The Toyota Corolla Theory of College

The Atlantic

By Sanjay Sarma and Luke Yoquinto

June 15, 2023

Over recent decades, the price of higher-education tuition has risen faster than costs in any other major consumer category, outpacing even medical care and housing. Despite that, for a while, applications kept flooding in—and for good reason: College was still worth it. As the MIT economist David Autor argued in 2014, “the real lifetime earnings premium to college education has likely never been higher.”

Yet today, the value of college is slipping in Americans’ eyes. Fifty-six percent of respondents to a recent survey said a four-year degree was a “bad bet.” Enrollment has been declining since its 2010 peak—a change explained partly by the shrinking pool of 18-year-olds but also by high-school students simply opting out. From 2018 to 2021, the proportion of high-school graduates entering college fell by 7 percentage points—a decline driven by falling enrollment in two-year programs in particular.

These numbers reflect only one dimension of the various threats now facing higher education. Academic departments across the country are hollowed out and underfunded; the personal finances of graduate students and non-tenure-track faculty members are precarious; and students are fearful of losing their high-stakes financial wager on a degree.

Ben Sasse: How to really fix higher ed

One common response from industry observers and policy makers is to urge institutions to focus exclusively on the value students are getting for the money they’re spending: placing a priority on vocational and STEM education (preferably delivered online and at scale) while paring back amenities, student services, administration, and supposedly unremunerative humanities coursework. After all, the argument runs, if colleges refuse to rid themselves of their excesses, they may find that someone else will do it for them. The Bloomberg business columnist Adrian Wooldridge recently compared the United States’ higher-education sector to “the country’s car industry in the 1970s, just before it was taken apart by the Japanese—hampered by a giant bureaucracy, contemptuous of many of its workers, and congenitally inward-looking.”

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