Fewer Students and Higher Costs are Driving Closures and Mergers
Your probably know that the name of this radio show and podcast is also the name of my New York Times best seller, The Truth About Your Future. And in that book, I made a prediction (well, a whole bunch of them). And one of them has come true. 200 colleges have closed over the past decade. That is four times as many as closed in the decade before that. There have been 95 college mergers.
Colleges are discovering two problems. Number one: fewer students. Number two: higher costs. With the inability to attract enough students willing to pay those higher tuition rates, colleges are having no choice but to close or merge, and the situation is not likely to get any better any time soon.
A recent survey by Gallup found that only half of high school students said they consider a college degree to be very important. A survey by USA Today says only half say that a degree is worth the cost. Quite frankly, I agree with a lot of those sentiments when you consider the incredible amount of money that people are spending to get a degree, the incredible amount of time they devote to attain it, and the impact it's having on their lives and their ability to get a job and make money. You really do have to question if it's worth a couple of hundred grand in six years in order to get a degree in a field that doesn't offer the economic opportunities that that degree provides.
Related to all this, the Department of Education says they are losing $200 billion on student loans it's made over the past 25 years, which means not only are students losing in the deal, not only are colleges losing in the deal, so are taxpayers.
And the situation is going to get a lot worse as President Biden has just announced a massive student loan forgiveness program, saddling taxpayers with huge amounts more.
The Pay Gap Continues
Meanwhile, there's a study of graduates from 2015 and 2016, 1.7 million graduates, 11,300 undergraduate and graduate degree programs at 2000 universities. This is a pretty exhaustive study. The study found that in 75% of those degree programs at all of those universities in three out of four cases, men are earning more than women three years after graduation. And 10% of those programs, men are earning 10% more than women are, even though they're graduating from the same program at the same university.
At Georgetown University, when men get an accounting degree, they are earning an average of $155,000. That's 55% more than women. They're only making $100,000. University of Michigan law degree men are earning $165,000. Women, $120,000. University of Texas Dental School men are earning $140,000. Women $103,000. University of Houston Petroleum Engineering Degree men are earning an average of $86,000 after three years. Women only $73,000. And how about the nursing master's program at California State? Men are earning an average of $200,000. Women, $115,000. Women are out earning men in only four of the 20 most popular degree programs.
Not only is this a huge imbalance where incomes are massively disparate based on sex, but the cost of those degrees are also identical. Quite frankly, I wouldn't object all that much if women were paying a lot less for the degree, since they're earning a lot less to obtain it. But that's, of course, not the case. I would even ask you the question. Would you be willing to earn less if it meant you could also pay less to get the degree? I mean, we kind of do that with concerts, don't we? You pay less for the cheap seats. Some people are willing to do that. College doesn't offer that opportunity, which means you're stuck paying the full tuition even though you're not going to earn as much as your male counterparts. This is an obscene situation. I'm astonished that it's permitted to persist in the American workforce, but you need to recognize that it does exist and factor that into your decision of what degree to pursue and what college to attend in order to get it.