Stephen
Kershnar
Subsidizing and Encouraging Weaker Majors
Dunkirk-Fredonia Observer
October
1, 2018
There is an interesting issue as to
whether it is wise to heavily subsidize weaker college majors.
College is a risky investment. According
to the National Center for Education Statistics, roughly 59% of students who
enrolled in colleges (and universities) in 2009 graduated in six years. Only
about 40% graduated in four years. Jaison Abel and Richard Dietz of the Federal
Reserve Bank of New York found in that in 2010, 62% of college graduates had a
job that required a college degree. As a result, more than half of those who
enter college don’t get a job that requires a college degree.
College is expensive for students
and, often, parents. According to Project on Student Debt, in 2015, 68% of
college graduates had student loan debt. According to the Federal Reserve, the
average debt in 2017 for student who had taken out loans was $39,000. The
amount of these loans can also be seen in that Americans owe more in student-loan
debt ($1.5 trillion) than credit-card debt ($0.9 trillion). Students frequently
default on these loans. More than one in nine people with student loans
default. A college student also loses years of income and on-the-job training.
Taxpayers and others also pay for
college. Writing in The Atlantic, University
of Colorado Law Professor Paul Campos reports that in 2014 federal and state
taxpayers paid roughly $160 billion ($7,900 per college student) to colleges. Many
pay for the student-loan defaults.
In The Case Against Education (2018), George Mason economist Bryan
Caplan concludes that the return on investment for return for fair and poor
students is often small (1-2%) and, in some cases, negative. On his account, a
fair student is in the 41% of cognitive ability and the poor student in the
24%. Caplan also found that the social return on investment (return taxpayers
get for investing in a college education) for college is poor and, sometimes, negative
in part because the college student gets most of the return on the investment. Again,
the return is noticeably worse for fair and weak students. This will become an
issue at SUNY-Fredonia because more than a quarter of recently admitted students
graduated in the bottom half of their high school class.
The problem is exacerbated with weaker
majors. Weaker majors have some of these features: higher unemployment, lower
salaries, weaker students, and a less important subject matter. They include
art (drama, music, studio, and visual arts), communication, education, ethnic and
gender studies, and recreation
(parks, recreation, and leisure and, also, physical fitness). Stronger majors
include accounting, computer science, economics, engineering, mathematics, and
physics. Some majors are harder to categorize. Consider English and psychology.
Subsidies for weaker majors should
be reduced. Lessening subsidies to these majors might be done by offering them
at fewer or no state colleges or by using merit-based subsidies as a way of
discouraging less capable students from studying them. Private universities would
likely still offer these majors and taxpayers generously subsidize these
universities through below-market loans, grants to students, grants to
universities, and tax breaks.
Here is the argument. First, if, on
average, one college major has a lower return on investment for students and
taxpayers than a second, then it should receive less of a subsidy. Second, on
average, weaker majors have a lower return on investment for students and
taxpayers than stronger ones. Hence, weaker major should receive less of a
subsidy. A similar argument suggests that students should be encouraged to
choose stronger majors. This is especially true for fair and poor students.
It is arguably callous, if not
cruel, to subsidize and encourage fair and poor students to have weaker majors
when they are less likely to graduate, less likely to do well in the major, and,
if they graduate, less likely to get a job that requires a college degree and
pays well. This is similar to how it was arguably callous, if not cruel, in the
years leading up to the 2007-2008 subprime mortgage crisis, to subsidize and
encourage poor people to take risky loans for houses they couldn’t afford.
One objection is that weaker majors
do not give students a worse return on investment. However, writing in Forbes, Niall McCarthy found that in
2017, the majors with the lowest median salaries included exercise science, education,
music, and psychology. According to a 2015 study by Georgetown University’s
Center on Education and the Workforce, the majors with the lowest median
earnings include counseling psychology, early childhood education, drama and
theater arts, studio arts, and visual and performing arts. It also found that the
majors with the highest part-time employment include visual and performing
arts, studio arts, and music.
A second objection is that even if
weaker majors give students a worse return on investment, they do not give
taxpayers a worse return on investment. I can’t find evidence for this claim. Perhaps
I am missing it. Even if there were such evidence, there is little reason to
believe that the greater return to people other than the student would outweigh
the lesser return to the student.
A third objection is that even if
weaker majors give students and taxpayers a worse return on investment, neither
taxpayers nor students should care about a major’s return on investment. This
might be because money is not a good measure of what these majors provide. Instead,
the value might be the students’ love of the major or the benefits it provides
to the rest of us that markets don’t value.
Consider
the arts. Even if students are willing to face lower salaries and worse
employment to pursue what they love, the rest of us shouldn’t have to pay for
it. Taxpayers can probably get much of the benefits through top-ranked programs
in these fields. For example, in music consider Julliard, Curtis, and Eastman
and in film consider USC, NYU, and UCLA.
It
is unwise to subsidize and encourage weaker majors, especially for less able
students.
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