and ladies and gentlemen, that afternoon. welcome to our book event. bill bennett and david's new book, "is college worth it?." here it is. if you haven't all bought a copy already we hope you will outside and you'll be glad you did. i'm a resident fellow at aei. and it will be my pleasure to introduce our speakers today. we are coming up on the 151st anniversary of the morrill act which was enacted july 2, 1862, 1 of the remarkable achievements under the lincoln administration in addition to fighting the civil war. and a landmark in higher education. it begins an act donating public lands to provide colleges for

the benefit of agriculture and mechanic arts. be it enacted their big round to the several about of public land for support and maintenance of at least one college where the leading object should be to teach such ranges are learning as are related to agriculture and mechanic arts in our to promote the liberal and practical education of industrial classes and of the several pursuits and professions of life. seems to me that they knew exactly what they were about. in 1862. that may be less true for us today. we've gone from a society where about one 40th of young people went to college a century ago, to about two-thirds are pursuing some form of education after high school. and this obviously changes everything in the economics of

higher education. and seems to have produced as today's book suggests a debt-financed glut of ba holders. many of us, like bill and david did, have noticed the parallels to our recent -- when it comes to higher education finance. debt financing is especially a problem if what is being financed is consumption, not investment. if as it has been suggested for a large number of students, college is not an investment, but consumption, four fun filled years before they had to settle down to a don't life. fees, and many more, interesting and challenging problems of college education, college and

location, runaway college costs and the debt explosion financing them are discussed in this insightful and practical book. for bill and david, like the authors of the morrill act want their work to be practical. and useful, and i think it will be. in addition to the discussion today, we invite all of you to be back this coming monday, june 24, for aei's related conference on the total dollar question reinventing student financial aid. this will start at 9:00 in the morning on monday and we hope to see you there. today, bill and david will present their book in about -- for about 20, 25 minutes. they will speak about 10 minutes each, it will give the authors a chance respond with a chance respond within the comic book litigation or arguments and then we'll open the floor for your questions. were going to adjourn at

1:45 for a coffee reception and book signing. we hope you will stay for that. "is college worth it?" will be on september hope you'll buy a copy. let me introduce our authors. bill bennett, as you know, is one of america's most influential voices on cultural political and educational issues. he's a senior advisor to project lead the way. is on the advisory board, chief evaluation, chief education advisor to beanstalk innovation. he has taught at boston university, the university of texas and harvard, served as secretary of education under president reagan and was america's first drug czar under president george h. w. bush. bill is the author of more than 24 books including two "new york times" number one bestsellers, is the host of "bill bennett's morning in america" and has received more than 30 honorary degrees. and as a final note, a very long

time ago bill and i were philosophy students together at williams college. bill will speak in a minute. he will be followed by david wilezol, the co-author of "is college worth it?." david isby sosa produce of the national syndicated "bill bennett's morning in america," a contributed to monday the campus to manhattan institute's higher education policy blog, claremont institute fellow and a study of greek and latin of the catholic university in washington, now in his honor, i tried to come up with an appropriate latin quote for addressing student debt. and i suggest -- happy is he who has no debt. [laughter] >> good. >> thank you. bill and david, we look forward to your presentation of this provocative book. bill, we welcome you to the aei podium.

[applause] >> thank you, alex. we're in the same class at williams college, say major of lawsuit, and if not for the honor system i would've copied from his books in our family final exams. with final exams, saturday classes to do you member that? that's the old we are. extraordinary. i won't describe the book. i will assume some basic familiarity with it but i'll hit some high points towards the end of my brief remarks. but one of the things we said at the very beginning of the book is that two-thirds of the people who graduate from high school and who immediately enroll in a four year college probably did something else first. we talk about various options like community college, get a job for a year or two, military, other things. we say this based on what we

have read and what the david said, including such facts as 46% of people who start a four year college don't finish in six to eight years. so that's one of the reasons we say it. there are other reasons. a lot of funny reactions to this book, some interesting, some not so interesting, but it's gotten a ton of reviews. i think it had some kind of a nerve and a discussion is going on and the debate will maybe follow. at the debate i hope, alex, from everyone else. one of the more interesting responses came from a guy from california who said i had triplets and their 14 and we been grooming -- we have been grooming for stanford. but having read in your book, i missed during the three of them to harvey mudd. i hope to hear from harvey mudd. i guess you should get some kind of percentage that the other one was from a recent graduate of north carolina state university

he said i'm afraid what you said about the liberal arts is entirely too. he said i finished before you program in liberal arts in the south. and he said i realize was done i had learned absolute nothing. he didn't say i couldn't get a job. he said i learned absolute nothing. that's part of the problem with humanities and social sciences that we were talking about before launch -- before lunch is the change dramatically. after finishing four years of liberal arts college, i don't know if it's bringing people like this guy. he said i've been enrolled as a freshman at north carolina state university in nuclear engineering and the graduated at 25 to he wrote me a 27. he said he for your mistake but i had a good time last night i said, i know that. that much i know about liberal arts colleges. you had a good time. other reactions, alex, we're getting lots of invitations to

go to campus forums on this, stanford, roundtable, other things. maybe the funnies one from university, added don't think she would my me telling, is heather wilson, former congresswoman from new mexico, cannot. she wrote me from the south dakota school of mines, to which with great praise in the book. please come into the winter commencement in rapid city. i said when is that? december 21. rapid city. i said maybe not. [laughter] she said, a recognized we don't have much of a budget to pay you because they just don't pay me much. i set my salary, public information committee $62,500. the average graduate probably makes $63,500. i said take up a collection him and recent graduates and send me a decent the. anyway, i think of it out there. if they will buy me the goods i will go in december.

