Jack Salmon writes for the Martin Center about the truth surrounding a popular argument for boosting college attendance.

With the onset of the COVID-19 pandemic, experts within the higher education policy space were projecting that four-year colleges could face a loss of up to 20 percent in fall enrollment. While these predictions never materialized, the political infatuation with college enrollment figures is not a new phenomenon.

Barack Obama proclaimed the orthodox view of college in 2009: Sending every young person to college is necessary to both promote equity and maintain US competitiveness in the world. Under this view, more federal investment to push high school graduates into college is a “human capital investment” that leads to higher lifetime earnings.

However, little research has focused on what effect the higher price and debt burdens of college have had on college wage premiums and job opportunities for graduates.

Studies that observe the college wage premium (the ratio of wages that college graduates make in comparison with high school graduates) find that college graduate earnings significantly outpaced those of high school graduates in the 1980s and 1990s, but have largely stagnated since the turn of the century.

The significance of this stagnation in the college wage premium over the past 15 years is important because this emerging pattern may complicate the orthodox view of college leading to higher lifetime earnings. Over the same 15-year period, the cost of college has grown by more than 50 percent.

That divergence between cost and earnings highlights the importance of choosing a high-earnings-ratio major when enrolling in college (or pursuing an advanced degree) to reap the largest returns on a college investment.

As wage premiums have stagnated, about a quarter of students studying for a four-year degree don’t graduate. Those students are burdened with large debt repay­ments and a lower wage premium—many of them will be financially worse off over their lifetime than high school graduates without postsecond­ary education.