The Silliness of University Education:
A collection of smart people doing dumb things
November 15, 2012
By John Berger
What is the American dream? In centuries past, immigrants came to this country with a dream that anyone could work hard, own property, and live in prosperity regardless of class or social status. Apparently this dream is now contingent on a college education. A 22 year-old high school graduate who is working full time instead of attending class may be pursuing the old American dream, but society thinks he is "trying to figure out what to do with his life." People must choose a path. Path "A" means going to college, Path "B" means "settling" for a high school education alone. To society, everyone on Path "B", other than the Zuckerbergs and Gates of the world, must be on Path B simply because they didn't have the opportunity to go to college. To society, path B is not a choice, but a consequence. Society is wrong.
The higher education system is broken and, until it is fixed, students should strongly consider waiting four or five years to attend college. They may be better served by working full time and saving money, joining the military, starting a business, or even travelling than running full speed into education without a good idea of where they want to go. The U.S. higher education system is broken largely because of three factors. First, many young workers and innovators need not go to college. Second, the cost of attending a university is rising much faster than overall inflation and wages due to a corrupt student loan system. Finally, learning institutions treat all degrees equally, and employers don't.
Alternative Education Should not be Dismissed
The founder of PayPal, Peter Thiel, sent shock-waves through the education landscape when he awarded fellowships of $100,000 each to youth under 20 years old, requiring them to drop out of college to become entrepreneurs. (CNET; Musil). Vivek Wadhwa, an entrepreneur who teaches at Duke and Stanford, argued that Thiel "doesn't understand how important education is for the masses . . ." explaining that he worries about "a message that's getting out there to America that it's okay to drop out of school, that you don't have to get college. Absolutely dead wrong." (Cnet; Musil) Wadhwa is not alone. Many critics excoriated Thiel for his plan, but their arguments fail to consider both sides of the argument. Few people believe that education is bad, but Thiel's premise is that formal education is not worth the direct costs and opportunity costs. For many students, Thiel is absolutely correct.
Learners now have more options than ever before with sites like academicearth.org and coursera.org, which offer free online courses from schools like Duke, Johns Hopkins, Stanford, MIT, and Harvard. Motivated and dedicated individuals, particularly those who believe learning is essential for success, can find all the information they need for free. Unfortunately, employers and governments don't recognize self-study as an accredited form of education. As a result, students rush to get their various degrees in hoop-jumping, with little regard for actual learning.
The Value of a Degree is muted by Massive Costs
Critics of alternative education are quick to point out that traditional Bachelor's degrees have significant value. One study, released by the Lumina Foundation and Georgetown University explained that the economy added 200,000 jobs for workers with bachelors degrees during the latest recession, with an additional two million more after it ended. (Huffington Post; Pope). By contrast, according to the same study, nearly 6 million high-school-only jobs have been lost since the downturn began, and they are still declining even in the recovery. (Huffington Post; Pope). Furthermore, recent estimates suggest that bachelor's degree holders earn $1.3 million more in their lifetime than those who hold only a high school diploma.
While the statistics above are persuasive, data like these don't necessarily mean that alternative education is ineffective. They simply suggest that employers are more willing to hire individuals with a formal education, possibly because those individuals are more dedicated and motivated than the pool of applicants who gave up after high-school. However, it defies reason for an employer to pass up a highly qualified and intelligent person who chose a cheaper and better approach to education. Imagine if college sports recruiters took such a silly approach: "Well James is bigger, faster, stronger, and his stats are much better, but I'm going to go with Mark because he went to a better program." It's ludicrous in the sports context, and it is ludicrous in the education context.
Critics of alternative education often fail to fully consider the opportunity costs, direct costs, and financing costs of traditional education.
First, Students are giving up three to six years to pursue a bachelor's degree, limiting the amount of hours they can work, promotions they receive, and money they can save. A student could spend four years saving up $50,000, which would be worth between $350,000 and $900,000 at retirement. (Future Value Calculator).
Second, the direct cost of education is going, for lack of a better word, "crazy." Education has grown at a faster rate than inflation for 29 of the past 30 years. (the Atlantic). Education has even grown at a faster rate than medical care for 27 of the past 30 years (the Atlantic). Even adjusting for inflation the cost of attending a four year university has nearly doubled since 1990. (nces.ed.gov). The cost of education has essentially inflated by 190% since 1990 (nces.ed.gov), rising 86% faster than average wages. (ssa.gov) The current average cost of attendance at four year institutions is $88,368 for four years. (nces.ed.gov).
