Magazine January 27, 2014, Issue

The College Trap

Our higher-education system hurts the poor

A few years ago, a friend learned that a mutual acquaintance had accepted a job with an elite D.C. law firm, at a starting salary of $160,000. She turned pre-law almost overnight. Because I was thinking about law school myself, I knew that those high-paying jobs were vanishing for all but the luckiest graduates. My friend was undeterred: She took an extra year of classes to raise her GPA for the applications (incurring thousands in debt in the process) and crammed for the law-school admissions test. It was an admirable effort. But eventually the reality of the employment market set in, and she took a different job. She never did go to law school.

My friend displayed a classic middle- and working-class mindset. In his 2010 book How Rich People Think, Steve Siebold criticized the almost religious belief “that master’s degrees and doctorates are the way to wealth.” I had that belief too — it’s why I wanted to go to law school in the first place — and so does virtually everyone I’ve ever known. When you grow up at the bottom or even in the middle, advanced education is the Holy Grail. Parents mortgage their homes and children donate their plasma (seriously) to pay for it.

Lately, writers have questioned whether many people spend too much on college and get too little in return. This fear has motivated recent proposals to encourage online education or make a $10,000 bachelor’s degree available to everyone. But there is a deeper problem with the college cult than the diminishing value of certain degrees: In our zeal to give many a college education, we’ve made it an employment barrier for those who lack it.

You can imagine the reaction if, tomorrow, Congress passed a worker-identification law with the following provision: “Only those who carry their federal ID card may apply for jobs that pay more than $45,000; ID cards may be obtained from government vendors for $100,000.” The country would erupt in protest. Yet this is what college does. When two people apply for a job, and they’re alike in every way except schooling, the employer will almost always hire the more educated. That’s true even of the many jobs that don’t require a college degree. As economists Neeta Fogg and Paul Harrington recently found, a shocking 39 percent of new graduates are working such jobs.

Academics call this phenomenon “degree inflation.” In an economy populated by college graduates, bachelor’s degrees become necessary just to get your foot in the door. A host of professions — photographers, lab technicians, and equipment operators — have seen their ranks swell with college graduates, despite the absence of any obvious need for forklift drivers to have studied Michel Foucault. The New York Times recently reported that these new education requirements often have little to do with ensuring that employees possess a particular skill set. Instead, they’re an easy way to winnow the applicant pool: There are so many degree holders these days that you can eliminate all non–degree holders and still have plenty of people to hire from.

Unfortunately for many working-class Americans, that winnowing process falls hardest on them. As it’s currently played, the college-education game simply isn’t fair.

Part of the problem is that bright low-income children don’t apply to colleges that match their talents. The brutal irony is that, for the poor, the colleges with the highest sticker prices are free (or close to it) because of generous need-based aid. So there’s much to be said for policies that make low-income students aware of the options they have.

Still, there are many subtle ways that colleges discriminate against working-class students. Take, for example, the admissions process. A common critique of modern affirmative action is that class is a far better metric of misfortune than race, and that colleges should adjust their admissions preferences accordingly. The underlying assumption is that a poor student gets no admissions boost relative to a wealthy student. But this actually understates the problem: Poor students are actively disadvantaged in the process. In a recent study, Princeton sociologists Thomas Espenshade and Alexandria Radford discovered that at private colleges — whose graduates have, on average, significantly better employment prospects than graduates of public schools — a poor white student is three times less likely to receive an admissions offer than his wealthy counterpart with the exact same grades and SAT scores. Race doesn’t explain this, and neither do grades or standardized tests.

#page#What does explain it? One factor is that a lot of colleges are not “need-blind”: They are simply less likely to accept students who will need more financial aid. Another answer is obvious to anyone who’s applied to a prestigious college. To gain admission to these places, you don’t just need scores and grades, you need a padded résumé — internships, sports, extracurriculars, and leadership positions. The Princeton Review, a test-coaching company, estimates that up to a third of the average college application is based on exactly these “soft factors.” But for a working-class child, chess club, baseball, and student government usually give way to an after-school job. And admissions officers apparently care little about an applicant’s experience bagging groceries.

When these students do get into college, they often encounter other barriers unique to their circumstances. Most parents complete their kid’s financial-aid forms, for instance, but a lot of poor students must fight through the bureaucratic morass alone. That’s harder than it sounds: For the 7.5 million impoverished kids living with single moms, filling out Dad’s income figures on the annual financial-aid application requires serious detective work. One recent graduate I spoke with had to borrow money from a friend so that he could pay his first month’s rent and security deposit. Even though he’d been awarded tens of thousands in financial aid, the money wasn’t disbursed until a month after classes had started.

This is the minefield that progressives and many conservatives have labored to make the only path to the top in modern America. Of course, we married ourselves to college for all the right reasons: Policymakers wanted to help people, and statistics showed us that college graduates earned millions more than everyone else over a lifetime. The next step was obvious: Send more people to school. It was one of the truly bipartisan issues in our society. In the 2000 presidential campaign, Al Gore offered a $10,000 tuition deduction while George W. Bush promised more funding for scholarships and Pell Grants.

