Credential Inflation Makes College Degree Not Worth The Cost (Randall Collins)

[Editor's note: This article first appeared in Randall Collins' blog The Sociological Eye.]

Belief in the value of college education was sacrosanct throughout most of the 20th century. In the early 2000s, the question began to be raised whether the payoff in terms of a better-paying job was worth the cost. For several generations, almost a taboo topic--but once out in the open, an increasing percentage of the US population has concluded a college degree is not worth it.

The first big hit was the 2008 recession, when graduates found it hard to get jobs. But even as the economy recovered and grew, faith in college degrees has steadily declined.

In 2013, 53% of the population—a slim majority, agreed that a 4-year degree gives “a better chance to get a good job and earn more income over their lifetime.” In 2023, education-believers had fallen to 42%, while 56% said it was not worth the cost. Both women and men had turned negative in the latest survey—even though women had overtaken men in college enrollments in previous decades. The youngest generation was the most negative, 60% of those aged 18-34. Not surprisingly; they are the ones who had to apply to dozens of schools, a rat-race of test scores, scrambling for grades, and amassing extra-curricular activities; most not getting into their school of choice, while paying constantly rising tuition and fees, and burdened with student-loan debt into middle age. Not to mention the near-impossibility of buying a house at hugely inflated prices, many still living with their parents; while all generations now agree that the younger will not enjoy the standard of living of their parents.

The only demographic that still thinks college has career value are men with a college degree or higher, who earn over $100,000 a year. They are the only winners in the tournament. Every level of education—high school, junior college, 4-year college, M.B.A. or PhD or professional credential in law, medicine, etc.—has value as an entry ticket to the next level of competition for credentials. The financial payoff comes when you get to the big time, the Final Four so to speak; striving through the lower levels is motivated by a combination of American cultural habits and wishful thinking.

The boom-or-bust pattern of rising education makes more sense in long-term perspective. For 100 years, the USA has led the world in the proportion of the population in schools at all levels. In 1900, 6% of the youth cohort finished high school, and less than 2% had a college degree. High school started taking off in the 1920s, and after a big push in the 1950s to keep kids in school, reached 77% in 1970. Like passing the baton, as high school became commonplace, college attendance rocketed, jumping to 53% at the end of the 1960s—there was a reason for all those student protests of the Sixties: they were suddenly a big slice of the American population. By 2017, 30% over age 24 had a college degree; another 27% had some years of college. It has been a long-time pattern that only about half of all college students finish their degree—dropping out of college has always been prevalent, and still is.

The growing number of students at all levels has been a process of credential inflation. The value of any particular diploma—high school, college, M.A., PhD—is not constant; it depends on the labor market at the time, the amount of competition from others who have the same degree. In the 1930s, only 12% of employers required a college degree for managers; by the late 1960s, it was up to 40%. By the 1990s, an M.B.A. was the preferred degree for managerial employment; and even police departments were hiring college-educated cops. In other words, as college attendance has become almost as common as high school, it no longer conveys much social status. To get ahead in the elite labor market, one needs advanced and specialized degrees. In the medical professions, the process of credential-seeking goes on past age 30; for scientists, a PhD needs to be supplemented by a couple of years in a post-doctoral fellowship, doing grunt-work in somebody else’s laboratory. In principle, credential inflation has no end in sight.

An educational diploma is like money: a piece of paper whose value depends inversely on how much of it is in circulation. In the monetary world, printing more money reduces its purchasing power. The same thing happens with turning out more educational credentials—with one important difference. Printing money is relatively cheap (and so is the equivalent process of changing banking policies so that more credit is issued). But minting a college degree is expensive: someone has to pay for the teachers, the administrators, the buildings, and whatever entertainments and luxuries (such as sports and student activities) the school offers—and which make up a big part of its attraction for American students. And all this degree-printing apparatus has been becoming more expensive over the decades, far outpacing the amount of monetary inflation since the 1980s. Colleges and universities (as well as high schools and elementary schools) keep increasing the proportion of administrators and staff. At the top end of the college market, the professors who give the school its reputation by their research command top salaries.

