Blog · 2026-01-06
College Is a Scam: The Numbers Prove It
The Core Problem: College Costs Have Exploded While Wages Stagnated
Let's start with the basics. In 1980, the average cost of attending a public four-year university for one year—tuition, fees, room and board—was about $4,140 in today's dollars. By 2023, that number had climbed to $28,950. That's a 599% increase in real dollars over 43 years. Meanwhile, according to the Bureau of Labor Statistics, median wages for college graduates have barely moved. A bachelor's degree holder in 1980 earned roughly $60,000 annually in today's money. In 2023, they earned about $65,000. That's a 8% increase across the entire period. The math here is devastating: costs went up 600%, earnings went up 8%. This isn't complicated economics—it's a pricing model that has become completely detached from reality and value delivered. Universities have essentially captured a pricing power that no other industry enjoys. Unlike smartphones, which cost $1,000 but deliver measurable utility and have real competition forcing price discipline, college costs $30,000 per year with no meaningful quality improvement and virtually zero price competition. Why? Because federal student loans are effectively unlimited. The government removed the market mechanism that normally constrains prices. Universities raised tuition because they could. Students borrowed because loans were available. Everyone else profited except the students.
Who Actually Profits From College? Follow the Money
This is where the scam narrative becomes concrete. College is a business. Treating it as anything else is naive. Let's break down who wins and who loses. University administrators have seen their compensation skyrocket. According to data from the Chronicle of Higher Education, the average university president now earns $890,000 annually, with many top schools paying over $2 million. That's up 350% since 1990 when adjusted for inflation. Meanwhile, adjunct professors—who teach the majority of classes at many institutions—earn between $25,000 and $45,000 per year with no benefits. Adjuncts teach 73% of courses at four-year public universities while making up only 48% of the faculty. The math works like this: a tenured professor costs the university $150,000 to $250,000 in salary and benefits. An adjunct costs $30,000 for the same work. Multiply that by thousands of classes across thousands of institutions, and you've found billions in profit that flows upward. Student loan servicers profit handsomely. Nelnet, MOHELA, and other servicers collect fees on loans they didn't originate and didn't fund. The Government Accountability Office found that servicers were collecting fees while simultaneously failing to process income-driven repayment applications, a pattern that directly benefited them by keeping loans in repayment longer. Textbook publishers captured another massive piece. The average student now spends $1,200 per year on textbooks—up 88% since 2006 when adjusted for inflation. Publishers release new editions every 3-4 years with minimal changes, making used copies worthless and forcing students to buy new. This isn't innovation; it's planned obsolescence. Construction contractors and campus services companies profit from the endless expansion of university infrastructure. Dormitories, athletic complexes, dining facilities, and 'student experience' spaces have exploded in scope while academic buildings deteriorate. Universities borrowed money at low rates to fund luxury amenities specifically designed to attract students who otherwise might not attend. Test prep companies (Kaplan, The Princeton Review, etc.) profit by convincing students that $2,000-$3,000 prep courses are mandatory for admission. The entire ecosystem is structured to extract money from students and parents while funneling it to vendors, administrators, and lenders.
The Student Debt Crisis: Numbers That Should Horrify You
The Federal Reserve's latest data shows that Americans now carry $1.77 trillion in outstanding student loan debt across 43 million borrowers. That's an average of $41,600 per borrower. For context, that's more than the total outstanding auto loan debt in the United States. About 66% of undergraduate borrowers leave school with debt. The median monthly payment for those with loans is $503, and that's before income-driven repayment calculations for those earning less. Here's where it gets worse: default rates tell the real story. According to the National Student Loan Data System, 3-year cohort default rates hover around 10% for students who entered repayment in 2019. That means 1 in 10 borrowers default within three years. For for-profit college attendees, the rate was 14.6%. These aren't people who took on debt and made bad decisions—these are people who did exactly what society told them to do (go to college) and still couldn't earn enough to repay it. The Brookings Institution found that 25% of borrowers with outstanding federal student loans will eventually default. One quarter. The median amount borrowed for a bachelor's degree in 2020 was $28,950—almost exactly one year's current tuition and fees for a public university. Students are going into debt for the privilege of attending. And here's the kicker: college graduates are no more financially secure than their peers of 40 years ago. They're actually worse off when you account for debt. A college graduate born in 1990 had $28,000 in student debt on average (inflation-adjusted) compared to virtually nothing for their 1960 counterpart. That debt delays homeownership by 7 years on average, according to Federal Reserve research, delays marriage, delays children, and delays wealth accumulation.
