Coronavirus bursts the U.S. college education bubble

US universities are world class. But the system as a whole is in trouble. Cost is a big part of the problem. I’ve written many times about the US’s dangerous $2tn student debt load. Soaring tuition fees, worthless degrees and dicey investments made by both universities and the government have become a huge headwind to economic growth and social mobility.

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If you don’t believe me, take it from the New York Fed, which two years ago called out student debt and the dysfunctions of higher education as problems for the overall US economy. That’s a sad irony, given that a college degree is supposed to increase wealth and productivity. Unfortunately, the US system of higher education — like healthcare, housing, labour markets and so much else in America today — is bifurcated. Those with fancy brand-name degrees from top schools do great. So do many who attend high-quality, low-cost community and state programmes.

But millions in the middle get neither a cheap nor a useful education. Underemployed and debt laden, they were struggling even before coronavirus struck. One study by the think-tank Demos found that the average student debt burden for a married couple with two four-year degrees was $53,000, and resulted over their lifetimes in an overall wealth loss of $208,000.

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