ANOTHER COLLEGE APPLICATION ESSAY. One More Time with Feeling

Education is not the filling of a pail, but the lighting of a fire. ~ William Butler Yates

Tis the season. Erstwhile high school seniors are now working on their applications to enter college next fall. This has been an increasingly popular fall pastime for young people, as I’ve noted before. This fall 2.9 million freshmen are starting their college journeys. The National Center for Educational Statistics expects 19.9 million students to attend the 4,627 American colleges and universities this year. That represents a whole lot of essays written in the past 4+ years.

The percentage of US adults that have at least a baccalaureate degree has never been higher at 34.2% in 2017 (latest year available). Interestingly, this share of adults who have attained at least a B.A. degree is virtually identical with the share of US adults who graduated from high school 67 years ago. What a difference a few generations make.

In the spirit of seniors I interact with at Berkeley High School, I’ve decided to write now another college application essay, to my hypothetical first-choice college, “All About University" (All About U). It’s been 56 years since my last essay. I’ll give it one more try with great feeling. Hopefully by writing this essay I can empathize with this year’s seniors, as well as summarize “my story” in a measly 650 words, which is the word limit for an essay submitted as part of the Common Application. The Common App website states, “Every applicant has a unique story. The essay helps bring that story to life.”

There is no lack of online or offline assistance available for those of us who face writing this essay. Over the years, it has become a very large cottage industry. When I Googled “How to write a college application essay” I received 326 million responses in 0.48 seconds, including one that cited the Modern Language Association’s recommendation that the essay be written in double-spaced 12-point Times New Roman. I’m neglecting these two formatting suggestions at my own peril. So here’s my unique story; I’m sticking to it. 

My Essay.  Plato’s Socratic paradox states, "The only thing I know is that I know nothing.” My educational life, from kindergartening through garnering a Ph.D., has been devoted to reducing the “know nothing” portion of this paradox. This essay reflects my interest in further diminishing my know nothingness via added education at All About U.

I characterize my formal education beginning, with a tip of my hat to Plato, as knowing nothing about virtually everything and ending up knowing virtually everything about next to nothing (in this case, my dissertation topic). This essay is the story of what I’ve learned and gained insight about. The greater domain of knowledge remaining for me to acquire remains. Attending All About U will offer succor in my quest.

My life has been filled with luck and good fortune because I’ve done the right kind of work that I was passionate about and because of perpetual support of family and friends. Although I wasn’t an all-star academic student throughout most of my K-12 and college career, my optimista nature, social competence, talent, inquisitiveness and ability to envision pathways to achievement were rewarded. A bit of luck was involved in selecting a then-obscure industry – electric utilities – as the focus of my dissertation research. I became one of a small number of energy experts at a fortuitous moment before the 1973 Arab Oil Embargo dramatically changed the US’s economic and energy perspective. Energy was no longer a background topic, it was very front and center as drivers waited for hours to fill their tuna boat-sized cars with gasoline. That crisis suddenly amplified my worth and helped guide my professional career in energy efficiency studies for decades to come.

After retiring from energy consulting in Berkeley, I found another career passion. I decided to “pay it forward” and volunteer my time assisting students at Berkeley High School. Specifically, 12 years ago I became involved with tutoring students who enrolled in two of the school’s college-level economics classes. I’ve helped them to start thinking like economists. Useful economic analysis requires careful, systematic, evidence-based thinking.

It’s been 50 years since I first taught introductory econ as a grad student teaching assistant; my how time has flown. I’m pleased to now be an elder TA, in a sense returning to where I began.

It’s a substantive understatement to say much has changed during the past five decades in our economy. Nevertheless, some overly-aged, now irrelevant concepts – like the Phillips Curve – still reside in these courses’ syllabuses. Despite this I’ve greatly enjoyed working with the teachers and their students. I estimate about 2,500 students have taken these courses since I began. I’m reassured that my efforts have made a difference for a number of them. I’ve also learned more about myself, economics and teaching.

