I am 25 years old and I still have not graduated from college. By the time I graduate, I will have been in school for 4.5 years and will be 26 years old. The only reason I am finishing is to fulfill a few promises I have made in my life. If it weren’t for that, though, I would have dropped out after my freshman year.
Many of those reading this article will probably disagree with me, but I fully believe that universities have created false demand by marketing the importance of a diploma. They have created a monopoly on the market and can charge whatever they want, because they know that people will still pay whatever they need in order to get that piece of paper.
A diploma is only important because we are told it’s important. And because we are told it’s important, we expect to be paid more when we have one. This is what creates that false demand and what causes people to go tens, and sometimes hundreds, of thousands of dollars in debt to receive one.
I believe the higher education industry is this generation’s diamond industry. Hundreds of years ago diamonds were extremely expensive because they were extremely rare. There is no intrinsic value in diamonds, and they are not an investment asset, so the only value they had was because not many people were able to get them.
In 1870 many large diamond mines started to be discovered in South Africa. This threatened the diamond industry because it was about to cause their value to plummet. After all of these were discovered, all the large diamond companies decided to merge and form one giant company to create a monopoly and maintain the image of a scarcity of diamonds.
Once merged, those companies needed to create a marketing campaign to help change the way the world viewed diamonds since the market was declining drastically. In 1938 Gerold Lauck and his team set out to find the best way to do so, and they landed on romance and love: specifically, new love and the decision to get married.
Lauck and his team started working with the “influencers” of their day, movie stars, and started giving them the biggest diamonds to show off in their movies and ads as a “symbol” of their love. By doing this, it created the false belief that diamonds were an outward expression of love and became expected when getting engaged.
If someone doesn’t give you a diamond, do they really love you? That’s the question Lauck wanted the world to think about, and it worked. That one ad campaign created what I call a false demand of diamonds that has lasted to this day. In 1939, 10% of engagement rings had diamond centers. By 1990, that number was up to 80%. The results have been profound.
In the past, I believe that universities did offer intrinsic value that was unique to a school setting. Outside of universities and libraries there were not many places for that kind of training, so there was much value in attending college. Today, that has changed. If you wanted, you could find all the same content available online for free. And if you don’t want to compile everything yourself, there are online courses that organize it all for you.
Where once there was a competitive advantage in the past because the information was not available anywhere else, today they are on a level playing field with the internet. Yet universities need to stay around, and to do so they must promote the value of a diploma. The quality of education won’t be how they do it, since the same professors often teach their material online as a way to earn extra income. So they need to come up with another way.
Tuition costs have been rising at a rate that is not explained by inflation or cost-of-living increases for years now. It’s not because the content is suddenly more unique or valuable. It’s certainly not because they are now paying professors what they deserve. I believe it is so they can reduce the amount of students who can afford a diploma so that they can artificially inflate the demand again.
While Lauck and his team were able to stimulate the demand for diamonds by attaching them to an emotion (love) that everyone needs and craves in life, universities are trying to stimulate the demand by reducing the supply. The diamond companies couldn’t go back and cover up the new mines to reduce the supply, but universities can control how many people have the ability to obtain a diploma, thus decreasing supply and increasing demand.
What makes me most upset about seeing these rises in tuition costs is that many of the only people who will be able to afford going to college already come from highly successful families. They are not the only ones qualified academically, but they will be some of the only ones qualified financially. Then after these students graduate, the universities will be able to use them as a case study to “prove” that getting a diploma increases how much you can make.
I fear that the ability to pursue higher education is going to be severely limited in the upcoming years unless major changes are made. The income disparity will grow larger and larger, because the ability for those who are at an economic disadvantage will be extremely handicapped. It is already becoming harder and harder, and my tuition rates have gone up thousands of dollars in four short years.
Obviously, those who work at universities are extremely smart, and they see that when other mediums (online, etc.) for learning the same information are viewed as being on-par to going to college, they are going to lose attendance and money. They needed a way to get people to view them as being superior again, and I think their strategy was smart for them.
I fully understand and agree that learning is important and learning how to learn is important. However, college is not the only place where we can learn. In fact, it’s not even the best place where we can learn. It’s just one of the places where we can. Yet until everyone fully understands the marketing genius at play, the world at large will continue viewing college as unequivocally the best place to learn, and we will see inequality rise.
