American Enterprise Institute senior fellow Beth Akers joins Allison Schrager to discuss student loans, the rising cost of college, and policy alternatives to blanket debt forgiveness.

Audio Transcript

Allison Schrager: Welcome to Risk Talking, a podcast about economics. I'm your host, Alison Schrager, and today, I'm joined by Beth Akers. Beth is a senior fellow at the American Enterprise Institute where she researches higher education, student loans, and workforce development. She is the co-author of Game of Loans: The Rhetoric and Reality of Student Debt and the author of Making College Pay: An Economist Explains How to Make a Smart Bet on Higher Education, which I highly recommend. It was released just last year and is now feeling exceptionally timely. So, I can think of no better person to help us make sense of all this news that's happening in the student loan and education space. So, we're especially excited to have Beth with us today. So, thank you so much for joining us.

Beth Akers: Oh, thank you for having me.

Allison Schrager: All right. Let's just cut to the chase here. Why has college gotten so expensive? We know its prices have completely outstripped inflation. So, what went wrong?

Beth Akers: Yeah. Okay. So, a few things. This is one of those cases where there's no simple answer, unfortunately. If you ask around, you're going to get a few different responses. One, people will tell you the government subsidizes education and that drives up the price. Well, yes. I don't think that gets us all the way to where we are, but that's a piece of it. People will blame the expansion of the size of the administrations on college campuses, all these new deans of basket weaving and deans of etc., etc. Yep. That's driven up the cost too. The fancy campuses, that's driven up the cost too. But none of it really adds up all together to get us to exactly where we are. Those are the prevailing themes. I think what's often overlooked in the discussion is that we have driven demand for college in this country to be so high that it has allowed institutions to increase their prices over time.

That's enough of a reason for me as an economist, but not always satisfying to other people. We've sold the idea that college is a necessary part of the American dream now. You've got to have the white picket fence, you've got to have the house, and now you have to have your bachelor's degree diploma hanging on the wall. So, when the government tells you that in order to even be a legitimate American, you need to have a college degree, people are going to go out and they're going to spend whatever it takes to get it. My belief is that that is really what's driven the increases that we've seen across time because those other explanations sure are kind of the mechanical pieces of it. But really what's happened is that we've had tremendous demand for college degrees.

Allison Schrager: So, we've created a situation where we have an elastic demand, and then also subsidized demand. As an aside—this is getting a little off topic, but it's a colorful story. So, I'm going to go with it. So, I got access to this data on illegal sex transactions. It was like a million observations, very detailed, and one thing I noticed looking at the data was that sex workers who had a college education earned a high premium over those who didn't. You're really doing the same work. It's the same segment of the industry. So, I always thought that was interesting because we've always had this debate about whether or not the value of college is the signaling value or it is something inherent, and I'm like, well, you'd think if you go into sex work, you don't care whether they went to college. So, maybe there's something inherent. I was curious if this also extended to the legal brothels. So, when I went to Nevada, I did this survey trying to figure out what people were getting paid, and one of the questions was, have you gone to college?

The guy who was helping me at the brothel, their PR guy—they all wanted to see the survey before they were willing to answer it. He said a lot of them were turned off by that question. So, my sample totally skewed for a while to college-educated sex workers just because the non-ones felt, he said, really judged by me. They weren't judged by the fact they were sex workers or anything else. I noticed when I did in-person interviews, I really targeted the non-college educated ones because I wanted my sample to be more precise, and I really just wanted to see if this premium existed.

Obviously, I didn't care one way or another. I wasn't there to look down on them because I went to college and they didn't. But I noticed when I'd do the interviews and I'd be like, "So, how much education do you have?" if they didn't go to college, it was kind of this moment of tension and almost great source of shame. Anyway, then they went on to describe the absolutely very filthy things they did for money. No judgment there either. But you know what I mean? It was weird.

