56% of Americans Think Four-Year College Degrees Not Worth the Cost: Poll
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56% of Americans Think Four-Year College Degrees Not Worth the Cost: Poll

Inflation is not contained to living expenses alone.
Neither the author, Tim Fries, nor this website, The Tokenist, provide financial advice. Please consult our website policy prior to making financial decisions.

According to a recent poll by the Wall Street Journal, most Americans see the four-year college experience as a bust for the first time in history. As per the poll’s results, up to 56% of Americans no longer think a four-year college is worth its cost. Was this a predictable outcome of multiple policies working in tandem?

New Poll Leaves Little Room for the American Dream

According to the latest Wall Street Journal-NORC poll, the American dream appears dead. The non-partisan research institution NORC (National Opinion Research Center) at the University of Chicago polled over 1,019 adults between March 1-13, 2023. 

The results show that 56% of Americans don’t think the 4-year college degree is worth it. Although this trend has been rising lately, it is a milestone nonetheless. Compared to 2013, 53% of respondents favored college degrees, while 2017 saw the difference shrink further to just 49%. 

Image credit: WSJ

Breaking down this new unfavorable attitude by age groups, 18-34 are the strongest college skeptics at over 60%. Interestingly, even the age group over 65 has eroded confidence in higher education, having dropped 44% from 56% in 2017. Most tellingly, people who graduated have regrets at 44%, a 10% increase from the previous decade. 

The question is, what is the root cause of higher education earning such a consistent bad rap?

Dual Rot Stemming from Inflation, but Not the Usual Kind

When considering the erosion of confidence in higher education, a simple concept should be considered – inflation dilutes value. When the Federal Reserve increased the M2 money supply by 39% during 2020/21, many predicted this would cause rampant inflation. And indeed, that happened, having reached the highest level in 40 years, peaking last June at 9.1%.

Keeping this in mind, what happens when inflation is applied to colleges?

In the 1960s, the era of the historic moon landing, US colleges had a modest budget of $7 billion. By the early 1990s, this budget ballooned to over $170 billion, a massive 24x differential that cannot be swept under the inflation carpet. 

When government subsidies come into play, the law of unintended consequences is also in play. The government injected liquidity into higher education on multiple fronts. Through the tax code alone, it provided $40.5 billion in tax expenditures (credits, exemptions, deductions, exclusions). This is $27 billion more in 2017 than in 2000.

Image credit: Pew Research; Two Decades of Change in Federal and State Higher Education Funding

Likewise, the federal government issued $94 billion in 2018 alone. For comparison, states issued less than 1% of that, at $452 million during the same year. Overall, federal loans rose by 26% between 2007 and 2018.

Image credit: Pew Research; Two Decades of Change in Federal and State Higher Education Funding

Such federal interventions had a dual effect – raised tuition and lowered quality. Just as banks tend to jack up risk if they can count on federal bailouts, so do colleges jack up tuition if they can count on federal subsidies. According to the National Center for Education Statistics (NCES), college costs increased by 143% from 1963 to 2020.

And with the inflation of college degrees, the value of each one declined as their costs rose.

Likewise, as the federal government injected more money into subsidies and student loans, colleges were incentivized to launch the lowest-common-denominator classes. Elite universities were not exempt. Case in point, Cornell University has a credit class on Tree Climbing, while Princeton University has a class on Clothing Styles.

Today, students are stuck between choosing either their educational aspirations, or paying bills just to survive. Across the US, more than half of college students struggle to have their basic needs met.

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Online Services Bring College Extravagance into Focus

For many decades, college degrees had a social status force. However, even social prestige is on a measuring scale. As it becomes clearer that one could gain college-level knowledge with effectively zero cost, the benefit of receiving such social status starts to wane. 

This focus is now sharper than ever before. Not only are online educational platforms readily available and drastically more cost-effective, but AI has turned up the focus notch. Whether one specializes in literature, art, or coding, ChatGPT has made it clear that engineering AI prompts will become more important than temporary curriculum acquisition.

As the AI revolution heats up, the value of college degrees begins to erode at an accelerated pace. Inflation played its part in raising the overall cost of living, just as inflated college access raised the tuition while simultaneously debasing college offerings.

Lastly, one could argue that colleges have turned mainly into ideological monoliths, failing to represent the general public. This is another factor that diminished the shine of the social status badge.

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Of the factors mentioned, which one do you think was critical in diminishing the worth of college degrees? Let us know in the comments below.