Phi Beta Cons

How the College Bubble Will Pop

That’s the title of an op-ed in today’s Wall Street Journal by Rich Vedder and Christopher Denhart. The central argument of the piece is that we have oversold college to the point where very large percentages of those who go to college can find only rather low-skill jobs. As people realize that college has guaranteed high costs but no guarantee at all of that supposed “college-earnings premium,” they will increasingly turn to other options.

It’s impossible to say everything that supports your case in a short article. One important point they omit is that the phenomenon of college grads having to take low-skill “high school” jobs is not just a recent development. It has been building for at least 20 years. One of the first books I read on higher-ed policy when I got involved in it was Who’s Not Working and Why, a 1999 book by Frederic Pryor and David Schaffer. They discussed that problem, which they had observed in data going back to the 70s. They blamed it on the declining standards spreading across the higher-ed landscape: “The low functional literacy of many university graduates represents a serious indictment against the standards of the U.S. higher educational system.”

Bubbles pop once a significant number of people realize that the purported value of something they’re thinking of buying is really less than previous buyers had thought and not warranted by the current price. That is definitely happening in higher ed.


George Leef is the director of research for the John William Pope Center for Higher Education Policy.

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