Beth Akers: Yeah. That's stunning and not at all surprising, to be honest, because I feel like we've really done a disservice to people by celebrating traditional academic degrees in this country to the point where somebody needs to feel shame for not having one. But I have observed that to be true. So, it's not at all surprising that in that context, you also found that, but what a stunning story, and it certainly illustrates what I think is part of the problem.

Allison Schrager: Incidentally, they all made a lot more money than I did too. But yeah. On that, college has become so expensive. But again, a lot of these blue collar jobs are actually a sure way to financial security. One of my favorite statistics is a good plumber can earn more than an average lawyer, and yet, do you think that we push college too hard? Is college so worthwhile?

Beth Akers: So, all of the studies tell us that on average, college degrees are worth it. Right? The estimates say somewhere like a 15 percent rate of return, or it's an extra $1 million dollars over the course of your lifetime. These are backward-looking studies trying to project forward. So, there's some question about how true this will be as we go into the future. I think for the most part, degrees have paid off, but there's tremendous heterogeneity in our system of higher education, and because it all fits under this umbrella of participating in the federal financial aid program, with research, we often lump it all together. So, when we say does college pay, yeah, it certainly does in some segments of the higher education world, and in some segments, we continue to see that semester after semester, year after year, there are programs and institutions that are not worth their cost in terms of what they deliver in the labor market.

So, I think that what we should be thinking about is that skills pay and going into the labor force as someone with a marketable skill allows you to earn a decent living. That's the lawyer vs. the plumber example. Lawyers may be getting beat out by plumbers, but they've still got marketable skills and are doing quite well, from what I understand anyway. So, I think the message about college has so often been you just need to go, that it's the golden ticket somehow. We don't often address the heterogeneity and what pathways exist through higher education, which is just terrible for the people who are unaware that there is diversity in the return on investment in these different pathways. You get people coming out of college and I think reasonably angry that they've been tricked into thinking that this is the only path and that it would necessarily pay off for them, and it doesn't always. It may on average, it may for most, but it certainly doesn't always, and the real problem with that is that it sometimes doesn't pay off in ways that are very predictable.

Allison Schrager: Yeah. It feels like it got sold as a risk-free asset, and we know in finance, when things are sold as a risk-free asset when there actually is risk associated to it, things tend to blow up.

Beth Akers: Yeah. Yeah. That's exactly right. Or sometimes, I say we've created a financing system for higher education that implies that education is infinitely valuable. Unlike any other type of consumer credit, there is no underwriting in the federal student loan program, which makes up over 90% of all of the outstanding student loans in the economy. So, for the most part, this is a loan product that is originated with little to no regard for whether or not the loan will be likely to be repaid.

To me, that implies this thinking, whether it's realized or not, or even explicit in the thought process, it implies this thinking that education must be infinitely valuable if we're willing to allow people to fund it at any level of expense in order to get there, and it's bad for taxpayers, it's bad for individuals, which I think, as the conservative in this space, people want me to be protecting the taxpayers. But really, it's a concern about consumers that were making these non-underwritten loans. We would consider that behavior to be predatory if it were auto lenders or mortgage lenders who were not considering the ability to repay at the time of origination, and yet, it is the way things are done and people grasp really tightly to that model in higher-ed finance.

Allison Schrager: So, the government took over loans in 2010 before they just guaranteed them, and the private sector was involved. Not that they were really doing great risk analysis either. But in retrospect, do you think that was a mistake? Did that make the problem worse?

Beth Akers: If you go to The Hill, you'll hear Republicans tell you that that's exactly what made the problem worse. It's actually more nuanced than that. So, before that time, the Department of Education was not originating or financing these loans. But they were telling private lenders exactly what terms to use for the loans and exactly who to give them to. So, it was basically a public program already at that point. Taxpayers were already bearing the risk through the guarantee and underwriting had been legislated out of the process. So, it sounds like, yes, it's consistent with the ideas that a lot of conservative thinkers hold, which is that if you move something into a public program, that it will become more expensive. The truth is, it was already a public program. It's just now perceived as a public program because we've eliminated that role in which the servicers were really doing a piece of that process. But it was more of a contract-type relationship.