a report from the brookings institution shortly after book came out written by stephanie on a code the main themes for our book and we were glad to do that because a couple people said they hoped they could characterize the book as a diatribe, which it's not. we were delighted it is from the brookings institution. they said college would be worth it provided if a student graduates, studies the right subject and goes for that student to the right school. this is very much along the lines of what we wrote in a recent editorial. college can still be worth it. major in the right subject, the right price, the right place, major factor in making itself. look at it from the perspective of the individual. the brookings institution report said this in part from long quote, there's enormous variation of the so-called return to education, depending on factors such as institution attendance, field of study, whether student graduates and

post-graduation occupation. while the average return, not the median return to the average return to obtain a college to read is clearly positive. we emphasize that it is not universally so. for certain schools majors, occupation individuals, college may not be a smart investment. colleen goggins people that they should go to college no matter what is a pretty loud message. we are actually doing some of them a disservice. that's pretty interesting. the second point i would make is we talk a lot about the same subject and the stem jobs, science, technology, engineering and math. and we say this is outsiders, i'm a philosophy major, david is a classics major, which once more pathetic in terms of getting a job after college is a tough competition. i returned to the university of texas where i got my ph.d in philosophy. went to the jobs bulletin board and the only thing out there was a notice from the department of labor about minimum wage and

what you are entitled to. it didn't look so promising. so-so student walked by, i could tell he was a philosophy student because i know what they look like, and i was one once, i said how you doing? fine. i did my ph.d but he said how's that working out for you? i said fine. i have a radio show. he said, well, that's good. that's dialogue in a certain tradition. i said i hope it is, i hope it is. anyway, we talk a lot about the stem jobs in the but because they are the jobs it seems a very much worth it. they are the course of study at the at present is quite with it. we base some of the conclusions we came up with in the book on the return on investment findings and pay scale from the year 2012-2013, numbers are out. this has shown this pattern continued. the top 10 institutions in terms

of getting a return on investment all technical institutions, or institutions that emphasize or have a very strong presence in science take no geoengineering and math. i mention harvey mudd, colorado school of mines, south dakota school of mines, caltech, mit attend standard which a very glowers -- another brookings report shows that one in 10 jobs in u.s. economy, this is very interesting, our sub of bachelor degrees, stem jobs. these jobs have an average salary of $53,000 per year. pretty good. in dallas and milwaukee, 15% of the job listings were sub bachelor stem jobs. real-life example, in the news, edward snowden. you all know who edward snowden is. not recommend him for a trader of the year or two of the year. that's not my topic. just note he had no college degree.

yet know high school degree and was getting paid $200,000 a year for his technical abilities. i should set the cement ago, in this pay scale, rankings where the schools with heavy stem focus, school with the highest in 2013 was harvey mudd. smaller meeting school in california. they earn about $2 million more in their lifetime than it he would've earned with just a high school education. in 2013 the number of prestigious private schools, princeton and yale, slipped. i wouldn't attach too much significance, but if there's a pattern over time, then i would attach significance and is a pattern over time. places like colorado school of mines, for example, are growing, moving further up the chart, 28

-- so that is where seems where the opportunity is now and for the foreseeable future. and note the following. something would point out in the book, a lot of people found this hard to believe but it is a true. although there are 50% more students enrolled in college now than in 1985, 50% more students enrolled in college now than in 1985, there were more graduates in 1985 and rj in the field of microbiology, chemical engineering and computer science. here you have a dramatic increase in the number of students enrolled in college, tremendous opportunities in these fields, and get 50% fewer graduates in these fields. i have some notions about why that's the case that has to do less with college and high school and even elementary school now. that's an extraordinary number. the other thing i want to say is a very hopeful note. we say at the end of the book is that we think technology, the

internet, other things can have a transformative effect on higher education. the next revolution may be coming. we talked about some of the programs like you tenacity which i'm a special senior advisor out of standard. lo and behold, not long after our book, i think this is the vanguard. it was announced, so if you may have seen, the georgia tech is now offering a totally online masters degree in computer science and only takes two years. price tag $7000. used to be $40,000 for out of state. $20,000 or so for him state. $7000 is the price the student will pay. this is a prestigious university. first rate acting program and there they go. this may be part of the future. let me just finish.

want to make room for david and very distinguished panel. i want to hear what we got right and what we got wrong. a few of the facts that we put, that of come from the book which people have found interesting. i just cited the once people have commented on. they did know these. we didn't either until we did a research. 43% of students under the age of 25 student debt. the average total amount is around $20,000, which is tough when you're just starting out. there are 115,000 janitors with a bachelors degree in the united states. did you know that? the study academically adrift found 45% of college students made no statistically significant gains in critical thinking, complex reasoning and writing skills in their first three years of college. what are you actually paying for? that's kind of the big question. what's the value added here? the academically a good study also found average college student did only 12 or 13 hours

per week of the study outside of class. what are they doing? don't answer that. [laughter] when our secretary of education i went to france and met with the minister of education for france, and we were talking and he slightly had his nose up in the air. american center of education. he thought i was security for the secretary of education. the mistake that happened to me throughout my career. i said good morning, how are your students doing? he said -- he thought i said what are your students doing? is that it is 10:00 and they're all reading. good. what are your american students doing? god only knows. [laughter] we have a decentralized system. many are in recess right now. anyway, another thing we talked about, this is so much, so much of our research turned to the work of richard vedder and his

colleagues. this is very interesting fact about faculty and cost whether to cost and where do overhead. university of texas-austin where did my ph.d, 57% of the credit hours are taught by on 20% of faculty. this is got a lot of people thinking. we've heard about a lot of boards of trustees. the answer to that is yes. a small part of the faculty teaches the largest part of the student load. the median graduate of the south dakota school of mines is now earning more than the median graduate of harvard. you have to spend four years in rapid city other than boston but life is lost but if you could survive williams down for four years, the winters, you can survive rapid city i think. in 1970, this to me is, this is the thing we have engaged in since the book came out. kind of the toughest not.

