Richard Cantillon explains some of the effects of the college bubble in An Essay on Economic Theory… in 1730.
The Labor of the Plowman is of Less Value than that of the Artisan
A LABORER’S SON, AT SEVEN to twelve years of age, begins to help his father either in keeping the herds, digging the ground, or in other sorts of country labor that require no art or skill.
If his father has him taught a trade, he loses his assistance during the time of his apprenticeship and is obligated to clothe him and to pay the expenses of his apprenticeship for many years. The son is thus dependent on his father and his labor brings in no advantage for several years. The [working] life of man is estimated at only 10 or 12 years, and as several are lost in learning a trade, most of which in England require seven years of apprenticeship, a plowman would never be willing to have a trade taught to his son if the artisans did not earn more than the plowmen.
Therefore, those who employ artisans or professionals must pay for their labor at a higher rate than for that of a plowman or common laborer. Their labor will necessarily be expensive in proportion to the time lost in learning the trade, and the cost and risk incurred in becoming proficient.
The professionals themselves do not make all their children learn their own trade: there would be too many of them for the needs of a city or a state and many would not find enough work. However, the work is naturally better paid than that of plowmen.
The key is in the second to last sentence. The problem that the USA and many other countries are facing is that they have encouraged too many young men, and far too many young women, to pursue college degrees, so there is now a massive surplus of degree-holders for the needs of the various nations where academic credentials have been subsidized and fetishized.
In a free and sustainable economy, the number of college students would be significantly reduced due to the combination of the cost and opportunity cost of a college education. But because demand has been artificially inflated by student loans, government grants, and the willingness of parents to go into debt on behalf of their children, the level of current malinvestment in college education is extraordinarily high. The fact that student loan debt can no longer be legally discharged was the first indication that the education bubble had reached its terminal point of expansion.
Longer lifespans and longer working lives justify spending more time and money in acquiring professional skills than in Cantillon’s day, but not indefinite amounts of either. And unless the student acquires skills that increase the value of his labor during that time, the entire process is a waste of both.
The irony is that the average college student is probably less valuable than the unskilled plowman now, because while he still lacks any useful skills, he also is unwilling to work hard at anything he is actually capable of doing.
UPDATE: “In 2008 there was $730 billion of student loan debt outstanding, of
which the Federal government was responsible for $120 billion. Five
short years later there is $1.2 trillion of student loan debt outstanding
and the Federal government (aka YOU the taxpayer) is responsible for
$716 billion. Using my top notch math skills, I’ve determined that
student loan debt has risen by $470 billion, while Federal government
issuance of student loan debt has expanded by $600 billion.”