For one thing, college payoffs vary widely by major and school. According to PayScale data for 1,310 colleges, “Brigham Young and Georgia Tech both top the list with a 12.5% annual return, but there are many schools that generate a negative return.”
Good advisors are also upfront about the risk of failure. The returns to college are normally reported for graduates who finish on time. Yet such students are the exception, not the rule: “Less than 40 percent of full-time students entering four-year colleges in recent years have been graduating in four years.…For those who are sure that their kids will graduate in four years or else, I can say from personal experience that demanding that your kids will do so doesn’t guarantee that they will.”
A deeper methodological problem with the standard approach is that it gives college all the credit for the extra money that college grads enjoy. But on graduation day, the college-bound already outshine their classmates.
Will College Pay Off? makes a compelling overall case. Yet the book is sadly peppered with omissions, errors, and implausibilities. As a result, mainstream education economists will find Cappelli’s wise book easy to dismiss.