not that it isn't true, but this is the one that people have kind of gotten angry about and we have some real back and forth because you know when you talk about increasing the price of higher education, the answer you get most often, the answer you get most often are too. one, and would or even engage with college presidents, university presents on this. one is, that's the price of excellence. well, that's just not an end to because a lot of places may have bought excellent. a lot of places they haven't. as we point out in the book a lot of places they bought climbing walls and gourmet room service for the dorms, believe it or not. and other things. but they haven't bought excellent. that's not what the money is all about. the second thing with her is the price goes up. we charge the wealthy students more money so we can give more money to the poor kids so they will come. as best we can tell, and only richard vedder will know for

sure, in 1970 something like 12% of recent college graduates came from the bottom quartile of the income distribution. 40 years later, 2010, the percentagpercentag e with 7%. so this whole notion that we charge more so we can give to the poor has not worked. we have fewer poor students in college. this combined with the marvelous "new york times" story which pointed out how the colleges, the elites are not reaching the extremely talented poor kids in america, even with their enormous budgets and enormous recruiting budgets, still remains a scandal in higher education but anyway, we are very pleased with the way the book has been received and look forward to more conversations about it. and finding out more, and we look forward to changes in higher education. many of which i think the conversation has begun to turn. thanks very much. thanks, alex.

[applause] >> thank you, bill. david? >> well, thanks very much. i wanted to first thank aei for having me here today, and thank bill for give me the opportunity to go buy this book. now i'm sitting on this distinguished panel with a couple man with decades, centuries of experience. [laughter] are i'm just the best looking 70 year old in america. you know, anyway, i want, i'm going to go heavy on statistics in the beginning and then i'm going to talk about what it means for millennials especially, because i am one. i think this is something useful, generational perspective. young college graduates are still struggling with student loan debt and unemployment even as the economy has improved somewhat in the last couple of

months. the major economic consequence of this is inability to get married, have kids, buy a car, things like that. there's a lot less room to achieve a lot of the aspirational goals for people of my generation, for people who are saddled with this kind of student loan debt. you can look at a couple numbers here that tell the story. a survey done by wells fargo found that one-third of millennials report regretting going to college. they said would be better off working and earning money. have to say that debt is the biggest financial concern with 42% called it overwhelming. 35% of indebted graduates under 30 are more than 90 day selling it on their student loans. the average graduate in 2013 have to get burden of around $30,000. i think the median debt burden for recent grads is $14,000, which it's not 30 but that's still quite a hefty sum of money to be burdened with when you come out of undergraduate

school. a new report from congress just have a student loans have increased from a nationwide total of five and $50 billion in late 2007, to just under $1 trillion in the first quarter of 2013. so when only six years, five years, we have doubled the amount of indebtedness in this country, and with pretty bad if x. as bill alluded to, i think the major culprits with this begins with the schools themselves. i think they are capitalizing on a prominent that can make in the labor force as a worker, as a human being, you need a college degree. it's all but essential. i think just speaking from experience an anecdote is not the beginning of data, not speaking from experience i see people, i meet people who don't have college degrees and they will attest to this generally that there's a feeling that only in themselves but feeling a

perception by other people that if you're without a college degree you somehow messed up in life. i think that's not a good thing. i don't think that's america. so schools can raise prices to capture students who can pay full price. your harvard, princeton, jonah, there'll always have a huge amount of people who can go so they can jack up the prices as they won because people will pay that because of that brand is synonymous with achievement in american life. and what is happening is that a lot of second your schools have followed suit and they also have raised their tuition to exorbitant levels the most people can't pay. not to make this school the, but george washington university i think is one school that is kind of the exemplary of this, it's the most expensive school in the country but nobody would say that it's of the highest quali

quality. but i think it's capitalizing on the belief that price is synonymous with quality. so if you're a parent or student who may be a his uninformed abot the college process, or informed and you see that can you think of a semi-kid there to be a great shot at a high level of achievement. and i know for a fact that there's a lot of kids coming out with huge amounts of student loan debt. win colleges capture this money they sink into expensive building projects, student centers and hot tubs and rock climbing walls and things like that which are fun. i went to american university. i was the beneficiary of a lot of these nice amenities, i'm not going to lie, but in truth they were very unofficial to the learning process and i think i would've been happier being less in debt and having a nice less dorm room or cafeteria, or something like that. and then lastly, they play came

with financial aid for low-income students, which i think is at times somewhat despicable. this is all undergirded by the ubiquity of student loans, and anyone basically who wants a student loan in america from the federal government can get one. and knowing that that isn't an indian money spigot the schools like to raise their prices and don't have a lot of compunction about doing that. and i think, there's a big kerry of hypocrisy because we know that the philosophical leitmotif of most colleges today is social justice, fairness, things like that, a lot of these various serial moral perspectives and bettering the world, and that's fine, but if you're going to hold the notions of economic and social betterment as tightly as the universities do, then you better be prepared to be honest when students when they're ready to sign a $20,000 promissory note per year for your student