Credential-minting institutions have been able to charge whatever they can get away with, because of the high level of competition among students for admission. Not all families can afford it; but enough of them can so that schools can charge many multiples of what they charged (in constant dollars) even 30 years ago. The result has been a huge expansion in student debt: averaging $38,000 among 45 million borrowers; and including 70% of all holders of B.A. degrees. Total student debt tripled between 2007 and 2022.

These three different kinds of inflation reinforce each other: inflation in the amount of credential currency chasing jobs in the job market; inflation in the cost of getting a degree; inflation in student debt. We could add grade inflation as a fourth part of the spiral: intensifying pressure to get into college and if possible beyond, has motivated students to put pressure on their teachers to grade more easily; in public schools, to pass them along to the next grade no matter their performance (retardation in grade, which in the 1900s was common, has virtually disappeared); in college, GPA-striving has a similar effect. Grades are higher than ever but the measured value of the contents of education, ranging from writing skills to how long the course material is remembered after the course is over is low (Arum and Roksa 2011, 2014). College degrees are not only inflated as to job-purchasing power; they are also inflated as a measure of what skills they actually represent.

The remedies suggested for some of these problems--- such as canceling student debt by government action—would temporarily relieve some ex-students of the burden of paying for not-so-valuable degrees. But canceling student debt would not solve the underlying dynamic of credential inflation, but exacerbate it. If college education became free (either by government directly picking up the tab; or by canceling student debts), we can expect even more students to seek higher degrees. If 100% of the population has a college degree, its advantage on the labor market is exactly zero; you would have to get some further degree to get a competitive edge.

Scandals in college admissions are just one more sign of the pressures corroding the value of education. College employees collude with wealthy parents to create fake athletic skills, in a time when students apply to dozens of schools, and even top grades don’t guarantee admission. Since athletics are a big part of schools’ prestige, and are considered a legitimate pathway to admission outside the grade-inflation tournament, it is hardly surprising that some try that side-door entry. There is not only grade inflation, but inflation in competition over the pseudo-credentials of extracurricular activites and community service. Efforts at increasing race and class equity in admissions increase the pressure among the affluent and the non-minority populations. Since sociological evidence shows that tests and grades favour children of the higher classes (whose families provide them with what Bourdieu called cultural capital), there are moves to eliminate test scores and/or grades as criteria of admission. What is left may be letters of recommendation and self-extolling essays--- what we might call “rhetorical inflation”, plus skin color or other demographic markers; but the result will do nothing to reduce the inflation of credentials. The underlying hope is that giving everybody a college degree will somehow bring about social equality. In reality, it will just add another chapter to the history of credential inflation.

Except for the small percentage of really good students who will take the tournament all the way to the most advanced degrees and become well-paid scientists and professionals, the growing disillusionment with the value of college degrees will result in more and more people looking for alternative routes to making a living. The big fortunes of the last 40 years--- the age of information technology—have been made by entrepreneurs who dropped out to pursue opportunities just opening up, instead of waiting to finish a degree. The path to fame and fortune is not monopolized by the education tournament. For the rest of us, finding more immediate ways of making a living (or living off someone else) will become more important.

P.S. The advent of Artificial Intelligence to write students’ papers, and other AI to grade them (not to mention to write their application essays and read them for admission) will do nothing to raise the honesty and status of the educational credential chase.

References

“More Say Colleges Aren’t Worth the Cost.” Wall Street Journal April 1, 2023 (NORC-Wall St. Journal survey)

Average Student Loan Debt (BestColleges.com) 

U.S. Bureau of the Census

Randall Collins. 2019. The Credential Society. 2nd edition. Columbia Univ. Press.

Richard Arum and Josipa Roksa. 2011. Academically Adrift: Limited Learning on College Campuses. Chicago: University of Chicago Press.

Richard Arum and Josipa Roksa. 2014. Aspiring Adults Adrift: Tentative Transitions of College Graduates. Chicago: University of Chicago Press.