“If everyone got a college degree, the result would not be great jobs for all, but runaway credential inflation. Trying to spread success with education spreads education but not success.” – The Case Against Education
The (assumed) incoming Biden-Harris administration has compiled a list of entitlements for their upcoming term. This grab bag of goodies is sure to delight their diverse group of Democrat voters. First up, is student loan forgiveness. Few are aware, however, that individuals holding the highest amounts of school loan debt are white and upper class. Making the Biden team's first act, what I like to call, white reparations. Ba-dum-tssh! (rimshot)
To support my claim, I started with the left-leaning Brookings Institution. In 2020, Brookings analyzed a Federal Reserve survey and found that the top-income earners carried 60 percent of student loan debt, while the lowest-income earners held less than 20. Forbes added to the analysis by revealing that more than half of all student loan debt comes from graduate degrees and not undergraduate education. And since individuals with master’s degrees and Ph. D.s are mostly white, Biden’s plan amounts to little less than white reparations for the affluent. Worse, individuals with advanced degrees are among the highest-income earners. Removing debt will only increase inequality between the upper class and the working class and between whites and blacks. An odd outcome for a political party that prides itself on delivering equality.
Perhaps an important question to ask before students get themselves into even more debt is the necessity of the education itself. To be honest, the goal for most who attend college is the credentials and not the knowledge. Studies show that most forget what they’ve learned after the tests are completed anyway. Add to that, only a small percentage of degree programs provide a well-defined career path, which makes the degree highly beneficial. For the majority of college graduates, however, credentialing is nothing more than a signal to a potential employer that they are bright enough, persistent enough, and obedient enough to handle a particular job. Today’s higher education provides employers with the goods, in the form of a disciplined and compliant field of candidates. But is it possible there is too much schooling for some people? Most jobs require only certain traits and skills, that one can acquire in high school, and trade schools. The rest is on-the-job training and learning.
Easy money makes a bad situation worse. School loans were completely removed from the private market in 2010, after decades of claims of greedy lenders. Up until then, loans were only given to students who chose a viable degree that could reasonably create enough income to repay the liability. When the government took over, they removed this condition and provided loans to anyone who applied. Loans in the private market were dischargeable under bankruptcy, while government loans were not. This was a clear trade-off. If you want your silly degree in underwater basket weaving, you can have the loan, but it will follow you to the grave. Unfortunately, the abundance of government loans provides an alluring path for advanced education to many who were simply not suited for college. Above-average students, regardless of gender or race, fare better in higher education.
In Bryan Caplan’s 2018 book, “The Case Against Education”, Caplan demonstrates why education is mostly a waste of time and money. He begins by revealing the disconnect between high school and college curriculum and the job market. He then explains the credential inflation that occurs when employers place college degree holders in jobs that previously did not require a degree, forcing even more education for higher-skilled positions. Caplan suggests that a reduction in government subsidies to higher education will deflate the credential crisis. Without easy government money for college, those who are better candidates for vocational schools or no advanced schooling at all will avoid getting themselves into fiscal trouble with four years of college expenses.
When gas prices are high, we blame the greedy oil companies. When college tuition is high, we blame everyone but the greedy colleges. Government loans flooded the university circuit and incentivized schools to raise their tuition. To make matters worse, colleges have very little skin in the game and don’t suffer when students drop out or end up with degrees that don’t earn enough to cover the cost to attain it. On top of that, many schools sit on extravagant endowments, some in the billions of dollars. Placing more accountability on colleges to make their degrees affordable and worthwhile, could help ease some of the pain.
Forgiving loans to wealthy whites will increase inequality. College degree holders earn significantly more than the working class, resulting in significant inequality between groups. Removing their debt burden will only exacerbate the differences between class and race. But don’t tell that to wealthy white college grads, busy scheduling their next trip to Europe after freeing up all that debt. And to you working stiffs…bon voyage!
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