Peter Coy on Student Debt and the Cost and Quality of Higher Education

by Reihan Salam

Having recently discussed Megan McArdle’s Newsweek cover story on the perils of credentialism, I thought I’d make note of Peter Coy’s article on the same broad set of issues. Coy, the economics editor of Bloomberg Businessweek, speaks to many of the same higher education scholars, including Richard Vedder of the Center for College Affordability and Productivity and the co-authors of Academically Adrift: Limited Learning on College Campuses. And somewhat surprisingly, he also offers a fair-minded description of Charles Murray’s higher education views, which have often been misrepresented in the popular press:

Political scientist Charles Murray would get rid of the bachelor’s degree altogether. In an Intelligence Squared U.S. debate last October in Chicago, he said education is or at least ought to be a lifelong process for everyone, diploma holders or not. “We are all engaged in the same process,” Murray argued. “We are not divided into professionals and service workers or blue-collar workers. We all start out as apprentices. We become journeymen, and we all strive to become master craftsmen.”

Murray is generally associated with the starkly inegalitarian view that some students are simply not bright enough to pursue bachelor’s degrees. Yet his deeper insight is that the traditional model of undergraduate instruction is failing a large and growing number of students, not just those in need of remedial instruction. This discussion reminded me of a new Deloitte report by John Hagel and William Eggers, which I’ll be writing about at greater length soon:

[T]he skills that graduates acquire after four years of college will soon have an expected shelf life of only five years – meaning that skills learned in school can become outdated long before the student loans are paid off.   

To return to Coy, he turns from Murray to the authors of Academically Adrift:

To tell the truth, though, many students are not exactly striving, if [Richard] Arum and [Josipa] Roksa’s Academically Adrift is correct. Five-year colleges would be a better label for schools, since that’s the average amount of time it’s taking students to get through them. Financial aid is part of the problem: Students equipped with big loan packages can play schools against one another—and what students seem to want is good grades for light work, according to Arum’s research. To combat grade inflation, which has made college transcripts virtually useless to potential employers, Arum recommends that transcripts include the average grade given in a class next to the student’s letter grade. That would be like grading on a curve without having to grade on a curve. Students will presumably study harder, he says, if they know that their grades contain real information for employers and grad schools.

As for paying it all back, it would be going too far to direct students away from, say, ethnomusicology just because it’s less lucrative than nursing or petroleum engineering. Princeton University economist Cecilia Rouse points out that the liberal arts provide benefits to society beyond those that loan officers pay attention to. It’s hard, though, to argue against a standard disclosure form that would tell students about the debt load, unemployment rate, and average first-year income for graduates of the school and the major they’re thinking of committing their lives to.

The beauty of the reforms advanced by Arum and Roksa is that they are incremental and unlikely to alienate higher education incumbents. And the idea of improved disclosure requirements has gained steam from the Know Before You Go proposal introduced by Sen. Ron Wyden (D-OR) and backed by Sen. Marco Rubio (R-FL). The bill places heavy emphasis on improving access to data on labor market outcomes, which third parties can then analyze and share with the broader public. 

The Agenda

NRO’s domestic-policy blog, by Reihan Salam.