Is college a bad investment?

With tuition rising and jobs disappearing, says Megan McArdle at The Daily Beast, many students are leaving campus worse off than when they arrived

A student takes a nap while studying: The price of a college education has nearly doubled since 1995, far outpacing inflation.
(Image credit: Andersen Ross/Blend Images/Corbis)

Americans "all seem to agree that a college education is wonderful," says Megan McArdle at The Daily Beast, but our obsession with getting a degree at all costs is getting out of hand. We're telling students that college grads make 80 percent more than their counterparts with just a high-school diploma, and that the student-loan debt they're piling up is a necessary investment. As a result, the number of bachelor's degrees awarded jumped by 50 percent between 1992 and 2008. The trouble is, 60 percent of those additional students wound up in jobs they probably could have landed without a degree — waitress, electrician, secretary, mail carrier. Indeed, many young Americans who arrive on campus expecting a diploma to propel them to success are finding "it won't even get them out of the spare bedroom at Mom and Dad's." Which begs the question: "Is all this investment in college education really worth it? The answer, I fear, is that it's not." Is this too pessimistic a view on college, or is the bill for four years of tuition really a bad investment?

College doesn't always pay off, but not going is worse: McArdle says an increasing number of kids are worse off, financially speaking, when they leave campus than when they arrived, says Daniel Luzer at Washington Monthly. "This is a good point. But it doesn't mean that college wasn't worth it." These financially hobbled grads are still more likely to get a job, and earn more, than if they "never set foot on campus." The problem is that we're pumping fewer public resources into education, so students are having to pay a bigger chunk of the bill.

"The lousy investment?"

Subscribe to The Week

Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.


Sign up for The Week's Free Newsletters

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

Sign up

Higher education is a better investment than ever: Sure, the average student leaves campus owing $30,000, says Felix Salmon at Reuters, but that's "still a small price to pay for a lifetime of access to jobs and promotions which would otherwise be off-limits." In fact, the "wage premium" for college graduates is only getting bigger in our digital economy. "So while the cost of going to college is rising, the cost of not going to college is, arguably, rising even faster."

"The necessity of a college education"

But one day, college might be a bad investment: College might not pay off for some marginal students, says Dylan Matthews at The Washington Post, but, according to the Brookings Institution, money invested in college still "more than triples your investment, an astounding rate of return compared to traditional investments such as stocks and bonds." That's why it's premature to dismiss college as a bad investment. However: At the rate tuition is ballooning, there will come a day when college is a bad investment — "unless growth in tuition costs is corralled."

"College is still a great investment. But it's getting worse"

Continue reading for free

We hope you're enjoying The Week's refreshingly open-minded journalism.

Subscribed to The Week? Register your account with the same email as your subscription.