January PFD Topic Analysis

Our topic analysis for January’s higher education Public Forum Debate resolution is below the fold!

Resolved: The costs of a college education outweigh the benefits.

Intro

Bob Dylan once sang that “it doesn’t take a weatherman to tell which way the wind blows.”[1] In modern America, it doesn’t take an economics degree to notice troubling trends: college is more expensive than ever, the average student is taking longer than ever to graduate and jobs are harder to come by.

This has caused the average student to leave college with $24,000 in student debt.[2] In total, student debt eclipses $1 trillion, a number that exceeds credit card debt.[3] The Pew Research Center says many are so fed up that they’d consider skipping college. A majority (57%) of Americans believe the higher education system fails to provide “good value” to students.[4]

However, the same study also notes that 86% of college graduates believe their education was a good investment. This tension reflects the risk-reward equation of earning a college education. As NPR host Korva Coleman quipped, college doesn’t always get you a job, but it almost always gets you in debt.[5]

Americans look at visionaries such as Facebook’s Mark Zuckerberg, Microsoft’s Bill Gates, and Apple’s Steve Jobs and wonder whether college is necessary. January’s resolution asks debaters to answer this question by weighing the costs and benefits of a college education. This essay will address that question in four parts. It will start by asking who is making the decision, what they calculate as “benefits” and why college is necessary. It will then develop the case for each side and conclude with strategic recommendations.

Introducing the Resolution: Who, What and Why

We begin with three questions of the resolution. First, who is weighing the costs and benefits of college? Second, how are the “benefits” of a college education determined? Finally, there is the question of why to attend colleges. Do colleges develop incredible people or do incredible people develop colleges?

First, we must determinewhois deciding to attend college. The answer to the question varies wildly based on who is answering it. For instance, if a student has enormous financial support, they face fewer costs and need only consider the benefits.

Other factors complicate the benefits of college for many students. The first is duration. According to the Department of Education, no more than half of those who began a four-year bachelor’s degree program in the fall of 2006 will get that degree within six years.[6] The second is merit. For those in the bottom quarter of their high school classes, 80% will probably never get a bachelor’s degree or even a two-year associate’s degree.[7]

As a result, the question in the resolution is not being asked to the 30% of students who don’t enroll in college or the 30% who graduate in four years. Instead, as David Leonhardt suggests, the question “is really about the 40 percent or so of students in the middle of the spectrum.”[8]

Second, we must determinewhat“benefits” college offers. The primary benefits and costs are economic; college is very expensive but greatly increases earning potential. However, neither the costs or benefits are purely economic. Going to college foregoes four years (or more) of other opportunities. For better or worse, it has a profound influence on the lives of those who attend. The benefits to college also exceed earning potential by offering the potential for tremendous personal growth.

Finally, we must ask whystudents achieve progress in college. Many argue that colleges reflect a self-fulfilling prophecy. In this view, colleges receive talented, driven students rather than producing them. These critics dismiss earning potential by arguing that the income gap exists because employers place a higher value on those with degrees, artificially affixing value to education. One educational consultant says that “you could take the pool of college-bound students and you could lock them in a closet for four years and thanks to their smarts and work ethic, they would still out-earn people who never went to college.”[9]

Opponents respond with a range of studies measuring the market value of a degree.[10] Others argue that this asks the wrong question. Michael McPherson, an economist who runs the Spencer Foundation in Chicago, notes that “college can’t guarantee anybody a good life, but it sure ups the odds substantially.”[11]

Pro: Costs > Benefits

This essay introduces five arguments in favor of the resolution. First, student debt is higher than at any time in American history. Second, college doesn’t provide the value to justify these extraordinary costs. Third, colleges are ill-suited to meet evolving labor-market demands. Fourth, reduced college attendance stems rising college costs by reducing demand. Finally, alternatives to college would offer the same rewards at a far lower cost.

Student debt, as noted previously, has reached historic levels. The average student leaves college with $24,000 in student debt, totaling $1 trillion nationally, a figure which surpasses credit card debt. This reflects a steep annual rise with no end in sight. Student debt places an enormous financial burden on students, many of whom struggle to pay it off within a decade. It also delays or cancels the pursuit of other worthwhile goals, such as home and auto ownership. While America laments the national debt crisis, another is mounting for America’s college graduates.

These historic debts aren’t met with an equal return in value. Traditional economics explains rising costs as the product of changes in the scarcity or quality of a good. Colleges aren’t scarce; more students enroll in college in America than anywhere else in the world. They also aren’t increasing in quality. No one believes in colleges as much as the presidents who lead them. That’s why the Pew Research Center’s finding that 38% of college presidents believe American education is “going in the wrong direction” is so alarming.[12]  Over half (52%) believe that college students today are required to study less than their predecessors.[13] Today’s institutions don’t produce the same challenges and benefits that they once did.

