henever I ask a fellow college student what they plan on doing with their degree after they graduate, they often tell me “I don’t know,” or “I plan on applying to grad school.”
Most times I ask that question, I get reactions as though the students are amazed I asked or that it was somewhat of an intimidating inquiry.
The fact of the matter is that most college students don’t have the slightest idea of what they plan to do with their degrees. This is because college today is portrayed as a compulsory step a person takes in life. It is similar to walking, riding a bike, or getting a first job. Therefore, many individuals who attend college haven’t really thought about the significance of attending; to them, it is like an everyday routine. This has done two things: pressured people who would not have gone to college to go to college and increased the cost of going to college.
The Cost of "Free" Education
When college is perceived to be “free” or a “right,” most individuals don’t think twice before enrolling since the opportunity is readily available to them. Nor do a great deal of them consider the cost since many of them are not the ones paying for their education. The ones who do pay for their education are guaranteed student loans, which make it less costly in the short-run to enroll. This excess demand for a college education in itself leads to a higher price. Moreover, the fact that most students are not too worried about the immediate costs (since the cost is paid through a third party—tax-payers—and repaid in the future) creates an incentive for the colleges to inflate the prices even more.
As Peter Schiff put it:
If the government didn't guarantee student loans, students couldn’t borrow money to go to college, nobody would lend it to them—it would be too risky, they wouldn’t pay it back. But with the government guarantee, lending money to a student to go to college is like buying a treasury box, you can’t lose...So what happens is that all the students bid against each other, they compete for slots in universities with government money, and so they bid the prices up.
As this empirical study by the Federal Reserve Bank of New York Staff Reports further indicates:
In the model, an increase in the federal student loan maximum boosts demand from lower-income students by relaxing their borrowing constraints. In equilibrium, the increased ability to pay raises tuition for all students, and not just for the aid recipients.
The outcry about the need for higher subsidies on higher education doesn’t help, either. Most mainstream Democrats have run on platforms of “free college” or “debt-free college” for everyone, as shown in Bernie Sanders’s 2016 campaign platform, which says “It’s time to make college tuition debt-free.” Ironically, it was the politicization of higher education itself that caused the increase in college enrollment and the rise in tuition.
Distorting the Market
In reality, when a college education is seen as a necessity, this not only increases the cost of education and increases the number of complacent students attending college, but it also incentivizes employers to discriminate against those students who chose not to go to college. This further persuades the individual who would rather have chosen not go to college to go into debt in the name of getting a college degree to please employers.
Although there is a correlation between having a college education and a higher income, most college graduates simply forget most of what they learned in college when they graduate.
Several economists, such as Bryan Caplan, have argued that, to the contrary, most students don’t come out of college with valuable jobs skills. And although there is a correlation between having a college education and a higher income, most college graduates simply forget most of what they learned in college when they graduate— similar to how most people forget most of what they learned in high school. This indicates that what is important is the degree, not necessarily the knowledge.
Most of my mates look forward to partying at university far more than they do going to class, which begs the question: why does the state continue to heavily subsidize this?