Yesterday, at Red State, Dan Spencer pointed out that Obama plans to try to impose rules on private colleges—rules that would disqualify his own education at Harvard.
Harvard Law fails to meet the new rules. Yet the rules wouldn’t impact Harvard – instead the rules would impact all the private for-profit colleges that help millions of minority and low-income Americans earn a college degree and work toward a better life. At four-year non-profit and public institutions, like Harvard, just 21 percent of graduates are black – compared with 28 percent of graduates at for-profit colleges and universities.
I’m opposed to the rules as well, but I’m not sure all these colleges are actually helping students as much as using them to profit from the Federal student loan program. But even if I am right, there will be no need for the government to step in; economic reality is already going to do the job. Ironically, the Obama Administration is doing all they can to stop that process. As a recent Wall Street Journal article pointed out,
The Obama administration has dubbed college “the ticket to the middle class,” and political leaders from Education Secretary Arne Duncan to Federal Reserve Chairman Ben Bernanke have hailed higher education as the best way to improve economic opportunity. Parents and high-school guidance counselors tend to agree.
Yet despite such exhortations, total college enrollment has fallen by 1.5% since 2012.
It is going to fall more. The economic reasons for going to college make less sense every year.
Since 2006, the gap between what the median college graduate earned compared with the median high-school graduate has narrowed by $1,387 for men over 25 working full time, a 5% fall. Women in the same category have fared worse, losing 7% of their income advantage ($1,496).
A college degree’s declining value is even more pronounced for younger Americans. According to data collected by the College Board, for those in the 25-34 age range the differential between college graduate and high school graduate earnings fell 11% for men, to $18,303 from $20,623. The decline for women was an extraordinary 19.7%, to $14,868 from $18,525.
Yet, at the same time, college prices are shooting up. This is obviously unsustainable. It is especially bad when you consider that most college expenses are dealt with via debt. Graduates have more debt to cover with lower income.
In fact, these graduates often end up underemployed.
We now have more college graduates working in retail than soldiers in the U.S. Army, and more janitors with bachelor’s degrees than chemists. In 1970, less than 1% of taxi drivers had college degrees. Four decades later, more than 15% do.
In 1970, when 11% of adult Americans had bachelor’s degrees or more, degree holders were viewed as the nation’s best and brightest. Today, with over 30% with degrees, a significant portion of college graduates are similar to the average American—not demonstrably smarter or more disciplined. Declining academic standards and grade inflation add to employers’ perceptions that college degrees say little about job readiness.
So the price of college is going to change, as are the number of colleges and the number of people seeking to go to college after graduating from high school. The bubble is going to burst. I suspect that the Obama is hoping to tame the coming bust by controlling which colleges are closed.
I doubt it will work.