Allison Schrager: If we hadn't done it that way, though, could Biden have forgiven the loans?

Beth Akers: Well, no. That's a tricky spot because a lot of what has happened is that we have allowed borrowers that did have loans through that system to consolidate their loans back into a publicly financed loan. And you're right. That is what has enabled the White House to arguably have the authority to forgive these loans. So, I think that it created the opportunity for further government intervention of the style that we've seen lately that I'm not a fan of, but the action in itself did not really change the game much.

Allison Schrager: So, if you recall—I'm sure this book was central for you. The Goldin and Katz book that argued that all the sort of wage divergence was being driven by people who went to college vs people who didn't. As an economist, that made me think more people needed to go to college. So, more people do go to college. I don't know if it's because of their book or just the times, because more people are going to college all over the world. Do you think in retrospect too many people go to college now or do you think it's still too few? Is there an optimal level of university graduates in our economy?

Beth Akers: Well, I think, yes—but. Right? I think the mistake that we're making is assuming that the unit of education needs to be the degree. Right? So, it's always this idea that either you get a degree or you don't get a degree. Skills and development of skills is on a continuum, and yet, we've put so much stock in a system that relies on you getting in and through a system and across the finish line that gets you the ticket to hold in your hand that says “I have the degree.” I think that's wildly inefficient. So, I do wish fewer people would subscribe to that system and I wish that we could promote a system of education through policy, through the availability of subsidies, and just through our rhetoric that would encourage people to obtain skills and encourage employers to hire based on skills. Because then I think you get a much more efficient allocation of resources here, people's time and energies and money towards skill development, rather than the arbitrary building block of degrees.

Allison Schrager: Do community colleges work at building skills?

Beth Akers: Well, sometimes. Community colleges have poor track records of student success on traditional metrics. So, what we find is that students graduate with associate's degrees from community colleges at shockingly low rates. I wish I had the number off the top of my head, but feel free to Google it, and I assure you you'll be shocked. So, they don't succeed in that front. Some are more successful than others in creating links to the labor force, which I think is really the objective for these types of institutions. For the most part, labor markets are local and community colleges sometimes do a great job of having pathway programs that connect young people, students with employers, and sometimes that doesn't take them through a path of getting a degree, and I think that's okay. So, they get a lot of flack for the lack of success on graduation-rate metrics, but that doesn't capture the whole story. So, sometimes they do a good job, sometimes they don't. But I think that they do a poor enough job in general that I'm concerned about proposals to increase funding to that sector of the higher ed market.

Allison Schrager: When you say pathways, you mean like internships or introductions?

Beth Akers: Yeah. What we know is when anybody's trying to do anything innovative in post-secondary education, the things that work and that get students into jobs is when the institution or the training program or whatever the entity is has relationships with employers and is designing educational experience in part to particularly launch students into that employer. So, yes. Basically, different paths of combination of apprenticeship programs or even just training programs that are specific to a very specific employer or for a market that's hyper-local geographically.

Allison Schrager: Do we need this third party? One issue that I hear from employers—they complain a lot about a skill mismatch, especially for technical skills—is that if you train people on the job, they become so valuable, they'll leave. So, do we need this post-secondary system that trains people in skills?

Beth Akers: Well, I don't think it's so much of a question of if we need it. I think the market will tell us if and when we need it, and it will always be kind of a sliding scale of where does training happen? We're in a moment right now where employees have a lot of power to demand things from employers. Employers are having a hard time filling the positions that they have. So, innovation on the hiring front may look like incorporating more training within those organizations, and I think that will be just a natural product of market forces as the unemployment rate potentially rises.

Or whenever it does rise in the future, it may be that companies decide that they can scale back and the burden of developing skills goes back onto the individual. So, I don't necessarily think it's good or bad that we have been in a place where less of the training happens at the employer level and more of it is happening at these third parties, though I do wish we could get more institutions to appreciate that their student success really depends on them making those relationships.

