The boom in college education in this country started as part of the GI Bill after WWII. In an effort to make reabsorbtion of demobilized troops easier to handle, the Federal Govt created subsidies for continuing education in order to motivate a percentage of the population to stay out of the work force for a time. It worked, and the economic boom that followed continued through the 60’s.
After Sputnik, the sudden jolt to our sense of world leadership reinvigorated the concept of government sponsorship of education. At the time it was seen as critical for competitiveness - and resulted in the National Defense Education Act of 19581. Since that time there has been there has been a steady increase in percentage of the population with a college education - from 4.6% in 1940 to 24.4% in 20002. We have reached the point where college degrees are as common today as high school diplomas were in 19403.
Unfortunately, in many cases, they’re also worth just about as much.
There is (at least) one major difference between the high school diploma of 1940 and the college education of today - access to public education means that you don’t have to pay for a high school education. Most people have to pay for college.
Except that many people don’t really understand the implications of that while they’re getting an education. They blithely sign the papers for student loans - at best vaguely aware of the repayment costs. And they can easily end up with debt burdens whose monthly payments exceed any salary they can hope to make from the training they received.
This presents the taxpayer with a problem, because many of these loans are guaranteed by the Federal government. While a skilled workforce is good, those skills only matter if they are the ones that employers want. Should the taxpayer be on the hook in case the educated poor can’t repay their loans? Doesn’t this punish those with the foresight to pick fields that have economic value?
My wife and I have had to deal with this issue recently. She is currently completing an MBA, some of which is covered by student loans, while I’m beginning law school. In both cases, we had to evaluate the economic potential of both degrees against the cost of obtaining them. We’ve used such resources as the Occupational Outlook Handbook to determine the expected economic value of each degree. My wife has also seen a friend of hers drop out of graduate school because the friend suddenly realized that she couldn’t afford to pay for the loans she had already accumulated, much less the new ones yet to be incurred.
You see, the question we really need to ask today is “Is getting a college education really that important?” Between libraries, bookstores, and the Web, there is more information available for free or cheap than any one person could hope to absorb on almost any topic imaginable. Learning for the sake of learning is there to be had. There is interactive media of every conceivable kind available today - so that no matter how you learn, the tools are available for you to learn. There is no need to pay college tuition if all you want to do is learn.
So then the value of an education must be in the value of the education brand - be it Harvard, State U., or the local community college. The proliferation of paid education alternatives make it possible for everyone to evaluate the price performance of the educational brand they choose to purchase. This value includes both the life cycle cost AND the life cycle income that can be produced because of a particular degree with a particular brand. If the Net Present Value of a particular education is negative, then that education must be deemed a hobby rather than an investment. And those taking on the cost of that education should seriously question what they are doing. And those asked to guarantee the debts (in this case, taxpayers) should simply refuse.
It used to be that getting TO a college education required so much effort that only those who had really thought through the value of the education bothered5. It also used to be rarer, and therefore more precious. Today, neither is the case. We as education consumers AND as taxpayers should closely evaluate the kinds of education expenditures we’re willing to make - not all of them will be good investments.
1. See History of Student Financial Aid
2. See United States Educational Attainment of the Population 25 Years and Over: 1940 to 2000
4. The Debt-for-Diploma Crunch
5. I am excluding those who don’t go into debt for the education. While this essay is primarily focused on those who pay for an education with debt, all education should be viewed as an investment - of time and money.