Devaluation of the College Degree

May 10, 2009 by  
Filed under Economics

entitlementIf you graduated from college in the 70’s or 80’s, get ready to be extra proud of that degree. The next generation of college graduates will also be receiving degrees. But many of them won’t be worth much compared to yours. I will explain.I have focused this week on the poor return on investment received from higher education in the U.S. and the roles that government and the educational establishment  have played in getting us to the sad state of current affairs.  I’ve discovered that the news from the White House on future plans for higher education is even worse than I thought.

First, President Obama wants to get private lenders out of the government subsidized student loan business. I actually am in favor of that because there is way too much student borrowing going on. The President has also decided to take funds used for loan subsidies and put them in the Pell Grant program. That doesn’t sound too bad except for this: He wants to make Pell Grants an entitlement program, just like Social Security and Medicare. My hopes have been dashed on the rocks of intrusive, misguided government.

Here is the educational policy statement from the White House web site:

In addition to increasing the maximum Pell award to $5,550 for the 2010-11 school year, the President’s budget makes the program’s funding more transparent by converting the program from a discretionary to a mandatory program. This would end the unreliable practice of “backfilling” billions of dollars in Pell shortfalls each year and provide certainty to families about the level of Pell Grant funding available each year.

I highlighted the really bad part. Taxpayers (those of us who remain after all of the refundable tax credits are handed out) will now be force feeding Pell Grants to a gazillion students so that Obama can pursue his dream of returning the U.S. to a position where we have the highest percentage of college grads. That means that even more mail carriers, restaurant servers, and retail clerks will have degrees. Awesome.

Here is the second – and probably worst part of the Obama initiative. He is not going to rely on having more federally funded students in college to increase the number of actual college graduates. Nope – he wants an initiative to increase graduation rates:

State and local governments provide the bulk of the operating funds for the public colleges attended by 76 percent of undergraduate students, but there is little national focus on increasing college completion.  The budget would include a five-year $2.5 billion fund aimed at improving college success and completion, particularly for students from disadvantaged backgrounds. States would have considerable flexibility in the types of programs that can be funded, but new programs must include a rigorous research component.  This effort will expand the knowledge base about what works in increasing college enrollment and graduation and disseminate these best practices. States would be able to use a portion of the funds to continue college outreach and information activities now supported through subsidies in the guaranteed (FFEL) loan program.

Do you see what is happening? Increase success rates for “students from disadvantaged backgrounds”? (Isn’t that educrat-speak for “dummies and slackers?”) We are already doing that in high school through social promotion and lowered standards. Ask any public university and they will tell you that millions of students arrive lacking basic skills needed for college work, such as the ability to write a coherent sentence in English other than text-message slang.

So now we are going to use federal funds (and the threat of withdrawal of same) to push colleges to increase their graduation rates. What does that mean? Many in the next generation of college graduates will come out with a degree that is meaningless. The “best practices” adopted by some colleges will be “graduate everyone” because that clears the path for them to stay on the Pell Grant tuition gravy train.

So hang on to that old school diploma and display it proudly. I predict that it won’t take long for employers to learn that many of the new Obama plan diplomas are comparatively low in value. If we are lucky, these students may learn what they should have been taught in high school.

I still like my Five Minute University proposal.

Image credit: valobstruction

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9 Responses to “Devaluation of the College Degree”
  1. SJ says:

    Bachelor’s have limited value. Forcing higher education =) and more loans woohoo

    The problem isn’t just college tho, it’s just that HS is useless right now. I don’t trust HS graduates to be prepared for … anything really… think about it this way do you trust present hs grads to be capable of delivering mail?

    (Okay now I’m being mean but haha…)

    As you dilute lower degrees higher degrees are also forced into dilution or seen easier than they truly are.

  2. MasterPo says:

    While I agree, your’re miss the bigger picture.

    By making PELL and other gov tution programs easier for students to get that means it makes colleges MORE dependent on GOVERNMENT money as a cash inflow. And when they become dependent on the gov’s cash, just like getting hooked ona drug, the gov can now start to MANDATE who they are to accept into the schools, quotas for various degree programs, even the content of then programs, etc.

    It’s not about opening the doors to more people, it’s about opening the doors to more government control into private affairs and our lives!

  3. MasterPo – I tried to make your point. Colleges wanting students receiving Pell Grants will need to do whatever is necessary to increase graduation rates, even if it means just handing out diplomas for showing up.

  4. Rick Beagle says:

    Arrrghhh! If only I had been born a few years later…. All that work could have been replaced with some really good partying!

  5. Kathy says:

    Mr. TML I am under the impression that you are against higher education in general. You had mentioned in previous posts that you have 3 children, I assume none of them are college educated……

    • Kathy – I am not against higher education. One of my sons has graduated, one has just finished his sophomore year, the third is taking a school break to work and figure out what he wants to study. I disagree with government control of higher education which is what Obama is targeting with his Pell Grant entitlement program. He also believes everyone should go to college. I don’t.

  6. cjbr549 says:

    A couple of points. If you go about it smartly, you can get an education in something that will actually get you a job (Engineering, Law, Medicine, etc.) at an in state public school without breaking the bank. But that is difficult and not very glamorous. What I find conspicuously missing from the Obominator’s plan is the stick. I find from personal experience that the stick is as great a motivator as the carrot and when combined they are extremely effective. I think that if you take this money to go to school, there should be some downside to dropping out as soon as you have the money spent. Having to pay that money back would certainly help the completion rate (as well as cutting down on the number of applicants to begin with). So maybe instead of a Pell grant, it would be a Pell loan that is given forbearance until degree completion or dropout. Upon dropout the payments would start, and upon degree completion the loan would be forgiven (turned into a grant). And by the way, the only way to get out of paying besides graduating is to die. That would ensure that only those with the drive and determination to actually get a degree would wind up benefiting from our tax dollars.

  7. MasterPo says:

    CJ – And what if a drop out doesn’t pay? Is the gov going to go after them? Before you say “YES!”, will that be applied equally and imparitally? Will an illegal Mexican for example be pursued as hard as you or I? Don’t bet on it…

  8. 09allin says:

    I think we need to be careful when we say that “euduspeak” means that disadvantaged equals dummies and slackers. That sounds an awful lot like a Limbaugh-ism! One of the differences between our educational system and those of many other countries is that we offer/try to educate everyone. Many countries do not even offer education to all of their populatios. That makes it very difficult to even start to compare the various systems. A suggestion. Take a look at educational efforts around the world and get the data for real comparisons. Try reading some nuetral authors such as Friedman or Gladwell to get a perspective on education. Education in our country, at least public urban districts, have been on trouble for long time. This is not a new phenomena. Part of the answer would be in examining systems and eliminating waste, and aligning educational practices with goal achivement. Part of the problem is that no one believes that their child is contributing to the problem. the attitude toward education has changed radically in the last 25 years. People ALL think that their child is above average and that anything the child says is the truth! Question. when is the last time YOU supported you local educational institute when your child wasn’t up to standards? Successful education involves the school staff, the child participating, AND the parents beingo ctively involved in the childs education. Many schools at all levels are treated as if they have the sole responsibility for the child. Parents treat K through 12, and beyond, as drop off babysitting services. I knwo that your blog is about government spending, but the educational crises is huge in this country and everyone needs to recognize their part in starting to correct it.

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