College graduation rates have again hit the peak this summer. Despite the gloomy unemployment rate, a considerable number of college graduates will join the work force. Politicians did nothing to stop student loans from reaching $23,000 per borrower in 2011. Many wonder if college education will become the next bubble. Behind all graduation celebrations, a controversial issue over whether the interest of student loans should be kept low has grabbed the nation’s attention and has been a prominent issue this election year.
A recent 60 Minutes episode told the story of Peter Thiel, a billionaire venture capitalist who’s dissatisfied with America’s college education system. A few years ago, he set up a $100,000 grant that selects 20 current college students every year to drop out of college and pursue their passion. Thiel is convinced that there is a bubble in college education because, with all the government subsidization of the college system, students and their parents overestimate college’s benefits and pay whatever it takes to attend college. But college’s costs have skyrocketed after state governments cut spending over the past two years.
Thiel’s “fringe” idea has drawn some criticism. For instance, Professor Vivek Wadhwa of Duke University said Thiel is so rich that he’s out of touch with average Americans. Wadhwa thinks Thiel fails to understand how important college education is to most Americans, and Wadhwa believes it’s dangerous to encourage students to drop out of college.
There is no question that Thiel’s effort has provided young adults an alternative to fulfill their dreams beyond the mainstream perspective. But both sides ignore one of the most significant driving forces for seeking education, which is individuals’ and parents’ judgment. Education, in its essence, is insurance against future uncertainty. Individuals facing decisions about college compare college’s costs and benefits and seek their parents’ guidance. But too much government involvement has taken away the power of families to decide on their own and has kept student loans superficially low at 3.4%. Overestimated costs and government subsidization of education has lured into college many students who otherwise could not afford or would not want to attend college.
With increasing numbers enrolling in college, the belief that college degrees are necessary for success has proliferated. Given California students’ furious protests against government cuts in public education last year, backlash will surely arise if federal or state government reduces college subsidies and colleges must raise tuition.
According to a recent Rutgers report and contrary to the alleged benefits that college advocates espouse, only half of recession-era graduates have full-time jobs. Students unable to find jobs by their graduation would have sought other opportunities to explore their talents if they hadn’t attended college. During this time, these students could have earned years of income and work experience instead of, in many cases, incurring large debts. Since college’s importance is exaggerated, young adults seem to be blind to other ways to better themselves, such as through online courses or starting a business.
Is Thiel or Wadhwa correct about college’s importance? Regardless, government subsidies and other interventions shouldn’t determine who should attend college. Individuals should be free from coercion and able to decide if college is their right path.