Is a College Education Really a Bad Deal?

The theory that higher education may be a bubble on the verge of bursting is in the news again this week, courtesy of a Newsweek cover story by Megan McArdle. In the piece and in the video above, Ms. McArdle argues that while college is still a good investment for the average student, it’s a riskier bet for students on the margins, who could end up “worse off than they were before they set foot on campus.” In a follow-up blog post, she sums up the story by concluding, “For a lot of kids the system works fine, but it’s definitely not working for everyone, and with budgets tightening everywhere, we need to think hard about how, and why, we invest in college.”

Several commentators have since tried to poke holes in the bubble theory that Ms. McArdle describes in her story. Here’s a look at what they’re saying.

Newsweek Cover Story Lacks One Thing: Evidence — So argues Justin Wolfers, a high-profile economist at the University of Michigan at Ann Arbor. He called some of Ms. McArdle’s numbers on student debt “alarmist.” The Huffington Post

The Necessity of a College Education — Felix Salmon agrees that college price inflation is a reasonable thing to worry about, but argues that the lifelong cost of not going to college is even greater. Reuters

Why College Isn’t a Bubble — A close look at the data reveals that the bubble theory is a dubious proposition, writes Jordan Weissmann. The Atlantic

The Lousy Investment? — Daniel Luzer calls Ms. McArdle’s framing of the issue “a very strange way to look at the purpose of higher education.” Washington Monthly

College is Still a Great Investment, But It’s Getting Worse — Unless increasing tuition costs are brought under control, writes Dylan Matthews, the return on a college education is going to keep falling. The Washington Post

The story has also sparked some buzz on social-media channels. Herewith, some samples of the feedback, in 140 characters each.

Filed under: Finance, Student Debt