Pedagogue Blog

Robert Reich, University of California, Berkeley

The early admissions deadlines for universities across the country have come and gone, and acceptance letters are on their way. But with the cost of a four-year college education rising an average of 5% a year, many students and parents are likely wondering whether the cost of a degree is worth it.

The simple answer is yes because people with degrees continue to earn far more than those without them. Last year, Americans with four-year college degrees earned on average 98% more per hour than people without them, according to the Economic Policy Institute. In the early 1980s, they earned 64% more.

But that’s only if the graduate can find a good job, which is no longer guaranteed.

Instead, almost half of new college graduates will likely end up spending at least a few years in jobs for which they are overqualified. According to the Federal Reserve Bank of New York, 46% of recent college graduates are now working in jobs that don’t require college degrees. That figure is about a third for all college graduates.

And the main reason a degree still demands a premium salary is that wages for non-grads are dropping. Employees choose college grads over non-grads on the assumption that more education is better, but as a result more of the latter are being pushed into ever more menial work, if they can find a job at all.

For years, I along with others argued that globalization and technological advances lift demand for well educated workers. But in 2000, the outsourcing of skilled jobs and advanced software reversed this trend.

First, millions of people in developing nations became far better educated, while the internet gave them an easy way to sell their abilities in advanced countries like the US, leading to ever more skilled work being outsourced to them.

Second, advanced software is taking over many tasks that had been done by well educated professionals – including data analysis, accounting, legal and engineering work, even some medical diagnoses.

As a result, the demand for well educated employees in the US seems to have peaked around 2000 and fallen since, even as the supply of such workers globally continues to grow.

That increase in supply even as demand drops is why the incomes of people who graduated after 2000 have barely risen. Indeed, the starting wages for graduates have dropped since then, 8.1% for women and 6.7% for men.

And that’s why a record number of well educated young adults are living at home with their parents.

The deeper problem is that while a college education is necessary to join the middle class, its share of the total economic pie continues to shrink, while that of the very top keeps growing.

An education is still worth the cost because without a degree young people can easily be left behind. But even with one, it’s hard to do much more than tread water. Some will make it into the top 1%, but the path keeps getting narrower and often requires the right connections.

Of course, going to college is not only about making a lot of money. An education gives our youth tools to lead full and purposeful lives.

It’s still worth paying for, but in such a perilous economy, young people and their parents should know the economics before they make such a large investment.

This is an adaptation of a post that appeared in November on Robert Reich’s blog.

Robert Reich, Chancellor’s Professor of Public Policy, University of California, Berkeley

This article was originally published on The Conversation. Read the original article.

Tristan McCowan, UCL Institute of Education

For decades, development agencies have encouraged low and middle-income countries to focus their education spending on primary schools and basic vocational skills. They have considered that universities provide lower rates of return on public investment and benefit elites at the expense of the poor.

That is changing and it’s now acknowledged that strong higher education systems are also a vital piece in the puzzle of poverty reduction. Countries need well-trained professionals to staff public services, as well as technological innovators and researchers to tackle local and national development challenges. The debates on what the priorities should be after the Millennium Development Goals end in 2015 have shown a stronger endorsement for the role of universities.

However, higher education won’t have a real impact on countries’ development unless three key things take place. First, universities have to function together as part of a coherent system in the public interest. Second, access to higher education must be equitable and allow admission for talented students from disadvantaged backgrounds. Third, teaching, research and community engagement must address key local and national development needs.

But none of these three elements can be taken for granted given universities’ current direction of travel.

Two major global trends in higher education are challenging these assumptions: commercialisation and “unbundling” – the gradual breaking up of the traditional campus university. Commercialisation has affected all aspects of universities’ operations, from “cost-sharing” or the introduction of tuition fees, to providing consultancy for the private sector and commercial outsourcing of campus services. Given the squeeze on public funds for universities across the world, there are few places in which institutions are not being strongly encouraged to commercialise their activities.

“Unbundling” refers to the process through which the combination of functions of the traditional university are separated out, potentially leading to the disintegration of the institution as we know it, according to Pearson’s chief education advisor Michael Barber in the report An Avalanche is Coming.

The unity of teaching, research and public service – with its roots in Humboldt’s University of Berlin in 1810 and developed through the US Land Grant universities – is slowly being unravelled. Teaching-only institutions, employer-based degree programmes, the movement of research to private laboratories and consultancy firms, and particularly the emergence of Massive Open Online Courses (MOOCs) are contributing to this trend.

The huge growth of distance education providers, such as the Indira Gandhi National Open University in India, has also contributed to challenging the notion of university as a physical location. There are also moves towards separating out the teaching and accreditation functions of the university, with skills “badges” now awarded by external agencies.

Proceed with caution

The implications of these trends for addressing development needs in the resource-constrained countries of Africa, Asia and Latin America need careful assessment. Evidence from the process of commercialisation has been mixed to say the least.

Liberalisation of higher education in Brazil from the 1990s led to an exponential growth in the private sector, now accounting for three quarters of enrolments, with nearly half of these in for-profit institutions. While undoubtedly having a positive impact on the expansion of access to university beyond just the most well-off in society, fees still put them out of the reach of many and there are widespread concerns about the quality of provision of these institutions. Profit incentives lead to a driving down of investment in academic staff and learning resources, and attempts at regulating the sector have had limited success.

Kenya, with a much smaller enrolment base and weaker public and private financial capacity than middle-income Brazil, has also witnessed its own form of commercialisation. Since the mid-1990s, state universities have introduced a parallel stream – admitting fee-paying students alongside the government-subsidised ones. In some institutions these parallel streams have spiralled out of control, reaching well over half of enrolments.

A tight squeeze at Kenyatta University library.
Book Aid International/flickr, CC BY-NC-ND

While for Kenyan universities these are a welcome source of revenue in the context of scarcity of public funds, they have led to an intolerable strain on quality. Recruitment of new lecturers has lagged way behind the expansion of enrolments and institutional infrastructure cannot support the influx of students.

Don’t push efficiency too far

In contrast to commercialisation, which has been developing for decades, unbundling is still in its infancy and we have no clear examples of systems in which the process is fully under way – so to a large extent we are reliant on extrapolation from initial signals.

One implication of the unravelling of higher education systems is decreasing state leverage, with an obvious impact on the ability to regulate for equality of opportunity in admissions. The importance of cross-fertilisation between teaching and research – benefiting both students and staff – is widely recognised. MOOCs, often touted as a potential saviour for impoverished regions of the globe, have limited potential in contexts in which poor primary and secondary schooling has hampered young people’s ability to learn on their own.

One of the best-known contemporary initiatives in this area, the non-profit university Kepler in Rwanda, in fact shows a trend of what might be called “re-bundling”, providing face-to-face tuition and dormitory facilities to support students undertaking MOOCs.

So there is a worrying disjuncture between the hopeful vision of the potential of higher education held by development agencies, and the current trends for delivery endorsed by many of them. Bilateral and multilateral donors have shown strong support for new private sector providers and online distance education under the emblem of innovation.

Efficiency and affordability when pushed too far can undermine the raison d’être of the whole venture. If universities are to succeed in fostering both poverty reduction and development for the benefit of society, they must provide high-quality teaching and research in the public interest, and engage with local communities. Ultimately, it’s not just any higher education that will do.

Tristan McCowan, Reader in Education and International Development, UCL Institute of Education

This article was originally published on The Conversation. Read the original article.