So The Wall Street Journal published an article last week titled “In Vermont, Small Colleges Are Closing“. It outlined the plight of college administrators in small cities which are forced to close their doors due to low enrollment. The focus of the article is a small liberal arts college no one has ever heard of called “Green Mountain College”. The relative obscurity of this college didn’t prevent it from duping poor 18-year-olds into enrolling for a whopping $37,000 a year. What exactly does a $148,000 undergraduate degree from this amazing university produce in terms of income potential? Not a whole lot. When we look at data from alumni who are employed 6 years after graduation we see their median income is a whopping $30,300.
These poor broke souls barely make more than the 2017 poverty level set forth by the US Government Health and Human Services agency. These alumni are mathematically better off not going to college. The poverty level defined by HHS is $25,100. The median alumni salary is $30,300. A degree from this university represents an additional earning power of $5,200. The problem is that these poor kids paid $148,000 to earn an additional $5,200. That’s $28.26 per additional dollar earned. Pathetic.
Thank god this insanity has finally ended. 2019 will be the last year Green Mountain College will be operational. The university is closing its doors due to low enrollment. Only 430 students are enrolled but the university needs a total of 650 just to break even. Think about the numbers behind that statement. If tuition is $37,000 and there needs to be 650 students enrolled to cover operating costs, that means the university’s operating cost is over $24,050,000 a year. How does such a small university justify a $24MM budget? Well, look no further than the bloated salary of the university’s administration. The president of the university had a total compensation package of $220,000.
We can only hope that more colleges follow in the footsteps of Green Mountain and close their doors. This is the only way we can solve the failed social experiment known as the US Department of Education Federal Student Loan Program. If more colleges close their doors, it will leave net fewer universities available to the general population. If there are fewer universities available, colleges will have the opportunity to be more selective in whom they admit. If colleges are more selective in whom they admit, more students will be forced to attend community college which 1/10th the fraction of a 4 year university. The notion of having universities like Green Mountain College with an embarrassing 78% acceptance rate needs to end now.
Is there a light at the end of the tunnel?
We can take solace knowing that, despite the unacceptable increase in tuition, the net closures of 4-year universities in America are also increasing. In fact, in 2016 there were 1,035 colleges in America which closed! 2016 was second in terms of college closures over a 16-year rolling period. In 2011 1,044 colleges closed their doors. It’s a good start but not enough.
We need to implement a performance-based system for American colleges where state and federal funds are provided only if colleges are able to produce students who have a 5-year median income which is at least 4x the poverty level. This means that if the poverty level is $30,000, colleges should church out students with job placement opportunities that are north of $120,000. If the college can’t hit the mark, then shut it down. We need to give hope, encouragement, and options to our young people entering the workforce. One option could be goto college, but it can’t be the only option. If we force-feed the ‘you must goto college to succeed’ mantra down the throats of our young people, they will end up like the Green Mountain College alumni: $148,000 in student loan debt making $30,300 a year. No thanks.