Benefits of the Decline in Higher Education Enrollments

The views expressed in this post are those of the author, and do not necessarily reflect the opinions of the Journal, the William H. Bowen School of Law, or UA Little Rock.

By: Adam Conrady

In the past decade, higher education enrollments for degree seeking students have declined. In 2011, 19.6 million students were enrolled in higher education whereas enrollment had declined to 17.4 million by 2020. Brandon Busteed, Wake Up Higher Education. The Degree Is On The Decline., Forbes (Sep. 25, 2020, 9:22 AM), eed/2020/09/25/wake-up-higher- education-the-degree-is-on-the-decline/?sh=21207cb77ecb/.

A contributing factor to the decline in enrollments is the decrease in the perceived value of higher education. Between 2019 and 2020, the percentage of the workforce who believe that higher education will be worth its cost dropped by 18% and those believing it will help them acquire adequate employment dropped by 25%. Id. The loss of confidence in higher education is reasonable as educational requirements for jobs and the amount of education obtained by the workforce is significantly unproportional. The combination of overqualified workers and overinvestment in higher education has created an inefficient labor market and has led to the decrease in value of a college degree. Richard Vedder, Christopher Denhart & Jonathan Robe, The Value of a College Degree Is Diminishing Over Time, Gale (2016), https://www.wscschool Y02205793/ Centricity/Domain/1022/Value%20of%20 College%20Diminishing .pdf.

The decrease in value of higher education creates a conflict of economic issues. Higher education is not only expensive and inefficient, but our society allocates an abundance of resources into an education system that is shielded from the market forces of creative destruction. Id. Thus, a decrease in the value of higher education indicates that our society is inefficiently using public resources. Id. College graduates are performing jobs that they are overqualified for in terms of educational requirements. Moreover, our society is generating more college graduates than are demanded by our labor market. Id. The undesirable result is credential inflation, in which the value of a college degree ultimately diminishes. Thus, declining higher education enrollments enables the rate of return on college degrees to increase as the inefficiency in our labor market is reduced. Id. 

Legislatures in the majority of states have implemented budget cuts to higher education funding. From 2008 to 2018, forty-one states spent an average of 13% less per student on higher education whereas the average tuition at four-year public colleges increased by 37%. Abigail Hess, The cost of college increased by more than 25% in the last 10 years, CNBC (Dec. 13, 2019, 9:00 AM),

25percent-in-the-last-10-years.html#:~:text=From%202008%20to%202018%2C%20the,on%20 Budget%20and%20Policy%20Priorities/. However, the budget cuts that state legislatures have implemented are necessary for the efficiency and effectiveness of our labor market. By reducing funding for higher education, state legislatures will efficiently use scarce resources. States will retain funding for other expenditures such as public welfare, health, and elementary/secondary education. Furthermore, the increase in the cost of higher education enables the labor market to reach its equilibrium by promoting lucrative alternatives to higher education. 

Higher education must not be a requisite but an investment for those who are in need of a college degree per requirements of a particular industry. Graduation requirements must be strenuous in order to isolate those that fully reap the benefits that higher education is intended to provide. Higher education must distinguish itself from merely a social tool into a valuable tool to achieve professional goals. The alternatives to higher education must be emphasized in our society. In addition to employment opportunities that do not require a college degree, job-based learning or apprenticeship programs allow workers to instantly contribute to the economy by earning wages and increasing economic activity. Moreover, certificate earning programs including trade schools and industry specific programs are alternatives that are inexpensive and efficient in comparison to higher education. 

Our society has relied on credentialism as a measure of intelligence or the ability to do a particular job, but as Heinstein and Murray explained over two decades ago: “credentialism … is part of the problem, not the solution.” Vedder, supra. Although the ideology of “college for all” is a sign of progression and advancement in society, it is not exempt from the law of diminishing returns. The bottom line is that the decline in higher education enrollments promotes efficiency in our labor market and increases the value of a college degree. 

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