How online education could stop the higher-ed bubble from bursting

“That doesn’t mean I think students don’t need to worry about their educational debts,” he said. “I just think people need to be responsible in their choices and take a long term view. Educational debt continues, in my opinion, to be one of the few good debts for the overwhelming majority of people.”

Degree holders have fared better in the current economy when compared to the general working population.

The unemployment rate among those with a bachelor’s degree was 5.2 percent in 2009, according to federal statistics. That number jumped to nearly 10 percent among high school graduates, and 14.6 percent among Americans with less than a high school education.

Among those who have earned a Master’s degree, unemployment was less than 4 percent.

Stout said colleges and universities are unlikely to cut the price of higher education during tough economic times, which usually translate to a college enrollment boom while out-of-work Americans hope to boost their credentials with a degree.

“If cost cutting were to occur, it would likely happen after the economy recovers,” he said, adding that web-based schools shouldn’t shoulder the blame for the creation of an economic bubble. “If I were to believe a bubble existed, I would tend to think the issue was with a proliferation of colleges and universities in general as opposed to singling out online programs as the culprit.”

The role of online education in the creation of the higher-education bubble can be seen in the skyrocketing enrollment among for-profit colleges like the University of Phoenix and Kaplan University.

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