Covid-19 Spring Break Tests the Value of College

(Bloomberg Opinion) -- As Covid-19 runs its course, it will test many aspects of life long taken for granted. One of them is likely to be the notion that college is the best way to usher young Americans into adulthood, and it may not stand up to scrutiny.

The coronavirus shutdown has peeled the luster from colleges. With campuses closed, college has become virtually indistinguishable from online continuing education classes for adults, many of which are offered free or nearly that by the same institutions that continue to charge students a fortune. The total cost of a four-year degree from a private institution averaged $194,040 in 2018, a 167% increase since 1971 after adjusting for inflation. The price of a public-school education has also ballooned over the last five decades to an average of $85,480, a 145% increase after inflation. For many students, that unfathomable cost is bearable only by taking on crushing debt.

So it was only a matter of time before students began demanding their money back. Class-action attorneys are pursuing lawsuits on behalf of hundreds of thousands of students. Undergraduates have sued more than 50 schools so far for partial refunds of tuition, room-and-board expenses and fees. The outcome will most likely be determined by technical legal considerations, such as whether courts grant students class-action status or how judges interpret explicit or implicit agreements between colleges and students. But if fairness were the primary consideration, students would have a compelling case.

As Stephen Mihm, an associate professor at the University of Georgia and Bloomberg Opinion contributor, pointed out recently, students pay for more than classes. “They're paying for the experience of college: dating, dorm life, fraternities and sororities, Frisbee on the quad — all the stuff that has come to define college for the past century or so,” he wrote. “But when education moves online, all of that disappears. Instead, you're left with a haggard-looking professor on Zoom. That's worth something, sure, but it isn't worth paying anything close to full freight.”

And that may be overstating the value students assign to the education. I'm lucky to have a big and close-knit group of college friends. In one of our group chats — a regular feature of this lockdown — I asked them what they valued about college. To a person, they cited the social interactions or the opportunities their degrees presented in the years just after college, either for employment or advanced degrees. Not one mentioned the classes, and I suspect the sentiment is shared widely.

That raises an important question: If the value of college for most people is the social life or the ticket to employment or graduate school, why is college necessary at all? Surely there are better and more cost-effective ways to achieve the same result. Much of the social aspect, for example, could be replicated by a mandatory two-year national service after high school. The college experience could remain largely intact, except that young Americans would volunteer their time rather than study and attend classes, in exchange for government-provided room and board. They could make meaningful contributions in the process, such as bolstering public schools, furthering research or helping to rebuild the country's crumbling infrastructure. It would also have the benefit of allowing everyone to participate.

Employers could then pluck candidates fresh from their two-year service. My guess is companies would find new hires to be at least as responsible and mature as newly minted college graduates, and certainly more experienced. And whatever skills those new hires lacked on day one — let's be serious, how well does college train anyone for their first job? — they would learn from superiors, not unlike an apprenticeship.

Graduate and professional schools could also admit candidates after their two-year service, supplementing the curriculum with classes they now rely on colleges to provide. Premedical courses could be merged into medical schools, for instance, with the understanding that advancement would be conditioned on completing successive courses to the school's satisfaction. The same could apply to law, accounting, engineering, architecture and doctoral programs.

The positive knock-on effects would be significant. Fewer Americans would be saddled with huge student debt, allowing them to launch their adult lives earlier and more easily. Academic institutions would be enriched because their students will have made a deliberate choice to enroll in their chosen fields. The country would be enriched, too, because national service would bring young Americans together across religious, ethnic and socioeconomic backgrounds, and perhaps rekindle a spirit of civic-mindedness.

Colleges won't disappear. There will always be some students who want to invest the time and money in a broad-based education or specialized programs such as music or theater. But a system that offers no realistic alternative to college puts many on a path they might not otherwise choose, and at great cost.

None of this is to minimize the hardship colleges face or would face if enrollment dropped. Peter McDonough, general counsel for American Council on Education, a college trade group, told Bloomberg News that colleges are facing a financial “catastrophe.” That may be, but protecting colleges from change can't be a reason to perpetuate the system.

For now, colleges will need students' cooperation to safely reopen campuses, so they'll have to make some reasonable accommodation around cost during the shutdown. But the bigger issue will persist. Many Americans will reflect during the break and in the years ahead about whether college is worth the enormous sacrifice, and they just might conclude that there must be a better way.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Nir Kaissar is a Bloomberg Opinion columnist covering the markets. He is the founder of Unison Advisors, an asset management firm. He has worked as a lawyer at Sullivan & Cromwell and a consultant at Ernst & Young.