomery.   Which means that Montgomery alone has three four-year campuses funded by the public.  Twenty-six public two-year colleges is likely too many as well. 

Professors are expensive, but they're no longer the biggest personnel expense, Joyner reports. That changed a few years ago.

In the fall of 2004, 50.6 of professional full-time employees in higher education (excluding medical schools) were faculty members. In the fall of 2006, for which data were released Tuesday, 48.6 percent of professional, full-time jobs in higher education were held by faculty members. 

As tuition soars, and unemployed parents find they can't afford it, and as unemployed graduates with huge loans move back home with parents paying taxes for higher education, something will happen.