Over at Marginal Revolution, Alex Tabarrok provides a graph that shows how many students are graduating from college with certain degrees.
One of the most surprising things about this graph is that, as Tabarrok notes, there are fewer people graduating with computer science degrees today than there were in 1985. And this is not an isolated example; while the total number of students in college has risen by about 50 percent, the number of students graduating with degrees in science, technology, engineering and math degrees (the “STEM” majors) has remained flat. If market demand had any significant influence on the education sector, the number of graduates with STEM degrees would almost certainly be increasing.
But the most concerning thing about the graph is how many thousands of people are majoring in the visual and performing arts, psychology, and communication and journalism. There is nothing wrong with these subjects in and of themselves, but there just aren’t enough jobs that require these skills out there for as many graduates as there are. That’s why only 55.6% of all college graduates under 25 have jobs that require degrees. The left over 44.4% are working at jobs they could have gotten right out of high school. All they have to show for their time in college (career-wise) is 4-6 years in foregone experience and tens of thousands of dollars in student loans. A lot of these graduates are the people who I referred to in my last post on this subject–the ones with the lousy retail or restaurant jobs, dingy apartments, and crippling debt.
Many people blame capitalism for these graduates’ fate–the Occupy Wall Street crowd chief among them–but their blame is misplaced. When the government subsidizes student loans, colleges and universities know that they can safely raise tuition without suffering a decline in attendance. They tend to “harvest” students by tactfully increasing costs as more federal money becomes available, in effect taking the money as a form of indirect aid. Student loan subsidies, in other words, are essentially transfer payments from middle class taxpayers to colleges and universities. These schools, fat on government money and safe from market competition, blithely encourage students to major in whatever subject they enjoy the most and perpetuate the misleading notion that any college education at all helps one in the job market.
Privatizing the student loan market would drastically improve the situation. Private creditors would be more concerned about a student’s future ability to repay their loans, meaning they would be more reluctant to shell out thousands of dollars to an aspiring photography major than to a future engineer. The student would be made aware from the start, therefore, that there is a substantial cost to spending four years studying an unmarketable skill. Making this fact clear from the start would almost certainly increase the number of students graduating with STEM degrees. These students’ job prospects after college would be much improved, and the economy would benefit greatly from their technical expertise.
Unfortunately, however, it doesn’t look like any of these changes are going to be implemented any time soon. And that means that every May for the foreseeable future, hundreds of thousands of sociology, psychology, English, fine arts, and communications majors will be looking in vain for jobs in their fields. And that will mean a lot of needless economic hardship, for the graduates themselves, their families, and taxpayers.