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In the past few years, it has been en vogue to denounce the utility of college especially when seen in conjunction with skyrocketing tuition costs. Everyone knows the story of college dropouts who went on to become titans of industry and amass wealth beyond imagination. Several high profile investors, companies, and entreprenuers go so far as to encourage people to either drop out of college or not go at all. For more, just google “Peter Thiel” and “college” and see what comes up.

Like everything in a free market society, prices will eventually stablilize and colleges will settle on a tuition that enough people will pay to keep the beast fed. Usually the impetus for change in this arena is competition and from what I can tell, we’re starting to see some of it. And I don’t mean community colleges or de-facto vocational schools like DeVry (I’m not denigrating these institutions – I applaud anyone who strives to improve his or her skills in any capacity). I’m talking about Khan Academy, Coursera, iTunes U, BigNerdRanch, and guys like this. The market is starting to recognize that college is no longer the golden ticket to prosperity that it once was and is responding with a cottage industry that is specifically designed prepare students for economic reality. Further, colleges themselves are sputtering when it comes to this role – at least in the tech sector. Within tech circles, MBA’s are routinely mocked and an on going debate wages between the value of an undergaduate CS degree and industry experience. Many feel that the four years spent in an undergrad program would be better served learning on the job and actually applying those skills. In this sector, college is growing obsolete. As the proliferation of online courses and for-profit educational programs continue, the market will gradually shift resources to this burgeoning industry where it finds better ROI.

Colleges, for their part, are not keeping up because they don’t have to. As more and more students major in Gender Studies, Psychology, and Cultural Studies, colleges continue to raise prices while maintaining or expanding enrollment. There’s no need to change. It’s good to be a college administrator today. This has led to the gradual atrophy of departments that used to prepare students for a global economy: engineering, sciences, math, and basic compositional skills. Ask any employer about the writing abilities of their entry level people. This void will be filled by the private sector. Someone will step in and provide this service and like I wrote in the last paragraph, we’re starting to see it in tech.

So what does that leave behind? If you had an 18 year old kid applying to college, would you pay $50,000 each year so he could go to Skidmore and study Folk Literature? Would you take out $200,000 in loans so your daughter could learn about gender equality at Sarah Lawrence? Neither would I. This leaves behind only those who would pay those amounts – the maligned 1%. This begs the question: if we won’t pay it, why would they? The answer lies in another post, Which Economy Are You In? They would pay it in order to provide their kids the advantage of hob-nobbing with other members of the 1% and thus form alliances that can be very helpful in their post college careers. It’s like a country club for 18 to 24 year olds. That’s what college has become. If you don’t believe me, watch an episode of The Real World and tell me those kids are prepared for the real world.

This post isn’t meant to be doom and gloom. I’m actually optimistic about all this. As a free market believer, I’m happy to see the market respond with alternatives that are superior to CS departments at major universities. If I was 18 years old today, I would enroll in a tech course and study on my own for a year. Then I would start programming professionally and by the time I was 21, I would start a company. That’s essentially what I did anyway but not until several years after college. Had I started at 18, I would have a formidable advantage over my peers who basically drank full-time from age 19 to 22 (myself included).

College will always be there. It just won’t always be occupied by the same people. For a while, college was explicitly reserved for the economic elite. The Civil Rights movement changed much of that for about 50 years. Though it took half a century, college was able to get back to where it wants to be.

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