It’s finally dawning upon a broad ideological cross-section of policy wonks that not only does the United States have a problem with high-school drop-outs, it has a problem with college drop-outs.
Conservative pundits have remarked upon the phenomenon for some time. Now they are joined by left-of-center wonks with the American Institutes of Research. In a new paper, “The High Cost of Low Graduation Rates: How Much Does Dropping Out of College Really Cost?,” Mark Schneider and Lu (Michelle) Yin estimate that the cost in lost income for just those students who started college in 2002 and dropped out — just one year — was $3.8 billion nationally (and $128 million in Virginia). Write the authors:
College graduates earn, on average, far more than college dropouts, and these higher earnings translate directly into higher income tax payments that can help solve growing fiscal problems at the federal and state levels. But our colleges and universities are now graduating only slightly more than half the students who walk through their doors. Much of the cost of dropping out is borne by individual students, who may have accumulated large debts in their unsuccessful pursuit of a degree and who forfeit the higher earnings that accrue with a bachelor’s degree.
Calculating the cost of college drop-outs is a worthwhile exercise. Unfortunately, Schneider and Yin exaggerate those costs to society and fail to grasp the implications of a policy that pushes people into squandering a year or more of their lives and racking up big debts chasing what, for many, is an unachievable dream.
While recognizing that federal and state governments spend $1.5 billion annually on students who drop out of their first year of college, Schneider and Yin do not question the goal of sending those students to college in the first place. Recent research has shown that many students are grossly ill-prepared for college-level courses and learn little from the experience. The authors also exaggerate the level of lost income. They assume that (1) college drop-outs are endowed with the same level of college preparatory background, intelligence, discipline and drive as those who graduate and (2) they would earn as much as their peers if they completed their college degrees. There is no basis for either assumption.
Schneider and Yin acknowledge the devastating cost to students who incur thousands of dollars in loans with no sheepskin to generate the higher income it takes to pay off their debt. However, they fail to draw the obvious conclusion: that the policy of making college education available to an ever-broader swath of the population may be a bad idea. The impact upon the supposed beneficiaries of this social engineering is much the same as the well-intended — and equally devastating — policy of expanding home ownership to segments of the population that could not afford it. Once again, do gooders afflict disaster upon the very objects of their noble intentions.
There are millions of jobs in the trades, manufacturing and services that Americans could fill productively with a year or two of community-college training. Perpetuating the illusion that everyone needs a bachelor’s degree not only impoverishes people who do not prosper in such an environment but it represents a massive misallocation of human and fiscal capital that hurts us all.