Allison Schrager: Back to that question, do you think a lot of the education value is signaling, or do you think it is people are actually, if they study literature at Wesleyan, getting actual skills?

Beth Akers: I think a tremendous amount of it is signaling. One great example, I don't know if it's still true, but at one point it was the case that the person who walks you to your car when you rent a car through Enterprise and then does the loop around your car and makes sure there's no dings on the bumper, that person used to need to have a bachelor's degree. It seemed very clear to me that that was an example of Enterprise using the college degree as a signal of something about those individuals, because it was clear that the skills being utilized in that role were not ones being taught in college. So, I think again, heterogeneous labor market, heterogeneous system of higher education. In some places, the signaling vs. skill balance is different, but I definitely think it plays a really big role.

Allison Schrager: Do you think there's more efficient ways, though? I think there are valuable signals—this is what I was getting at with the sex workers, the delay of gratification—to the discipline. Are there more efficient ways to signal that?

Beth Akers: I think certainly, and I think this comes back to, again, the state of the labor market and the drive that employers have to find workers. When labor is abundant and you can use the college degree, why not? Right? It's an easy signal, and apparently the cost of paying, I believe, what's revealed is that the cost of paying college-educated workers doesn't outweigh what it would cost to seek more efficient signals in the hiring process. Maybe that's not right. Maybe employers have been doing the wrong thing here and leaving money on the table in not seeking other signals. But I think we're at a moment right now where we may see an evolution of that just because of the claimed inability to fill these roles. So, if anything will drive innovation on that front, I think it may be this moment.

Allison Schrager: I also wonder if it's just a bad equilibrium. If you go to college and you end up in a job where your coworkers haven't gone to college, that's got to hurt your morale. I think that's one reason why people love to throw around the statistics of someone's in a job that didn't require a college degree. Anyway, they have one.

Beth Akers: Yeah. No. I think it's definitely true, and we often hear about places where there's this upward creep in the required credentials because once you've hired someone with a bachelor's degree, they certainly don't want to hire the next person to do that job without a bachelor's degree. So, I think there is some behavioral component that keeps us stuck in this place. How do you push against it? Profit motive, right? It's going to take employers, and we're seeing this. Employers today are starting these big initiatives to go out and hire people without college degrees, and I think they're doing it as a clever marketing effort. Makes them look like they're the everyman's company. But the real reason they're doing it is because they can't fill jobs or they can't fill jobs at the wages that they want to pay. So, that's what will drive a correction there ultimately, but it may be that it takes these very severe labor market conditions in order to get a correction from what was a really inefficient way of doing things.

Allison Schrager: The strange to thing about student debt is, when they did the forgiveness, people expressed sentiments like “paying my student debt every month, it just kills me.” No one never says that about a car loan or a mortgage. What is it about student debt? For me, of every other debt I've ever had . . . I've never had a car, but when I pay off a credit card bill, I don't feel bad that the sweater I have has to be paid off, and it has declined in value since I bought it. But when you get a college degree, the value of that only increases over time. So, you'd think if anything, you'd feel better about paying that loan vs., say, a car loan, where the asset you bought with it actually depreciates over time. Why is it that people feel so angry at having student debt?

Beth Akers: Well, Allison, I think this is a place where we can't learn anything about most people from the way that you feel about paying off your sweater is on your credit card. You're probably hyper-rational compared to the typical consumer. But you're right. This was a question that has really driven my research agenda for a decade because one of the early things that I identified using empirical methods is that on average, people are spending about 4 percent of their monthly income on student loan repayment, and that's a small share relative to what is spent on other consumption streams. It's about what people spend on their entertainment, things like going to the movies and things. So, as an economist, as this hyper-rational, insufficiently sympathetic person, I'm thinking, okay, great. What's there to be so upset about? You're in a good spot. But it turns out that people still feel angry.

