College in America Needs Overhaul

One of the reasons American colleges are the most envied in the world is because of the lavish subsidies they receive. And yet, American colleges are in trouble. Enrollment is down and will continue to go down because of depressed foreign-student access and because Americans hit a baby bust two decades ago. Colleges are beginning to close at an alarming rate. Confidence in American higher education is polarized. Only 23 percent of Republicans place trust in higher education. But that trust is slipping overall. Only 50 percent of Democrats say they have confidence in these institutions of learning.

That lack of confidence may be due to the fact that American universities seem to defy the laws of gravity. Every intuition about markets tells us that when demand falls, prices fall with it, especially if forecasters can see a shrinking customer base in the future. But from 1977 to 2024, published tuition rose by roughly 1,513 percent, an average of 6.1 percent a year against general inflation of about 3.6 percent. The number of colleges multiplied in this time, making the degrees ubiquitous and less useful as a status signal. Yet while the market is imploding, all-in sticker prices at elite universities are reaching six figures a year. Incentivized to invest for themselves, many top-tier universities have enormous endowments that produce tens of millions in income every year.

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Michael Brendan Dougherty

Michael Brendan Dougherty is a senior writer at National Review Online.

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One of the reasons American colleges are the most envied in the world is because of the lavish subsidies they receive. And yet, American colleges are in trouble. Enrollment is down and will continue to go down because of depressed foreign-student access and because Americans hit a baby bust two decades ago. Colleges are beginning to close at an alarming rate. Confidence in American higher education is polarized. Only 23 percent of Republicans place trust in higher education. But that trust is slipping overall. Only 50 percent of Democrats say they have confidence in these institutions of learning.

That lack of confidence may be due to the fact that American universities seem to defy the laws of gravity. Every intuition about markets tells us that when demand falls, prices fall with it, especially if forecasters can see a shrinking customer base in the future. But from 1977 to 2024, published tuition rose by roughly 1,513 percent, an average of 6.1 percent a year against general inflation of about 3.6 percent. The number of colleges multiplied in this time, making the degrees ubiquitous and less useful as a status signal. Yet while the market is imploding, all-in sticker prices at elite universities are reaching six figures a year. Incentivized to invest for themselves, many top-tier universities have enormous endowments that produce tens of millions in income every year.