The Useless Degree Problem: Credentialism Without Credential Value
Let's talk about what students actually get for their $120,000 to $200,000 investment. Many don't get a functional education. They get a credential. There's a massive difference. According to Gallup's 2023 survey, only 39% of college graduates felt their degree prepared them well for success in the working world. Only 39%. Meanwhile, the National Association of Colleges and Employers found that 73% of employers rate college graduates' critical thinking skills as below expectations. These aren't people who went to bad schools—these are graduates of accredited institutions who paid full price. The credential inflation is real and measurable. Jobs that previously required a high school diploma now require a bachelor's degree, not because the job changed, but because employers use college degrees as a screening mechanism. A 2019 Burning Glass Technologies study found that 65% of job postings requiring a bachelor's degree were in roles where the vast majority of people with on-the-job experience could do the work. The degree became a filter, not a qualifier. And we've created a negative feedback loop: employers require degrees because everyone else requires them, so students go to college, so employers can continue requiring degrees. Nobody actually benefits except the institutions. Consider specific fields: Business Administration is the most popular undergraduate major with over 400,000 degrees awarded in 2022. How many of those graduates end up in jobs where they needed a business degree? Maybe 40% if we're generous. The other 60% either work in fields unrelated to their major, or work in entry-level positions that don't require a degree at all. Liberal arts degrees—once designed for intellectual development—have become increasingly generic and job-market irrelevant. Philosophy majors, English majors, history majors: these aren't being hired for their expertise. They're hired despite their major and paid the same as someone without a degree who got the job through connections or demonstrated ability. The credential has value purely because society has agreed it does, not because it provides measurable skills in most cases.
The Alternative Paths Nobody Talks About
Here's what makes the scam narrative particularly insidious: the alternatives actually work, and nobody in power talks about them. Trade schools, apprenticeships, bootcamps, and direct-to-work entry programs produce better economic outcomes for many people, yet high school guidance counselors rarely mention them. A plumber or electrician entering an apprenticeship at 18 will earn while they learn, graduate debt-free, and earn a median income of $60,000+ by age 30 with a clear path to six figures. They're not sitting in lectures on abstract theory. They're learning skills they use immediately. A software bootcamp graduate pays $15,000 to $20,000, learns in 12-16 weeks, and enters the job market earning $70,000 to $90,000 with 80-90% employment rates within 6 months according to Course Report data. Compare that to a $100,000 four-year computer science degree where the first year is spent on general education requirements unrelated to programming. A data analytics certification through Google or IBM costs $300 and takes 6 months. Employers recognize it. It leads to jobs paying $65,000+ entry level. Nobody needs $100,000 in debt to prove they can analyze data. Military service offers the GI Bill, which pays full tuition while providing salary, healthcare, and retirement. A servicemember completing a four-year enlistment gets roughly $235,000 in tuition benefits plus military compensation. That's college paid for, not college financed through decades of debt payments. The reason these alternatives aren't the default path is political and social, not economic. College has been marketed as the only legitimate path to success. This marketing works because universities profit from it, test prep companies profit, loan servicers profit, textbook publishers profit, and the entire apparatus of academic prestige depends on maintaining college as the default.
The Data on Student Outcomes: Who Actually Benefits?
