The temporary popularity of Caplanian views on higher education
Bryan Caplan as you know argues that even the private return to higher education isn’t what it usually is cracked up to be, especially since large numbers of individuals do not finish with a four-year degree. Susan Dynarski (tenured at Harvard education, but an economist), writing in the NYT, seems to have started flirting with this view:
…a majority of people holding student debt have moderate incomes and low balances. Many have no degree, having dropped out of a public college or for-profit vocational school after a few semesters. They carry little debt, but they also do not get the benefit of a college degree to help them pay off that debt.
Defaults and financial distress are concentrated among the millions of students who drop out without a degree. The financial prospects for college dropouts are poor; they earn little more than do workers with no college education. Dropouts account for much of the increase in financial distress among student borrowers since the Great Recession.
And dropout is not at all rare. A bit less than half of college students don’t earn a bachelor’s degree. Some people earn a shorter, two-year associate degree. But more than a quarter of those who start college hoping to earn a degree drop out with no credential. A full 30 percent of first-generation freshmen drop out of four-year colleges within three years. That’s three times the dropout rate of students whose parents graduated from college.
I’ve seen modest variants on those numbers, but the general picture is broadly accepted. Now here is Dynarski’s Congressional testimony from last summer:
College is a Great Investment
A college education is a great investment. Over a lifetime, a person with a bachelor’s degree will earn, on average, a million dollars more than a less-educated worker. Even with record-high tuition prices, a BA pays for itself several times over.
She is quite clear in the former NYT piece that she has changed her mind, so there is no “gotcha” here. But clearly her views are evolving in Bryan’s direction.
In terms of policy, Dynarski notes that more than a quarter drop out of college with no credential. Shouldn’t we restrict loan forgiveness to them? Doesn’t that at least deserve discussion? Or should we just go ahead and grant forgiveness to those with the “great” returns as well? Her change of mind concerns the higher-than-expected problems of the non-finishers, not that she has seen new and inferior income numbers for the successes. (In fact since the numbers for the average return haven’t changed, being more pessimistic about the losers has to mean being a bit more optimistic about the successes. That should make us all the more interested in targeting the forgiveness.)
Why are we not allowed to know what percentage of the forgiveness beneficiaries fall into the “didn’t finish” category? What should we infer from the reality that no one is reporting that statistic? Is that good news or bad news for the policy?
What does Dynarski think is the marginal return from trying to finish college? Are they really so positive for the marginal student? What is the chance of the marginal student finishing? The cited figures are averages, presumably for the marginal student the chance of finishing is much worse. Presumably she is pessimistic about the nature of the college deal for the marginal student?
Now I know how these discussions run. Suddenly there is plenty of talk about how we should make it easier for people to finish, perhaps by offering more aid. As someone who teaches at a non-elite state university, I do understand what is going on with students who need to drop out to take care of family, and so on. Still, in the meantime should we be encouraging more marginal students to try their hand at college?
Yes or no?
That question runs against the prevailing mood affiliation and good luck trying to get a straight answer. In the meantime, the world is taking an ever-so-temporary foray into the views of Bryan Caplan. Let’s see how long it stays there.