The Next Tech Boom vs. the College Crisis

This morning, I wrote an article about how highly-skilled, college-educated young people facing meager job opportunities are making their own online companies, and that this might show the way to a new economic boom in the Web-based service industry.

It's important to square this theory with the question of college, because you can't have a smart tech boom without smart techies. The costs of college are immense, and growing. The price of a post-secondary education is rising even faster than health care costs. As a result, the average four-year college student graduates with $25,000 in loan debt ... and those are the success stories, since less than 60 percent of four-year college students graduate within six years, anyway.

The long escalator to the post-graduate world is getting longer and pricier. Meanwhile, there's less room for recent grads at the top, for two reasons. First and most acutely, the recession has decimated opportunities for young people in the short term. Second and more broadly, technology and globalization (among other forces) have hollowed out the middle class while at the same time raising the reward for the highest paying jobs and increases the pool of jobs for low-level service workers in food, personal care and so forth. An illuminating stat: health care is the fastest growing industry in the country, and seven of the fastest growing jobs in health services don't require a bachelors degree.

If that paragraph makes it sound like college isn't worth your time, consider one chart of 2010 unemployment broken down by education:

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For Americans without a diploma, who rely on cyclical service jobs that took a hit in the recession, the last few years have been a disaster. But for Americans with bachelor's degrees, this Great Recession has been much more mild. The downturn froze out millions of workers, but a college degree has provided great insulation.

Here's the conundrum. On the one hand, college is getting more expensive while the employment opportunities for college graduates in some sectors are thinning. On the other hand, the premium of a college degree has never been more clear. College graduates out-earn and out-work non-college graduates at record numbers. And if you're going to go into debt to acquire some new asset, it might as well be something that retains its value (like an education) rather than depreciates (like cars and almost every other thing).

So what can we do to make college work better for the working class? Bridget Terry Long, a Harvard University education economist, offered an answer at a Center for American Progress conference a few weeks ago. She said the government should pass a new law requiring every college to post a standard fact sheet about its degrees. The fact sheet would include: total cost of attendance, loan default rate, six-year graduation rate, employment rate within six months of graduation, and alumni satisfaction rate. Choosing a school will never be as easy as choosing a digital camera, but if we force schools to make their specs as transparent as a Best Buy product, students might make better decisions -- for their wallet and their future.

What would be the upshot of this plan? Scattershot, but net positive. Brutally honest information about college costs and benefits might make some students choose not to go to college. Or it might send students to better schools. It might make other students apply to a completely different set of schools. It make might students chase high-reward degrees rather than take a risk on Philosophy. It might identify schools that fall short and cause them to lose applicants and finally shutter. The implications are not all positive, but they could be an improvement.

The last thing we want from college is a generation with $30,000 in debt and without job prospects. Instead, we want to give our youngest generation the chance to create new industries -- like a Web-based service revolution. To get there, we need to think about ways to maximize the benefits of college while making students smarter about the costs.