Inflation is Making People Realize that College isn’t Worth it Anymore
According to the NSC Research Center, undergraduate enrollment rates have dropped by 3.1% — nearly a million students — in the last year, a sharp increase in annual churn.
It’s almost as though people are starting to think that the inordinate cost of tuition doesn’t justify an unfulfilling, underpaid job in an industry that has nothing to do with their degree.
How could they? Don’t they care about their future? Don’t they know that, by opting out of college, they’re crippling themselves financially and intellectually for the rest of their life?
Unfortunately, we’re probably all screwed financially anyways.
And maybe intellectually, too.
The Rundown on Inflation
In case you’ve been living in a bubble (no shame, I do it too), the Consumer Price Index has risen by 8.5% since 2021; gas prices surpassed $6.00/gallon in California, food prices have risen by 10%, and the average rent has increased 11% nationwide.
This inflation is largely due to the quantitative easing enacted at the onset of the Covid-19 pandemic, where the federal government injected a ton of money into the economy but productivity and output remained very low.
As inflation runs rampant, we, the public, are reacting in anticipation of an ever-increasing cost of living. Landlords are increasing their rent, businesses are increasing their prices, and employees are demanding higher wages. As employees/consumers have more income, merchants can increase their prices again, and the vicious cycle perpetuates.
Naturally, government officials can’t just stand by if they want to be re-elected. In response to inflation, the Fed has started to raise short-term interest rates (to discourage borrowing, decrease the supply of money, and encourage market competition) and sell its bonds (again, to decrease the supply of money and force businesses to competitively lower prices).
With every action there is an equal and opposite reaction.
By reducing the supply of money, the Fed may eventually decrease wages, put many merchants out of business, increase unemployment, and devalue the stock market.
Arguably, much of this is needed- how many extraneous businesses have only survived due to the excess of capital? How many incrementalist employees simply collect paychecks?
Although disinflationary policies may boost competition and productivity, the growing pains will be real. Ultimately, too much downward pressure on demand could trigger a recession.
Okay, but how does inflation affect college enrollment?
Apologies for the tangent.
Basically, the cost of everything has risen, including college tuition.
While the average household income is also rising, wages are “sticky”, which means that any changes are slightly delayed relative to market changes. Since the inflationary spike has just begun, wages have not risen enough to keep up completely.
Additionally, rising college tuition rates have outpaced the average household income for decades now. The disparity is nothing new, but recently inflated costs are at least making the absurdity more obvious to people.
It’s also possible that, in a covert effort to combat inflation, the federal government has also reduced the amount of financial aid available per capita. That’s just my wild theory, though.
Yes, colleges are subject to the same inflationary costs as everyone else, but I would argue that college doesn’t have to be so expensive in the first place. Do we really need extravagant dining halls and state-of-the-art rec centers? How much tuition revenue is spent on education versus administrative bloat and bureaucratic bonuses?
In the face of economic instability, is a college degree worth it?
Unfortunately, our current system is not equipped to uplift college opt-outs. Many of the million students who did not enroll in college last year may end up in low-paying jobs and face financial instability (although not unlike many of their highly educated counterparts…).
There’s a ton of stigma against “uneducated” people. Many employers filter resumes by education level or make a bachelors degree a prerequisite to entry-level jobs.
Employer: Forget everything you learned in college, you won’t need it here.
Me: That’s fine, I didn’t go to college anyways.
Employer: Oh, then you aren’t qualified for this position. :)
The first million people who enter the job market straight out of high school will have to compete with the hundreds of millions with college degrees. But if everyone else is demanding higher wages to keep up with inflation, opt-outs may have a competitive edge by being a cheaper hire since they don’t have student debt. Heck, they may even be part of the inflation antidote.
Additionally, if unemployment and a recession are on the horizon, it makes sense to jump into the workforce earlier. Not only will people have more time to amass emergency funds, they’ll also earn some kind of tenure and be less likely to be laid-off than newer hires if the time comes.
These million people are just the beginning. As more people realize the true value of our higher education system, more will jump into the workforce without collegiate accreditation and prove themselves equally capable, if not more ambitious.
Ultimately, opt-outs will face the future — be it recessionary, inflationary, or anything in between — without a mountain of debt.
And that’s priceless.