Is a college degree worth what you pay for it?

Michael Barone writing in Human Events.


We are still suffering from the bursting of the housing bubble created by low interest rates, lowered mortgage standards, and subsidies to Fannie Mae and Freddie Mac. Those policies encouraged the granting of mortgages to people who should never have gotten them — and when they defaulted, the whole financial sector nearly collapsed.

Now some people see signs that another bubble is bursting. They call it the higher-education bubble.

For years, government has assumed it’s a good thing to go to college. College graduates tend to earn more money than non-college graduates.

Politicians of both parties have called for giving everybody a chance to go to college, just as they called for giving everybody a chance to buy a home.

So government has been subsidizing higher education with low-interest college loans, Pell grants, and cheap tuitions at state colleges and universities.

The predictable result is that higher education costs have risen much faster than inflation, much faster than personal incomes, much faster than the economy over the past 40 years.

Moreover, you can’t get out of paying off those college loans, even by going through bankruptcy. At least with a home mortgage, you can walk away and let the bank foreclose and not owe any more money.

Peter Thiel, the co-founder of PayPal, is adept at spotting bubbles. He sold out for $500 million in March 2000, at the peak of the tech bubble, when his partners wanted to hold out for more. He refused to buy a house until the housing bubble burst.

“A true bubble is when something is overvalued and intensely believed,” he has said. “Education may still be the only thing people still believe in in the United States.”

But the combination of rising costs and dubious quality may be undermining that belief.

For what have institutions of higher learning done with their vast increases in revenues? The answer in all too many cases is administrative bloat.

Take the California State University system, the second tier in that state’s public higher education. Between 1975 and 2008, the number of faculty rose by 3 percent, to 12,019 positions. During those same years, the number of administrators rose 221 percent, to 12,183. That’s right: There are more administrators than teachers at Cal State now.

These people get paid to “liaise” and “facilitate” and produce reports on diversity. How that benefits Cal State students or California taxpayers is unclear.

It is often said that American colleges and universities are the best in the world. That’s undoubtedly true in the hard sciences.

But in the humanities and to a lesser extent in the social sciences, there’s a lot of garbage. Is a degree in religious and women’s studies worth $100,000 in student loan debt? Probably not.

As economist Richard Vedder points out, 45 percent of those who enter four-year colleges don’t get a degree within six years. Given the low achievement level of most high school graduates, it’s hard to avoid the conclusion that many of them shouldn’t have bothered in the first place.

I think college is a good idea if you you don’t spend too much on it, and if you can make back the investment by getting a job in a good field. In general, no subject that is easy is worth spending $100,000 on, though. Engineering, science, medicine, law, etc. are worth it.

8 thoughts on “Is a college degree worth what you pay for it?”

  1. I’m very concerned when I hear the pundits saying college isn’t worth it. Seriously, do they WANT stupid citizens?

    They are also conveniently “forgetting” that virtually ALL jobs now REQUIRE a college degree to even be considered. Even flipping burgers.

    That being said, one need not go to the most expensive college. Do the junior community college for two years and transfer… saves big bucks. Shop around.

    I’ve seen two-year Associates programs costing more than my Masters degree! Be careful what you sign up for. It should cost NO MORE than one year’s salary for the job you want.


    1. College IS worth it if you study hard things. I was very clear in the post. I have an undergraduate degree and a graduate degree in computer science. Those kinds of degrees are worth the money. Also, I went to a very inexpensive school and worked as much as I could – I came out with $9000 in surplus when I graduated No debt.


  2. Michael Medved has often spoken of getting the federal government out of education. When universities don’t have to worry about funding, because most people can get a loan or grant from the feds, they can charge whatever they like and expect to still get students year end and year out. But force people to come up with the money on their own, either through saving or getting loans privately, and both the loans and the selection of universities will be subject to a truer free market dynamic which will force universities to adjust their tuitions in order to attract students.


  3. Ever see or read In Pursuit of Happiness? “Placism” is alive and well in the business world. Despite the fact an employee has shown they are a true asset to a company and can excel at the job/company, reach a certain point in corporate America and you will be told you can go no farther without a degree. Try getting a job doing anything above restaurant work and they want a degree. Obviously if you didn’t go to college, they reason, it is because you are too stupid or too lazy. Try being a woman who didn’t graduate college and worse stayed home to raise her children. WELL, you are obviously stupid and definitely lazy. People find out you’re a stay at home mom at a party and their eyes will glaze over and start scanning the crowd for someone “intelligent” to talk to or worse start explaining the conversation to you since you obviously won’t be able to follow along with such an intellectual conversation. If people know you didn’t graduate college they will devalue anything you say, after all what can you possibly know. People today absolutely believe ALL knowledge and wisdom come out of universities and if you didn’t graduate you aren’t as intellectual as those who did.


  4. I’ve interviewed people with college degrees to be an assistant in my department. They usually recite a litany of microsoft certifications and computer languages. Then I tell them that we don’t use any of those. All this illustrates one thing. Often subjects studied in college are of no use in the private sector. Even the hard subjects like computer science change so radically so quickly that a computer science degree from five years ago is practically worthless from an applicational perspective.

    Even if a “college degree” does help you get a job, it’s still only a piece of paper. Did you really pay 100,000 for a piece of paper to help you get a job? What did you learn? Impress me. How would you solve the following problem?….etc


    1. I’m surprised Wintery approved this as this is completely wrong. Most of the theoretical nature of CS was discovered well over a century ago and is still practical today. You are talking about programming in general and no, programming != CS. Additionally, programming doesn’t change that much. If you look at the tiobe surveys, C is still the most commonly used language. Does the web world roll out new frameworks on a regular basis? yes, it doesn’t mean that skills from 5 years ago become irrelevant. In the embedded space we haven’t had a huge change in techniques or paradigms in a long time. We’ve had some new technologies introduced that have made it easier, but nothing that would make techniques or skills even 5 years old obsolete.

      Almost nothing you said it true, add to that, it barely applies to the post at hand. People get the certificates because too many companies want/require them believing they make a difference.


  5. Another great post. I couldn’t agree more – we encourage if not push too many people to get 4 year degrees when most jobs really require nothing more than an associates (even if the job posting calls for a bachelors or more, few rarely require those skills). I believe our secondary schools really need to take a look at how europe and Japan do it and emulate more of what they do which is to look at a persons skills and competencies early on and push them in a direction much closer to their aptitudes. Then, we give out so many loans and financial aid without any type of scrutiny. I think if you can’t pay for your degree yourself and need to get loans/financial aid it needs to take more of the business case approach – you need to justify the money and prove that your degree has the potential to pay itself back.


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