WiredAcademic reporter Derek Reed weighs in on the varicose ongoing argument about the value of college. These days, the university hasn’t taken such a public beating since John Belushi starred in Animal House in 1978. Reed drops in on the debate and proffers a solution.

By Derek Reed

Higher education has been on a trial of sorts, as of late. And its more serious than the trial and expulsion Bluto and other members of Delta Tau Chi Fraternity faced in the 1978 film Animal House.

Tuition is rising at a faster rate than inflation, graduates’ employment prospects are dwindling in a recessed economy, and for the first time, Americans owe more on their student loans than they do on their credit card debt.

Taken together, these factors have prompted a new wave of criticism, with people questioning whether a college degree is really worth the time, money, and faith that people put into it. But though this issue is now stirring conversation in the mainstream media, it’s actually the product of a cultural phenomenon that’s been developing for half a century.

In a 2003 article for the Professional School Counseling journal, Dr. James Rosenbaum, a professor at Northwestern University, calls this the “college-for-all” trend. During the past 40 years, Rosenbaum says, job-market demand for high-skilled labor shot up, and universities became more accessible (via lower tuition costs and increased federal aid), leading to the idea that college is and should be for everyone.

And why not? A university degree leads to a higher salary (and still does), and if the best jobs require a college degree, then it’s only fair that everyone be given a chance to complete one.

Under the college-for-all trend, university has become essentially a trade school for the specialized skills required for high-tech, high-pay job fields—a one-size-fits-all pathway to the American dream. This is why one of the first questions anyone asks a college student about his or her degree is, “What are you going to do with that?” It’s also why there’s such a fuss, now that the pathway is looking less and less promising.

PayPal’s billionaire founder, Peter Thiel, has been higher education’s leading critic, or at least its most high profile one lately. Last year, he set up a foundation that awards $100,000 grants to students who drop out of college before the age of 20 to pursue their entrepreneurial dreams.

Thiel said in an interview this year with National Review that college is “a bubble in the classic sense” because it’s “extremely overpriced” and “people are not getting their money’s worth.” Thiel estimates that the higher education market will soon collapse, because “70 to 80 percent of the colleges in the U.S. are not generating a positive return on investment.”

But what exactly is that investment? Is it calculated simply by subtracting the cost of tuition from the college graduate’s eventual salary, or is there something more to it? In a recent article for the New Yorker, Louis Menand wrote that the answer used to be the latter. “Education is about intellectual growth,” he said, “not winning some race to the top.”

A degree’s value consists not only in the slip of paper itself, but more importantly in the work that went into earning it. All of those late nights spent reading dense philosophy and writing 15-page papers of literary criticism—they build diligence and character, and these things carry over to the workplace. In fact, they’re the very things that a degree is supposed to signify.

This was why the first universities were created; to develop young people into responsible citizens. “For a time the great moral consciousness alleged to have been fostered in students by the great universities,” Alan Bloom wrote more than two decades ago in the introduction to “The Closing Of The American Mind.” “They were doing something other than offering preliminary training for doctors and lawyers.” The purpose of higher education is not only vocational training, but also the transformation of 18-year-olds into mature, motivated, discerning adults.

But that development only happens when students apply themselves in the classroom; when they’re motivated not only by the economic prospects to be had post-graduation, but by the growth that happens in the here and now. “When people come into the system without believing that what goes on in it really matters,” Menand says, “it’s hard to transform minds.”

Even Thiel – a graduate of Stanford University for undergraduate and a law degree – recognizes this. He says part of higher education’s problem is that students treat college as “consumption,” as “just a four-year party.” He’s right. There are plenty of ill-prepared, hard-partying John Belushi “Bluto” characters on U.S. college campuses. Some of them should, indeed, consider dropping out rather than wasting tuition money and charring their report cards with poor grades. But telling other hard-working students to drop-out because of people like Bluto does them – and society – a huge disservice. You don’t fix the campus party stereotype by preaching that the payoffs of a college education happen after you leave the place.

It gets fixed when students realize that every second spent listening to lectures, studying for exams, and writing arduous papers is part of what they’re paying for—that the true value of their degrees has less to do with that slip of paper than it does with the type of people they’ve become by the time they walk across the stage at the end of four years. It’s this that will serve them, even in a job market where a degree alone doesn’t guarantee them employment.

Higher education is an investment, but that investment should be in more than a future salary. If students forgo college for the reasons Thiel predicts, enrollment would drop, but that would mean more room for students who value an education for the proper reasons. It would also mean that the students who decide against college are pursuing the perfectly-viable alternative routes best suited for them—trade school, online courses, or simply entering the job market.

Thiel speaks as if he’s prophesying the death of the university, but all he’s describing is a classic case of supply and demand—the correction of the college-for-all trend. It’s a case where the market works for the better.