

The Cost of College - James Surowiecki - mhb
http://www.newyorker.com/talk/financial/2011/11/21/111121ta_talk_surowiecki/#

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tokenadult
As an American who has lived overseas, pursuing higher education in two
different countries, I always like to look at policy issues like this from an
international perspective. I have read Organisation for Economic Cooperation
and Development (OECD) publications about comparative higher education policy
over the years, as well as the writings of Mark Blaug, one of the founders of
the study of the economics of education.

The submitted article notes that "more than two million college graduates are
unemployed." I can remember a high school classmate in the early 1970s who
seriously thought that if the government subsidized everyone to go to college,
no one would be unemployed, an example of fallacious reasoning about
economics. Plainly, just increasing the supply of college graduates does not
magically bring about a stronger economy with full employment. The comparison
newly independent countries in Africa with newly developing countries in east
Asia in the 1950s, 1960s, and 1970s shows, in fact, that the best strategy for
national economic growth is to strengthen primary education for all learners
rather than to subsidize university studies for a small elite. Productivity
growth is built on the capabilities of the masses.

As long as what college major to pursue, and whether or not to complete a
degree, is a matter of individual choice, as it long has been in the United
States, it makes sense to have much of the financing of higher education rely
on individual resources. That's the consistent finding of international
studies of higher education: college access improves, and college quality of
instruction improves, if students can rely on private credit markets or family
savings to fund their higher educations, rather than having all applicants who
are admitted gaining a full governmental subsidy for their studies. And as a
policy matter, it makes sense to put the decision on whether or not to study
for a degree in folklore (a degree progam actually offered at Harvard!) in the
hands of the person, the student, who will most be at financial risk if the
decision does not result in gainful employment.

The article's conclusion, "Until America figures out its priorities, college
kids are going to have to keep running just to stand still," has it about
right. If college studies are for workforce preparation, major subjects will
be prioritized by guesses about future workforce needs. If college studies are
for students to find themselves and become exposed to the world outside high
school, that's fine, but that has a low-priority claim to subsidy from taxes
that are imposed on all taxpayers, including those who will never attend
college. For the moment, college is expensive, but it is not unattainable, and
for many students enrolled in college, it appears to have a positive return on
investment.

(Basis for knowledge: I'm a Baby Boomer who was going to college during the
era identified in the article as the one recent era in which college degrees
didn't offer a growing income advantage, who worked my way through a state
flagship university with no debt upon graduation. My oldest son now has
sufficient scholarships and financial aid actually to put money in the bank at
the end of each semester as he studies for his degree, and his degree offers
excellent employment prospects even in today's bleak economy.)

~~~
tryitnow
Thanks for the insightful comment. I think you hit the nail on the head when
you write "it makes sense to have much of the financing of higher education
rely on individual resources"

Unfortunately, there seems to be several outside forces that pull students
away from the more practical degrees that would almost guarantee employment.

First, government subsidized students loans don't differentiate among majors.
I don't private student loans do either. I find this odd, I would rather lend
money to a petroleum engineer major than an English Lit major.

Second, college students have spent their academic life influenced by people
who privilege learning for the sake of learning: teachers and professors. They
push the myth of "follow your bliss" onto way too many students. Personally, I
believe in "follow the money", then you can "follow your bliss" to your hearts
content.

Third, most colleges really don't seriously care about career placement and
development. Sure they have career development offices, and invite recruiters
to campus, but imagine if a college really cared about preparing students for
a good career. Imagine having potential recruiters evaluate professors and
courses instead of just students. That would be pretty interesting.

"Education" in its current incarnation makes the lethal mistake of mixing the
practical with the "learning for learning's sake." This leads to terrible
value proposition for the majority of students and for most employers.

Until this business model changes, there is little hope.

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ShabbyDoo
"There’s a big flaw in the bubble argument, though: things may look grim for
college graduates, but they’re much grimmer for people without a college
degree."

No. There's a flaw in the reasoning above. For years in the US, society has
perceived that there is something wrong with a young person who did not
complete high school. Want to find a good mate? Stay in school. Want a decent
job? Stay in school. So, young people, fearing societal judgement and the
accompanying disadvantages, stayed in school. Given these judgements, those
who did not complete high school likely indeed had something wrong with them
or came from families without means. So, a simple comparison of the outcomes
for high school graduates vs. dropouts usually has shown significant
differences. What percentage of these differences can be explained by the
selection bias of the sample pools vs. actual effects of the treatment (a high
school diploma)?

The same selection biases hold true for a college education. Few with ambition
have considered skipping college. Without any metrics on the abilities, goals,
etc. of those skipping college, we can not determine whether differences are
the result of selection bias or treatment.

My Hungarian in-laws "dropped out" of high school in 1956 to come to the US.
During the revolution, they escaped across the border into Austria and
eventually got to the US (Green Cards effectively handed out when they got of
the plane). My father-in-law attended a few night school classes over the
years, but never obtained any formal degrees. He retired as the CEO of a small
manufacturing organization for which he still consults -- a good outcome for
anyone by most accounts. The difference between him and the average middle
class American teenager was that it took a certain level of ambition and risk
tolerance to decide with only a few days notice (the revolution was sudden and
short-lived) to leave his home country for an uncertain future. Not entering
into a degree program was an active choice -- not a passive result of low
ambition.

I am annoyed with the popular press's continued assertion that education has
value simply because the outcomes of those with education are better. Unless
someone measures various personal characteristics and then randomizes the
treatment (education vs. workforce entry), I won't buy into claims about how
valuable education is.

Ironically, I have two graduate degrees.

~~~
tryitnow
Spot on. I find it amusing that people who talk about the benefits of college
education fail to see the flaw in their argument* - apparently they could have
used another stats course.

*Any statistical analysis of the college/no college income differential needs to adjust for socioeconomic status, IQ, personality traits, opportunity costs of time and money, etc. I have yet to see a study that thoroughly does this and still shows the huge gains to college that a first glance presents.

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Cl4rity
That article was written in the future!

I'm a pretty high-ranking editor at a large publishing company and I did not
go to college, so I am very lucky. However, I feel for those who are in
serious debt because of school. I believe that next year, 40% of all student
loans will default. That's terrible.

