The STEM Education Bubble Has Burst
The collapse of the U.S. housing bubble that resulted in the 2008 financial crisis has become one of the most well-documented and widely-cited cases of an “economic bubble," where speculative investment in homes caused prices to rise well beyond their real value until the market could no longer sustain them. But there is another “bubble” that has become more evident in recent years: STEM education. STEM disciplines have long been regarded as being more technical, quantitative, and rigorous than other fields like business and the social sciences. Investments in these degrees have produced so much hype that it has tightened the job market, leaving many recent grads unemployed and in debt. Entrepreneur magazine even reports in 2025 that the 3.2% unemployment rate among philosophy majors is around half that of computer science, which has a rate of 6.1%.
But what has led to the influx of students looking to pursue a degree in STEM? The reasons are quite similar to those that led to the housing bubble of the 2000s: the promotion by 'experts' of the investment's desirability and a downpour of federal funding. Among the many respected voices propping up the value of a STEM degree is the celebrated author and guru Malcolm Gladwell. In a presentation that was broadcast on Google Zeitgeist, Gladwell conflated being an “uber smart student” with pursuing a degree in science and math, arguing that it was better for American students to pursue such degrees in lower-tier institutions than to pursue degrees in something else at a prestigious institution. He even said that STEM degrees were the “most valuable commodity any graduate can have in today's economy.” Such comments that inflate the value of a STEM degree are similar to those made by financial “experts” who helped exacerbate the 2008 housing crisis. Business economist Margaret Smith, for instance, remarked in August 2008 when home sales were “spiraling downward” that a “home is almost always a smart investment, even if values do temporarily decline.” STEM degrees today are no longer a path to financial success and stability (with their graduates being more likely to be “underemployed” than liberal arts majors), yet the media and famous personalities continue to claim otherwise.
Moreover, parallels can be drawn between STEM education and the housing bubble in terms of federal initiatives. One of the many factors that worsened the collapse of the 2008 housing bubble was how the U.S. government incentivized homeownership through low interest rates and the Fannie Mae & Freddie Mac government-sponsored enterprises (GSEs), the latter allowing lenders to issue “risky home loans” that ultimately contributed to the inflation of the housing bubble. In a similar fashion, global investment in STEM education has been significantly increasing: the U.S Department of Education has poured more than half a billion dollars into promoting STEM education, while Hong Kong’s government in 2024 has dedicated itself to supporting STEM education in public schools. However, STEM graduates are experiencing increasing rates of unemployment and underemployment and the burden that financial institutions bear on student loan defaults signals that the STEM bubble is bursting, with the “median amount owed on student loans” for these degrees in the U.S. being 80% of the tuition four years after graduating.
Australia has perhaps promoted STEM education in the most controversial fashion, subsidizing the cost of Science subjects by increasing the cost of humanities subjects. According to the Australia Institute, the cost of humanities and social science subjects was “doubled” (while the cost of law subjects rose by 28%) after the introduction of the Job-ready Graduates package (JRG) in 2020 in an effort to “redirect students to STEM.” This again speaks to the perceived supremacy of a STEM degree in the eyes of policymakers, trivializing the contributions that fields like the humanities and law (based more on verbal intelligence and reasoning) bring to society. However, even with the disadvantage brought to the humanities to subsidise this degree, students taking STEM are still faced with higher tuition costs and are considered to be “more likely” to experience unemployment after graduation (2012-2016 data).
Recent STEM graduates rarely see the return they had initially expected upon commencing tertiary education. The increasing federal investment in STEM and the encouragement by thought leaders to enter this field have overvalued the degree when the reality reveals that the supply of new graduates exceeds that of the demand for their specialisation. The attempts to lure students into pursuing STEM have undermined the importance of more qualitative fields like the humanities that appeal to a different kind of intelligence and skill set.
