Thread by @Noahpinion

Today's @bopinion post is about college.

Is demand for college falling? If so, what does that mean?

bloomberg.com/opinion/articl…

First, it's definitely true that one kind of college IS in free fall: FOR-PROFIT universities.

People are abandoning for-profits.
insidehighered.com/admissions/art…

And that is a good thing, because all our evidence indicates that for-profit universities are terrible.

So the market is working as it should - winding up a bad business model.

The sad thing is that the students of for-profits will end up bearing the cost of this failed experiment, by being saddled with debt.

We should probably forgive those loans.

theatlantic.com/education/arch…

But is the demise of the for-profit college industry the canary in the coal mine for a broader drop in demand for higher education?

Enrollment at 2-year colleges has also fallen, while enrollment at 4-year colleges has held steady.

Enrollment rates (as a % of population) have been flat in recent years.

But that may mask deeper shifts. More Hispanics are enrolling in college, but fewer white and black people are. Does that presage a long-term drop in demand?

Meanwhile, tuition actually fell at 4-year public universities recently, and is stagnant at 4-year private universities.

A price drop is another sign of falling demand.

If demand for college in America really was weakening, this is how we'd see it manifest.

Enrollment drops at less desirable schools, price drops at more desirable ones.

Why might demand for college be weakening in America?

One possibility: The stronger labor market.

Another possibility: fewer young people.

A third possibility: Rising student debt burdens combined with a stagnant college wage premium.

frbsf.org/economic-resea…

A fourth possibility: People realizing that their preferred college majors might not be so helpful in getting them a good job.

This last explanation is corroborated by the fact that students have been stampeding out of the humanities in recent years.

bloomberg.com/opinion/articl…

If demand for college declines, will this torpedo my plans to revitalize declining American regions?

Well, no. Research universities will still be good tools, since their effect on local economies comes from research rather than education.

bloomberg.com/opinion/articl…

But the idea of saving rural areas with smaller colleges - where education IS the main driver - would not be as effective.

bloomberg.com/opinion/articl…

There are definitely things the government can do to forestall a decline in the demand for higher education.

But if the great college boom is really over, it means changes are coming to American society, and a lot of people will have to re-think their plans for the future.

(end)

bloomberg.com/opinion/articl…