I think that part of it is a lack of understanding on the front end about what they're signing up for. I hate that this is true, but did some survey research years ago where we asked some college freshmen just a couple semesters after they had signed their first promissory note for their loan, how much they had borrowed, and we asked them how much they were paying for school. For the most part, nobody could tell us how much they had borrowed and nobody could tell us how they were paying for school. To me, that was shocking, and that was just a few months after their very first student loan was originated. You would think these numbers would be fresh in their mind. It's a scary thing to sign that first loan paper, but it didn't stick. So, now, four years later or three years later, whatever, when that first loan payment comes due, it seems to me like a lot of people feel like they didn't sign up for this or they didn't know that they signed up for it, and that's got to be contributing to a lot of the anger that we're seeing.

I think some of it is getting spurred on by people who legitimately felt like they were victims because they didn't have the information, their case, and the public outrage over their issue, I think, has enabled people who actually are in a decent position financially and maybe did know what they were doing to also portray themselves as victims. So, I think some of it is genuine outrage, some of it is genuine feeling victimized by the process, and some of it is we have made it socially acceptable to feel a victim of this system, even if you necessarily weren't. So, it's complex. It feels a little bit like it's beyond me, to be honest with you, as an economist to understand, because when you look at the dollars and cents, it doesn't quite add up as being as outrageous of a situation as most people seem to perceive or want to portray it to be.

Allison Schrager: I don't know if you've looked at this, or maybe it's been too soon. So, I went to college in the UK, and I started in 1997, which was a notable year because 1998 was the first year they started charging fees in Britain, or actually just England. So, it started to be about £1,000 a year, and now it's more than £9,000 a year for fees, which is actually a lot, especially considering it's fairly new, and that's more than a lot of state schools charge here. But you don't pay it up front. You pay it through income-based repayment. As I said, this is generational shift. The people in my year didn't pay fees. The people that year behind me did. So, do European students who are in income-based repayment for either fees or for living expenses, do they have the same level of resentment?

Beth Akers: Okay. So, the repayment success in the UK is better than it is here. So, I think that probably minimizes any resentment that people would feel there. But I haven't seen that documented. I'm not quite sure what the difference is. But there is a belief, if we had a more elegant repayment system, that people wouldn't be so worried about their student loans, and I think that could go a long way and that's more like the system that they have. Right now in the US, we in theory have this universal program that covers you in the case that you can't really afford to repay your loans based on how much you're earning. But in practice, you jump through a lot of hoops in order to get those benefits, you need to know it exists, and it's not a straightforward idea or it's not even widely known that we have a safety net that's very robust. So, I think that angst is created by that, and if we had a more elegant policy solution, we could reduce that anger.

Allison Schrager: Yeah. I wonder if it's the transparency because everyone in England knows it's £9,000-plus, everyone knows it's this income-based repayment program. There's nothing to sign up for. It's probably what we would do if we were starting from zero also in 1998.

Beth Akers: Yeah. Yeah. That's not the only challenge with transparency we have in college pricing, which I think also contributes to the problem. College pricing right now, you look on the website, there's what we call the sticker price. That's that $70,000 a year price at those elite institutions right now. But then there's also something called the net price. Net price is basically the sticker price minus any individual school-level scholarships, and yeah, scholarships have always been a thing. But what's new is that these aren't scholarships anymore. This is basically the school's bid at what is the highest price that they think you'd be willing to pay to go to their institution. So, we have this very complex system of price discrimination that creates non-transparency in the pricing process. So, I think that contributes to people not understanding even really what they're paying, and yes, anybody should be able to figure this out, especially if there someone who has the aptitude to go to college. But again, research suggests this is a point of confusion for a lot of people.

Allison Schrager: So, if you could design a system, if we made you queen, which I fully support, instead of giving $500 million to student borrowers everywhere who make less than $250,000, what would you do?

Beth Akers: Yeah. You mean as an intervention for where we are today, or building things from scratch?

Allison Schrager: Let's fix what we have now with the existing people who have balances, and also, what do we do going forward?

