President Barack Obama, addressing graduates at historically black Hampton University on Sunday, said that it is the responsibility of all Americans to offer every child the type of education that will make them competitive in an economy in which just a high school diploma is no longer enough.
Unfortunately for most college graduates, this kind of advice comes at least a decade too late. Some degrees still have fairly high ROIs but these will be arbitraged down as more students pursue these degrees. My own MBA in finance isn't worth anything in the job market because I don't have a privileged family pedigree to back it up. People who've actually done the math on payoffs from college are starting to learn the truth:
As the price of a college degree continues to rise, there's growing evidence that the monetary payoff isn't quite as big as often advertised. The best estimate now is that a college degree is worth about $300,000 in today's dollars—nowhere near the $1 million figure that is often quoted.
Subtract the interest payments on student loans and the ROI of your typical bachelor's degree will be in negative territory soon enough. This may be a moot point as further credit contraction will dry up traditional sources of student loans.
Politicians, particularly at the left end of the polity, depend on campaign contributions from teachers' unions for their continued livelihood. Even conservative politicians go along with this scam because the system worked quite well for them. All those years spent drinking and carousing in the Ivy League paid off with dynastic alliances, trophy marriages, and elite family introductions to movers and shakers. Those options aren't available to the hoi polloi, but that doesn't stop the elites from encouraging them to waste money on college scams. Elected officials will thus continue to talk up the value of consumer acquiescence to the education racket's greed.
The best advice I can give to anyone genuflecting at the "more education" altar is to consider something else first. Working in entry-level jobs and developing a plethora of real skills will pay off in the austere decades ahead once middle-class workplaces have dried up and blown away. Don't get some worthless credential just to impress an employer. I'm more impressed with people who work for themselves.
