Here's an interesting article about college closures.

Here's my take on it:

College is primarily a filtering mechanism, and only secondarily a venue to impart learning. When some institutions become know as unreliable filters, their graduates get discounted in the market, and those institutions become not worth the price of tuition. This is ultimately what's behind the "don't go to college" meme that's so prevalent right now.

Unfortunately, the people for whom that's good advice (i.e. the super intelligent and motivated ones who will go out and found a company or some such) are the very ones that will actually benefit from college as a place of learning where they can refine their thinking. They're also, by and large, the ones that will get into the elite colleges and universities that will equip them with a solid network of successful peers (with successful parents). [Just because Bill Gates et al. didn't graduate from Harvard doesn't mean they didn't benefit from going there.]

The kids of (typically) lesser academic ability at the lower tier colleges are the ones who desperately need some indicator of quality, like a college diploma, to compete in the marketplace. Without one, they're just another schmuck HS graduate among the 74% of the population that didn't go to college, likely scraping together low-paying, dead-end jobs. They don't really learn very much from the educational format of a typical college, and their tuition debt is often too high to justify their "educations", but without that diploma they don't even have a shot at a decent living.

This tension between the need for a quality indicator on the one hand, and the lack of real or perceived quality generated on the other hand, isn't just driving the spate of closures. I think it's also behind some of the mismatch between employer needs and employee skills that is helping to keep the unemployment rate high (which would be even higher if so many hadn't been so discouraged they stopped looking). The situation is unsustainable, and like the author, I'm glad these schools are closing. However, I worry that a productive alternative won't arise to fill the void. In places like Germany, Sweden, or Finland the local governments would just get the big firms of their areas together and twist their collective arms into funding vocational training programs, which would supply the needed skills to the kids not bound for elite universities. Here though, that would be *gasp* socialism, and we couldn't have that now could we.

The thing is, this is one area where governments can correct for market imperfections. Individual firms won't be willing to fund training because the graduates of those programs might just go to their competitors. However, every firm in the industry would be better off with better trained employees. Government serves a coordinating role in this type of case, getting every firm to participate proportionally and fund larger programs. Then, there are plenty of trained workers, which also helps to keep wages stable, since there are no longer only a few well-trained workers able get firms to bid up salaries to attract them.