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Bill Gross Gets the College Crisis Wrong

Bill Gross of PIMCO participates in a conference on the future of housing finance at the Treasury Department in Washington, DC.
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Bill Gross of PIMCO participates in a conference on the future of housing finance at the Treasury Department in Washington, DC.

Bill Gross joined the chorus of college skeptics today.

"A mind is a precious thing to waste, so why are millions of America’s students wasting theirs by going to college?" he writes in his latest investment letter.

I’d like to welcome Gross to the club. I’ve been advocating this position for several years, as has the writer and entrepreneur James Altucher.

Parts of Gross’s analysis of the problem of college are very good. He correctly understands that the signaling value of getting into a good college has been greatly degraded. He also understands that the dearth of new jobs in the economy limits the value of social networks colleges create.

But the primary problem is not “outdated curricula focused on liberal arts instead of a more practical global agenda focusing on math and science.”

This is an old complaint against liberal arts but it makes less sense today than it ever did. Only 9.7 percent of college students major in humanities and the liberal arts, according to a study of the economic value of college majors by Georgetown University. By contrast, 41.1 percent of college students major in engineering, computers, math, physical sciences and business.

Even subtracting out the most popular major—business—we have 16.1 percent of college students majoring in those math and science courses Gross thinks are so vitally important to the future. How high can that number reasonably be expected to climb? It’s very clear that only a limited portion of the population has the cognitive ability to complete a course in one of these majors.

It is true that the approximate average IQ of high school graduates intending to major in English or philosophy are right up there with math and science majors—and slightly above engineering majors. So perhaps if we cajoled some of those students into studying Gross’s favored subjects we could squeeze out a few more graduates who are “shovel ready” for high tech. (Although one wonders if the economy would really create enough science and math jobs to prevent this from simply diluting the earnings power of these majors.)

But for most students, this would simply be a dead end. They’d spend a year or two in college, accumulate debt, and discover they are unable to compete. The problem is not the curricula—it’s the expectation that college can make all students above average.

Overinvestment in college education is not something that can be repaired by tinkering with what college kids are taught. We’re just sending too many students to college at too great an expense.

In the present crisis, college education is not the solution; college education is the problem. We need to get college off our backs.

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