This week, new students are arriving at my university and others. I believe this is a good time to say something both provocative and nuanced: A college diploma is virtually worthless.  The question we must then ask is, “Why do so many smart people go to college and make so much more money than high school graduates?”  This is a trick question because, unlike high school, it is the college education that matters most, not the diploma.  A high school diploma is now a necessary credential for the adult world, so that fact makes it a valuable credential. A college diploma is different.

At one time, a college diploma meant the learning of a fairly broadly accepted set of things that virtually guaranteed good job opportunities, but that time passed more than a generation ago.  As a greater share of Americans graduated from college, the wages associated with a degree became less certain, but not necessarily because of oversupply.  Though oversupply is a problem in many disciplines, the real problem is diminished learning.

Today, about two-thirds of Americans go to college of some sort, and about half graduate.  Still the number of students obtaining degrees in the most technical disciplines remains fairly constant.  We produce about the same number of chemical engineers and accountants each year as we did 40 years ago, and these graduates have superb job prospects.  Salaries for graduates vary with a three-fold difference in starting salaries for finance and actuarial science graduates versus psychology and performing arts graduates.  These latter are two of the fastest growing majors over the last generation and this wage gap appears to grow over a graduate’s lifetime.  Astonishingly, Indiana counts psychology as a technical degree, but not finance, but that is a topic for a later column.

Clearly, good students in any field will do well, and a true education requires liberal arts.  Furthermore, a college education is not only about getting a job.  Still, it is folly to suppose that a college degree in an oversupplied major with uncertain learning is a gateway to a good job.  If you think otherwise, you should take an economics class instead of “Praxeology of the Simpsons”.

So what about Indiana’s higher education policy? If it is quality that matters, then schools should be rewarded on their quality and contribution to learning. Like most states, Indiana barely attempts this, but Indiana should not aspire to be like other states.  Our current education policy mindlessly pushes more men and women into college without regard to aptitude, interest or labor market demand. Many of these students are likely to shy away from tough majors, learn little, saddle themselves with huge debt and find themselves without the skills needed to successfully enter the job market.   

Any reader of this column knows I am a champion for changes to higher education (recall the histrionics about my tenure column) but this reform needs to be about improved learning for students and a better Indiana, not simply more diplomas to adorn a wall.   That is the first lesson of the year.