Democracy is, at its core, a system for working out differences in vision through the ballot, not the bullet. Each election and legislative cycle becomes a kind of bloodless revolution, with disagreement, debate, and sometimes even contempt — but without violence. It’s an invitation for every voice to help shape the country we share.
Ryann Liebenthall’s Burdened: Student Debt and the Making of an American Crisis, coupled with the research and myth-busting of Purdue’s David Hummels and Jay Akridge in the “Finding Equilibrium” newsletter, lays bare the choices the United States faces over the meaning and value of higher education. Is college merely a commodity, best left to market forces, or a public good fundamental to a “great society,” as President Lyndon B. Johnson once envisioned?
When it comes to the value proposition of higher education, the evidence is clear: the expansion of universal high school education in the U.S. unleashed dramatic improvements in health, life expectancy, innovation, and economic growth. Extending broad, affordable access to college — including vocational, four-year, and graduate degrees — promises even greater returns, especially as automation and Artificial Intelligence reshape labor markets.
Yet myths persist: that college is overpriced, doesn’t pay off, and that alternative paths — skilled trades, direct-to-work — are equally fruitful for most Americans. Hummels and Akridge confront these directly.
The first myth? Contrary to headlines, the returns on investment of a college degree remain robust. A NY Fed study found the lifetime internal rate of return (IRR) for a bachelor’s degree is 12.5% — better than stocks or bonds — and this figure has held steady for 35 years. Graduate degrees yield even higher returns, especially in fields like engineering and business.
Not everyone achieves these returns, Hummels and Akridge assert. Students who need six years to graduate see that return drop from 12.5% to 7.1%, and about a quarter of college grads earn only slightly more than high school graduates — a figure that has held for decades. Low-income households benefit less, and this gap is growing, largely because those students had lower GPAs when they applied for college, were accepted into weaker institutions, and the deficit followed them. But for those who finish a reputable degree in a high-demand field, the financial payoff is outstanding.
The second myth is that prosperity opportunities are equitable. While it’s possible to do well in some skilled trades, statistics tell a sobering story. Two-thirds of skilled trade jobs (construction, transportation, materials moving) pay around $42,000–$45,000 annually, with flat wage trajectories — meaning little income growth over the course of a career. Only the top trades require expensive, lengthy training, and they are numerically rare (just over one million electricians and plumbers in a workforce of 151 million).
On average, those without college degrees fare worse, and their situation is declining. Unemployment among non-degree holders soared above 20% in the last two recessions — twice the rate for college grads. Labor force participation among people without degrees has plummeted in 50 years. Disability rates are two to three times higher among high school graduates and dropouts, and by age 50, nearly a third of dropouts are on disability. Marriage rates have dropped, living at home into the 30s and 40s is common, and incarceration rates are far higher. The most shocking: life expectancy for college graduates is now nine years longer than for those without degrees.
So, is college affordable? Hummels and Akridge’s research busts myths. Sticker shock at elite private universities dominates headlines, but most students don’t pay sticker price — and most don’t attend those schools, Hummels and Akridge found. Financial aid dramatically lowers costs. From 1995 to 2015, average tuition revenue per student rose only 4% at private universities, and 30% at public universities, a result of declining state support. States cut funding by about 40% per student during that period, shifting the cost burden from taxpayers to students almost dollar for dollar.
Over the last decade, things have improved. Inflation-adjusted sticker prices at public universities are down 4%. Actual tuition collected per student is down 13% at publics, 6% at privates. At Purdue, the real cost of attendance has dropped by 38% — the steepest decline among major institutions. The total cost of a four-year degree at a public university is now only slightly more than the price of a new car, and the wage premium for a college grad pays off those costs within two years.
So how did we end up in a student loan crisis? First, it’s important to note that the headlines don’t tell the whole story. Today, three-quarters of undergraduates don’t borrow at all. For the 25% who do, typical balances at public universities are $27,400.
The real crisis stems from policy push-pull over the past 40 years, Unburdened recounts. Fiscal conservatives created policies based on the idea that the only beneficiary of a college education was the individual. They cut grants to students, reduced funding directly to universities and widened access to loans. They also pressed for privatization, so loan programs would turn student borrowers into a “product” in a for-profit loan industry. This disincentivized lower interest rates, and before the 2008 Recession, the loan providers and for-profit colleges targeted low-income students who previously would have ruled out college as unaffordable. The same sub-prime, high-risk lending trend that sank the housing market hit the student loan lenders.
Hummels and Akridge note that online, for-profit, and vocational programs led to a borrowing explosion (926% increase in grad loans at for-profits), with loans frequently concentrated among non-completers and students at for-profit institutions — exactly those least able to repay.
Since 2012, loan policies have tightened substantially. 54% of outstanding student debt is now owed by graduate students. New grads today graduate with reasonable debt loads and the ability to pay them off rapidly.
All this should lead us to ask if higher education and its funding streams should be run like private businesses, focusing more on competition, market rewards, and the “magic of failure”? The data about private business is worth pausing over: about 20% of startups fail in their first year; only half survive five years. Most mergers and product launches flop. In the S&P 500, median CEO tenure is just under five years — similar to university presidents.
Academic competition is fierce: one in four new PhDs earns a tenure-track job, and in engineering, only 8% succeed. Publishing in top journals and winning federal grants is similarly competitive — 5–10% success rates. Funding flows, student headcount, and even institutional survival hinge on winning this competition. Departments shrink and close, staff and faculty lose jobs, and wages are cut when universities lose ground.
For-profit universities show the flaws in the business-first model. Nearly half have disappeared since 2012, and one-third of graduates among those remaining aren’t repaying loans. Liebenthall points out that the recruiting staff of some profit-centered universities dwarfed the teaching faculty and career placement staff. Teaching was subpar, or sometimes non-existent. Though it’s been slow in coming, legislators have finally moved to cut access to federal student aid for for-profit colleges.
Long-standing institutions like research institutions and public universities invest in long-horizon science, producing basic research that the private sector increasingly avoids due to the average 20 year wait times from initial discovery to market impact. The blockbuster diabetes drugs GLP-1, for example, originated from decades-old university research on gila monster venom. Some discoveries produce societal value without clear commercial payoff — a justification for public support, not a condemnation.
Supporting accessible, affordable higher education is not just good policy — it elevates the economy, innovation and citizens well-being. The returns to college remain strong, with better job resiliency in economic downturns, higher marriage rates, longer and healthier lives among college grads, and a lifetime of increased earnings. The true failing in the student loan and college industry reflects broader choices in public investment and social priorities. Higher education still matters profoundly both for individuals and for the economic strength of the United States.