How the College Bubble Will Pop
From NCPA January 14, 2014
College enrollment has fallen by 1.5 percent since 2012, says Richard Vedder, a professor at Ohio University, and Christopher Denhart, an Ohio University student.
While the political class has insisted that a college education is vital to individual success, college graduates have been losing their earning potential advantage over high school graduates.
- Since 2007, the gap between what the median high school graduate earned and what the median college graduate earned has narrowed by $1,387 for men over age 25 and $1,496 for women over age 25.
- For Americans between 24 and 34 years of age, the earning differential between college and high school graduates fell 11 percent for men and 19.7 percent for women (from $18,525 to $14,868).
All of this has happened as the cost of college has skyrocketed 16.5 percent since 2006, while household incomes have fallen due to the poor economy.
- Today, there are more college graduates working in retail than there are soldiers in the Army, and there are more janitors with bachelor's degrees than there are chemists.
- Today, more than 15 percent of taxi drivers have college degrees, while that number was less than 1 percent in 1970.
Part of this is the result of the recession and public policy, part is due to exorbitant higher education spending, and part is due to the fact that we are sending more high school graduates to college than professional fields can accommodate. Colleges must learn to contain costs and measure up to the new benchmarks that exist today to test a university's worth.
Source: Richard Vedder and Christopher Denhart, "How the College Bubble Will Pop," Wall Street Journal, January 8, 2014.
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Related: Rep Ward: Eliminate Prepaid College Tuition