The Higher Ed Scam

As I pointed out Monday, there is a clear correlation between income and college degrees. In particular, certain graduate and professional degrees carry a punch. But, to be fair, certain undergraduate degrees do not. In fact, it’s pretty clear to me that certain degrees from certain colleges are basically a waste of time, or worse if one considers the high cost of attaining the degree, including lost opportunity cost.

Thus far, the high water mark in the U.S. for undergraduate education was 2010, the same year I assumed the presidency of a small liberal arts college. Since then, overall undergraduate enrollment has dropped by 6.6 percent. But just look at what student-loan debt has done since that time:

Most of these borrowed funds have been supplied by our federal government. Our federal student-loan program is tantamount to a giant, recurring fiscal stimulus bill for the economy — in the short run. But the long run paints a different picture, for borrowed funds need to be repaid. With interest.

One of the reasons I became disillusioned with higher ed is that it’s become a debt machine that preys on unsophisticated people who are ill-equipped to make sound decisions about the incurrence of debt. The graph is disturbing enough. But when you meet and get to know some of these students who are digging holes for themselves, it becomes personal. And you feel dirty being part of a system that is taking advantage of these kids.

So it will be up to you, Vera, to educate yourself in such matters, presumably with the help of your parents. It will be up to you to learn that debt for consumption purposes is rarely a good idea. You need to assess the payback if you’re going to borrow money and never presume that just any degree constitutes sufficient payback.

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