The Triple College Crisis: Crisis #3. Too Few Good Jobs

College enrollments have fallen for seven years in a row and a growing number of schools are closing. While many blame demographics (a sharp decline in American fertility rates) or high college tuition fees, I think prospective students are reassessing the entire collegiate value proposition and, in growing numbers, concluding that going to college is a risky and sometimes losing investment, not at all the sure-fire ticket to financial success implied by some of the more exuberant propaganda from the College for All crowd.

For starters, about 40% of those entering four-year colleges do not receive a bachelor’s degree within six years (well under one-half receive degrees in the four years it allegedly is supposed to take). Some Federal Reserve data suggest that earnings of those who do graduate in the bottom quartile of their college class average not much more earnings than that of typical high school graduates. To be sure, the truth of that importantly depends on the quality of the school attended as well as the major subject studied, but it appears that fewer than half of entering college students end up having a good outcome from a financial perspective because they either fail to graduate or do not get good jobs.

Some other good data suggest the job picture is actually a bit worse than that. Federal Reserve Bank of New York data show that in December 2018, the underemployment rate for all college graduates was 34%. It was even higher, over 41%, for recent graduates. “Underemployed” workers are doing jobs traditionally mostly held by persons with lesser education: baristas, bartenders, home health care aides, cashiers in big box retail stores, custodians, Uber and taxi drivers, etc. That is in a tight labor market over nine years into an economic recovery. If 40% of those attending don’t graduate (at least within six years), and one-third of those who do graduate are “underemployed,” then only about 40% of those entering college full-time end up graduating and taking jobs requiring the skills normally expected of college graduates, generally well-paying jobs in the managerial, technical, or professional fields (sometimes after graduate school). That proportion varies enormously no doubt—most matriculating at, say, Harvard no doubt end up in well-paying jobs, while those attending open admissions state schools and majoring in subjects like gender studies are more likely to join the underemployed.

Why is this happening? I have talked to business leaders who claim, “American universities are not providing the skills we need.” It is probably true, as a recent post articulated, that the learning outcomes of college graduates are embarrassingly low, a continuation in part of an arguably even bigger scandal of non-learning at the K-12 level. But I think the underemployment problem mainly reflects something else: too many college graduates. We are over-invested in higher education. While the need for highly skilled persons with advanced collegiate training has grown considerably over time, the demand for such graduates has grown far more slowly than the supply, so graduates who in the past would have taken fairly high-paying beginning-level managerial-type jobs are often forced to take lower paid less-skilled jobs. Thus we have a large number of Americans with degrees today who mop floors and work as Uber drivers. In response to the flood of college graduates, there is credential inflation going on—employers asking applicants to have more education. Soon, you will need a master’s degree in janitorial science to become a janitor.

Moreover, governmental officials have encouraged this. They have urged students with indifferent academic records and limited intellectual curiosity to seek bachelor’s degrees, lured with government-subsidized student loans and Pell Grants. President Obama proclaimed at the beginning of his presidency that we would regain world leadership for having a high percentage of adults with four-year degrees. Politicians now are trying to outdo one another urging taxpayers to fund “free college.” Rather, we need to go in the opposite direction, recognizing that we are over-invested in higher education.

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Warren's 'Universal Free College' Plan Is No Free Lunch

It's classic Marxism: Take from the rich to pay for government wealth redistribution.

The country’s favorite 1/1024th Native American and Democrat presidential candidate Elizabeth Warren recently released her plan for tackling the growing problem of student-loan debt. Currently running a disappointing third in her own state, Warren’s pitch is a desperate attempt to gain attention by running to the left of current Democrat frontrunner Bernie Sanders. Warren is seeking to take the lead on government-provided “free stuff” by offering some actual details as to how she would implement a “free college” program. Not surprisingly, the former college professor’s plan is chock-full of stuff that would make any Marxist revolutionary proud. No wonder she made her pitch on Vladimir Lenin’s birthday.

Warren’s first order of business would be to “solve” the problem of student-loan debt by simply canceling it. She explains, “The first step in addressing this crisis is to deal head-on with the outstanding debt that is weighing down millions of families and should never have been required in the first place. That’s why I’m calling for something truly transformational  —  the cancellation of up to $50,000 in student loan debt for 42 million Americans.” So, by a stroke of the pen, she would eliminate at least part of the obligations of “more than 95% of the nearly 45 million Americans with student loan debt,” as well as “wipe out student loan debt entirely for more than 75% of the Americans with that debt.”

But everyone knows that money doesn’t grow on trees; somebody has to pay for this. Warren has an answer for that: “the government,” which of course any thinking person knows means taxpayers. However, she contends that it would only be “a one-time cost … of $640 billion.” It’s the second part of her plan, the Universal Free College program, that would tip the scales at “roughly $1.25 trillion over ten years” and should really be getting everyone’s attention. (Americans owe a collective $1.5 trillion in student loans.) But, don’t worry — Warren has this cost figured out as well. You see, only “the 75,000 wealthiest families in the country” will be charged. She calls it her “Ultra-Millionaire Tax” on “those with fortunes of $50 million or more.” This is plainly wealth redistribution.

Warren is committed to the “universal” aspect of her plan — so much so that she would “prohibit public colleges from considering citizenship status” during admissions decisions. Her plan would also “ban for-profit colleges from receiving any federal dollars (including military benefits and federal student loans), so they can no longer use taxpayer dollars to enrich themselves while targeting lower-income students, service members, and students of color and leaving them saddled with debt.” Evidently, Warren would rather they become permanent wards of the state.

