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College in the US is used by employers as a proxy for intelligence, something that's an outgrowth of laws and court rulings that date back to the '70s. So if y

College in the US is used by employers as a proxy for intelligence, something that's an outgrowth of laws and court rulings that date back to the '70s. So if you want to put yourself on the path to the C-Suite in a Fortune 500 company or to a partnership in a major law firm, you have to get into one of the very top colleges in the country. That, in turn, means top colleges can charge pretty much whatever they want and it's still worth the money. Not because of the instruction students receive, but because getting admitted is highly competitive and those students managed to do it. In other words, it's a positive feedback loop driving up prices for a scarce resource. Even when you get out of the nosebleed tier, colleges are easy to rank by their accept/reject ratio. So if you're a big employer and you have a candidate from Brown (acceptance 9.5%) and one from Cornell (acceptance 15.1%), you'd probably prefer the one from Brown, everything else being equal. The sad part is adding more money just makes the problem worse for the same reason adding money to real estate markets just makes everything more expensive.

akhilcacharya 9y ago
Hmm, what happens if we don't go to any of these schools?
- gozur88 9y ago
  Meaning what, not going to college or going instead to the local State U?
  - akhilcacharya 9y ago
    Going to a State U instead of those elite Us
    - gozur88 9y ago
      State U is just fine for a technical degree, but you're diminishingly unlikely to be a CEO of a large company you didn't start yourself. Or a partner in a big NYC corporate law firm.
ethbro 9y ago
Above and beyond that, and to crib on one of the grandparent comments re: "Eventually, demand will decrease if prices continue increasing": If the minimum barrier to employment is having a college degree, then people will continue doing whatever they have to in order to get a college degree. The only way you're going to change demand is if decent jobs start being created that don't require a bachelor's degree. And I don't see that happening...
- gozur88 9y ago
  >The only way you're going to change demand is if decent jobs start being created that don't require a bachelor's degree. And I don't see that happening... I do. At the lower end, if employers can't afford to pay people enough to make their loan payments, they'll start hiring people without debt.
  - lmm 9y ago
    But there are already more applicants than jobs. Labour is a buyer's market at the moment.
    - gozur88 9y ago
      Right, but people with loan payments can't take jobs that won't allow them to make the payments. If they can't take those jobs, the jobs will go to people without degrees.
      - ethbro 9y ago
        Well, a bit more than 10% are, based on the student loan delinquency rate. The worry I have is that if the automation worries are born out, then you're going to have an inflexible debt loan (student loans) meeting a market that offers fewer jobs (due to automation).
- strommen 9y ago
  Electricians, plumbers, etc. all make very good money without 4- year degrees. But nobody aspires to these professions nowadays - everybody assumed they must go to university.
bjourne 9y ago
But wait. The more colleges charge for tuition, the harder it becomes for intelligent but poor people to get admittance. Therefore, the worse a college degree from a "top college" can act as a proxy for intelligence.
- gozur88 9y ago
  That's why top colleges give generous scholarships to exceptional poor kids.
- WillPostForFood 9y ago
  It doesn't make admission harder, it makes attending harder. Or life after attending harder, dealing with the debt.
skewart 9y ago
> That, in turn, means top colleges can charge pretty much whatever they want and it's still worth the money. The most prestigious colleges actually don't charge much money, except for families that can easily pay. Financial aid, including stipends for living expenses, is extremely generous at elite schools. The sticker price might be high, but few people actually pay it. The problem is more with second tier schools that aspire to greater prestige but have more limited financial resources. While many of these schools offer perfectly good educations, they don't really open the same kind of doors that going to a more elite school can. A big tuition price can make parents think they're sending their kid to a really elite school - just like people often will assume a more expensive diamond ring is better than a less expensive one. But it's probably not really worth the money.
- cableshaft 9y ago
  I've seen this mentioned several times, and I wish I had realized this when I was younger. I didn't even bother to apply to top tier schools even though I would have probably been accepted there because I knew my parents weren't too well off and I didn't think they'd be able to afford to support me, and I really hated the idea of taking out big college loans ($20k+ per year to go to school just seemed insane to me at the time... now 20 years later it's the average tuition + lodging at my local public university!?!). So instead I only applied to in-state colleges, thinking I was being sensible and pragmatic by doing so. But there's a chance I would have paid less at the top tier schools than I ended up paying for local schools.
  - munchbunny 9y ago
    That's absolutely a thing, and the knowledge of that fact is more limited than it should be. At my alma mater, I had friends who were getting almost a full scholarship. They left with only a few thousand dollars of debt (as opposed to tens of thousands) because they were able to pay off most of it with a part time on-campus job like being a lab technician. It's an example of how inequality along financial or racial lines can be real despite there being no theoretical reason for it: if you don't know that you could attend a top tier university and leave with very little debt, you'll consider applying as a student. If you don't, then you've preemptively rejected a very good opportunity for upward mobility. Too many people just don't know because their families or communities don't play the college admissions "game."

