Decision season is upon us once again. Over the next six weeks, millions of high school seniors will make a life-defining choice: which college to attend.
What makes this year different is the increasing number of students who are not trying to decide where to enroll for the class of 2029, but weighing whether they should go to college at all.
The percentage of graduating high school seniors who enroll at a college the subsequent fall is called the “immediate enrollment rate.” In 1980, that number was around 50%. Then it began to rapidly rise, climbing all the way to 70% by 2009. This dramatic change was celebrated as a positive development for our country, and the trend was expected to continue. But 2009 turned out to be a peak; the immediate enrollment rate has been trending downward ever since.The last few years we have returned to rates as low as those in the 1990s. In the meantime, since 2010 over 650 colleges have closed their doors due to declining demand.
Why College Enrollment Has Declined
What happened? Though some analysts will point to a mix of complicated factors, the real story is much simpler. From 1980 to 2020, the cost of a college education rose roughly 1,000%. That is triple the rate of inflation over the same period. In terms of real-world purchasing power, college today is three times more expensive than it was a generation ago.
Allow me to state the obvious: if the price of something triples, that’s going to have a significant effect on whether people think that thing is “worth it.” The assessment of value is a ratio of cost to benefit. If the cost goes up but the benefit stays the same, then the value has decreased. There’s no debating that. And it’s not as though people weren’t going to notice. In a recent survey, only 22% of US adults said they think a college education is worth taking out loans for. The problem is the majority of American families simply cannot finance a college education without debt. If you put those two things together, it adds up to declining enrollment.
Higher Education Has Perpetuated The Opportunity Gap
The most troubling aspect of this declining enrollment is the way it is affecting some demographic groups more than others.
If the decline is being driven by increasing costs, then it will have the greatest effect on those who are most cost-conscious. This is exactly what we are seeing. According to Raj Chetty, Director of Opportunity Insights at Harvard, students who are born into the wealthiest American families have a nearly 100% chance of attending college, compared to a 30% chance for those born into the poorest families.
Those wealthy students who attend college will have more career opportunities than the low income students who do attend college. Which means that the same dynamic will be repeated in the next generation, widening the opportunity gap.
The increase in income inequality in the United States is well-known at this point; what’s less well-known is the role that higher education has played in exacerbating the problem. Instead of reducing income inequality, higher ed has been perpetuating it.
Two Big Questions
There are two questions worth asking in response to all of this. The first – why should we care? The second – what can be done about it?
First, why should we care? Or, more to the point, why is this widening gap something that wealthy Americans in particular should be concerned about?
According to the moral norms of our culture, the rich have always been expected to care about the poor, or at least pretend to. These norms have been shaped by a variety of sources, from the Declaration of Independence to the Sermon on the Mount. But in recent years, these norms have been weakening. In their place, a more Hobbesian vision of society has emerged in which each person’s only obligation is to their own tribe.
So rather than appealing to compassion or empathy, let me instead appeal to self-interest. The reason that the rich should care about the growing opportunity gap is because it means we are all missing out on many of the breakthrough discoveries upon which we could build a better, more secure future.
Wasted Talent Is A National Loss
Amongst those who wish to “make America great again,” there seems to be a studied indifference to what made America great to begin with. Our secret is no secret at all. It has long been written on the Statue of Liberty, for all to read: “Give me your tired, your poor, your huddled masses yearning to breathe free.” America’s message to the nations of the world has always been, “We’ll take your leftovers.”
But why has America been so passionately willing to take in those who were failing to thrive in their home countries? The answer has never been charity. America was not the benefactor in this arrangement, but rather the beneficiary. What America has always known is that within those huddled masses were hiding the very men and women who can make a better world for us all, if only they were given the chance.
If talent is evenly distributed, but opportunity is not, that means a lot of talent is going to waste.
This is why we have never called ourselves “the land of talent,” but rather the “land of opportunity.” What distinguished us was not that we had more talent but that we made room for those who did. We wanted to give people the chance to take their shot and see what they could make of themselves without the constraints of caste and corruption.
To put it mildly, the bet paid off. As a result of these attitudes and policies, America became the richest and most powerful nation in the world.
Removing Barriers To Entry
All of that to say, removing barriers to entry isn’t just a humanitarian concern. It’s also an economic one. We used to believe that increasing competition leads to better outcomes. We also used to believe that the best way to increase competition is by helping all the would-be competitors to make it to the starting line. Becoming great again is as easy as recovering these foundational beliefs.
Which brings us to the second question: how can this college enrollment gap be solved? Again here, the answer is not so complicated. To close the gap, we must remove the barrier to entry. The barrier to entry is money. All that would be necessary to eliminate that barrier is to set the price of tuition such that it does not discriminate between rich and poor. The only price which satisfies that requirement is $0 per year.
I am growing tired of the notion that such a price would somehow be impractical. Currently, there are over 140 schools in the US with endowments exceeding $1 billion. Each of these could stop charging tuition immediately while continuing to operate with a balanced budget. As for the remaining schools, all it would take is a gift of $1 billion. The top 1% of American families have a collective net worth of around $50 trillion. If we wanted to, we could solve this problem by the end of the month.