loans. i think that's exploitive, to say the least. i want to point you to some stats from the new america foundation, this is an incredible study that just came out. it talks about pell grant recipient of some the nation's best colleges. so they say they will give you money and then they enroll some low income students. but what we're finding is that a lot of the students still come out of school heavily indebted. so at boston university, 15% of the students are low-income, which means they're full-time freshmen whose families make $30,000 or less a year. 15% of the scenes are low income. those students are still forced to pay $24,000 a year your out of pocket or student loans. santa clara university was the worst offender. 15% of the students are low income and are paying an average share of $46,000 a year out of pocket between student loan

found out of pocket costs. that's ridiculous. the consequence of all this jan, i think, each individual perilous financial state and not being able to get married, have kids, buy a car, what have you got is i think we are creating a class of citizens who are perpetually alienated, disillusioned from the economic system. they feel like they bought in, they worked hard, they have done what they're supposed to do, they have made an investment as a lot of the student loans are sold as, and they can be. i'm not saying that student loans are never a good idea because it can be. but especially in light of looking at the last election, looking at the themes of that election of 47% income inequality, economic fairness, i think this needs to be part of that conversation for republicans or conservatives. a lot of scholars at aei have done a really good job of

talking about that. so in conclusion, yes, college can still be worth it. it does depend on what you are studying, where you're going, things like that. but i think it's important to recognize that the kinds of people that we're turning out of the university system not only, economically, but also cynically where creating a class of people that are not going to go here as citizens perhaps and are missing out on what america is really about. thanks very much. [applause] >> thank you, david. we have two expert discussants of this book and the sadistic the first will be dick george. president and ceo of great lakes higher education corporation. ethan substantial involved in

public finance and post secondary educational finance sets 1972. he is chairman of the wisconsin covenant foundation, director of the national association of student loan administrators, which produces the drug national student clearinghouse and was a principal negotiator in 1992, 1998, and 2007, of the u.s. department of education's negotiated rulemaking committees for student loan programs. he is also a console and post secondary educational finance for the international finance corporation, and as a director of great lakes higher education corporation myself, i can attest to his a cute and creative insights into the issues were addressing today, i do hope you all pick up a copy of his little piece called and in modest proposal for higher education finance, which is available out in the reception area. our second discuss and will be trained for, the sadistic which professor of economics at ohio

university, the director of the center for college affordability and productivity. how are you doing on that, affordability and productivity? >> not so well spent and actions call at aei. he briefly served as a member of the department of educations commission for the future of higher education. he's written widely on american economic history, authoring such books as out of work on a deployment and government in 20th century america. and the american economy in historical perspective, and particularly with respect to today's subject and issues, the book, going broke by degree, why college costs too much. i guess in the future going broke by degree and is college with it ought to be sold as a two book set. we could have everybody by. rich is also the author of numerous scholarly papers and many short pieces for the popular press. i should mention that

congressman petrine had hoped to join us today but he is caught in a markup and so we'll have to look forward to his joining in this discussion, which is shortly going to be ongoing on another occasion. dick, you have the floor. >> thank you, alex, and thank you to aei for having this event and the invitation to participate. i have to say, bill and david, that i thoroughly enjoyed the book. i think that when you look at some of the over arching issues in the post-secondary space, and particularly the fundamental issue of whether post-secondary education is intended to confer a societal benefit or an individual benefit, and the answer to the question in part determines who should pay for the post-secondary education, or whether it should be the public or the individual beneficiary. a second overarching question is

what is the purpose of post-secondary education? is a classical education and enlightenment, or is it training? i think both of those issues i grappled with mike lee in the book, and i think anyone who wants to understand where we need to go and post secondary education, driven by the answers to the overarching questions, needs to read this book. it's a compilation in many respects of much of what those of us who are practitioners in this area have seen in piecemeal in the past. but it doesn't excellent job of bringing it together and documented yet. and for anyone who wants to do research in this area, particularly the notes in this book provided a transcript of much of what influences the debate. i was particularly taken by the

book in terms of its second overarching issue of whether education is for classical enlightenment or training, and the statistic that is cited in the book that 2011 survey of students where 88% of the students responded that their principal interest and principal purpose and post-secondary education was training and job opportunity. that tells us again a lot about who might be most appropriately paying for that training. should be individual, or should be the prospect of employers will be the beneficiaries of that training? as i said, i think indeed being with any of these questions, this is an excellent primer, and

i commend it to all of you. i also particularly agree with something that the book touches on several times. and it's really the fundamental issue of whether colleges are worth it. and the answer, of course, as both bill and david have told us is yes and no. it depends. it depends on where you go, what you study, what your preparation is, what your motivation is. and so what we see is very, very much differentiated space in post-secondary education. and yet as the book also put a point, we have a monolithic system that addresses and particularly in the context of financial aid. and i'm going to end my remarks by focusing specifically on the student loan program. and i should say that all of my comments are my personal observations, and alex, as a board member, i'm making this

disclaimer an so nothing is reported as having been said on behalf of great lakes. nonetheless, just so all of you who may not be fully with great lakes understand, we service over $150 billion in student loans. for over 6 million borrowers nationally. we see every day what this debt burden means in america. and it's a picture that is not particularly attractive, unfortunately. much has been said about college cost increases and how they have outpaced inflation significantly, but the more important comparison is how college cost increases have outpaced income growth. that is simply an unsustainable course. it will lead to a continuation of the problem that we see, particularly the problem outlined in chapter two of the book. but if i have one criticism of the book, it's that it only

