Megan McArdle on the Coming Burst of the College Bubble

Effectively, we've treated the average wage premium as if it were a guarantee--and then we've encouraged college students to borrow against it... [But] those 18-year-olds often don't look quite so hard at the education they're getting. In Academically Adrift, their recent study of undergraduate learning, Richard Arum and Josipa Roksa find that at least a third of students gain no measurable skills during their four years in college. For the remainder who do, the gains are usually minimal.

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Between 1992 and 2008, the number of bachelor's degrees awarded rose almost 50 percent, from around 1.1 million to more than 1.6 million. According to Vedder, 60 percent of those additional students ended up in jobs that have not historically required a degree--waitress, electrician, secretary, mail carrier. That's one reason the past few decades have witnessed such an explosion in graduate and professional degrees, as kids who previously would have stopped at college look for ways to stand out in the job market... "Employers seeing a surplus of college graduates and looking to fill jobs are just tacking on that requirement," says Vedder. "De facto, a college degree becomes a job requirement for becoming a bartender."

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What might be a lot cheaper [than subsidizing/forgiving education debt] is putting more kids to work: not necessarily as burger flippers but as part of an educational effort. Caplan notes that work also builds valuable skills--probably more valuable for kids who don't naturally love sitting in a classroom.