But to the extent that politicians viewed college education as a panacea for rising inequality and reduced upward mobility, they were wrong. The average college graduate may make more money, but anyone can tell you that a Harvard degree pays more than one from the online University of Phoenix — so statistics about the “average” graduate tell us little. The truth is that graduates of America’s worst colleges have little to show for their time besides mountains of debt. And the graduates of those colleges are disproportionately poor.

Liberals justify the tens of billions we spend on college education on at least one other ground: that it ensures that our society is better prepared for the “new economy.” President Obama has repeatedly committed the United States to leading the world in college-graduation rates by 2020, a goal that, if achieved, would allegedly cure many social ills. But if college is the key to the future, then it makes little sense that South Korea, Japan, and Canada — the best-educated societies on the planet — rank far behind the United States in per-person productivity. Meanwhile, Singapore and Switzerland, among the few countries that outrank us in terms of per capita GDP, lag behind the U.S. in college completion.

So, at the national level, the link between college education and productivity is virtually nonexistent. If we’re not creating much value with the billions we spend on education, it’s worth asking what those billions have bought. And the answer is: good jobs for university employees, and a social system that disadvantages the poor.

Economists have long understood that subsidies work best when producers are able to increase output. It’s a very intuitive concept. If universities can’t produce more employable graduates but are still taking in loads of cash, they’ll spend it somewhere else. In practice, this meant that dorms grew plusher, professors earned more, administrative staffs swelled, and an industry of for-profit colleges sprouted from nowhere. A Goldwater Institute report found that since 1993, administrative outlays have increased by 61 percent per student. My own alma mater, Ohio State, employs six non-teachers for every full-time faculty member. This is where our education dollars go.

So, in a world with a finite supply of degree-requiring jobs, giving colleges more money will have negligible social value. Even if the colleges increase enrollment, the enrollees don’t benefit from their degrees in any tangible way. From 2000 to 2010, national college enrollment swelled by 6 million — an astonishing 37 percent increase. For millions of these new enrollees, though, college was little more than an expensive career detour, because the market simply couldn’t provide enough degree-requiring jobs. Ultimately, then, you have a redistribution to the education establishment, at everyone else’s expense: It takes from the many and gives to the already well-off few — professors new and old, and their support staff. College does not solve or ameliorate the crisis of opportunity; it exacerbates it.

#page#And in a world with finite resources, as we spend more on college, we’re necessarily spending less on everything else. That’s a shame, because we have evidence that alternative approaches to skill formation might actually benefit the working class. In Europe, well-designed apprenticeship programs ensure that interested students leave high school with practical, marketable skills. In contrast, as Boston Consulting Group senior partner Harold Sirkin recently wrote, “U.S. factories are begging for skilled workers.” Unfortunately, our country is too obsessed with the almighty B.A. to supply them.

It’s no surprise that Germany, with its aggressive efforts to promote vocational education, bests the United States in both youth employment and upward mobility. Finland has experienced similar success with its emphasis on practical-skill formation. We ought to follow their lead and divert some of the subsidies for higher education into similar vocational programs. Progressives often say they want the U.S. to be more like Europe. On this issue, conservatives can lead the way.

Addressing this lack of practical skills, while helpful, is still only a partial solution. A big part of the problem is that by the time many of our poor kids reach college age, they’re so far behind the curve that they’ll never catch up. University of Chicago economist James Heckman, a winner of the Nobel Prize, has shown that far too many poor children lack the soft skills — such as the abilities to delay gratification and to cooperate — that help set the successful apart from everyone else. His research has found that high-quality early-childhood education is the most productive investment in the lower class. In fact, it’s an investment that pays returns: We spend so much less in incarceration costs, welfare payments, and the like that we actually save tax dollars. The case for investing more in early-childhood education is based not just in fairness but in economics.

Not all early-childhood education is created equal. As progressives push for an expansion of the largely ineffective, federalized Head Start program, there is a better option: subsidizing early education in the same way we subsidize college education. Give people money and let them decide how to spend it.

Conservatives have supported vouchers for all the right reasons: Vouchers give kids the opportunity to escape a failing school, they give parents a choice, and they force educators to compete. Yet it needs to be said that vouchers grow less effective as children age. Skills beget skills, and knowledge begets knowledge: Heckman’s research shows that a good preschool produces significantly better results for children than does a good high school. The most effective voucher programs will target our youngest kids, not those nearing adulthood.

This means that subsidizing college is a terrible way to promote opportunity. Of course, college still has value. There are millions of jobs that require advanced education. And many of our universities produce cutting-edge technologies that create real growth and improve our nation’s future. But we have reached a point of diminishing returns. Our society turns its nose up at 19-year-old plumbers while reinforcing the notion that every undergraduate is “going places.” All the while, our government finances the creation of more undergraduates while doing little to help young kids close the skill gap.

The irony is that our economy needs more plumbers and fewer undergraduates. And America’s poor need more opportunity, not heavily subsidized pieces of paper.

– Mr. Vance, a recent graduate of Yale Law School and a Marine Corps veteran, is working on a book about the social mobility of the white working class. He can be reached through his Twitter account, @jdvance1.

J. D. Vance is the author of Hillbilly Elegy: A Memoir of a Family and Culture in Crisis.

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