The Trouble with Sending Everyone to College
by Benjamin Studebaker
As time has passed, more and more people are going to college in the United States. Unfortunately, this is not a good thing. Let’s see why.
Firstly, how do we know that more people are going to college? Here are the statistics:
Keep in mind that, since the seventies, the size of the population has grown by around 100 million, so this larger percentage is even bigger than you might imagine–25% of 18-24 year olds in 1970 is a much larger number of people now. Point being, there are a lot more people in college than there were during the 45-73 period.
Why is that significant? Because the 45-73 period is the period in which the United States experienced the strongest economic growth–since the early 70’s, growth has steadily declined. If you don’t believe me, here are the average growth figures during the respective decades:
So we should be disturbed right off the bat by this–sending more people to college has not translated into improved economic performance. In contrast, our rate of growth has declined as the rate of enrollment has risen. How can this be? In a word, structure.
The economy is not structured to supply every person with a high-income position. Imagine if you will that every person was a very hard working genius without exception such that all applications to universities were perfect and identical. It would still remain the case that the best universities would have a fixed number of available places. What you would get is a lottery for spots, with decisions made arbitrarily based on qualities of otherwise little significance. Perhaps examples of “taking initiative” or “extra-curricular activities” or “leadership experience”. Oh–you say universities already base their decisions on those things? Well, now you’re beginning to see the problem. A lot of people do not get into the best universities not because there’s any evidence that they are not capable of working at the level in question but purely because there are not enough spots. Inevitably, only a given number of students can go to the best universities, no matter how good the pool of applicants is.
This applies even more strongly in the job market. Even if every single person were an Ivy League graduate, the number of available high-paying positions provided by the economy would not expand. The economy would still demand that some people fill minimum wage positions. Poor-paying positions are not created out of the kindness of our hearts to provide employment to those without education, they exist because we need those jobs to be done, and if they are not done, our economy will not function. If every minimum wage employee in the country went on strike tomorrow, the nation would be brought to a standstill. Unfortunately, this means that a given portion of the population, regardless of the level of education it attains, how smart it is, or how hard it works, is going to end up in low-paying work.
So what happens when we send a very large portion of the population to college? We send more people to college than can expect to find higher-paying work. The result? A lot of people who have been to college end up underemployed in jobs that do not maximise their skill sets and correspondingly pay them less. Don’t just take my word for it, here’s some data:
Since 2000, more people going to college has only resulted in stagnant or even sinking incomes, as the economy fails to provide college graduates with a sufficiently large number of higher-paying jobs. At the same time, the cost of college degrees continues to soar. Unable to match their planned incomes and with increasingly larger expenses to cover, these people struggle to pay back the various loans they took on to go to college in the first place, and so you get this:
That’s right–even as America has been struggling to pay down all that mortgage debt since the financial crisis in 2008, student loan debt continues to accumulate. The effects of this are several:
- A lot of people are forced by the urgent need to repay student loan debt to take whatever jobs they can find, denying them time to find the right jobs for them or the opportunity to negotiate higher salaries.
- A lot of people will have to delay buying homes in the future.
- A lot of people will get married or have children while they are still encumbered with student loan debt, locking them into lives they never really chose themselves.
Take these together and we find that for many students, college is not freeing them to pursue their dreams, but robbing them of their freedom to determine their own destinies. The student loan debt is the beginning of a functional enslavement, a dire dependency on an employer for money straight out of college that has the potential to last a lifetime if a house or a family is added on as well.
So why don’t students just refuse to go to college if for many of them it is such a bad deal? Well, unfortunately, the quickest way to guarantee that you end up one of those people in low-paying jobs is to not go to college. The data has my back on that too:
So what we have here is a perverse incentive to go to college. If you don’t go to college, you are guaranteed to be one of the people who has to work for a poor wage. However, because so many people now go to college for precisely this reason, going to college is no guarantee of success, and you could end up just like those who don’t go to college but with substantially more debt. And in the meantime, with costs rising every year, the amount of debt you have to displace grows.
This means that the college debt bubble won’t pop because students suddenly decide that going to college isn’t worthwhile–as long as you’re reasonably intelligent, college gives you a chance at a higher salary that, while not certain, is not one you’re going to pass up. No, it will pop when all of these people who have graduated from college yet nonetheless find themselves unemployed or underemployed default on their loans at a pace that creates serious problems for their creditors. Already, the data shows we’re on our way, as student loan delinquency has just surpassed that of credit cards: