Why Are Americans Losing Faith in the Value of College?

AMANPOUR, HOST: Now, here in the United States, higher education is no longer seen as an advantage. Rather, many now see those huge tuition fees outweighing the benefits. Since 2016, there has been nearly a 10 percent drop in students heading straight to college from high school. Author Paul Tough recently investigated this trend. And he joins Hari Sreenivasan to discuss his findings.

(BEGIN VIDEO CLIP)

HARI SREENIVASAN, INTERNATIONAL CORRESPONDENT: Christiane, thanks. Paul Tough, thanks so much for joining us. Recently, you had an article in “The New York Times” magazine that was titled “Americans Are Losing Faith in the Value of College. Whose Fault Is That?” You are pointing out, really to start off the piece, that students and parents are turning away from higher education. Why do you say that?

PAUL TOUGH, CONTRIBUTING WRITER, THE NEW YORK TIMES MAGAZINE: Yes, really. Everyone is turning away from higher education. I mean, the main place that this first came to my attention was in public opinion polls. So, starting in about 2015, there was this sharp decline in how Americans were answering polling questions about college. And it kind of didn’t matter how they were asked. Do you believe in the value of college? Is college a positive force in the country? Is a college degree worth it? People were really starting to change their answers in the negative. And that has continued up until today. Gallup Poll just came out a couple of months ago continued to show a decline in what Americans are saying about college. At the same time, the numbers are going down on campuses. So, college going. The undergraduate population peaked a little more than a decade ago. And there are now more than 2 million fewer college students on American college campus, undergrads, than there were a decade ago.

SREENIVASAN: There has been, for decades, the notion that if you go to a four-year college, you will earn more over your life than someone who just has a high school diploma. Isn’t that still true?

TOUGH: Well, it is. The math has gotten more complicated over the years, but that basic calculation is absolutely still true. So, the economists have this thing they called a college wage premium that shows how much more an average college graduate makes compared to a high school graduate. And right now, college graduates are making about two-thirds more than high school graduates on average. So, yes. In it’s most basic terms, the value of a college degree is strong as ever.

SREENIVASAN: So, value versus, for example, I guess — or I should say, if you compare wages to wealth, what happens?

TOUGH: That’s where it gets complicated. So, I think two things have changed. One is, yes, that this idea of wealth. When — there’s economist in St. Louis who I wrote about, found this new way to look at college — the value of a college degree. And they looked at lifetime wealth. How much, you know, your assets minus your debts would be. And what they found is that, in those terms, more recent graduates, younger people, people born after 1980, college graduates were not doing much better than high school graduates. And what they figure is that that has to do with debt. It has to do, first of all, just with the expense of college, which takes a big chunk out of the assets of a student that goes to college. And the, a lot of students have debt pay back over a lifetime. And so, on the whole, these younger people, the equation is not working out for them the way that it used to and they are not benefitting, in terms of wealth, from a college degree the way that earlier generations were.

SREENIVASAN: So, give me a scale of how much more expensive college is than, say, when the parents of college going students might have gone and what is factoring into like our decision-making process and what we think college was in terms of cost?

TOUGH: Well, the cost of college is extremely difficult to calculate, partly just because, you know, inflation goes up over time. So, people my age, when they look back, say, everything used to be so much cheaper. So, some of it is that. There is definitely a significant increase in the cost of college. It’s risen about twice the rate of inflation over the past 30 years. But it’s also — the cost of college has also mode very complicated by the fact that financial aid is so complex for so many families. So, the sticker price of college is almost always much higher than what families will actually pay. But it’s really difficult for families to understand exactly what that number will be. On the whole now right now, it costs, with financial aid, about $33,000 on average for a student to go to a private university. And about $19,000 on average for a student to go to a public university. But there’s a huge amount of variation depending on what kind of aid you get, who you are and where you’re going.

SREENIVASAN: Because even state schools are expensive if you’re, well, out of state.

TOUGH: Exactly. So, one of the numbers that really surprised me was that at the University of Michigan, if you’re an out-of-state student, you may pay a lot more than in-state student. Juniors and seniors, all in, including tuition and expenses, they’re paying more than $80,000 a year as the sticker price. That’s a huge amount for a public college and it’s much more than was true a generation or two ago.

SREENIVASAN: So, how much does the cost of college and the kind of debt load you might be under when you come out factor into this changing opinion of whether or not college is worth it in America?

TOUGH: I think it has a huge impact. I think it really — it probably is the underlying force. And I think there are a lot of things, cultural facts, political facts that are making more people skeptical about college. But my sense is that the money is the big one. The other factor that complicates the financial calculation is that college has just become more risky. So, it used to be that a college degree would pay off fairly similarly for everyone. Everyone was benefitting a little bit from a college degree. Now, depending again on partly the luck of the draw, partly where you go, partly what you study and certainly how much you borrow, there are some students who are benefitting tremendously from their college degree. And there are others who aren’t benefitting at all and who, in fact, are losing money in the gamble of going to college. And I think that has just created this very different sense. You know, when you go to high school, you don’t think of it as a gamble, right? You just think, OK, I’m going to high school. This is what you’re supposed to do. I want to graduate. When you go to college, suddenly, you know, you’re only a year older but you’re suddenly in this incredibly complicated and expensive academic game where some people are doing great and some people aren’t. And a lot of 19-year-olds don’t have the mindset to suddenly be in this very competitive world. And I think for a lot of them, they feel like it’s just not a gamble worth taking, it just doesn’t feel good to be suddenly thrown into this dog-eat-dog world.

SREENIVASAN: When you talk about gambling, there’s an economist that you profile in this piece and he likens college to going to a casino. Kind of break down the odds for us, or what kinds of games are we playing here? Because not everybody walks into a casino with the same number of chips or the same probabilities.

TOUGH: Yes. So, this was an economist at the Federal Reserve named Douglas Webber. I should say that the casino analogy was mine, not his. I think he didn’t want to go on the record of saying college is a casino. But I’m happy to. But what struck me in his numbers, he was the person that laid out these odds, and I just found it fascinating that — and what he was able to do was to figure out different factors in a student’s life and how they played into those odds. So, one of the things that he found is if you’re going to college and you’re certain that you’re going to graduate, and you are paying zero for tuition, you have a 96 percent chance of having higher lifetime earnings than a high school graduate. So, for those people, those are somewhat imaginary people, there is no — you know, there is no risk, right? For them, the college is working out the way that it always did. The problem is about 40 percent of students who start college don’t finish on time. And certainly, college is no longer free. So, the more you pay and the higher your risk of dropping out or not finishing your degree, the worst the odds again. What he found — he also found a real impact of what majors a student takes if you study a STEM field, science or technology or math, you’re much more likely to win in the casino. But for everybody else, people who are taking arts, humanity, social science degrees, for them, even if they’re spending only $25,000 a year on college, they are — their odds are 50/50, just a coin flip of coming out ahead of a high school graduate. And if they’re spending 50,000 a year, which a lot of students are, suddenly their odds are worse. Their odds are — it’s more likely that they’re going to end up with lower lifetime earnings than a high school graduate.

SREENIVASAN: You spent six years working on a book about kind of the inequalities in higher education. And I wonder, when you kind of looked across the landscape, interviewing the experts that you did and the students that you spoke to, did you come out feeling like this just is a system that needs minor tweaks or that it was much more kind of deep rooted?

TOUGH: I think it’s much more deep rooted. I mean, the thing about higher education, when you spend the kind of time around it that I was able to do when I was reporting, first the book and then this article, is that it does still have this incredible effect on social mobility, on the transformation of young people, especially young people from disadvantaged backgrounds. But for the country as a whole, it is hard to argue with the idea that it is actually making us more unequal. It is leading to less mobility. It is keeping us trapped in the kind of social divisions that we’ve been trapped in for a while. And changing that I think takes a really serious reconsideration of, first of all, how we finance higher education, how we pay for it, but also, how we organize it. You know, the idea that there are, you know, a very small number of colleges that everybody wants to go to, that are incredibly valuable and incredibly expensive, that is just not very democratic. That does not create a system where everyone does well and where everyone supports this institution. It creates a very competitive system where everyone is kind of anxious and mad all the time, where certain people are benefitting a huge amount, but lots of others are just feeling constantly disadvantaged.

Lots of them are being disadvantaged by the system, but I think everybody feels insecure. It’s true of a lot of things in American life right now, it shouldn’t be true of higher education. But increasingly, I think it does feel like an institution that’s making us all more anxious and more insecure.

SREENIVASAN: You also point out that there are now cultural factors in America influencing how you feel towards college in a way that they didn’t exist along partisan lines, for example, 25, 30 years ago.

TOUGH: Yes. This was one of the interesting things that showed up in the polling data, which was beginning in about 2015, there was this real divergence in what Republicans said about higher education and what Democrats said.

Democrats are not quite as enthusiastic as they were a decade ago, but their enthusiast hasn’t tailed off too much. But for Republicans, it’s really fallen through the floor. The shift in how positive Republicans are about higher education has been massive since 2015. And so, I think that partly has to do with everything we’ve been talking about with economic insecurity, with the sense of unfairness, but it also, I think, has to do with this idea on right that colleges are institutions of the liberal establishment. And, you know, I think that that can be overblown, but there are data that show that there’s some truth in it as well. College freshmen by about three to one say they are liberal over conservative. With college faculty, it’s more like five to one. With administrators who are facing students, it’s more like 12 to one. So, it’s not surprising if you’re, you know, let’s say, a rural conservative person thinking about sending your kid to college, the sense that this is it not going to be a place where they and their ideas are welcome is not a crazy idea. And so, I think that shift is really undermining the whole institution. When institutions of higher education feel monolithically liberal, I don’t think that’s good for anybody. I don’t think that’s good for liberals or conservatives.

SREENIVASAN: Give us an example of how other countries are dealing with the cost of higher education. What does it cost overseas to go to college, especially considering the cost is one of those driving factors of whether we feel college is worth it in the United States?

TOUGH: So, yes, when I looked at numbers from other developed countries, there’s a range. In some countries, in France, for instance, college is free for students. In other countries, it’s usually a few thousand dollars, $2,000, $3,000, $5,000.

I come from Canada. And I was there over the summer and talking to friends who have kids who are going off to college. And in some ways, it is the — a very much sort of an alternative system to the United States. And that it’s cheaper. It’s not free, but it’s cheaper, significantly cheaper. I’d say less than half the price of college here. And part of that is because the government pays more. But part of it also is that there just isn’t this sense of there being certain like gold-plated institutions that everyone wants to go to. There are a lot of really good colleges. There aren’t a lot of, you know, low quality colleges. It’s a much flatter system. And I think that not only serves the country better, it also just changes the sense of public opinion. Because everyone is feeling like, yes, you know, you graduate from college — from high school. You find something that fits for you, whether it’s a two-year degree or a four-year degree, and it’s not a huge deal. It’s not something that you spend, you know, the last two years of high school freaking out about and then have loans that you got to pay back the rest of your life.

SREENIVASAN: You know, when you see this trajectory happening, I mean, this is a relatively small period of time for public opinion to shift so significantly. Where do you see this playing out?

TOUGH: When you look at — not only the American past but at other developed countries or competitor nations, they do higher education very differently. So, they all — while we have been turning against college, they’ve been turning towards college. Their percentages of their young people going to college have all been going up rapidly over the past 20 years. And a big part of that is that they invest in public university. Tuition is much lower because the public bears a much larger part of the burden. And that’s just based on this national idea in these our countries that higher education is something that benefits everybody. And I think that used to be an idea that was widely held here, you know, when the G.I. Bill, after World War II, we invested in all the G.I.s because we thought having lots more people go to college and graduate was going to benefit the country as a whole, and it did. It created, you know, the post-war middle class and the great post-war economic boom. And so, at this moment, I think we could make a similar decision and decide that we’re going to invest in higher education that doesn’t necessarily mean four-year universities, it can mean all sorts of different types of degrees for different types of interest. But I think we could invest in a public education, public higher education system that benefits everybody.

SREENIVASAN: What’s worked? I mean, what is the best model for getting the education that you need to be competitive in the economy without stressing ourselves out or your family finances?

TOUGH: Well, I think going to a public college is — if you go to an in- state college, it’s still a much better deal than going to private for most students. And to me, I think as — I’ve got my oldest son is a high school freshman. So, this is only a few years off for me. For me, I think, what I would think about differently as a parent than I would have before is you really sort of have to think like a consumer.

And so, I think, in the past, parents have just thought, whatever the best college your kid gets into, that’s the one you should go to. Instead, I think you really have to take questions of tuition and debt into account. And you have be aware of the kind of data that these economists are coming up with.

Going into huge amounts of debt to get a degree sometimes it’s worth it, if it’s exactly the right degree and you’re sure you can pay it off. But often, it’s not. And so, I think a lot of families are becoming more sensible consumers of tuition and of debt. And I — so, I think that is the best advice that I can give right now to parents.

SREENIVASAN: Paul Tough, thanks so much for joining us.

TOUGH: Thank you.

(END VIDEO CLIP)