Forty years ago I started my junior year of college. I lived at home the first two years, working a part-time minimum wage dishwashing job that covered all college expenses and travel (including driving two hours round trip every day to class). I earned $3,892 and paid $456 in tuition and fees. Adjusting for inflation, that’s equivalent today to earning $13,800 and paying $1,600 per year for college.
The more government subsidized education, the more expensive it became. Since 1979, inflation averaged 3.2 percent per year and tuition more than twice that, rising 6.7 percent per year. Adjusting for inflation, students today pay more than twice what their parents paid to attend college.
Many in my Baby Boomer generation saw college as our ticket to a great career and believed the same for our kids. Employers considered a college degree as proof that graduates were educated enough to meet the minimum requirement for reliable employment. Americans believed they needed to pay anything to get their kids through college, so they did. Many pulled money from IRAs and took out second mortgages on homes to cover the skyrocketing tuition. The government also simplified the requirements for student loans. The average student loan debt is now $31,172 per person.
As a rule of thumb, total student debt should be less than an annual starting salary. According to the US Census Bureau’s Post-Secondary Employment Outcomes data, very few college degree programs have the return on investment to support that level of debt. If you are not a STEM major (Science, Technology, Engineering, Mathematics), you will not earn a starting salary sufficient to pay back that debt.
And why are students encouraged to go into debt for worthless degrees? Well, universities have no incentive to inform students that Underwater Basket Weaving degrees will never pay off, since they charge the same for worthless degrees as for STEM degrees. Second, tenured Underwater Basket Weaving professors would end up working for their own students at Starbucks.
With college expenses rising at twice the rate of everything else, the risk of debt overload has led students to boycott college. Apple CEO Tim Cook says there is a “mismatch” between the skills learned in college and the skills that businesses require, and that half of Apple’s U.S. employment last year consisted of people without four-year degrees.
There are two realities pertaining to higher education that should be more well-known. First, college enrollment has declined every year since 2010 while the number of high school seniors has increased. Second, the U.S. birthrate peaked in 2010 and has plummeted ever since, meaning the number of college students will start tumbling in 2028.
The solution is straightforward, albeit painful: go back to the basics. College is first and foremost about education.
-- Administrative staff has grown 10 times faster than tenured faculty – terminate them and their pet programs. Start with any programs and positions created in the last 20 years.
-- Stop the compensation race. The six most highly paid employees in the state of Idaho work for BSU and UI, and 83 percent of all state employees earning more than $150,000 work in higher education.
-- College sports is a financial black hole kept afloat by “allocated revenues.” Don’t make student tuition subsidize unprofitable sports programs.
-- Eliminate all Underwater Basket Weaving degrees. Start with any program that has the word “studies” in the title.
-- Get rid of Club Med fitness centers, climbing walls, lazy rivers, arenas, etc.
-- Inform students what the average starting salary is for graduates with their degree from their institution. Warn them about taking out a loan for greater than that amount. Check out the PSEO data: http://bit.ly/2k2pely
Finally, college towns need to prepare for the impact of the inevitable bubble burst in 2028 of the educational-industrial complex. What will Moscow and our local economy look like with half the number of current students?
Dale Courtney served 20 years in nuclear engineering aboard submarines and 15 years as a graduate school instructor. He now spends his spare time chasing his grandchildren around the Palouse.