I’ve learned the value of patience, perspective and priorities. It’s crucial to know the details of a particular issue, but also to comprehend the broader perspective and context about how it’s related to the rest of the economy and society. I’ve learned that the most important “law” of economics isn’t the Law of Supply or Demand; no, it’s the inescapable Law of Unintended Consequences.

Another insight I gained in my educational and professional career was to always take advantage of an Open Door policy, referring to the time teachers, supervisors and clients make available for interacting with them. Despite their fears of entering a teacher’s or supervisor’s office/workspace, undergraduates will not be embarrassed by posing questions. In fact, entering their office will directly benefit you because it demonstrates your interest in learning and doing well and positively distinguishes you from many of your colleagues. Just do it.

My education and career have allowed me to travel extensively, meeting fascinating people and seeing fascinating places. I look forward to continuing to expand my knowledge – and reducing my know nothingness – of people and places. Entering All About U will facilitate my journey.  [650 words, oh yeah!]

THE FALLACY OF FREE HIGHER EDUCATION

Cauliflower is nothing but cabbage with a college education. ~ Mark Twain

Forget college football, we are now entering the peak of college applications season, when high-school seniors decide where they want to spend the next several years of their lives. The ever-rising cost of going to college is a prominent factor for many applicants. In May, Sen. Bernie Sanders introduced legislation to make 4-year public colleges and universities tuition free. He said, “We live in a highly competitive global economy. If our economy is to be strong, we need the best educated work force in the world. That will not happen if every year hundreds of thousands of bright young people cannot afford to go to college and if millions more leave school deeply in debt.”

His plan, reputed to cost $750 billion (B), would replace what public colleges and universities now charge in tuition and fees. It would also overhaul student loan programs to reduce their cost in part by eliminating any accrued federal profits on the loans. After Sen. Sanders’ noteworthy announcement, Hillary Clinton produced her own plan to reduce the cost of going to college by providing $350B in federal money to states over 10 years, so undergraduates would pay tuition at public colleges “without needing loans.” If Sen. Sanders’ or Hillary’s plans somehow become law (a very unlikely prospect with Republican majorities in Congress), far lower (“free”) college costs will dramatically increase the demand for higher education.

Both plans embrace the idea that a college degree is the new high school diploma. Although a growing number of people believe this, I think it’s exaggerated and not self-evident. Holders of BAs still receive a sizeable 60% premium in wages over high-school diploma holders. Sanders’ and Clinton’s proposals would essentially expand the long-established norm of free K-12 public education and offer free K-16 public education. To say that’s a big change in government educational policy is a PhD-level understatement. From a market perspective, the concept of lowering a service’s price a lot (a college education) in the face of notably escalating demand poses many challenges.

According to Dept. of Education statistics, 81% of high-school age students now graduate with a diploma, 34% of young adults now have a BA, and 44% of young adults have either an Associates or BA degree. Interestingly, 81 years ago, in 1934, 34% of adults had a high-school diploma, the same percentage that now holds a college degree.

Both Sen. Sanders’ and Hillary’s ideas to remove the expense of tuition when going to a public college is a leftish shibboleth that will cost a ton of taxpayer money[1] and put the post-high-school education (PHISE) market in a precarious, unbalanced position. It will significantly increase the number of students demanding an Associate or BA degree without increasing PHISE capacity to actually educate them.

Beyond these consequences, tuition-free college isn’t likely help that many young adults because of subsequent greater “degree-inflated” job requirements imposed by employers and probably most important, insufficient incentives for colleges to produce graduates more effectively and efficiently.[2]

I doubt that highly-selective colleges will increase their educational capacity much, but other private and public colleges, 2-year and online colleges might expand to meet more demand. However, such expansion will only occur if additional public funding for more facilities and faculty is made available to public universities and community colleges – something that neither Sen. Sanders’ nor Hillary’s plans directly address. Increased funding also flies in the face of many states’ contracted fiscal support for their public universities and community colleges during the past decade. This is why low-overhead providers of online PHISE services (such as MOOCs) will see this policy change as a significant opportunity. The need for more bricks-and-mortar classrooms (and of course administrators) may be partially avoided via online means. Whether online college education is effective remains an open question.