touches briefly on one of the significance moral issues that underlies the problem with student loan debt, and it's the unheard voice that's very rarely focused on, and that's the voice of the defaulter. we have an unfortunate situation in the student loan space where the overwhelming majority of the folders are those who have not completed their education, not completed a degree, not completed their credential. and, unfortunately, the overwhelming majority of those defaulters are the most vocal reports, minority, first generation student, low income students. with a broken k-12 system and the idea that everybody has to post-secondary education, what this does is it gives rise to

the concept of free public education. if everybody has to go on to post-secondary education, a close second education isn't free and we force ill-prepared and underprepared students to pay for the post second education. we have given life to free public education in this country. and when we do and we create an enormous pool of defaulters you are not persistent students, who then we lose contact with because we haven't put the resources and to skip tracing and location finding, we can't help those defaulters with the tools that are available. and so we need a student loan program that is different in context of a financial aid program where no one should be allowed to borrow until they have demonstrated preparation and capacity to persist.

it is far cheaper for us to make enhanced grants to those most global cohorts than it is for us to make loans and then pretend that we're going to collect on those loans or put those loans into income-based repayment or income contingent repayment, or any of the other host of variation. because the reality is, it's cheaper for us to make the grant then is to make an income contingent loan that is forgiven sometime in the future. we need to protect those vulnerable cohorts from borrowing at all. schools need to scan and again. they need to fund remedial education. we need to enhance pell grants, other grants and institutional aid for global cohorts. don't borrow until they're able to demonstrate the capacity to persist and at that point then we need differential underwriting of the loans so that we matched what their capacity to pay maybe in the future with the about of capital

we're willing to commit to the education. that's the only way we're going to get compete -- complete transparency in the student loan space. it won't be by having a new information sheet over new disclosures. it will come about when the provider of the capital tells the individual student, this is how much will be made available to you based on what you intend to study, because this is the anticipated outcome based on. that will get us transparency. so if we can combine grant funding of vulnerable cohorts, differential under income we can create a student loan system that will fundamentally change how post second education operates today. it needs to be done. and needs to be done now. we have the wherewithal. we have the resources to do it. it would look at the money that is spent in tax credits, tax

benefits and the existing student aid system, there is more than enough money to do it. it just takes the will for fundamental remediation of the program. thanks very much. [applause] >> thank you, dick. rich? >> the four i read bill and david's new book, i sat down and listed what if that were the three biggest shortcomings in american higher education, thinking i would compare my list with bears, after i read the book. my first shortcoming, by the way, not surprisingly, was that american higher education is extremely costly and inefficient, burdening students enormously, and leading to a

student debt crisis of increasingly serious magnitude. second, i think that american higher education involves remarkably little learning with teachers, students, and even buildings being grossly underutilized. many students fail to graduate from college, and to many that do are not much better critical thinkers or have acquired much more knowledge of virtue than they did as freshmen. then the third, i think that the overproduction of college graduates and related pathologies such as the proliferation of students majoring in topics of little relevance to the world of work has created massive underemployment of college graduates, and cause a general decline in the financial rate of return on college education. then i read "is college worth it?." interestingly the authors reached exactly the same conclusion as i did.

making me wonder why i wasn't a co-author. [laughter] the evidence is overwhelming. i should've been. i am sighted enough in the book. [laughter] >> settle for royalties. [laughter] spent the evidence is overwhelming, and to my way of thinking, irrefutable. colleges are too costly, students are learning to vote, and implement prospects of graduates are increasingly dismal. what i like most about the book, however, is the way it is written and the audience to which it speaks. it makes the factual case convincingly, but literally, using a non-technocratic writing style that the average moderate literate citizen contemplating attending college can

understand. it is filled with numerous real-world examples of some of the tragic results of higher education shortcomings, such as individuals running up huge debts, living in their parents basements with huge seemingly unending financial albatrosses around the neck. the authors think the current situation is unsustainable and that big changes coming to higher education. early indicators already point to that. in 2004, 68% of those going on to college went to four-year schools, 68%. eight years later, 2012, that has fallen by over 11 percentage points to 57%. for your colleges are too costly, so people are starting to look to lower cost alternatives. in 1970, less than 1% of our

nation's taxi drivers have a college degree. today, more than 15% do. on sunday, a d.c. taxi driver, this is anecdotal evidence, which is to say a nonrandom sample, on sunday, a d.c. taxidriver told me that he had a bachelor's degree from georgetown, and more recently, a nursing degree or to become and are in i.t. can't get a job in either of the areas that he studied in and so he's driving a cab. as stories like this become more and more common, prospective students are starting to turn away in big numbers from traditional higher education in spite of the propaganda from the college crowd. you don't need a bachelors degree to drive a taxi or to mop floors where there are 115,000 janitors with bachelors degrees that bill was talking about. the colleges are too slow to change, burdened by tenure,

union grove, murky governments and other problems. so many mediocre liberal arts colleges and secondary quality state universities increasingly face the prospects of extinction. creative destruction is coming to a higher education with a vengeance. and bill and dave make that point beautifully in this great new book. now, i think higher education reform will revolve around three words. information, incentives, and innovation. much of the modern dysfunction and higher education reflects massive information gaps which bill and david are trying to help fill with this book. colleges in the information business are notoriously brittle and to provide information about themselves. colleges have lacked incentives to make cost reducing changes

that typically involve innovation. federal funding has fueled an academic arms race that puts a premium on spending money and lowering productivity, not raising it. so less traditional higher education loses market share, what will be the substitute for traditional schools lacks new technologies hold great promise is to reach what might be called the wal-mart honda civic segment of the education market. those who want high quality learning at low price. the best example, there are trade schools that offered vocational training and specific schools that are now booming. we need more electricians, welders and long distance truck drivers, but fewer anthropologists or women's studies majors. one of the virtues of having tenure is you can say anything you want. the only virtue of tenure.