Let's be precise about who benefits from college and who doesn't. The return on investment (ROI) varies wildly by major, school, and individual circumstances. Georgetown Center on Education and the Workforce published comprehensive data: A graduate from a top-tier university earning a STEM degree has excellent outcomes. They'll earn about $3.6 million over their lifetime compared to a high school graduate. They'll recoup their investment within 5-7 years and profit for decades. That's real ROI. However, this describes maybe 15-20% of college students. A graduate from a mid-tier state school with an engineering degree: good outcomes, $2.8 million lifetime earnings premium. A graduate from a private school paying $60,000 per year with a humanities degree: earnings premium of around $900,000 over a lifetime. That sounds good until you realize they spent $240,000 on tuition alone. They'll break even around age 50. A graduate from a for-profit college or a private school with a business degree that's largely generic: lifetime earnings premium might be $300,000 to $500,000. Cost: $100,000. Payback period: 20+ years. The data from the Federal Reserve shows that college graduates do earn more on average—roughly $900,000 more over a lifetime. But that's the average. The median is different, and the distribution is heavily skewed. Some graduates earn $2 million more. Others earn essentially nothing more despite the debt. The variation is so large that the average number is almost useless for decision-making. What actually matters: 1) The specific degree and field (STEM vs humanities matters enormously) 2) The specific institution (elite school vs regional state school matters) 3) Your family's financial situation (can you graduate debt-free? can you afford to take unpaid internships?) 4) Your personal circumstances (do you have connections? can you relocate? do you have health issues?) For a student from a wealthy family who doesn't need to work through school, attends a good state school, and pursues a practical degree: college is a reasonable investment. For a first-generation student from a lower-income background who needs to work 20 hours per week, is saddled with $40,000 in debt, and pursues a degree in communications because it seemed interesting: college is quite possibly a disaster. The system treats both as the same product with the same price.
Why the Scam Persists: Structural Incentives and Cultural Momentum
The college scam doesn't persist because of conspiracy. It persists because of incentives. Every actor in the system benefits from more people attending college on borrowed money. Universities get more tuition revenue. Administrators get job security and salary growth. Lenders profit. Textbook publishers profit. Test prep companies profit. Rankings organizations (US News, etc.) profit by providing the data that colleges use to justify tuition increases. Real estate companies profit from campus development. Construction companies profit. Even high schools benefit because college-going rates affect their rankings. Meanwhile, the cost is distributed among millions of individual students and families. When 1 million people each lose $20,000 to a system, it's not visible as a scandal. When one company steals $20 billion, it's a headline. The incentive structure creates a system where individuals making rational decisions (administrators raising tuition slightly, lenders offering more credit, students enrolling in college) collectively produce an irrational outcome. Congress eliminated bankruptcy protection for student loans in 1998. This removed the ultimate market check on lending. Previously, if a school produced graduates who couldn't repay, lenders faced losses and would stop lending. Now lenders face no consequence. This is why for-profit colleges could deliberately recruit low-income students with 14% default rates and keep operating. The lender doesn't care because the government backs the loan. This is a subsidy to lenders and schools, funded by borrower default. Culturally, college is positioned as the path to middle-class stability. This isn't purely a lie—college graduates do earn more. But the stability claim is increasingly false. A college graduate with $40,000 in debt starting at $45,000 per year faces a decade of payments. They're not financially stable. Meanwhile, we've convinced an entire generation that skipping college means permanent economic failure, even as evidence mounts that debt-free alternatives produce better outcomes for many people. This cultural narrative is powerful enough that students attend college against their own financial interest because the alternative—being seen as someone who 'didn't go to college'—feels riskier than $100,000 in debt.
The Bottom Line
The college industry is a scam not because every college is bad or every degree is useless, but because the system's incentive structure is fundamentally misaligned with student outcomes. Universities have pricing power with no competitive discipline. Lenders profit from lending to people who can't repay. Servicers profit from servicing those loans. Textbook publishers profit from planned obsolescence. Construction companies profit from luxury campus amenities. Test prep companies profit from fear and false necessity. The entire ecosystem extracts wealth from students and parents while providing value that hasn't kept pace with cost in decades. For high-achieving students from wealthy families pursuing STEM degrees at selective universities, college works fine. The cost is manageable and the earnings premium is substantial. For everyone else—which is 80% of college students—it's increasingly a bad financial decision. The data is clear: you can't evaluate college as a monolithic product. You must evaluate specific degrees at specific institutions against specific alternatives. Many students would be better served by trade schools, apprenticeships, bootcamps, and direct employment with on-the-job training. These alternatives produce faster earnings, lower or zero debt, and more job-relevant skills. The reason college remains the default isn't because it's the best option for most people. It's because universities have successfully marketed themselves as mandatory, governments subsidize their pricing through unlimited student loans, and we've stigmatized alternatives. Change requires honest conversations about ROI by degree and institution, meaningful accountability for outcomes, and cultural permission for non-traditional paths. Until then, millions of students will continue making rational individual decisions within an irrational system, paying premium prices for increasingly generic credentials while lenders, servicers, publishers, and administrators extract the wealth they create.
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