The NYT exposes that earnings data are starting to bubble to the surface, and it’s bad news for the educational-industrial complex. There are too many universities and students in the US. But who could blame them when the Department of Education gives loans to every Tom, Dick, and Harry who walks up to the counter? Education is a valuable thing, but (here comes my refrain) can we please analyze this value judgement through economic thinking? Education is valuable insofar as the cost of acquiring it is less than its expected future returns. The existing policy to massively subsidize students enables universities to exploit (this is real exploitation) inexperienced 18 year old kids who unwittingly mortgage their future without having analyzed their future prospects.
Again though, who would choose vocational school or enter the workforce when the government waves easy money in your face? Who would decide to offer alternatives and compete with Big Education when the government supports it to the tune of billions of dollars? Praxis is brave enough to try, thankfully. When the price system works freely it signals how resources ought to be allocated. In this case, the price system would suggest to many potential students that their time may be better spent outside of the traditional college route. We go to college to learn skills that are needed for various highly skilled careers. The current system perversely encourages kids to go to college because of some nebulas idea that it’s good for you, but we are starting to see that this is clearly not the case.