Buy the book — The Bubble: How Higher Education Became America’s Most Over-Rated Product

Higher Education Shows All the Signs of a Bubble

But We’re Not Allowed to Talk About It

“This institution will be based on the illimitable freedom of the human mind. For here we are not afraid to follow truth wherever it may lead, nor to tolerate any error so long as reason is left free to combat it.”

— Thomas Jefferson, upon founding the University of Virginia

A new vernacular has emerged on college campuses: “safe spaces,” “microaggressions,” “trigger warnings” and the like. Even liberal professors admit to being “terrified” by their students. Yale students cornered and screamed at their professor for warning them not to overreact to “cultural appropriation” in Halloween costumes. On other campuses, mobs have called for the heads of figures like Charles Murray, Heather Mac Donald, and Milo Yiannopoulos for daring to voice controversial opinions on campus.

These incidents reflect a pathological victimhood mentality that can be seen throughout society, but seems to have begun on college campuses. It doesn’t take an advanced degree to see the difference between an act of physical violence and wearing a sombrero to a party (unless that degree is in “Cultural Studies”). The vast majority of professors and guest speakers who have been silenced have had good intentions — namely to share their knowledge and opinions.

It would appear that the Free Speech Movement is dead. Universities used to be places where ideas could be challenged and discussed in the open. Today, they are bubbles that insulate their students from any speech that could be deemed offensive. Led by the Foundation for Individual Rights in Education (FIRE), a small minority is fighting back against repressive speech codes and “disinvitation campaigns” against controversial speakers, but the problem is likely to get worse before it gets better.

Popping the Bubble

Remember Fannie Mae and Freddie Mac? The federal government guaranteed all those subprime mortgage loans, blew up a housing bubble, and then we, the taxpayers, were stuck with the bill when the bubble burst.

Student loan debt, fueled by subsidies, looks like the next big financial bubble. Federal government spends over $100 billion on higher education each year, both through direct subsidies and as guarantor of student loans. The amount of student loans outstanding — nearly $1.5 trillion — is greater than the amount of outstanding subprime mortgage debt leading up to the housing crisis.

Once again, loans are being given indiscriminately and defaulting at an increasing rate. These loans are particularly sinister since they are not dischargeable in bankruptcy court.

How did four-year universities capture such a strong place in the public’s imagination?

When everyone “knows” that college is necessary to succeed, it becomes a self-fulfilling prophecy. Those who don’t go seem odd or stupid. The more money we invest in upholding the myth, the stronger is becomes. For most kids, going to college pays. Employers want the piece of paper certifying that a person is “system-approved” — i.e., smart enough to play the game, follow directions, and tolerate boredom in the pursuit of abstract goals.

A diploma signals strongly to future employers that a student has done the requisite conforming and is ready for the job market, but it says nothing about the knowledge and value the student acquired during their time in school. Arnold Kling writes that higher education is the only product where the customer tries to get as little out of it as possible. Being a “full-time” student is actually more like a part-time job, with students averaging just 27 hours of academic work per week (including time in class). The rest of the time they are surfing the web, playing sports, going to parties, or just hanging out with friends.

Surveys of the general public reveal that college grads are embarrassingly ignorant — even in the impractical areas that schools emphasize in their curriculum. Students are spending four critical years studying topics only slightly more useful than underwater basket weaving.

To make matters worse, higher education is now an entitlement, and entitlements are notoriously hard to roll back. Until this narrative is broken, it may be up to a handful of rogue reformers to buck the system and chart their own course during the college years.

Watch the trailer for my new book

From System Approved to Market Approved

It is rarely recalled that President Obama, having successfully taken on the banks, the mortgage brokers, and the credit card issuers set his sights on regulating for-profit colleges. Unlike four-year colleges, for-profit schools train students in specific, marketable skills: dental hygienists, medical technicians, lab technicians, artists, fashion designers, etc.

Vocational schools cater to those who have less money and formal education. Their students may have a higher failure rate, but their mission is education in purposeful activities — not indoctrination. Hence, they are the perfect target for certain politicians.

Speaking at an oversight hearing on for-profit colleges in 2010, Iowa Senator Tom Harkin said, “Proprietary schools have profited and prospered, and this is a disservice to students and taxpayers.” In other words, anybody who profits is bad.

To make a profit is to owe society an apology. Trade schools perform a valuable service, and exist in an active marketplace where they compete for students. The largest of these schools, University of Phoenix, has about 458,000 students. Regulations on for-profit schools lead to a loss of valuable education for students who are underserved by four-year colleges. There is a valid argument that federal student aid has fueled a bubble in for-profit schools as well, but the solution is to end the subsidies — not to pile on new regulations.

Furthermore, most of what can be said against trade schools is equally if not more true of four-year colleges. Is it not true that four-year colleges are overpriced in terms of employability? People who graduate with a degree in classical studies or philosophy, for example, will be hard-pressed to find jobs that enable them to pay off their student loans.

An educator recently observed that 40% of four-year college graduates, when polled, said that they would never go to college if they had all over again. He identified a four-year degree college as “America’s most overrated product.” Lastly, the bottom-half of high school students, who are encouraged to go to college, have a minuscule chance of graduating even if they spent eight years.

The apprenticeship system works well in Germany and Switzerland, but hasn’t caught on in the U.S. The reason boils down to what Bryan Caplan calls the “social desirability bias,” which makes people hesitant to utter socially unacceptable truths.

In 2019, it’s not cool to trash college. Apprenticeships are seen as a second-class option. Telling your child to consider vocational training is like telling them to lower their expectations of life. The lack of free speech on campus only cements the many lies and unchallenged biases that are flourishing on America’s college campuses. As the bubble gets bigger, we can expect that free speech will only be suppressed more violently, as the lies will only get louder.

The topics of student loans, federal subsidies to higher education, and free speech on campus may seem unrelated, but I recently published a volume of interviews from my radio program, making an under-appreciated connection. Each of my guests has written a book that presents a different angle of the story.

We probably can’t revoke government subsidies to higher education, but we can push back against social desirability bias by lowering the status of a university education and raising the status of for-profit and vocational school.

This won’t be an easy battle. The army of debt-saddled college grads is more sensitive than previous generations, having shielded themselves from alternative points of view. Telling members of the “iGen” that they’ve wasted the last four years of their life is likely to provoke severe anxiety (assuming you can get them to look up from their smartphones). I think it’s time to burst their bubble.



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