At first blush a “tuition-free college education” sounds quite appealing; everyone likes “free” – especially if you’re a young adult or the parent of one contemplating college – but has as much veracity as a driverless car. This idea has some merit from a generationally-based subsidy perspective. More public subsidies for young adults might begin to balance the far more sizeable subsidies offered to old folks through Social Security and Medicare/Medicaid expenditures, but I’m not really sure it’s truly equitable. After all, a university education’s principal benefit goes to those who graduate with a degree that traditionally has been rewarded by getting a much better (higher-paying) job than young people who don’t have a BA. Such wage premiums might continue, although I have serious doubts as ever-more students enroll in (and hopefully graduate from) college.

The valuable collective, social benefit of having more college graduates accrues from having a better educated more knowledgeable and productive population. This social benefit explains why subsidies are available to college students via government-guaranteed and -subsidized student loans and education tax credits. These fiscal mechanisms reduce the cost of attending college and are among the few directly helping young people.

I’m all for having more young adults graduate from college. But the market for educated labor in the US, like every market, has two sides to it – supply and demand. If the supply of young adults with college degrees rises significantly, as Sen. Sanders hopes, their salary prospects may not. Unless employers’ demand for educated labor also increases a lot, the price of such labor (their wages) won’t increase, it could even decrease. Such reductions in the wage premium for college graduates won’t be greeted with enthusiasm. With a “free college tuition” policy in place, maintaining the college-educated workers’ wage premium will require increased macroeconomic growth to spur employers’ hiring of more such workers. And it probably will further degrade the wages of lower-skilled high-school graduates. Despite its virtues, designing and implementing policies to advance macroeconomic growth remains a quixotic quest for economists and politicians, especially when Republicans decrease publicly-funded research, infrastructure expenditures and investment incentives.

Also, a sustained, large increase in folks who have PHISE degrees is likely to reduce the marginal value of such degrees, as reflected in reduced expected wages, even with economic growth. The law of diminishing marginal returns applies to holders of 2- and 4-year college degrees with respect to salary prospects simply because having such a degree will become less distinguishing.

No one wants to consider this possibility – and certainly no politician will say it, especially during the unending election season. Because it’s contrary to our long-established, personal hopes that more education provides better economic prospects. Middle-class citizens’ “American Dream” is founded on this hope; they hold it as a keystone of their children’s brighter future.

This is the fallacy of espousing unsystematic policies that can change only one part (the supply) of the market for highly-educated people. Such policies will produce an imbalance for college-educated workers because policy-makers don’t consider about how employers (the demanders) of BA-holding people will react to the consequences of their policies.

Other nations have adopted policies which reduce the cost of higher education, usually involving significant public expenditures and subsidies. Of the 15 countries listed, the nation with the lowest 2010 college costs (tuition, books and fees) was Denmark – Bernie’s favorite? – with annual costs of only $530. I can’t even count that low. The US college costs were $24,700 (private) and $7,123 (public). As a percent of median household income Denmark’s college costs were 2.3%, the composite US cost was 51.3%. According to a recent OECD report, 15 of the 33 nations had higher college (tertiary-level) graduation rates than the US, including Denmark. How does Denmark achieve such low college costs and elevated graduation rates? In part by having its citizens pay higher income taxes – a 71% higher average income tax rate than the US.

Our nation has a long and pricey way to go if we want to significantly lower the expense of getting a college degree and increase our national college graduation rate. Lowering college expenses for students is only one part of a possible solution, which will only be effective and beneficial if college education policy is systematically implemented, covering both the supply and demand sides of the market.

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[1] Actually a lot more than a ton. One billion George Washington $1 bills weigh about 1,100 tons. So Sen. Sanders’ free college plan would weigh 825,000 tons of Georges. That’s about the weight of 8 huge Nimitz-class aircraft carriers, the largest US Navy ship. And something that Sen. Saunders would no doubt be very happy to trade-in for more college students.  

[2] Effectiveness is doing the right thing; efficiency is doing a thing right (in economics, doing it with the least opportunity cost).