An economy that creates too few good-paying jobs is part of the problem, but colleges and universities are spending foolishly and not providing the kind of education students need to compete.
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Eighty percent of students attend public colleges and universities, and at most, inflation-adjusted spending per student has hardly changed over the last 25 years.
As mandatory state contributions to Medicaid and funding for K-12 education have increased, public subsidies for higher education have been curtailed. Parents, through higher tuition, and students, through bigger loans, have been forced to shoulder a greater share of the cost.
Meanwhile, colleges and universities increasingly compete for students by shifting resources from educational purposes into athletic arenas, lavish student centers and other frivolous amenities, euphemistically justified as building community and enhancing the student experience.
Faculty measure their success by how little they teach, and many disparage instruction in anything remotely useful in the job market.
University presidents manage to provide students with the entertainment they demand and faculty the lifestyles they desire by encouraging enrollment in lower-cost but not particularly practical programs such as art history and global studies, while limiting access to more expensive schools of business, engineering and the like.
Too many graduates end up selling cell phones or working at Starbucks (SBUX) .
President Obama has proposed to rate colleges on metrics such as tuition, graduation rates, debt and earnings of graduates, and the percentage of low-income students enrolled, and limit access to federal loans for students at institutions that do poorly.
Much of this would make matters worse.