Is There an Education Bubble?

University defenders say an education has value far beyond the difference it makes in your salary - but upper-middle-class Americans tend to overvalue the non-financial benefits of grad school too
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Peter Thiel says that there is an "asset bubble" in higher education. As I ponder the rebuttals from critics like Freddie, my instinct is that financial metaphors are obscuring more than they're clarifying. "Education cannot survive on what I am horrified to find is the generally assumed model, that it exists for the purpose of increasing earning potential," Freddie writes. "To see an education, college or otherwise, as merely a way to increase the amount of money you make is a terrible corruption."

As far as it goes, I agree.

But I don't see what this tells us about the American system of higher education, and whether it is overvalued. The key phrase in Freddie's post is "education, college or otherwise." Those of us making our way in the world have a choice after high school among further educating ourselves by learning a trade, or moving abroad, or spending nights and weekends reading great books in the local library, or working as a bartender in Berkeley while sneakily auditing classes in big lecture halls.

Or investing a lot of time and energy in education as a formal course of study that ends in a diploma from a degree granting institution. People should value and pursue education. But surely financial incentives are an appropriate factor as they decide which option is going to most enhance their flourishing. I tend to think going to some college (though not necessarily the most expensive one) is a good decision for most people - even if it ought to be a lot cheaper. But grad school is a lot less certain. Take a student who pursued this route: selective four year college, two years spent working for a non-profit that helps defend indigent clients in the criminal justice system, and admission to an elite law school. For her, there isn't a conflict between "law school to increase earning potential,"  "law school to enrich the life of the mind," and "law school to advance career prospects." All are regarded as reasons to attend, and she borrows $150,000 to do so.

Three-and-a-half years later, she regrets the decision, not because she saw law school as "merely" a way to make more money, but because despite enjoying the intellectual experience, she is deeply in debt, and most other opportunities she has in life are constrained by it. We've all seen the law students lamenting their fate as what they thought to be guaranteed corporate law jobs disappeared. But what led them and their analogues in other academic disciplines to this fate? It's partly that they miscalculated the future salary their degree would confer. But non-financial factors are as influential in causing many Americans to overvalue degree granting programs.

Think of it this way. In large parts of America, a college graduate can inform his parents or peers or a woman he meets via Ok Cupid that he is about to quit his job in public relations, borrow $100,000, and spend it on a year studying journalism at Columbia University before returning home. Few people are likely to tell him that this is irresponsible. Whereas if this same man announced that he planned to quit his job, withdraw half of his $10,000 savings account, and spend two months surfing, drinking beer, and reading David Foster Wallace novels in Costa Rica?

"Wow, you're brave to do that in a recession."

"What do your parents think about that?"

"If you want to lay around and drink beer you should at least do it in grad school."

In the American meritocracy, the most subversive thing you can do is model yourself on Benjamin Braddock in his "just floating here in the pool" period, because we've taken Freddie's insight that education is valuable whether or not there is a financial payoff, and conflated it with the proposition that enrolling in graduate programs is inherently valuable no matter the financial payoff - and just practical enough, even in the humanities, that it isn't stigmatized as "irresponsible." For guilty young people intent on pleasing a certain kind of parent, grad school is one of the only socially permissible vehicles for work-life balance or opting out of the high status economy. Parents who'd be horrified by a child who was a yoga instructor think its romantic so long as it's done during a summer between years at the Kennedy School of Government.

I went to graduate school. As an intellectual experience, it was wonderful. Enriching. It was also an excuse to move to New York City - grad school makes big moves less intimidating -  sit around drinking beer with folks who enjoyed talking about ideas, and attend all night parties in deep Brooklyn. I'll always remember it fondly. It was worth the relatively small amount of debt I took on. It improved my writing, and helped my career via networking too. But I got great financial aid. And when people ask me whether they should go to journalism school, I always warn them against being seduced by the romanticism of higher education or inflated expectations of how it'll advance one's career. Admissions staff at most institutions exploit fuzzy thinking about those things.

I don't agree with everything Peter Thiel says about higher education. But insofar as he is challenging the cultural assumptions that cause a lot of people to make bad life decisions, I say good for him.

Image via Reuters