I think that in many cases a college degree is a waste of money! I do believe that university educations should only be for a select few. In particular I do not believe that sending everybody to college will make us collectively smarter. Consequently, I do not believe that college degrees will make our society richer or more competitive. Thus I believe that government support for continued education in the form of 529 plans and cheaper tuition at state universities is a misguided policy. There I said it!
The main problem is that a college education does not make people smarter. Hence, the consequence of sending increasing numbers of kids to college and demanding that they get degrees has been to dumb down the levels, reduce the number of challenging courses, and inflate the grades to allow people to pass. This hurts the smart students who do not get challenged and it hurts the stupid students who exit college with a useless degree and spend months and years before ending with a job that actually matches their abilities. In turn it also hurts the people who did not go to college as they have to compete for jobs with people with “college degrees”. I think it is generally accepted that a college degree is now so prevalent that it is practically equivalent to a union card for the white collar job market. Hence, employers use this as a first screen for potential applicants. Hence, what used to be “high-school” jobs are now “college degree” jobs: “Must possess a minimum of a bachelor degree and be able to lift 50lb”. And thus even people who know that they don’t need to go to college to learn the skills for a particular job, realize that they better go anyway to have a shot at getting their foot in the door of the job market.
The effect of government sponsorship and the fact that university administrations have willingly played along (after all, more students mean more income) have not resulted in higher education. It has merely resulted in longer education leaving students with more debt and taxpayers with more expenses. Also, it deflates the credentials of the present workforce. For instance, a 1990 “A” is worth more than a 2000 “A” but less than a 1980 “A”. As such grade inflation may put pressure on people with older degrees and transfers credentials from the haves to the have-nots (just like ordinary inflation).
Now, personal finance experts like to talk about good debts and bad debts. Since most personal finance has to do with consumption and not capital investment(*), I am personally not able to draw the line and I think all personal debt is bad debt. However, in general student debt is often considered a “good debt”. However, I think that in many cases, in particular for the multitude which SHOULD NOT have gone to college, such student debt is quite insidious in that it does not generate a corresponding return in terms of money and opportunity losses compared to going for a more suitable job like machinist, mechanic, chef, etc.
(*) For many people a college degree is not an investment in human capital. It is simply akin to an extended vacation with room and board.
So who needs a college degree? Except for a select few in highly technical fields and those who desire to be professors, I submit that most middle managers, technicians, etc. can be suitably and much more efficiently trained on the job. The colleges may cry out about the value of education, but I say from experience that you find very very few intellectual students on a college campus. Maybe 1 in 20 read the newspaper (the entire newspaper) and even fewer read books outside the assigned curriculum (some don’t even read that much). Thus as I see it, colleges provide very little educational value for most of its attendants and thus most people don’t need to go there.
The way to correct the situation is two-pronged. First, the government needs to stop subsidizing the education industry so that the price signals of higher/longer education are not distorted. This means student loans at market rates and tuition at market rates. That way people can better evaluate whether a 3 year degree in basket weaving is economically sounder career strategy than the $80,000 salary available to a precision machinist (it’s not). Second, companies need to be less lazy in their screening process. It just may be that the person who does not hold a college degree, but rather started his own company or travelled to another country and found employment (rather than backpacking around and wasting time) might be a better asset that someone who partied for 4 years courtesy of the parents of the taxpayers.
End of rant.