Dear Class of ’13: You’ve Been Scammed

May 18th, 2013

Via: MarketWatch:

You sit here today, $30,000 or $40,000 in debt, as the latest victims of what may well be the biggest conspiracy in U.S. history. It is a conspiracy so big and powerful that Dan Brown won’t even touch it. It’s a conspiracy so insidious that you will rarely hear its name.

Move over, Illuminati. Stand down, Wall Street. Area 51? Pah. It’s nothing.

The biggest conspiracy of all? The College-Industrial Complex.

Consider this: You have just paid about three times as much for your degree as did someone graduating 30 years ago. That’s in constant dollars — in other words, after accounting for inflation. There is no evidence that you have received a degree three times as good. Some would wonder if you have received a degree even one times as good.

According to the College Board, in 1983 a typical private American university managed to provide a bachelor’s-degree-level education to young people just like you for $11,000 a year in tuition and fees. That’s in 2012 dollars.

Some members of the College-Industrial Complex are talking about a new solution to bring down costs. They want to reduce, or eliminate, the amount spent on the actual teaching. Instead, students will watch online videos. Perhaps these will be on YouTube, or TED. It sounds like a column by the late, great Art Buchwald: “For $30,000 a year we can provide you with a top-of-the-range B.A. degree, just without any actual teaching.” You couldn’t make this up. But we’re already halfway there anyway. Even today most undergraduates don’t get within a million miles of the big-name professors they’re paying for.

Today’s graduates, so badly served by comparison with their parents and grandparents, may actually look lucky to those who come later. Costs are probably going to keep rising. The super-rich can bid up prices, just as they do for real estate in New York or London. (The difference is that you don’t have to live in New York or London, but you do have to get a degree: Unemployment rates for those without a bachelor’s degree are twice as high as for those who have one.) The conspiracy will keep pushing for more federal support.

How high will it go? Try this: The College-Industrial Complex says that degrees are still worth it because those with B.A. degrees will earn a lot more over the course of their lifetimes, and should pay for that. They point to U.S. Census data showing those with bachelor’s degrees earning on average $26,000 a year more than those with just a high-school diploma.

Using that logic, they could justify charges approaching $500,000 for a college degree. With the interest rate on subsidized student loans down to 3.4%, the net present value of those future earnings is, theoretically, very high.

No one is going to slap that price tag on a degree in public. Not yet.

One Response to “Dear Class of ’13: You’ve Been Scammed”

  1. prov6yahoo Says:

    I graduated from college in 1981. My tuition and books cost me about $1000 a year. I went to a small public college in my home state.

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