Some other thoughts from our friends on the Right:

“We are familiar with all the fine rhetoric about higher education being the key to preparing the 21st-century work force and maximizing its productivity, but we cannot help but notice that this is being championed by the same people who have helped to make our K–12 education system the grotesque laughing stock that it is. The public schools are in effect a dysfunctional and wildly corrupt full-employment program for Democratic constituencies, and that same dynamic has driven much of the growth in college administration, too: There are a lot of deputy deans of social justice out there. We don’t need one more, much less 10,000 more.” —National Review

“As long as the government makes it easy to get loans, colleges are going to continue increasing tuition and fees above the rate of inflation. If the federal government bails out students, colleges will increase costs even further as everyone realizes there will be no consequence.” —Erick Erickson

“This pander will not only be incredibly costly, but it will be a slap in the face to those who have already struggled to pay off their student loans without government assistance.” —Philip Klein

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In Wisconsin, School Choice Has Unexpected Benefits

Elisha Doerr would not have had an opportunity to attend Wisconsin Lutheran High School, a Milwaukee-based private boarding school, if it weren’t for a school choice program.

The school’s excellent curricula and the religious community were valuable to Doerr, 18, who now attends Harvard University and is deciding between majoring in government or computer science.

Raised in rural Waupun, Wisconsin, with six younger siblings, Doerr’s choice for a superior education in his hometown appeared limited.

His parents, who had homeschooled Elisha, looked at Wisconsin Lutheran High School for its religious affiliation, but they needed financial assistance to send their son there.

“With there being seven kids in my family and just having gotten a mortgage on our house that we just moved into,” Doerr said in an interview with The Daily Signal, “it didn’t seem particularly feasible to try to go to a private school that we were hoping to go to without getting some sort of financial support.”

Wisconsin Lutheran is one of 129 schools that are part of the Milwaukee Parental Choice Program, launched in 1990 to provide alternatives to troubled public schools.

The program had 28,917 participating students in kindergarten through 12th grade during the 2018-19 school year. Under the program, a school receives a state aid payment on behalf of the eligible student and parent or guardian.

Before Doerr could get into the school voucher program, his parents first had to save money in an education savings account to cover his freshman year.

Doerr’s parents saw the Milwaukee Parental Choice Program as giving them control of their son’s education. The student’s father, a Lutheran pastor, had ties to Wisconsin Lutheran and wanted his son to grow not only academically but spiritually.

Commonly referred to as the nation’s first modern school choice initiative, the Milwaukee program provides vouchers to students from lower-income families for use in attending private schools.

Doerr’s parents gained the flexibility to decide what was best for him.

Before the Doerrs’ experience, though, Milwaukee lawmakers had some disagreements in the mid-2000s about the future of the Milwaukee Parental Choice Program, which had not been analyzed since 1995.

Two researchers evaluated the Milwaukee Parental Choice Program after pitching the idea in 2007 to then-Gov. Jim Doyle, a Democrat in office from 2003 until 2011, and legislative leaders who wanted to reduce funding for the program.

The researchers were Patrick Wolf, a professor in the University of Arkansas Department of Education Reform, and Corey DeAngelis, a former student of Wolf’s who now is an education policy analyst with Cato Institute, the libertarian think tank based in Washington, D.C. 

“There was a group of legislators who wanted to put additional restrictions on the program, and there [was] a group of legislators who wanted to raise the cap on enrollment and expand the program,” Wolf told The Daily Signal in a phone interview about the paper that resulted.

The Wisconsin lawmakers, he said, “came to a compromise” that included calling for an evaluation of the Milwaukee Parental Choice Program.

Initially, the research by Wolf and DeAngelis focused on analyzing test scores from 2007 to 2012, but “test scores are not everything that we want from a child,” Wolf said in the interview. They found the program had positive effects on reading scores and a neutral effect on math scores.

Wolf and DeAngelis decided to look beyond test scores and also evaluate school vouchers for their impact on character. The result was what Wolf and DeAngelis say is the first research report on the effect of school choice on reducing crime.

The report, released Feb. 26 and titled “Private School Choice and Character: More Evidence from Milwaukee,” found an intersection between greater school choice and less crime committed by young adults.

“We took a representative sample of participants in the [Milwaukee Parental Choice Program] and carefully matched them to similar Milwaukee public school students, and then tracked their outcomes over time,” Wolf said.

The two researchers found that students who took advantage of the school choice program committed fewer crimes than their counterparts in public schools. Specifically, students committed 53% fewer drug crimes and 86% fewer property crimes.

The study also found that 38% fewer paternity suits were filed once students reached their mid-20s. When difficulty in identifying a biological father occurs, lawsuits can be used to force child support payments.

Asked what could have contributed to the results beyond curricula, Wolf said the religious component in many private schools may have had a deep influence. Most teachers in public schools are stifled by regulations, he suggested:

It could be because of the religious environment that many of these schools foster. The majority of the schools participating in the program have a religious affiliation. And so maybe just going to school with a religion, you make it a lot easier to instill these values in the students. Public schools are limited in the values they can communicate to students.

What does Doerr think was the advantage provided by Wisconsin Lutheran High that a traditional public school could not provide?

“The interactions with the teachers, like having chapel every day and knowing that they’re of the same faith as you,” Doerr said.

Doerr said his parents valued this specific experience through the Milwaukee Parental Choice Program the most.

Although academic success helped him become a Harvard freshman, he said, he and his parents gained the power to customize his education.

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