College and Value

I agree that it is mostly signalling.

(1) Colleges select for high IQ
(2) Businesses select for IQ by requiring a college degree for executive-track training.
(3) There is a cultural belief that a person cannot succeed without a college degree, limiting the success of non-graduates.

Employers and schools often dismiss the value of earlier college training, even in the case of future doctors and lawyers. The college education is regarded as an indication of dedication and interest. But, the employer or graduate school implies that the student should "forget what you have learned" and start to learn the real subject, if he can.

So, a college degree may be valuable mostly because of cultural bias, the lack of a more efficient and cheaper alternative, or the prohibition against employers giving aptitude tests (from supreme court rulings). How much does the "learning" in college really matter?

People mature from 18 to 22 while in college. Most mature in their discipline, outlook, and knowledge, but I think that has little to do with the college. Colleges are happy to take credit for the advancement of some, while writing off the failures as "not doing the work".

College is an Expensive IQ Test

Supply and demand are both at work in the higher ed bubble.

The big problem on the supply side is that, just as with the recent finance bubble, managers of assets (the college officials who admit and oversee students) are paid according to volume of assets managed -- more students means more tuition and more donations (and maybe more grants if those new students are from "disadvantaged" groups).

They are not paid according to ROI or anything like that. So it wouldn't matter if we did what Carey says and publish more data like probability of flunking out, probability of graduating in 4 years, loss given flunking out, etc.

These incentives push sub-elite colleges to take in as many students as possible, just as banks took in whatever garbage they could get their hands on.

And as Charles Calomiris pointed out in the context of finance, the true demanders of grade inflation, re-centering of the SAT, etc., is the buy side. If it were the sell side -- students, their teachers, parents, etc. -- every buyer (college) would know it was a joke and adjust the grades and scores they received accordingly.

Rather, the buy side wants students with inflated grades and test scores because sub-elite colleges need to pass similar regulatory hurdles to admit students -- maybe not as formalized as financial reg rules, but still, you can't admit a bunch of students whose average GPA and SAT is 1.0 and 900. Inflate them to 2.0 and 1000, and would-be regulators or castigators of college admissions boards now have less of a basis to complain.

Hell, the colleges even cherry-pick the best score you got on each sub-test of the SAT. If you take it more than once, only your best math score shows up and only your best verbal, even if on different tests. That's a smoking gun that the buy side is driving grade inflation, not the demand side.

If a student goes to college right out of school, then finds they aren't ready for it and drop out, only to return (or reenroll in a different school) in a few years, does that count as two students with a 50% dropout rate?

Earlier this year I remember there being talk of allowing student loan forgiveness for graduates who went to work at government-approved firms for a certain number of years--ROTC for community organizers, if you will.

Private employers seem for the most part content to pay a little extra for the assurance of IQ and cultural tractability that comes with a name-brand education. Nonprofits, on the other hand, don't want to pay the kind of salaries needed to afford payments on a six-figure loan plus the cost of living in an elite coastal city.

As a triangulation method, I suggest legislation allowing these organizations to use aggressive pre-employment testing similar to that used by the US military. Then they can hire all the non-wealthy kids they want from UMass and Charlestown Community College, or even straight out of Boston Latin, rather than Harvard and Tufts, and still have guarantees of quality.

It seems to me that an important point is being overlooked. High school graduates should be able to read and write proficiently before enrolling in college. They should also be proficient in arithmetic, algebra, geometry and trigonometry.

But many are proficient in neither English nor math. So universities face the dilemma of either admitting students who are not proficient in English or math or both. Or universities may have to reject a large proportion of applicants.

Neither alternative is appealing.

It's not so the credential that's valuable, so much as the well-selected social network you build.

How many of these students who enroll at lesser ranked colleges and community colleges end up transferring to higher ranked colleges after one or two years. I don't know if current research is picking that up, but I do know that is was a problem with such studies just a few years ago.

Seems K-12 is an abysmal failure if it is true that these college students can't do basic math or read prose. Anyway, if such a large portion of students are essentially functionally illiterate, how will forcing institutions to provide more information help their decision making at all. If we assume some 31% can barely read prose and another 25% can't even do arithmetic, how would they be able to discern the results of a time series study about graduation rates, costs, or even wage expectancies?

Pushing this information out is important for the marginal student, or the students with high intelligence but uncertainty about college, as well as the lazy. By publishing expected wages, controlling for major, GPA, parent’s income, and other factors, these students would be able to make far better investment decisions, as well as effort level decisions. I know I probably would have just pursued a trade (electrician most likely) had I known how little a B average Econ major can expect to make (maybe I’m an outlier).

Chris said

"It's not so the credential that's valuable, so much as the well-selected social network you build."

I think that is absolutely the case for students in schools with high notoriety. It is actually even beneficial to the hiring unit to0, as they know they are acquiring a talent that can be vouched for.

I'm not so sure it is that important at lower end schools though, but it definitely can't hurt.

Yes, Carey has some of the supply side correctly described, such as the outsized supply-side focus on reputation. But reputation only achieves such outsized value if the demand-side is primarily interested in signaling. Reputation would be dropped like a hot rock if demanders were interested in competence and training. As it is, there seems to be a nice compromise--faculty can focus on reputation and students can focus on social networking and drinking once they're in their top U.

Also, what an interesting publication, Democracy: A Journal of Ideas. All Progressive ideas, analysis, and bios all the time. Analysis? The genre goes like this: there are a lot of people with a vaguely similar problem; the "lot of people" makes it a social problem, requiring gov't intervention; conclusion: here's a great big, very nuanced gov't solution that's only now possible due to advanced information technology.