Is College becoming another company store?

You know the old saw about the company stores in mill towns:  they made sure they charged enough for their goods so that workers never got ahead and had to keep working at the mill.   Well, according to a recent post by Mike Mandel at innovation&growth, the same thing might be happening with colleges.

In the third quarter of 2011,  full-time workers with a bachelor’s degree and no advanced degree earned 3.5% less, in real terms, than a year earlier. . . .  Male college graduates saw their real wages fall by 5.3% over the past year,  while female college graduates had a 1.4% decline. . . . Because real wages are declining, it’s much harder for grads to pay back their loans.

This situation could make it almost impossible for many graduates to ever get out of debt and to achieve the self-sufficiency that has always be the ultimate promise of a “good education.”  You can read Mandel’s post here.  You can see graphs of the decline in graduates’ wages here and here.  Clearly, this makes the less-expensive public colleges and universities colleges an even more important resource for the society.  But even they need to do even more to help students with career preparation.  (Here is one example of such an initiative.)  But this problem has mostly to do with the changing nature of work and globalization.

If this trend continues, it suggests strongly that students that successfully complete their undergraduate program should have their tuition partially waived or completely forgiven.  It is in society’s interest that young people get a BA so they can then go to graduate school (which still provides a reasonable payback to attendees).  But it may no longer be reasonable to require young people to assume substantial debts for a degree that, by itself, may eventually become a net financial loss to the individuals who attain it.

Via Kevin Drum.

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