Student-Loan Forgiveness Is Really a Bailout for Woke Higher Ed

We’ve all heard that Americans who earn a college degree make more than those who don’t—and that’s true in the aggregate. The Association of Public and Land-grant Universities says that recent bachelor’s degree recipients earn a median $44,000, which is about $14,000 more than young people with only a high-school diploma.

Yet many recent grads with expensive degrees earn less than workers without any higher education. The median earnings for a recent Columbia grad with an anthropology degree ($85,967 annual sticker price) was only $29,201, according to the Education Department’s College Scorecard. Low pay isn’t an aberration in the humanities and social sciences.

Many could earn more working jobs that don’t require a college degree. Employees at the lowest end of Deere & Co.’s pay scale earn $22.13 an hour ($46,030 annually), and the company’s more-skilled workers such as electricians make $33.05 an hour ($68,744). Construction and maintenance staff at the University of Southern California make more than twice as much as the school’s recent graduates in English.

A Federal Reserve Bank of New York analysis last month found that 41% of 22- to 27-year-old college grads work at jobs that don’t require degrees.

Alexandria Ocasio-Cortez

worked as a bartender after graduating cum laude from Boston University. Her current job also doesn’t require a degree or hard skills, though it pays well ($174,000).

Some argue that even if jobs don’t require a college education, a bachelor’s degree can help employers screen for attributes such as a strong work ethic and sense of personal responsibility. That might have once been true. But professors report that many students nowadays don’t show up for class or turn in assignments on time, make ridiculous excuses, and try to intimidate instructors into being treated leniently.

Yet most of them graduate, often with high grade-point averages. College completion rates have been increasing since 1990, which a study last year by Brigham Young and Purdue professors linked to grade inflation. The authors noted that instructors who give higher grades get higher student ratings, which are considered in tenure decisions and contract renewals.

Higher-grading departments also draw more students and thus more institutional funding. This could explain why grade inflation is more acute in the humanities and social sciences, where teaching positions are more precarious.

The broader problem is that colleges, though in many ways disconnected from the real economy, operate too much like businesses. They grow by charging higher tuition, which allows them to suck in more federal student aid. They aim to keep their customers—the students—happy, whether by building rock-climbing walls or giving them undeserved good grades.

Who cares if students graduate without the skills or traits needed to succeed in the real economy? Many are increasingly choosing to prolong their academic experience by going to graduate school. In the 2019-20 school year, universities awarded more than a million graduate degrees—about half as many as bachelor’s degrees.

Over the past two decades, the number of Americans over 25 with a master’s or doctorate has more than doubled. About half of the $1.6 trillion in federal student debt is now held by Americans with graduate degrees.

Advanced degrees can increase earnings potential, but they often don’t. A recent recipient of a master’s in film from New York University earns about $30,581 and has $113,180 in debt. Recent recipients of humanities doctorates make on average of $55,000. Most work as college lecturers, positions that don’t pay especially well since the academic labor market is oversaturated.

Meanwhile, employers say they can’t find skilled trade workers such as electricians and machinists. The labor market has roughly 10.7 million job openings, most of which are in occupations that don’t typically require college degrees. Many require skills training, but students in coding boot camps and many trade schools aren’t eligible for federal aid.

Government subsidies have been driving too many young people to pursue degrees whether or not they are worthwhile investments. The president’s loan forgiveness and 5% income cap on monthly loan payments will compound all these misaligned incentives that have produced a growing class of underemployed and over-credentialed young progressives.

None of this is good for the U.S. economy or democracy.