No, Rising College Enrollment Is Not a Sign of an Improving Economy

Starting a better higher-ed conversation.
Oct. 31 2013 12:12 PM

No, Rising College Enrollment Is Not a Sign of an Improving Economy

It might actually be the opposite.

Degrees from for-profit collegescan cost up to four times as much as a comparable degree from a public college.

Photo by Ingram Publishing/Thinkstock

People with college degrees make more money than people without college degrees. They are also less likely to experience unemployment, and if they do, they tend to be unemployed for shorter spells than those without a degree. Lots of really smart people—like Jonathan Cowan and Jim Kessler, of the centrist policy agency Third Way, in a recent piece for the New York Times—look at that data and interpret it to mean that increased college enrollment, which itself was a product of the 2007–08 economic crisis, bodes well for our economic insecurity, persistent high unemployment rates, and yawning inequality. They are wrong.

Cowan and Kessler are right that college enrollment surged after the economic crisis—an 18 percent increase since 2006. They see these data points as signs of America’s can-do spirit clearing a path out of the economic darkness. But to really understand what the data means, we need some historical perspective. College enrollment in the 1960s and ’70s spiked to keep pace with the rapid expansion of the U.S. economy. In contrast, the economy of 2006–2011 has done anything but expand. At best, we’ve narrowly escaped a depression. When millions of workers opt into college under these conditions, it’s more about gnawing fear than exuberance.

In addition to the shrinking economy, the job market is increasingly polarized, with one labor market happening for the most skilled and another for the least. The champions of college-degree attainment skip over a sobering fact: There are not enough high-skill jobs to compensate for those lost in the middle. And the contraction of jobs in the middle means fewer pathways for low-skill workers to move up.


Smart people should know this. So why do they continue to make arguments about how higher education is going to save our faltering economy? For one thing, the message isn’t entirely wrong. I believe in college enough that I have—as a 5-year-old recently told me—“gone all the way to the 20th grade in school.” College can be a transformative experience. The public good benefits when there are affordable, high-quality college choices available to all. But those choices are not the same for everyone. Cowan and Kessler herald the 3.5 million degrees conferred over the last six years because that number “blows past previous highs.” But not all college degrees are created equal. African-Americans and Hispanics increased their college participation during the same time period, but most of that growth occurred in for-profit colleges. In 2013, the for-profit University of Phoenix was the No. 1 producer of African-Americans with a bachelor’s degree. Whether one loves them or hates them, it’s generally agreed that degrees from for-profit colleges can cost up to four times as much as a comparable degree from a public college.

We also know significantly less about how well for-profit graduates and drop-outs fare in the labor market as compared to decades of studies about traditional college graduates. And we know next to nothing about the social mobility of the disproportionately poor and minority students who are most likely to enroll in for-profits. Though we lack a clear picture of what happens to them once after they enroll, we can make an educated guess about why they enroll in the first place. In 2009, during the lowest depths of the economic crisis, David Pauldine, president of for-profit DeVry University, told the New York Times, “I have heard repeatedly from our admissions offices that when they interview prospective students, they’re saying they just lost their job or fear that they might lose their job.” Four years later, those fears about job loss and reduced benefits and wages have yet to taper off, according to a Gallup poll from last month.

All of the crowing about degree expansion ignores this kind of insecurity and stratification of degree attainment and outcomes. It also creates an ideology of a higher education “crisis” that is really a labor market crisis. In The Great Risk Shift, Jacob S. Hacker details the private sector’s successful outsourcing of corporate and public sector risk onto individuals: Pensions became 401(k)s, welfare subsidies got time limits and work requirements, health insurance premiums sky-rocketed. A similar shift occurred at the institutional level as all responsibility for workforce training and career security was transferred to colleges and universities. It is a nifty trick that unfairly frames higher ed as a problem to be solved.

The real problem is that conferring more degrees in a polarized, stagnant job market can only create more stratification as more people compete for fewer good jobs. For the most vulnerable, that is a particularly dangerous scenario as they pay the most for degrees, need a good job more desperately to justify the expense, and are least likely to have the social connections that grease the wheels of the high-skill labor market. The great shift and the resulting stratification are bad enough. But expecting us to buy the delusion that it is good for us is just adding insult to injury.



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