Why are the costs going up so fast? The most reasonable argument is that costs are going up due to an insane demand for college education, as nearly 20 million students attend college each year in spite of rising costs. (asa.org). However, students can only pay these high prices because of easy-to-get federal loans.
Combine the above factors and your potential costs, including opportunity costs, could easily be over a million dollars, significantly muting the "1.3 million in additional earnings" argument for bachelor's degrees. And the cost of a bachelor's degree is apparently unrelated to wages or general inflation. Universities will continue to raise tuition and fees so long as students can borrow the money to pay, while at the same time Universities will continue failing to increase the value of their product to match the rising costs.
All Degrees are NOT Created Equal
Consider the following list of Mid-Career Median Salaries for the following degrees: (Full List at Wall Street Journal)
Chemical Engineering: $107,000
Economics: $98,600
Physics: $97,300
Computer Science: $95,500
Math: $92,400
Marketing: $79,600
Political Science: $78,200
Business Management: $72,100
History: $71,000
English: $64,700
Graphic Design: $59,800
Criminal Justice: $56,300
Education: $52,000
Stop the presses! Career earnings for a Computer Science major are approximately $1.4 Million more than earnings for a Graphic Design major. That is more than the difference in career earnings between a bachelor's degree holder and a meager high-school graduate.
At the University of Utah, resident tuition for a junior in the graphic design program is $3,137.14 per 15 credits. For a Computer Science major, tuition is--wait for it--$3,137.14 per 15 credits. (University of Utah) Clearly, cost is not associated with value. Furthermore, the department of education gives loans to everyone who qualifies, regardless of their choice in major. Education majors can borrow every bit as much as Chemical Engineering majors. This is equivalent to allowing a borrower with decent credit borrow the same amount of money to purchase a 2007 Toyota Yaris as a 2013 BMW X5.
Many educators argue that there is some intrinsic value of a well rounded education which cannot be calculated by potential salary. Even if this is true, why must that well-rounded, liberal-arts education cost as much as a technical degree? Furthermore, why can't students pursue such an education online or in the library?
In 1909, Dr. Charles William Elliot, president of Harvard University, was instrumental in publishing the Harvard Classics, a 51-volume anthology of classic works. Dr. Elliot claimed that if you were to spend just 15 minutes a day reading books that could fit on a five foot shelf, you could give yourself a proper liberal education. (Gutenberg)
In 1909, access to education was limited to the elite and few other lucky individuals. One solution to such a problem would be to spend trillions of dollars in private and public money, allowing individuals to gather in large stone buildings and text-message through art-history lectures. A second solution--the solution proposed by Dr. Elliot--was to read books, a significantly more affordable approach.
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While all education has significant value, not all education is created equal, and not all education must be taught in a traditional setting. However, until employers and governments believe Dr. Elliot's approach might work, and so long as the government allows all students to borrow absurd amounts of money regardless of major, the demand, and cost, of college education will continue to skyrocket.
As this ridiculous pattern continues, students should strongly consider waiting four or five years to attend college. They may be better served by working full time and saving money, joining the military, or starting a business than they will by running full speed into costly education without a good idea of where they want to go.
Some might be concerned that this will delay their career and "big money" opportunities, but as explained above, most graduates can't even make their loan payments. Additionally, 43% of young adults under 25 currently live at home anyway. (USA Today; Nasser). We currently push young adults to get an education, but we need to focus on getting the right education in an efficient way. We should start by eliminating the bad decision-making promoted by easy government financing. Until then, students should strongly consider staying out of the pasture of education until they can cut through the crap.
Sources
C|net News. Steven Musil, Thiel's college dropout plan scrutinized by '60 Minutes', available here.
Huffington Post. Justin Pope, College Costs: New Research Weighs the True Value of a College Education, available here.
American Student Assistance, Student Loan Debt Statistics, available here.
Investopedia Future Value Calculator, available here
the Atlantic; Niraj Chokshi, Education Costs Rising Faster than Health Care, available here.
National Center for Education Statistics (nces.ed.gov), Fast Facts: Tuition Costs of Colleges and Universities, available here.
Social Security Administration, National Average Wage Index, available here.
The Wall Street Journal, Salary Increase by Major, available here.
University of Utah, Undergraduate Tuition Per Semester, available here.
Project Gutenberg, Harvard Classics, available here.
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