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4 Reasons Why Bill Bennett’s Book on College Costs Is Wrong

Yahoo! Finance

By Zac Bissonnette

Former Secretary of Education William J. Bennett is out with a provocatively-titled new book: "Is College Worth It?: A Former United States Secretary of Education and a Liberal Arts Graduate Expose the Broken Promise of Higher Education."

Bennett and his co-author, an associate producer on Bennett’s radio show, purport to offer new, fresh, well-researched information and perspective. But this is really just the latest product in the fast-growing “College is Overrated!” menagerie, and the argument is familiar: too many people are going to college, they’re picking the wrong majors, borrowing too much, and emerging from the experience worse off than if they hadn’t gone at all. Bennett put together this slim hardcover with the stories of callers on his radio show, commenters on blogs, non-peer reviewed studies based on self-reported data from PayScale Inc., and too many sentences that end with phrases like, “as he told an Associated Press reporter.”

The anti-college argument generally involves exaggerations about the scope of student loan debt, and Bennett’s book is no exception. He begins his chapter on the student loan problem with the story of a 39-year-old who racked up $339,361 in debt on a bachelor’s degree, two master's degrees, and law school followed by a PhD—a level of borrowing so exceedingly rare that it’s not worth mentioning except as a sort of financial Darwin Award winner.

We then read about a bartender Bennett met who graduated from college owing $50,000—about twice the national average among the two-thirds of graduates who do borrow. He follows that with mentions of graduates with $120,000 and $70,000 in debt. He then briefly notes the average—$25,000 or about the size of the average loan on a new car—and moves right along to the story of a 25-year-old who told the Huffington Post she exchanged sex for help with her student loans.

Here are some quotes from Bennett’s new book with short explanations about why he’s wrong:

  • “Two-thirds of people who go to college right out of high school should do something else.” For the 40% of students who won’t end up completing their college degree, this is true. Luckily, high school performance is a strong predictor of college success. As Marty Nemko writes, “among college freshmen who graduated in the bottom 40 percent of their high school class, 76 of 100 won’t earn a diploma, even if given 8-1/2 years.” Those students should pursue alternatives. But among students who will be able to graduate, college is a worthy investment.

  • “Eighty-four percent of employers rate college graduates as unprepared or only somewhat prepared for the job.” However, they still insist on hiring college graduates. According to the Bureau of Labor Statistics, the unemployment rate among those with a high school diploma is 8.3%. It's 4.5% for bachelor's degree holders, and 2.1% for those with a professional degree. Bachelor's degree holders earned $1,066 per week versus $652 for high school grads. Bennett notes those stats much later in the book, and they completely undermine the idea that two-thirds of students who enroll in college shouldn’t be there.

  • “. . . [A]s the economy recessed in 2008. . . the calculation that college is worth the high cost is looking like much less of a sure thing.” As The New York Times reported in January, “the drop in employment and income was much steeper among people who lacked a college degree." Of course, experiencing the smallest decline in wages and employment rates is hardly an uplifting outcome for college students but, in a tough economy, it’s a good one. The college vs. no college argument tilted further in favor of college during the recession.

  • “[T]oo many students gravitate toward majors in which they gain few skills or for which there is little workplace demand.” However, as a recent survey from the Association of American Colleges and Universities shows, most employers just aren’t that interested in a student’s major. Bennett’s a big proponent of engineering majors, but few students who start out there will graduate into the field; the work is challenging and the notion that there is an enormous cohort of students majoring in communications who could just switch into petroleum engineering and graduate with great job prospects is dubious.

So what should students do?

First, go to college if you performed well enough in high school to have a good chance of graduating. For most students, the best advice on picking a school will be, to quote Ben Stein quoting the economist Frank Knight: “Take advantage of all subsidies.” If you can find a private college willing to give you a ton of financial aid—and those packages generally come from the best-endowed, most selective schools—go there. Otherwise, opt for a lower cost in-state public college. When picking a college, minimizing debt should be your first concern. Major in a subject you find interesting, do well in your classes, and make connections.

To be sure, there are plenty of legitimate macro arguments about ways the system could be made more efficient and affordable. Policy makers and universities need to explore those, and voters should put pressure on politicians to do something about college costs and interest rates on student loans. But for personal finance advice, most high school students would be better off listening to their overworked and under-trained guidance counselors than this former United States Secretary of Education.

Zac Bissonnette graduated from the University of Massachusetts Amherst in 2011 and is the author of "Debt-Free U," the "best and most troubling book ever about the college admissions process," according to The Washington Post.