The primary purpose of college is to prepare graduates for the labor force. Today’s colleges teach skills that are woefully mismatched with the needs of the market. The Bureau of Labor Statistics notes that only seven of the 30 jobs projected to grow at the fastest rate over the next decade in the United States typically require a bachelor’s degree.”[14] Policy-makers must address and ameliorate the labor crisis. Today’s unemployment rate stands at 8.6%, almost double its 4.6% mark just a half-decade ago.[15] Colleges financially gouge students to teach skills that simply aren’t needed in over three-quarters of the most high-demand fields.

College costs are rising exponentially and the only solution is to reduce demand. Tuition and fees have increased 439% over a quarter-century while the median family income rose 147%.[16] As a result, financing a student at a four-year public university amounts to 28 percent of the median family income, while a four-year private university will absorb 76 percent of the median family income.[17] James Altucher, author of books like Trade Like a Hedge Fund and managing director of Formula Capital, along with PayPal co-founder Peter Thiel, propose a simple solution: “reduce demand so costs go down.”[18] This complicated issue can be simplified by asking a simple question: “Why do colleges charge so much money to attend?” An equally simple answer is that they do it because they can. However, if reduced demand caused colleges to fight over a smaller pool of applicants, colleges would lower fees, improve services or both to increase their attractiveness.

In response to these criticisms, college supporters echo Churchill and note that college is the “least bad alternative.” Even if imperfect, they claim, college is still the best available route to many students. This is only partially true. Yes, college is the best route if you’ve earned a scholarship, if your parents pay for school or if you’re interested in one of the 7 of 30 top-growing industries that require one. However, for the previously discussed “40 perfect” in the middle, the question is whether the best choice really involves 4+ years of crippling debt.

Many attractive alternatives to college are available. Economists Richard K. Vedder of Ohio University and Robert I. Lerman of American University, the political scientist Charles Murray, and James E. Rosenbaum, an education professor at Northwestern (ironically all academics at respected colleges,) would direct some students towards vocational and career training through expanded high school programs and corporate apprenticeships.[19] PayPal co-founder Peter Thiel has put his money where his mouth is, giving scholarships to promising students to drop out of college and put their entrepreneurial skills to work.[20] The Clarium report, which Thiel commissioned in 2009, noted the opportunity cost of attending college; “It’s also a question of how many options (students are) precluding for the future.”[21] James Altucher agrees, arguing that “if they had a five-year head start over their peers by not going to college, they could figure out how to make a lot more money – and wouldn’t have to deal with massive debt.”

The most prominent argument raised by college supporters is the earnings gap between college graduates and their peers. College graduates almost always earn more money. Instead of disputing this fact, there are three alternate ways to defeat it. First, the college diploma’s increasing return is due to the declining value of a high school diploma, not the rising value of a college diploma. The Clarium report states this argument well; “Relative to the past, students who go to college do better than their peers who do not, but this is simply a mathematical result of their peers doing worse than in the 1970s.”[22] Second, the benefits take too long to accrue. Statistics from The College Board suggest that it takes 14 long years before the four-year college grad’s income starts to surpass what the high school grad earns.[23] Third, this begs the question of causality. If colleges attract intelligent and dedicated students rather than producing them, they aren’t responsible for these students’ upward mobility.  For example, Zuckerberg, Gates and Jobs all would have risen quickly because of their skills and ambition. Finally, this method of valuation is artificial. Employers express an unnecessary bias towards formal education, which artificially inflates the value of a degree. 

Con: Benefits > Costs

This essay introduces five arguments opposing the resolution. First, college graduates exhibit greater earning potential than their peers. Second, college graduates face lower levels of unemployment. Third, reduced college attendance is disenfranchising and exacerbates wealth inequality. Fourth, a well-educated populous protects core American interests. Finally, college offers several non-economic benefits.

The greatest benefit to attending college is enhanced future earning potential. According to Mark Kantrowitz, publisher of the websites Fastweb.com and FinAid.org, students who earn their Bachelor’s degree have 80% higher incomes than high-school graduates.[24] The U.S. Census Bureau noted in 2010 that the median gap in annual earnings between high school and college graduates was $19.550 annually.[25] While the cost of attending many colleges is steep, the difference in median income is more than enough to justify it. An average college graduate who works until retirement earns an extra $840,650 in their lifetime.[26]

Reduced unemployment is another benefit to a college degree. According to Mark Kantrowitz, previously cited, the unemployment rate of college graduates is half the level of their peers.[27] While the Pro correctly cites high unemployment rates, these are the product of a depressed labor market. A depressed labor market makes a college degree more valuable. With a larger number of applicants than openings available, employers are operating in a “buyer’s market,” increasing the necessity of earning a degree. Degrees distinguish applicants by demonstrating the ability to overcome challenges.

