Opinion: College Is Not A Losing Investment

"College enrollment is dropping again — and that’s a bad thing," The Washington Post columnist Catherine Rampell writes in an opinion piece.

"A Labor Department report released this week finds that the share of young people enrolled in college by the October after they graduate from high school has tumbled in the past few years. From a high of 70.1 percent in 2009, it was down to 65.9 percent in 2013. Other reports have found similar declines in enrollment for the entire universe of college students, not just those coming directly out of high school.

No doubt many pundits will celebrate this news. The previous swells in postsecondary enrollment, driven partly by the lackluster job market, brought frequent calls of a 'college bubble.' Just as the government subsidized too much homeownership, the argument goes, it’s also been subsidizing too much higher education. ...

But here’s why college is still worth it, and still worth subsidizing. ...

A college degree is certainly no guarantee of financial success, but it is nearly a prerequisite for moving up the income ladder if you’re poor. Of Americans born into families in the bottom income quintile, almost half who didn’t get a college degree remained stuck in the poorest income quintile as adults; the same was true for just 10 percent of Americans born poor who then got a college degree, Pew’s Economic Mobility Project found in 2012.

As for why higher ed should be subsidized: There are large, positive spillover effects from having a more educated workforce beyond the gains that accrue to the degree-holder. Research has found that having a higher concentration of college graduates in a local economy increases the wages of not only the college grads themselves but also those without bachelor’s degrees. (Which is why it’s especially shortsighted for states to cut higher education funds, which forces schools to raise tuition and price out the more marginal matriculants.)

Public policy could do much more to nudge students into disciplines that produce bigger private and public economic returns, including better career counseling or tuition discounts in fields where there are expected skill shortages. But first things first: We need to stop playing down what a great investment college is for most Americans."

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