by Mitch Kokai
Senior Political Analyst, John Locke Foundation
Not content to lay low after angering President Obama’s supporters with a Newsweek cover story suggesting that it’s time for Obama to “hit the road,” Harvard historian Niall Ferguson aims his latest column at his own profession.
It asks “Who Needs College?” and documents problems with the American system of higher education.
Little do the foreigners know that all is far from well in the groves of American academe.
Let’s start with the cost. According to the College Board, average tuition and fees for in-state residents at a sample of public colleges have soared by 25 percent since 2008–09. A key driver has been the reduction in funding as states have been forced to adopt austerity measures. In the same time frame, tuition and fees at private universities rose by less (13 percent), but still by a lot more than inflation.
According to the Consumer Financial Protection Bureau, total student debt (which includes private loans and federal loans) climbed to more than $1 trillion. It is the only form of consumer debt that has continued to grow even as households pay off mortgages, credit cards, and auto loans. In real terms, students are borrowing twice what they did a decade ago.
It’s not only Facebook stock that Silicon Valley superstar Peter Thiel is selling. He’s shorting higher education, too, arguing that college is the new asset bubble—the natural successor to subprime. Remember when we all believed that a home was an investment that would never lose money? Now, Thiel argues, exactly the same thing is being said about a degree. To back up his point, Thiel is paying 20 of the country’s most promising students $100,000 to walk away from their studies and become entrepreneurs.
But Ferguson’s take on the topic differs from Thiel’s in some significant respects.
But doesn’t a degree improve your chances of getting a job? Not anymore. Recent graduates are just as likely as anyone to be out of a job right now. Globalization and technology aren’t just destroying unskilled jobs; many of the functions previously performed by graduates are now being off-shored.
As a professor, I can see much that is wrong with our system—but not so much that I would advise a smart 18-year-old to skip college. The real problem is not that our college system is failing. The problem is that it is succeeding all too well—at ranking and sorting each cohort of school-leavers by academic performance.
One wonders how Ferguson would respond to George Leef’s thesis that college is oversold.