Reduced college attendance would increase disenfranchisement and exacerbate wealth inequality. Andrew Rotheram, a co-founder and partner at Bellwether Education, rightly refers to college as “the most effective social mobility strategy we have.”[28] The Brooking Institution’s Ron Haskins determined that without a college degree, less than 15% of Americans from the bottom fifth of parental income reach the top two fifths. However, with a college degree, that number jumps to 41%.[29] When students are told they “can’t cut the mustard” they are being deprived of an enormous chance for growth.[30] While student debt has reached record levels, so has wealth inequality.[31]

A well-educated populace is vital to America’s national interest. At the turn of the 20th century, Europeans dismissed the new American high school system, which aimed to graduate every student, as a gross misuse of funds. Due to these efforts, an American high school education transformed from being elite to being common.[32] With the most educated population in the world, we quickly built the world’s most successful economy. Some go so far as to call it the “single most important determining factor in U.S. economic growth.”[33] Others have identified the cross-cultural competence developed by a diverse educational experience as “the most important new attribute for future effective performance in a global marketplace.”[34]

Colleges also provide several non-economic benefits. James Rosenbaum, an education professor at Northwestern, noted that college “contributes to aesthetic appreciation, better health and better voting behavior.”[35] A better informed population is better protected from tyranny. Rebecca Mead writes in The New Yorker that college is also used “to nurture critical thought; to expose individuals to the signal accomplishments of humankind; to develop in them an ability not just to listen actively but to respond intelligently.”[36] This enlarged view of the world is enormously valuable as America attempts to nurture the next generation of artists, inventors architects and policy-makers. Almost three-quarters of college attendees described their experience as “very useful in helping them grow intellectually.”[37]

Rising college costs can’t be dismissed. However, there are three very good responses to this concern. First, despite high costs, students are receiving a good value. As previously noted, a college graduate will earn an income that is 80% higher than their peers. Second, students who attend college can easily create a prudent “rule of thumb” to limit their costs and make prudent decisions. Mark Kantrowitz advises students that “total education debt at graduation should be less than your expected starting salary, and ideally a lot less.”[38] Third, students can invest energy into earning scholarships. If they’re unsuccessful, they can choose community colleges or inexpensive state institutions as alternatives.

Similarly, the extended length of time most students spend in college also can’t be dismissed. Yes, a majority of students will not graduate in four years. However, we should not throw the baby out with the bathwater. Instead of telling students not to enroll in college, we should attempt to lift graduation rates and strengthen graduation deadlines. While the advice to avoid enrolling is sometimes wise, “for most students, it’s among the worst advice they could get.”[39]

Conclusion and Strategic Recommendations

While the Pro has a very powerful case, I would highly advise debaters to flip “Con” for five reasons:

A. Judge bias. Most judges have been to college, sent their children to college or at the very least are tax-payers whose funds support colleges. There is an enormous confirmation bias at play. In other words, people don’t want to tell themselves that those hundreds of thousands of dollars they spent were wasted. They won’t want to buy what the Pro has to sell.

B. The educational alternatives to a traditional college degree are less costly and risky than the alternatives proposed by the Pro. Yes, some entrepreneurs like Gates, Jobs and Zuckerberg rose to the top. Citing exceptional performers doesn’t speak to the norm. Most folks are better off in community college than being entrepreneurs.

C. Non-economic benefits. The costs to college are primarily economic. The benefits to college exceed economic calculations and offer other ancillary benefits to the individual and to the country at large.

D. The income gap. It’s a real thing. The average person who foregoes a successful shot at college also forgoes $850,000 in income over the course of their lifetime. Although the value assigned to college may be artificial, it affects real decision-makers with real power over the allocation of real jobs and resources.

E. It’s the wrong time to skip going to college. In a better economy, the benefits to entrepreneurship might outweigh the risks. However, given the lack of available loans and enormous unemployment rate, I believe graduates are best advised to take the sure route and attend college.

If you have any questions, comments or ideas for improvement, please feel free to contact brian.rubaie@ncpa.org anytime! Don’t forget, we offer FREE case critiques and we’re willing to revise your case as many times as you’re willing to share it with us.



[1] Dylan, Bob. “Subterranean Homesick Blues,” 1965, Bringing it All Back Home, http://www.bobdylan.com/songs/subterranean-homesick-blues.

