The Education Bubble

For some time now, I've been engaged in an informal survey of college majors. Whenever I cross paths with a person speaking about upcoming college plans, I always ask them what their major is. Although I've talked with many people, only one was majoring in STEM. He was a recent high school graduate who was spending the summer waiting tables to earn some money before embarking on a four degree in Chemistry. My wife, Christine, congratulated the young man on his stellar choice of study, telling him that her company hires interns each summer in that field. In my day there was never an abundance of students majoring in science and math, but today it's as if there are none. What gives?

Instead of bashing millennials which my generation is fond of doing, I put the blame squarely on the vast number of colleges across the country which are all vying for the billions of dollars doled out by the Department of Education via Title IV of the Higher Education Act of 1965. Back when I was in school colleges got money too through government grants made directly to the institutions, and financial aid and Pell Grants issued to the students. The fed gave out money to schools with the caveat that the institutions had to ensure that their dropout rate was kept to a minimum. Back then legislators didn't want young people to become encumbered by a debt for an education they didn't complete. Colleges sought talented students who had the tenacity to get through a four year degree. The carrot and stick policy ensured that federal money gave each party something of value. That was 35 years ago when about 20% of the population earned a college degree.

Today federal money is disseminated to academic institutions primarily through financial aid. Colleges are allowed to have as much as 90% of their profits come from federal sources. Initially the restriction on funding from federal sources was much lower. Lobbyists for educational institutions managed to get the limit raised over the years. Federal law requires institutions to provide a quality education, but drop out rate is no longer used as a metric impacting funds. Unconcerned if a student actually graduates, educational institutions now lure in high schoolers with simplified programs which give them little chance of landing a job.

In my informal survey many students told me that they were seeking degrees in anthropology, communications, theology and exercise science. Worse yet there are fields of study which are mostly activities turned into college degrees as in animal rescue, turf and golf course landscape maintenance, puppetry, equine care, fermentation science, bowling industry technology, packaging, poultry science, piano pedagogy and floral auctioneering. One kid was majoring in Canadian Studies. What's to learn about Canada other than their chief exports are Canadian money and Justin Bieber? Another told me that a college counselor asked him what he enjoyed doing. He answered,

"I like to wash my car."

So he's getting a business degree with an emphasis on car detailing. There's always been degrees that are worthless, but back in my day a liberal arts degree would land you a good paying full time job with benefits managing a department store. Today those jobs are mostly part time and filled from the floor. A degree in Communications, often sited as one of the worst college majors, is what you get if you tell your guidance counselor that you hate math. The problem is you can't succeed in this world by avoiding math. Additionally, many institutions let students "make your own major," a policy which vastly expands enrollment while diluting the value of a college degree. Today 30% of the US population gets an undergraduate degree, up fifty percent.

When I was applying to colleges in the early 80's, the brochures for the schools mostly highlighted what the institutions were known for academically, any renown laureates on the faculty, and significant research conducted at the institution. Today high school graduates are recruited by colleges who send unsolicited brochures which espouse the wonderful "campus life" and the many amenities they offer including the views from the dorms and the extensive food programs. The advertisements read more like a country club rather than an academic institution.

During the 2016 presidential election, Bernie Sanders, the socialist senator from Vermont, espoused the idea of making two year community colleges free. Hillary Clinton chimed in and said that all community colleges should offer free tuition paid through increased taxes on the rich. More recently Cardi B told Joe Biden that her fans mostly want a "free college education."

To which he responded,

"By the way, we're going to have, if I get elected president, free college education for four years of college, flat out."

The problem with government subsidies is that federal money drives costs up, not down. Biden's tuition free program applies only to families making less than $125,000 a year which includes undocumented students. Many kids transfer credits from community colleges as a more economical means of obtaining a degree. As federal money rolls in, the cost of college will soar. There is also no restriction on the majors a student can aspire to under the Biden program. As a taxpayer I don't want to indirectly fund some kid's anthropology degree unless I at least get a chance to impart on them parental wisdom at the proper decibel level. I usually start with "a worthless degree is still worthless even if it's free." 

When I was young, my juvenile head didn't need to tap out for me to understand that you can't do much with an easily obtainable degree, but the recruitment effort was vastly different. Today young people are courted by institutions of higher learning offering useless degrees in exchange for massive debt. The education bubble is not going to burst. It will slowly deflate as fewer students sign up for a worthless education offering a phony promise of success.

When it comes to this latest bubble, the education is in front of us not behind.

Editor's Note: Originally posted on August 3, 2017.