How do we think about the price of getting a degree if we happen to be the one paying the bills? That is, if you’re a parent or a student?
It’s not easy. The anonymous LawProf goes into a long, detailed discussion about disclosure, as only a lawyer would. He notes that some of his colleagues claim that all of the information– like the truth in “The X-Files”– is already out there. So the faculty is absolved and can go on selling the majesty of the law because the students can make up their own minds.
LawProf points out that availability isn’t the same thing as understanding. No one understands the numbers very well and he’s pretty scared of what he himself can comprehend. He feels that no one knows what to think.
This is the real trouble. No one knows what the economy will look like in 4-10 years, the amount of time it takes to reach employability. No one can predict demand or anticipate unforseen inventions that will both create and destroy jobs. It’s an impossible bet.
Consider what Jeff Bezos told Steven Levy:
Our first shareholder letter, in 1997, was entitled, “It’s all about the long term.” If everything you do needs to work on a three-year time horizon, then you’re competing against a lot of people. But if you’re willing to invest on a seven-year time horizon, you’re now competing against a fraction of those people, because very few companies are willing to do that. Just by lengthening the time horizon, you can engage in endeavors that you could never otherwise pursue. At Amazon we like things to work in five to seven years.
In other words, one of the best capitalized industrialists brags about the fact that he’s one of the few long-term thinker who’s willing to think five to seven years in the future. So how is a kid of 18 supposed to think in the same way.
The only solution is for the cost of tuition to drop dramatically. The college industrial complex loves to point at some software genius who makes a hefty salary and insist that it get a fair share of the value that it created in the classroom. The college industrial complex never wants to consider the huge risks that the students take and it doesn’t want to factor in a risk premium.