[laughter] >> education is both an investment and consumption goods, and the harvard's and williams of the world will survive, serving the lexus neiman marcus end of the market, also protected by vast endowments. it is a lowly and out of private school, the lowly and out of private schools with marginal reputations and similar counterparts in the public sector that are most vulnerable. plato allegedly said -- bill, tell me if i'm right, necessity is the mother of invention. and even in the short months as bill and david finish writing the book, new ideas are evolving. only yesterday the educational testing service announced it was creating a proficiency profile, an electronic certificate offer to those doing well on a test that assesses critical thinking, reading, writing and mathematics. a second certificate will be

issued to those doing well on a digital technology related test. new screening devices to certify employment competency are evolving. certificates that cost $100 or $200 instead of the pervading 100,000 or $200,000. in a 200 page book, you can do with everything, this is not the book for policy wonks that want extensive critique to public policy. a more comprehensive treatment of the ailments of higher education would need to deal with some of these issues. let me just mention for briefly just point out that there are some things that they don't talk much about. first, the majority of professors outside the sciences are doing research of some marginal use to anyone. nearly three papers are published daily on waiting shakespeare, for example. why? why not incentivize professors

to teach more? second, the recent government browbeating of the for-profit colleges have been excessive with rules being proposed for that sector that is, if extended to public institution would lead to the closing of literally hundreds of public schools. the for-profit industry owes its existence largely to the dysfunctional federal student financial aid program, to be sure, and it does have something of an even passionate and even record of a competent. it has proven itself highly efficient in delivering decent quality education for both conventional and electronic means. it hopefully will play a significant role in the evolution of american higher education. 30, the accreditation system in the u.s. is broken and needs radical change, something our authors were moderately silent about. fourth, the scandals and increasing cost of associate

with big time into collegiate athletics has finally reached the point where they're starting to impose real burdens on american higher education. in general, however, the errors of omission are minor. and the errors of commission are nonexistent. this is a marvelous book. quite frankly, not quite the equal of, say, plato's republic, or even king lear, but it's still pretty darn good. the bill into david, congratulations on a great book. to those in testing or considering to invest in post secondary education for yourselves or your children or your grandchildren, one, do not walk to your bookstore to get your hands on this book. you will not regret it. thank you. [applause] >> thank you, rich. and thank you to all the

panelists for your great presentations. i want to give bill and david a chance to respond if they would like to any of the points made by dick and rich. you want to start, david? >> sure. i think one thing that was alluded to was everyone feels like they need to get to cause because the k-12 system is broken and i don't where to look to hard to see that. that it is broken. our test scores on the national assessment of education progress has basically remained flat since early 1980s. and a lot of of income and minority groups have underperformed significantly. if anyone remembers around the system time there was a commercial done by target, you know, the big retailer, and it was a video montage of a bunch of students opening up a college education to our college acceptance letters. in fairness it was a touching and they were all celebrating

wildly. but then it flashed on the screen and said every kid deserves this chance. that's why target is giving $1 billion to higher education by 2020, or something like that. and my reaction was, well, why aren't we saying, okay, every kid deserves a chance to graduate high school and get a good job? i think we have moved on, a lot of people i think in america in general i don't, necessary in education policy community, but in america in general have moved on from the idea of regaining and reforming k-12 in the way that i think now, especially with the rise of technology and blended warning -- lincoln we could do. i think that's one thing in particular that stuck out to me. >> build? >> i think criticisms are fair with exception of intercollegiate sports. i will be spending part of the fault on college campuses,

alabama and texas a&m, and i'm sorry, but there are series questions here. sec football is very hard to be. in fact, no one beats them. we could talk about that. the one question i have, you know the answer, richard, i know the answer will be different on different campuses, due intercollegiate athletics, let's see the big places, the places i just mention, are they a drink or do they bring in my? >> at the big plays, at the sec, big ten, the schools using sort of a narrow accounting framework, are pretty much break even, and arguably with some of the spillover effects that the give a positive effect. the problems are at other schools. the total subsidies at ncaa schools, by the ncaa's definition, division i is to .3 billion which is one, 2% of budget. it's not a huge item at some schools it's $1000 a head

advocate jumping in student sales and that's, 4004 eastern 5005 years, that's a big burden. >> i just think this could go on forever but i just think education from john wooden or and mike krzyzewski might be there and you get from most sociology majors in four years. >> no argument with me on that. >> dick or rich come in at the further point open the floor to questions? >> okay, ladies and gentlemen, it's time for you to be able to ask questions. let me remind you of how this will work. we have a microphone nuclear please wait for the microphone to get to you. tell us your name and your affiliation, ask a question. if you feel a sudden urge to make a speech before asking your question, the chairwoman mind you it's time to ask the question. so i think i have a question

right here. >> hi. i'm from the eisenhower institute, and i am a small liberal arts school religious studies major, which is probably around classics right now, the job market. and hearing this discussion i definitely understood a lot of these points as i'm already overwhelmed by the debt that i know is coming to me within the next 12 months. but i am wondering about, some of the other guys that i think i've gotten from the college education such as critical thinking, personal relationships with professors, kind of these experiences that are more developmental rather than just statistical what my paycheck is going to be after college. >> let me take that. you may want to comment on the

classics connection. look, you pay your money can you take your choice, but what we want is a better informed consumer. so you know what you're getting. i went to williams college. i was a scholarship student i had loans, borrowed a lot of money. went to graduate school, majored in philosophy. went to graduate school in philosophy. i had a $900 stipend my first year of graduate school, texas. i ate one meal a day. that's all i could afford, el chico or else occult or something. i ate refried beans and walked out in the texas sun in the nfl down on the sidewalk. that was the graduate life. when i finished my schooling in 1971, i owed $26,000. what would that be in today's dollars, alex? 150? that's a lot of money. regrets?

