Post-Secondary Education
By: Pat Canny
Tags: Education Reform, Education, College, Economics

Every month, I stash away $400 in each of my kid’s 529 savings accounts with the hope of saving enough for 2.5 years of a state school university education for each of them by the time they get to college. So far, we’re on track, but this process got me thinking about the future of post-secondary education post-COVID.

Am I actually over-saving?

In recent years, a few trends have emerged which point towards a dramatic shift in the U.S. university system in the coming decades:

Rapid growth in online-only courses Cost growth in undergraduate education (which has, for years, outpaced inflation and drives more student loan debt) Shrinking population of tradespeople (e.g. plumbers and other contractors)

I’ll start by saying that some countries have already offered solutions to these problems. My favorite is Germany, which utilizes a rigid specialization system to encourage students very early on to pursue a given area. This may run counter to many values in the United States, but we could certainly learn from other countries.

The Failure

Post-secondary education in the United States is inefficient: too many students pursue degrees which do not pay off in the long run.

The Solution

First off, I’m not suggesting we impose a rigid specialization system like in Germany. That would require such a fundamental, and coordinated, shift which would likely never “take.”

Instead, I’ll suggest some guiding principles:

“Sunshine is the best disinfectant”

One of the best things the Obama Administration did was launching the U.S. College Scorecard in 2016. The reporting requirements imposed on universities alone are worth praising. If a university leverages federal student loans, they need to provide evidence to prospective students that the investment is worthwhile. It’s up to the students and their parents to then decide whether a four year Bachelor of Arts in Engineering from Brown is a reasonable choice.

I suggest the Scorecard continue pushing students down alternative paths (as it has already tried), including use of online degrees and certificates to offset costs. Not everyone is going to launch their own business at the age of 18, but then again: maybe more people should give it a try.

2. Reduce the Flow of Student Loans. Issue More Grants and Small Business Loans.

Student loan forgiveness has emerged as a hot topic in the U.S. since Joe Biden was elected last month. The idea is that by forgiving “billions of dollars” in student loans, people who have had a hard time getting out from under the debt burden will be able to spend their money on other things and move on with their lives. I think it’s a half-baked and unnecessary solution to the wrong problem.

Jeff Jacoby of the Boston Globe recently outlined two issues with student loan forgiveness: it rewards the wrong people by rewarding those who took on loans over those who saved up for college, and there are already solutions available to those who have a hard time paying off their loans.

Instead, keep the existing solutions in place and start putting the screws to schools whose students tend to take on a lot of debt. The data provided by the Scorecard already includes Financial Aid and Debt metrics. Why not make it mandatory for schools to provide this to prospective students?

Another approach is to “convert” some of the student loan money into grants or business loans offered to entrepreneurs who exhibit some drive and ability to venture out on their own after high school? The Small Business Administration is already set up to do this, but I would be amazed if more than 5% of high school graduates in the United States were even aware the SBA existed. Leverage existing resources!

3. Break Down College Degree “Signaling”

In economics, “signaling” is effectively a means of conveying value through some mechanism or other information. For instance, I may “signal” that I am intelligent by wearing glasses and a Harvard hat. Celebrity endorsement is another popular form of signaling: if Michael Jordan says Nike is great, then Nike must be great because it can afford to hire Michael Jordan!

College degrees often serve as signals to prospective employers that someone either has enough domain knowledge or, at the very least, has the ability to work hard and survive the academic gauntlet.

(As a brief aside, I am not talking about Master’s degrees, which are a different animal. I have two of them, each of which sends a different signal, however they collectively signal ‘This guy likes learning’, which is true and has helped me invaluably. Bachelor’s degrees, on the other hand, send a more basic and problematic set of signals.)

The problems are that: not every Bachelor’s degree sends the same signal, and too many jobs require a Bachelor’s degree.

First to the matter of degree type and issue institution: a Communications degree from UNCW sends a different signal than an Electrical and Computer Engineering degree from WPI. These are both perfectly good degrees on their own right (my sister has the former, I have the latter). In the case of the Communications degree, my sister knew what she wanted to do and went on to work in a field which actually required her degree. On the other hand, many of her classmates treated it as “the easy degree” and ended up either studying or working in an entirely different field.

I posit that certain degrees send a stronger “signal of intent” than others, and all too often the issuing institution plays too strong a role with recruiters. In the long run, this is a disservice to the student (who pursues a degree ‘just to get one’) and the employer (who ends up hiring too many people with the same background).

Instead, employers should use signals which go beyond the degree, such as project work and individual characteristics. Ignore the issuing institution altogether, or better yet: don’t require a specific degree in some of your postings.

On that note, what is wrong with hiring someone with an Associate’s Degree? There are countless jobs out there which needlessly require a Bachelor’s Degree when an Associate’s a bit of hard work would suffice. You are not lowering your standards by being honest about the skills required.

4. Online-Only First Year

I can remember the first day of classes back in late August 2003. I was a freshman at WPI intent on studying Electrical and Computer Engineering. My first class was PH 1110, the intro physics course. It was the first of literally dozens of college courses I would take over a ten year span and three degrees, and… I barely remember any of it.

I’m sure some of it is just baked into my head, but all I can really remember about those first few courses were goofy moments with the professor and/or stressing out about an exam. The lecture halls were all packed, and I struggled with a few topics while breezing through others.

Giant lecture halls filled with nervous 18 year-old kids away from home for the first time who have never taken a college course and were bound to struggle and, generally, not ask for help from institutions that have, if anything, shown less interest in individual learning over time and more interest in cracking down on cheating.

Some of these students will inevitably fail their first few courses and either switch majors, transfer schools, or drop out altogether. Hopefully they will have had a good time before letting mom and dad know their hard-earned tuition money was just a bad investment.

How is this still a thing?

Simple solution: put all first year “core” courses online and designed for individual learning. Make the kids actually learn the stuff before they hop on campus for three good years.

You do not need four years of campus living to get a good college experience. In fact, most students only live on campus for a couple years before moving off-campus (I “went Greek” and lived off campus for three wonderful years). How would this do serious damage to the university’s economics? You’d still have the room-and-board income and, if anything, a more stable base of students.

While we’re at it: accept more first-year online-only students. The marginal cost of instruction is negligible with online courses, so why not accept 10–15% more first-year students? In order to get a degree, students will still need to complete their remaining coursework on campus. Assuming that, over time, the attrition rate is predictable and/or the on campus environment can “flex” with more or less students in a given year, this would open up opportunities for more students. And, of course: make it easy to transfer credits. Be reasonable.

In the end, I can see the four year on-campus experience going away over the coming decades. I understand why this would be a sad thing for many who, like me, got a lot out of being on campus. I would ask one simple question: how much better would the college experience be if you retained more of your first year courses and “packed in” more during your three years on campus?