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May 30, 2014 1:00 PM Why Isn’t it ‘Worth It’ to Make College Cheap Again?

By Daniel Luzer

Now, since it’s college graduation time, it’s also the season for the annual “is college worth it” discussion.

No one is actually willing to say with a straight face that college isn’t worth it, but some try to talk around it.

The Wall Street Journal does a slightly misleading, almost entirely anecdotal story about a bunch of college graduates accepting jobs on commission and selling knives and stuff.

Forbes has a piece about how entrepreneurs and how “College Degrees Are Vastly Overrated As Today’s Entrepreneurial Dropouts Routinely Reveal,” though entrepreneurs have never needed to complete college, or even really high school, if they had really innovative ideas and the skills to make those ideas into a business.

But a deep evaluation of the value of a college degree isn’t quite so straightforward. David Leonhardt over at the New York Times certainly tries, pointing out that:

The pay gap between college graduates and everyone else reached a record high last year, according to the new data, which is based on an analysis of Labor Department statistics by the Economic Policy Institute in Washington. Americans with four-year college degrees made 98 percent more an hour on average in 2013 than people without a degree. That’s up from 89 percent five years earlier, 85 percent a decade earlier and 64 percent in the early 1980s.

Getting your first professional job won’t lead immediately to a place of great financial security, but that doesn’t mean college isn’t worth it. Without that college degree there probably would be no professional job.

All of this is sort of missing the point, however. We know college is “worth it,” it’ll be worth it until it costs $181,000 a year.

But the college critics, and the college apologists, are highlighting some rather interesting trends. The most important trend is that college is worth less than it used to be. Really.

This isn’t because the benefits of college are declining. In fact, the benefits are more than they’ve ever been.

Earnings

The median annual earnings of people between 25 and 32 with the college are now more than $45,000, more than they’ve ever been.

But college is getting less valuable, less “worth it,” because we make students pay too much for it. Some 71 percent of college graduates had debt last year. The average is now a whopping $29,400 per borrower.

If, after all, you earn $45,000 a year but owe $25,000 you’re a lot worse off than if you made $40,000 a year but only owe $8,000.

The trouble here isn’t that we have too many people going to college, or even too many people studying the wrong things, the problem is that due to declining state funding (relative to the total cost) for state universities (where the vast majority of Americans go to college) people are paying too much money to enter professional jobs.

State support for public research universities fell 20 percent between 2002 and 2010. This means state colleges increasingly depend on tuition to run their operations (between 1999 and 2009 net tuition and fees increased from 12 to to 22 percent of total revenue at public colleges and universities) and tuition and fees are skyrocketing. Adjusted for inflation, the average public college cost $2,700 a year in 1973. Now it’s almost $9,000. That’s almost a 27 percent hike from in-state tuition in 2008.

The appropriate question here isn’t whether or not the price students and families pay for college is worth it. That’s not really debatable. No, the question is not a personal one; this is a public policy question.

How much do we think it’s appropriate to make students pay for their own intellectual development, and then require that intellectual development for even the most basic of professional jobs?

What matters is not whether or not some high school student is making a good financial decision to go to college. We should worry that he even thinks it’s valid to ask such a question.

Daniel Luzer is the news editor at Governing Magazine and former web editor of the Washington Monthly. Find him on Twitter: @Daniel_Luzer

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