Degrees of Value- Making College Payoff- Review of WSJ Online Article by Glenn Harlan Reynolds
“Four in 10 college graduates, according to a recent Gallup study, wind up in jobs that don’t require a college degree.”
The WSJ online just posted this great article. Here are three key takeaways:
1) The credit-driven higher education bubble of the past several decades has left legions of students deep in debt without improving their job prospects. To make college a good value again, today’s parents and students need to be skeptical, frugal and demanding.
2) University of Michigan economics and finance professor Mark Perry has calculated, tuition for all universities, public and private, increased from 1978 to 2011 at an annual rate of 7.45%. By comparison, health-care costs increased by only 5.8%, and housing, notwithstanding the bubble, increased at 4.3%. Family incomes, on the other hand, barely kept up with the consumer-price index, which grew at an annual rate of 3.8%.
3) Despite the high costs and use of debt financing, four in 10 college graduates, according to a recent Gallup study, wind up in jobs that don’t require a college degree.
“Today’s emphasis on measuring college education in terms of future earnings and employability may strike some as philistine, but most students have little choice. When you could pay your way through college by waiting tables, the idea that you should “study what interests you” was more viable than it is today, when the cost of a four-year degree often runs to six figures. For an 18-year-old, investing such a sum in an education without a payoff makes no more sense than buying a Ferrari on credit.”