[2] Reuters Money Blog. “Is College Worth It?” September 15, 2011. http://blogs.reuters.com/reuters-money/2011/09/15/is-college-worth-it/

[3] Reuters Money Blog, see [2]

[4] Pew Research Center. “Is College Worth It? College Presidents, Public Assess, Value, Quality and Mission of Higher Education,” May 15, 2011. Pew Social and Demographic Trends, http://www.pewsocialtrends.org/2011/05/15/is-college-worth-it/.

[5] Coleman, Korva. “Is A College Education Worth The Debt?” Sept 1, 2009, National Public Radio (NPR), http://www.npr.org/templates/story/story.php?storyId=112432364 .  

[6] Steinberg, Jacques. “Plan B: Skip College,” NY Times, May 2, 2010, http://www.nytimes.com/2010/05/16/weekinreview/16steinberg.html

[7] Steinberg, see [6]

[8] Leonhardt, David, “Is College Overrated? (Cont.)” Economix Blog at the NYT, May 8, 2010, New York Times, http://economix.blogs.nytimes.com/2010/05/18/is-college-overrated-cont/.

[9] Leonhardt, David. “The College Calculation,” Sept 24, 2009, New York Times,  http://www.nytimes.com/2009/09/27/magazine/27fob-wwln-t.html.

[10] See Card, David. Professor of Economics @ Cal Berkeley, “THE CAUSAL EFFECT OF EDUCATION ON EARNINGS,” Handbook of Labor Economics, Vol 3, http://emlab.berkeley.edu/users/card/papers/causal_educ_earnings.pdf

[11] Leohardt, see [8]

[12] Pew Research Center, see [4]

[13] Pew Research Center, see [4]

[14] Steinberg, see [6]

[16] Lewin, Tamar. “College May Become Unaffordable for Most in U.S.,” Dec 3, 2008, New York Times, http://www.nytimes.com/2008/12/03/education/03college.html.

[17] Lewin, see [16]

[18] Smith, Daniel B. “The University Has No Clothes,” New York Magazine, May2 010, http://nymag.com/news/features/college-education-2011-5/.

[19] Steinberg, see [6]

[20] Reuters money blog, see [2].

[21] Smith, see [18]

[22] Smith, see [18].

[23] Burns, Scott. “Is college worth the money?” MSNBC, 2009, http://articles.moneycentral.msn.com/CollegeAndFamily/CutCollegeCosts/IsCollegeWorthTheMoney.aspx.

[24] Reuters Money Blog, see [2]

[25] Pew Research Center, see [4]

[26] Calculated as x (median gap) * y (number of years employed until retirement). Y was calculated as 65 – 22, the assumed median age of a college graduate.  This produced the following equation: 19,550 * 42 = $840,650.

[27] Reuters Money Blog, see [2]

[28] Rotheram, Andrew. “Actually, College Is Very Much Worth It,” TIME Magazine, 5-19,

http://www.time.com/time/nation/article/0,8599,2072432,00.html#ixzz1gMGNPgjv

[29] Rotheram, see [28]

[30] Steinberg, see [6]

[31] Professional Staff Congress (PSC), City University of New York. “PSC/CUNY Supports Occupy Wall Street.” http://www.psc-cuny.org/sites/default/files/PSC_CUNY%20Supports%20Occupy%20Wall%20Street_0.pdf.

[32] Leonhardt, see [8]

[33] Malcolm, Chubin and Jesse. “Standing Our Ground:A Guidebook for STEM Educators in the Post-Michigan Era,” October 2004,

http://www.ecs.org/html/offsite.asp?document=http%3A%2F%2Fwww%2Eaaas%2Eorg%2Fstandingourground%2FPDFs%2FStanding%5FOur%5FGround%2Epdf+.

[34] Gottschalk, Todd. “BRIEF OF GENERAL MOTORS CORPORATION AS AMICUS CURIAE IN SUPPORT OF APPELLANTS,” 2005, http://www.vpcomm.umich.edu/admissions/legal/gru_amicus/gru_gm.html

[35] Steinberg, see [6]

[36] Mead, Rebecca. “Learning by Degrees,” June 7, 2010, New Yorker, http://www.newyorker.com/talk/comment/2010/06/07/100607taco_talk_mead.

[37] Pew Research Center, see [4]

[38] Reuters Money Blog, see [2]

[39] Leonhardt, see [8]

About Lauren Sabino

Lauren Sabino is the Director of Youth Programs at the National Center for Policy Analysis. She currently administrates Debate Central, the largest free online debate resource.
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