none. i love lawsuit. i didn't care. i was going to crack that and figure this doggone business out, the meaning of life. i love the. i've never had a moment of regret. i decided as much as i could pay off the debt as quickly as i could. i'm sure it had something to do with my decision, however, not to get married early. i didn't get it until i was in my 30s. i knew what i was doing. we don't discourage people from doing that. in fact, one of the origins of the book answered richard said, we think most colleges fai failn both counts but they don't give you value for dollar. they do give you the opportunity to get a good job for the most part. and if they want to take the high road and say it is to save your soul and a larger mind, then start trying to save souls and in large mines, but i don't think most of them do that because again, another topic at a different place, the basement of humanities which to me was

the beginning of life itself. i could not get enough of this literature and philosophy, and that is willing to, and pay for years. but, you know, as long as you know what you're getting. as long as they are being honest. one of the things you hinted at, both of you come is the catalog copy, it's an irony as richard points out. by the way, we will make it, is it worth it, does that work to? >> that works. >> is that for all the information that they put out, often they don't tell the truth. and that's, you know, i think most of us if we had been told when we are majoring in philosophy, you'll probably not be able to get a good job, would have done it anyway. ..

>> well, what do you think you can make as a philosophy major? [laughter] well, it was a fair question, but i didn't care in those days, just like bill. i fully agree the key thing is to know what you're doing. we mentioned parallels to the housing bubbles bubble and the e cost bubble, the flow of credit in both cases with great, good intentions from the government into the sector, both housing and colleges, has pushed up the costs. and in both cases the most

important thing is to know what a you're doing. in talking about mortgage loans, i always tell people the -- who is making the most important decision about getting a mortgage loan isn't the lender. the lender's going to underwrite you, but vastly more important is for you to decide and know what you're doing, and like bill, if you want to eat oatmeal and hot dogs for ten years so you can pay for the house of your dreams, that's fine with me as long as you know what you're doing. and the point you make about college is exactly the same and exactly are right. the question over here, please. >> good afternoon, my name's tom. quick question, side question would be is college really worth it for those who are aspiring entrepreneurs or business owners? so in other words, if you know

what your career's going to be and you're better off in a trade environment or a high-tech business, is college really worth it statistically speaking? >> i think that's one of the, one of the great calculations of becoming an entrepreneur, you know, am i going to forgo this experience to do that one. life is, life is often the best teacher of those things, and i think that's absolutely true when it comes to starting a business is and building a business and things like that. you look at steve jobs, mark zuckerberg and bill gates, really there was no value added for them of college, but i'm sure there's, you know, thousands of individuals across the country who would -- who said the same things about themselves and had the next big idea and maybe it didn't pan out. so maybe in one sense college, yeah, it absolutely might be a great fallback if your idea

doesn't work out, and be you can go be a computer programmer at google or apple or whatever and have a great career. you might not be the next great silicon valley intlep neuro. so it's -- entrepreneur. it's a prudential calculation. >> couple things. one, we do talk about in the book, i don't know how much of a model it is for how many people, but peter teel, he recruits top high school students in the country just like harvard does, and he pays them to come work with him and the other students, what 100 now? >> 100. >> they get paid to go. they make a deal where teel gets a percentage of what they make, it's investing in human capital, and it's an interesting idea. one anecdote that david wants me to tell quickly. after graduate school, simultaneously i went to harvard law school.

i was a proctor. i became known as the stay in college proctor. when people were gettingty affected and wanting to leave college, i was the one that told them they were probably better off to stay. when one of my freshmen became a proctor, john asked me to talk to this young man, gates, bill gates. and i talked to him and talked to him, and he just kept saying i have this thing i want to do, and finally in frustration i told my friend let the dope go, you know, just let him go. [laughter] and i had, i thought, a pretty good argument. if you're smart, aren't you going to make the idea better surrounded by some of the brightest young people in the country and a good faculty? he said this is something i just want to do on my own. i said, fine, good luck. never heard from him again. [laughter] >> rich, you had a thought? >> i don't know of any -- mark

in the audience might have some empirical evidence. that's a hard question to answer. there's risks associated with anything you do. but i do think there is a class of people for whom with the entrepreneurial spirit and the entrepreneurial drive and basically high levels of cognitive abilities to begin with that can thrive outside of the traditional college environment. it's not for everyone. indeed, i think it's for a few, and remember, most entrepreneurs don't really succeed. it's a high risk venture. >> one last -- i'm sorry. >> it's probably true that the aggregate -- [inaudible] all entrepreneurial ventures is negative in the aggregate. that's why some people have to be able to make it big. bill, go ahead. >> john stewart mills says any standard will work ill if we suppose universal idiocy to be conjoined with it.

