An excellent observation from Glenn Harlan Reynolds:
Just last week, the New York Times, normally a big fan of higher education, ran an article on "The Dwindling Power of a College Degree." In our grandparents' day, a college diploma nearly guaranteed a decent job.
Now, not so much: "One of the greatest changes is that a college degree is no longer the guarantor of a middle-class existence. Until the early 1970s, less than 11 percent of the adult population graduated from college, and most of them could get a decent job. Today nearly a third have college degrees, and a higher percentage of them graduated from non-elite schools. A bachelor's degree on its own no longer conveys intelligence and capability."
This is a simple case of inflation: When you artificially pump up the supply of something (whether it's currency or diplomas), the value drops. The reason why a bachelor's degree on its own no longer conveys intelligence and capability is that the government decided that as many people as possible should have bachelor's degrees.
There's something of a pattern here. The government decides to try to increase the middle class by subsidizing things that middle class people have: If middle class people go to college and own homes, then surely if more people go to college and own homes, we'll have more middle class people.
But homeownership and college aren't causes of middle-class status, they're markers for possessing the kinds of traits -- self-discipline, the ability to defer gratification, etc. -- that let you enter, and stay in, the middle class.
As I've observed elsewhere in this blog, any time the government creates a big pot of money, it creates a bubble in the economy. The advent of government subsidized student loans (Sallie Mae) in 1972 has led to tremendous inflation in the cost of higher education, far exceeding the consumer price index.
In recent months, students have been out in force in the Occupy movement demanding that their higher education be provided for free (it's only fair) and their debts forgiven. They seem to blame the big banks for their debts, forgetting entirely the role of the government in making those loans possible. They also seem to forget where the principal for those loans went: to fund the liberal professors who indoctrinated them at great cost and then released them on society with unmarketable degrees. The banks only collect the interest on the loans the students took out to pay the colleges, not the banks.
The answer, of course, is to get the government out of the college loan business. Let students make informed decisions based on the job markets, their own resources, and the scholarships they receive based on their own abilities and hard work.
