College choices

This piece in the Chronicle of Higher Education has much to say about colleges, most of it negative. I agree with much of the critique but not much of the remedy.

I think the author overstates the extent to which students who are not finishing are at the most expensive schools.

I like the idea of making available data on colleges. More of that happens already than the author lets on. The Department of Education's Integrated Post-Secondary Education Data Survey (IPEDS) collects data on many college characteristics. Others can be obtained from the various firms that rate colleges, such as Barron's and US News. The main problem with these data is that, like with the state graduate rates that inspired me to start this blog, there is no necessary uniformity in measurement. Also, they have not been chosen as thoughtfully as they should have been, with the result that many schools now game them in order to increase their rankings in places like US News. For example, I was told that one reason that the University of Maryland started admitted fewer freshman but more transfers was the US News uses the average test score of the entering freshman class in its rankings.

Customer service measures are largely useless - they always turn out really positive and so do more to mislead than to inform. That is, presumably, why such measures are included in, e.g., the performance standards for the Workforce Investment Act.

My main concern, though, is that the author blames colleges when in fact they are merely cogs in the machine. How many politicians rant on about how everyone should go college? We have loan and grant programs that are set up to encourage not everyone who is ready for college to go, or everyone who is academically prepared to go, but just everyone. The combination of cultural pressure and finanical incentives induce many to go to college who should not. This is a waste of resources both for the individual and for society. At the same time, as Manksi and others have pointed out, college is an experience good, which means that the socially and individually optimal dropout rate is not zero. That is, for some students it is optimal to try college out, even though there is a non-trivial chance they will not finish.

There is also an issue around reporting the high "return" to college estimated in many studies by labor economists. This return is typically cited and interpreted, even by economists, as a common effect. It is surely not. In a world of heterogeneous effects of college, which is surely the world in which we live, it is marginal returns that matter, not averages. I suspect that for many students at the margin, who are the students who are not finishing the overall return, including both direct costs and foregone earnings, is surely negative. I think the literature is moving in a better direction on this point, but it is doing so much too slowly.

I will end with two other, not unrelated, points: (1) most students do not make full use of the college education they, their parents and the longsuffering taxpayer purchase; (2) for many students waiting a year or two or three after high school before going on to university would lead them to make much better use of the opportunity (and probably to do a better job of sorting between going to college and not). More research on the latter point would be useful though it is tough when those who do delay college entry at present tend to be a rather unusual lot, leading to really serious selection issues.

Hat tip: instapundit