What is the value of a college education?
That is a question, the connection to
student loan debt raises our question.
How much student loan debt is a college
Bryan Caplan has a piece in the Atlantic delving in detail as to what students learn and why a college degree does increase lifetime earnings.
As an economics professor, he is looking at the value of a college education.
Education is so integral to modern life that we take it for granted. Young people have to leap through interminable academic hoops to secure their place in the adult world. My thesis, in a single sentence: Civilized societies revolve around education now, but there is a better—indeed, more civilized—way. If everyone had a college degree, the result would be not great jobs for all, but runaway credential inflation. Trying to spread success with education spreads education but not success.
So, we do have 5,000 janitors with masters degrees.
How is this possible? Credential inflation: As the average level of education rises, you need more education to convince employers you’re worthy of any specific job. One research team found that from the early 1970s through the mid‑1990s, the average education level within 500 occupational categories rose by 1.2 years. But most of the jobs didn’t change much over that span—there’s no reason, except credential inflation, why people should have needed more education to do them in 1995 than in 1975. What’s more, all American workers’ education rose by 1.5 years in that same span—which is to say that a great majority of the extra education workers received was deployed not to get better jobs, but to get jobs that had recently been held by people with less education.
My take away from this, is that same degree costs way more now than it did ten years, 15 years, 20 years ago, but, there is no increased return on that investment.
You have the same premium over earnings of a person with only a high school diploma, but, at what cost?
Student Loan Debt Not Being Repaid
LInking to a couple of stories on the collateral damage of everyone chasing those extra lifetime earnings by going into student loan debt.
Nearly 5 million Americans are in default on their federal student loan payments, the Wall Street Journal reported Wednesday.
That’s nearly double the number of Americans who were severely behind on payments four years ago. The number of borrowers that haven’t made a payment in at least a year grew by nearly 274,000 in the third quarter alone. And it’s happening despite promising signs for economic growth and job creation, the WSJ reported.
We sold these students a bill of goods, and they are not going to be able to repay the student loan debt.
More than one-in-three borrowers who have defaulted on their student loans did so without ever attempting to make a payment, according to a new report.
A record 11 percent of the 44 million former college students with outstanding loan debt now sit in default—far beyond the 8.6 percent peaking mortgage defaults at the height of the housing crisis that caused the Great Recession—according to the Student Loan Report. Nearly half of all those in default, 48.6 percent, said in a survey that they never obtained a college degree, while 33.8 percent have not made a single payment on their debt.