Tuition keeps rising, yet millions of young people continue to pursue college degrees. Defenders of a traditional degree say it’s the gateway to a successful career and life, and they bristle at any criticism of the system. But is it really all it’s cracked up to be? George Leef, director of research for the John W. Pope Center for Higher Education Policy, addressed that question during a conversation with Donna Martinez for Carolina Journal Radio. (Click here to find a station near you or to learn about the weekly CJ Radio podcast.)
Martinez: Why does college tuition keep going up?
Leef: It keeps going up because of two factors. The government keeps making it easier and easier for students to get money. Loans are easier than ever to get, and you can get more money. Grants keep going up. Pell grant keep going up. That’s one factor. The government throws money into people’s pockets and says, “You can spend this money on college education at approved colleges.”
Also, there is the factor of the hype. The idea that you’ve just got to get a college degree or else your life is just going to be one of misery and drudgery. And when young people hear this and their parents hear this, they think, “Well, you know, college costs a lot, and we’ve heard about a lot of kids who went to college and they’re delivering pizza. But nevertheless, we have to go to college to make sure we have a chance at a halfway decent occupation in the future.”
So between the financial incentives, the subsidies for going to college, and the hype that you just must get a college degree or else, people keep enrolling despite the ever-increasing cost.
Martinez: What happens if you don’t, in today’s economy, have a college degree?
Leef: Well, you may find yourself working at a mundane job, and you may find yourself working a mundane job even if you do have a college degree …
Martinez: Right.
Leef: … after spending years and lots of money. But lots of young people are also finding that if they hone some skills that help them find good jobs, then they’ll be able to do very well. For instance, there are young people that learn welding, and welders are in great demand these days — welding on pipelines, for instance, and ships. So if you can find a job that is in demand and go and learn the skills that that job requires, whether you go to college or not becomes an irrelevancy.
Martinez: And in fact, now, with so many baby boomers retiring, there’s a dearth of people who actually have that skill. And when that supply keeps going down, and the demand is still there or increasing — well, you know about supply and demand.
Leef: Yes, yes. It would be a very good idea for many young people, especially if they don’t really have a knack for educational pursuits, to go and learn some trade —welding, auto mechanics, something like that — where they’ll have steady work, easy-to-find employment if you have the right skills.
[It is a] much better idea than just saying, “Well, I’ve got to go to college and get some kind of generic degree, even though I don’t like studying. I don’t like papers and so forth.” Those are the kids who are finding themselves eyeballs in debt and trying to pay it off with a job that any high school kid could do.
Martinez: And yet it seems that conventional wisdom is if you earn a college degree you will, over your lifetime, earn $1 million more.
Leef: Yes, we hear that over and over again. It’s a terribly discredited figure that you’ll earn $1 million more. That has been debunked over and over again. And it’s certainly not true to say that you’re guaranteed any such thing, because we know lots and lots of young people with their college degrees these days aren’t earning any more than kids who dropped out of high school, because they’re doing the same kind of work.
Martinez: Now, there is one particular person, a well-known person, who has taken to heart what we have been talking about here, and who definitely believes that you do not have to have a college degree in order to have a successful life, successful careers. His name is Peter Thiel. What is his idea?
Leef: Peter Thiel was one of the founders of PayPal. He made a huge amount of money from his entrepreneurial ventures, and with some of that money what he started up is a venture that he calls the Thiel Fellowship. And what he does is, he funds 20 ambitious young Americans who could go to a top college, but instead he pays them to, instead of going to college, study entrepreneurship with him and work on their business ideas.
This has been going on for several years. Some people dislike the fact that he’s acting like the Pied Piper of Hamelin, luring these bright kids away from college, but they can leave if they want to.
What I’ve heard about the track record is quite a few of them do become successful entrepreneurs, and they don’t really miss college, and they can go and study whatever they want to study on their own afterward.
Martinez: It sounds like it’s a sought-after apprenticeship.
Leef: Yes, it’s a sought-after apprenticeship. It’s a good learning opportunity. They turn away many more people than they can possibly give these fellowships to.
Martinez: Why would that be a threat?
Leef: Why would it be a threat? Because people who look at higher education in the traditional sense think that Thiel is somehow undermining higher education, giving the false idea that you don’t have to go to college. But, in point of fact, I think it’s clear that many successful people don’t go to college. Thiel did, but as we know, Bill Gates was a dropout. Many other very successful entrepreneurs did not finish college.
Martinez: George, let’s circle back to the issue of cost of tuition for a moment, if we could. In your description of more and more aid being available, whether it’s a grant, whether it’s a loan. Because there is more aid, that would lower the cost that the actual individual pays directly for their education. But you’re saying it’s the opposite.
Leef: It lowers that individual’s cost because part of it, more of it, is picked up by the taxpayers. But over time, what has happened is that the institutions of higher education, the people who run them, want to maximize their revenues just as much as any businessman does.
And, therefore, they figured out that since there is more money in the pockets of their customers, they can charge more, and then they can spend more on the things they like to spend money on, which are things that are designed to enhance the institution’s reputation.
So we get all this spending on stuff that really has little to do with education, but more amenities on campus, more beautiful buildings on campus, more perks for the administrators on campus. They spend more, and then they charge more because they know that there is more money in the pockets of the students to pay.
Martinez: Where does that end?
Leef: Where does it end? Eventually, I think it ends when the populace in America realizes that subsidizing higher education is a bad idea, and finally we’re going to stop doing that.