akhilcacharya 9y ago

Hmm, what happens if we don't go to any of these schools?

gozur88 9y ago
Meaning what, not going to college or going instead to the local State U?
- akhilcacharya 9y ago
  Going to a State U instead of those elite Us
  - gozur88 9y ago
    State U is just fine for a technical degree, but you're diminishingly unlikely to be a CEO of a large company you didn't start yourself. Or a partner in a big NYC corporate law firm.

ethbro 9y ago

Above and beyond that, and to crib on one of the grandparent comments re: "Eventually, demand will decrease if prices continue increasing": If the minimum barrier to employment is having a college degree, then people will continue doing whatever they have to in order to get a college degree. The only way you're going to change demand is if decent jobs start being created that don't require a bachelor's degree. And I don't see that happening...

gozur88 9y ago
>The only way you're going to change demand is if decent jobs start being created that don't require a bachelor's degree. And I don't see that happening... I do. At the lower end, if employers can't afford to pay people enough to make their loan payments, they'll start hiring people without debt.
- lmm 9y ago
  But there are already more applicants than jobs. Labour is a buyer's market at the moment.
  - gozur88 9y ago
    Right, but people with loan payments can't take jobs that won't allow them to make the payments. If they can't take those jobs, the jobs will go to people without degrees.
    - ethbro 9y ago
      Well, a bit more than 10% are, based on the student loan delinquency rate. The worry I have is that if the automation worries are born out, then you're going to have an inflexible debt loan (student loans) meeting a market that offers fewer jobs (due to automation).
strommen 9y ago
Electricians, plumbers, etc. all make very good money without 4- year degrees. But nobody aspires to these professions nowadays - everybody assumed they must go to university.

bjourne 9y ago

But wait. The more colleges charge for tuition, the harder it becomes for intelligent but poor people to get admittance. Therefore, the worse a college degree from a "top college" can act as a proxy for intelligence.

gozur88 9y ago
That's why top colleges give generous scholarships to exceptional poor kids.
WillPostForFood 9y ago
It doesn't make admission harder, it makes attending harder. Or life after attending harder, dealing with the debt.

skewart 9y ago

> That, in turn, means top colleges can charge pretty much whatever they want and it's still worth the money. The most prestigious colleges actually don't charge much money, except for families that can easily pay. Financial aid, including stipends for living expenses, is extremely generous at elite schools. The sticker price might be high, but few people actually pay it. The problem is more with second tier schools that aspire to greater prestige but have more limited financial resources. While many of these schools offer perfectly good educations, they don't really open the same kind of doors that going to a more elite school can. A big tuition price can make parents think they're sending their kid to a really elite school - just like people often will assume a more expensive diamond ring is better than a less expensive one. But it's probably not really worth the money.

cableshaft 9y ago
I've seen this mentioned several times, and I wish I had realized this when I was younger. I didn't even bother to apply to top tier schools even though I would have probably been accepted there because I knew my parents weren't too well off and I didn't think they'd be able to afford to support me, and I really hated the idea of taking out big college loans ($20k+ per year to go to school just seemed insane to me at the time... now 20 years later it's the average tuition + lodging at my local public university!?!). So instead I only applied to in-state colleges, thinking I was being sensible and pragmatic by doing so. But there's a chance I would have paid less at the top tier schools than I ended up paying for local schools.
- munchbunny 9y ago
  That's absolutely a thing, and the knowledge of that fact is more limited than it should be. At my alma mater, I had friends who were getting almost a full scholarship. They left with only a few thousand dollars of debt (as opposed to tens of thousands) because they were able to pay off most of it with a part time on-campus job like being a lab technician. It's an example of how inequality along financial or racial lines can be real despite there being no theoretical reason for it: if you don't know that you could attend a top tier university and leave with very little debt, you'll consider applying as a student. If you don't, then you've preemptively rejected a very good opportunity for upward mobility. Too many people just don't know because their families or communities don't play the college admissions "game."