Making College Worth It Requires Reform

In an article published last week, The Economist asks "Is College Worth?" and skirts very closely to offending university presidents and liberal arts advocates alike.    

The article discusses the findings of the 2014 College ROI report produced by PayScale, a research and consulting firm. PayScale surveyed employees with Bachelors degrees from more than 900 universities and colleges. The company looked at what an employee majored in, how much they are currently earning, and the cost of their degree after financial aid. From this information, PayScale estimated the return on investment by major. Important to note is that PayScale analyzed individuals whose highest degree was a Bachelors. No individuals holding graduate degree were part of their sample.

Unsurprisingly, The Economist reports that graduates with engineering and finance degrees earn more than those who study art. The school one attends also matters with degrees from “rigorous” schools “such as Columbia or the University of California, San Diego” paying off “handsomely.”

Instead of ending the story with the unsurprising finding that some degrees (Think: Finance. Engineering. Prestigious schools.) are worth more than others, The Economist makes the case for more affordable higher education in America.

…Overall, the PayScale study surely overstates the financial value of a college education… What is not in doubt is that the cost of university per student has risen by almost five times the rate of inflation since 1983, and graduate salaries have been flat for much of the past decade. Student debt has grown so large that it stops many young people from buying houses, starting businesses or having children.

In the rest of the article, The Economist acknowledges the negative impact of a “lousy” job market. It also takes the U.S. to task for having an overpriced, inefficient higher education system whose value is obscured by universities themselves.

For all their flaws, studies like PayScale’s help would-be students (and their parents) make more informed choices. As Americans start to realise how much a bad choice can hurt them, they will demand more transparency… In time, transparency and technology will force many colleges to cut costs and raise quality.

Instead of doing the predictable thing – putting the onus on undergrads to be smart and simplistically choose the highest paid majors – the magazine calls for greater college affordability, reform and creativity to ensure that not everyone HAS to get a finance or engineering degree if they are to survive and thrive post college.

However, the magazine stops short in resting its analysis merely on the education consumer's cost-benefit question and in proposing higher education reforms that focus mainly on greater transparency and increased use of technology to make course delivery more efficient. 

Increased transparency and more technological delivery are only some of the solutions needed to make U.S. higher education more affordable for those wanting training in occupations other than finance and engineering. As Demos explains in a recent report, The Great Cost Shift Continues: 

In less than a generation, our nation’s higher education system has become a debt-for-diploma system—more than seven out of 10 college seniors now borrow to pay for college....

According to the report, average tuition at public 4-year colleges increased by 20 percent between 2008 and 2012. This only exemplifies a trend of dramatically rising tuition that has been going on for several decades.

As states have systematically cut their support of public higher education, tuition has become the tool to make up the deficit. In 2012, revenue from tuition paid for 44 percent of all operating expenses of public colleges and universities. This is the highest share ever. Twenty-five years ago, universities relied on tuition to cover just 22 percent of operating costs. The level of outstanding student loan debt now stands at $1.2 trillion.

Analyzing individual ROI for college degrees leaves an incomplete picture of the larger impact of rising costs and growing student loan debt. Education does benefit the individual, but it also benefits society at large in the form of producing doctors, lawyers, teachers, skilled manufacturer workers, and other professionals who provide indispensable services. That these individuals take on massive, increasing and disproportionate amounts of debt to be trained to provide services needed by society is a trend that needs to be reversed. Focusing solely on the benefits of education to the individual pushes us too far in the direction of believing that individuals should bear the full burden of their education costs.