genius, the zuckerberg, the gates, the jobs, it works anyway. madison didn't learn at all at princeton. madison just knew a hot and read a lot. -- a hot and read a lot. this book isn't written for those folks. arguably, from what i can tell of reading the jobs book, you should live in a ranch house in california, use your garage, you could play the guitar or invent machines, and you will make it much more likely than college. statistically, i think that could be true. >> questions over here or? >> just kidding. >> hi. i just a wanted to thank you all for being here today, making this presentation. i have a question for bill bennett. by the way, i'm actually at alum, so hook 'em horns. two questions for bill bennett. you were talking about the liberal arts education about how it had changed, and i was

curious to know how it had changed, and how do you think this has impacted students in terms of their ability to get a job? and my second question is you seem to, in my opinion, overemphasize the economic benefits of an education but underemphasize the ability to think critically which, in my humble opinion, is the primary reason for going to college. yes, it's important to, you know, make a living too, you know? we all live in a real world, and we have to make money. but i think the ability to think critically would elevate our society to a different level. my second question is for -- >> that's all the questions you get for the moment, bill. take that. >> i just wanted to ask one other panelist. >> just wait, and i'll be back to you. >> okay, sorry. >> go ahead, bill. >> very quickly, the humanities, i think, have been so debased,

narrowed, professionalized, deconstructed that there's very little left. we had the sense when we were studying shakespeare and philosophers that we were engaged in critical thinking that we were learning to think big about big questions and that our thinking about these things would help us in the world. we were not thinking that we could make up any text that we wanted, that we were engaged in this great enterprise about life and that when you entered into a dialogue, you didn't do fancy intellectual footwork, you left the dialogue a different person based on that. if i ran a college, i wouldn't met people just major in anything they wanted if it was my college. i would say you have to pass through certain things. there are certain books you have to read because you want to be an educated person. then i wouldn't have a catalog that says you can hit the stars,

you can major in any damn thing you want with, borrow as much money as you want because that would be a lie. the second part was -- >> the second part was emphasizing economic benefits over critical thinking. >> yeah. well, i mean, look, richard commented that, you know, we said in the book this is what the customers say they want. now, you may wish to go to st. johns college, you're going to read all the great books while you're here. too bad, that's the way we do it. but if 88% of the students put this as their number one priority and you present yourself as saying we'll get you there, man, then get 'em there or be more truthful, be more truthful about it. >> now you have a fast question, i think, for mr. george. >> okay. fast question for richard. just curious, why do can you think that women's studies

programs don't have value? >> i knew i was going to get in trouble with that one. i didn't say they didn't have value. i said that people graduating in women's studies -- i think bill and david in their book, i think, have empirical evidence from payscale.com that says women's studies graduates, area studies graduates, latin american studies graduates don't on balance earn a lot of money. that doesn't mean they have no value. there is both a consumption and an investment value to higher education. you can go to college for as many years as you want and take courses in, you know, i studied french literature for a year in france. it's done me utterly no good vocationally, but i'm glad i did it. and if you want to major in women's studies, fine. but there is a public policy issue of do women's studies

graduates who are in women's studies, are they being deceived thinking they will earn money? and there may be even a public policy issue that the public policymakers want to discuss on how much public subsidies should we make on private consumption of people whether it be women's studies or basketball or anything be else. why should the government be paying more people to -- for people to live their consumption dream when they don't do it for joe six-pack or bucket or whatever -- the guy who has the lunch wasn't who works -- bucket who works in the steel mill. we don't do anything for him, why should we do it for the college yuppies? >> great question. do we have another question? >> david -- >> here. okay. wait for the microphone, please. >> hi, my name is adrian, i'm the ceo and founder of career guild, i'm also a entrepreneur and a stanford grad, so i'm not

sure how i'm positioned in front of this panel. knowing that colleges are slow to adapt but students will still likely go to college at least in the near future, what is, in your opinion, the best way to maximize the return on the college investment and whether students need to take a very different approach to college than their parents in terms of focusing around practical skill acquisition and job placement 234 and what is the role of career prep at the high school level to allow students to be more empowered in figuring out a way of aligning that generalist education system towards those end career goals? >> want to give dick george a chance to attack this one. >> well, i think one of the things that the book ends with is the impact that technology will have on the transformation of the academy. and i think, clearly, if we could fix accreditation, which is as broken as the financial aid system itself, we could move much more rapidly.

and most of you are probably familiar with badges, but i think in competency-based education we're going to see badges that are developed to assess competencies in multiple fields of endeavor including entrepreneurial skills. and if you can imagine a badge that is awarded by a consortium of silicon valley companies recognizing entrepreneurial l skills, that badge may with worth far more than a computer science degree or an mba. and i think as we can more rapidly move into competency-based education, employer-based designation of skill sets for badges, that that will be one of the most important be things in the technological transformation of the academy going forward. >> that's not unlike an old a fashioned apprenticeship program you just talked about.

i'm going to take one more question. i want to go way to the back. we've been giving these people in the front an unfair advantage. >> jared meyer, st. johns university. i had a question about -- not -- [inaudible] college, this is a different one. [laughter] we talked a hot about outstanding student loan debt. what do you think should be done? because you really cannot discharge this under any circumstances. you have to pass the bruner tests which is ultimately impossible. so is it unjust to forgive it? how does that stand in the strong tradition of bankruptcy we have in this country? what do we do with the debt that's already out there? >> good question. >> it is unjust to forgive it. it sounds kind of horrible. but this was a private decision made, someone decided to take advantage of a public subsidy. it was a calculated investment that hasn't worked out so well.