Is College a Rotten Investment?

Annie Lowrey:

Here's a familiar story. Americans had a near-religious belief in the soundness of this investment. Uncle Sam encouraged it with tax breaks and subsidized it with government-backed loans. But then, in the 1990s and especially the 2000s, easy money perverted the market. Prices detached from reality. Suddenly, millions of Americans found themselves holding wildly overvalued assets. They also found themselves without the salaries or jobs necessary to pay off the huge loans they took out to buy the assets.

This is not just the story of American real estate. It is also the story of higher education, at least if you believe the dozens of different thinkers and publications that have come to this conclusion in the past few months. They say that higher education is a bubble, just like housing was a bubble, and that it is getting ready to burst. Famed entrepreneur Peter Thiel, for instance, insists that just about every degree is worth little more than the paper it is printed on: Schooling is not education, he says, and ambitious kids should drop out and skip forward to the workplace. New York magazine calls it one of "this year's most fashionable ideas." But is it really true?

Posted by Jim Zellmer at May 14, 2011 5:38 AM
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