Beth Akers: So, in an ideal world without political barriers, I would basically put the repayment system in the hands of the IRS so that we collect repayment on student loans through the income-tax system. It becomes seamless for people when they're eligible to not repay because of low income. It's automatic. They don't even need to know that they're participating in any sort of relief program. I think that would go a really long way. I think the forgiveness provisions that we already have are sufficiently robust for protecting people who have long-term unaffordable loans. So, I don't think that needs to change. I just think it's the delivery that needs to change. Then immediately going forward, I want to get rid of the graduate-student loan program. I think that this has been a place where we're just bleeding out in terms of programs, making things more generous that result in financially savvy students being able to take advantage of the benefits that exist, and putting a tremendous amount of cost on taxpayers.

Most critically, it's a place where, if the government were not intervening, I anticipate that we'd have a robust private market participation. The advantage of that is that it would automatically introduce underwriting so that we would not be originating millions and millions of loans each year that are predictably unaffordable to repay. Then I think we've got to take that into the undergrad lending system as well. Stop letting institutions originate loans if their former students have a track record of not being able to pay them back. So, you just tie their federal student loan eligibility to their track record of performance, and that encourages institutions to do all the things we want them to do, which is to keep the price in line with the value that they provide, whether that means lowering the costs that students face or improving the outcomes that they deliver students into. I think that would go a long way.

Allison Schrager: So, what do you think of the other suggestions? What do you think of being able to discharge the loans in bankruptcy?

Beth Akers: Right now, I think it's necessary. So, you currently can discharge loans in bankruptcy. It's a very high bar. I think we probably want to reconsider that and make it work a bit better. We need to require that people attempt to repay for a period of time, that they take advantage of loan forgiveness programs and income-driven repayment when they exist. But until the safety net on the student loan program actually works really well, I do think we need bankruptcy as a safety valve. But ultimately, if I get my dream and I'm the queen and create this system with withholding through the IRS, it's unnecessary. You don't have future tax liabilities waived through the bankruptcy process, and I would believe the same to be true for student-loan collection.

Allison Schrager: What do you think about free college? Should college just be free?

Beth Akers: I don't think so. I believe in the market-based system that we have. We have, of course, a tremendous amount of public control over the system, higher education, and the majority of students enroll at public institutions. But I believe the fact that private and public institutions compete for students drives them to be innovative, at least within the constraints that are imposed on them by regulation. I think eliminating that and introducing total state control would only reduce the quality of our education system, and that's something I'm very concerned about, and I'd hate to see us having to spend billions of dollars to support a system that's not actually creating value.

Allison Schrager: So, one thing I really loved about Making College Pay is it's getting people to think about college not only as an investment in your future, but also as an investment that actually isn't risk free, which is part of the problem. So, how should students approach the decision to go to school? How should they research different programs or think about what to study?

Beth Akers: So, when I went to school, when you went to school, we did not have the luxury of information that students have today. First, I would say, and I say in the book, the student needs to sit down and decide what it is that they value and what it is that they can afford. It may be that they are independently wealthy, have a trust fund, and they really like art history. So, for them, going and studying that at a $70,000 a year institution may be the right choice. The vast majority of people are going to sit down and decide, for me, the concern is that the money that I spend today is going to yield a financial return for me in the future in terms of a better job, a job that will pay me a higher income that will allow me to both have a higher standard of living and also to pay back my student loans.

Students who were seeking colleges on that dimension, like I said, when you and I went to school were taking a shot in the dark. But during the Obama administration the administration created a website called the College Scorecard that publishes student graduate earnings after they finish each program at every single college in the country that participates in federal student aid. So, most people are going to have geographic constraints on where they go to college. So, I think you sit down with a list of institutions, think about what it is that you're willing or able to do or have the aptitude to do, and look at what the different outcomes are for students across the programs of study at the institutions that are a reasonable option for you, given your other constraints, and then maximize on those things, of course, taking into account any other considerations or values that you have.

But as someone who's economically minded by nature, I guess it's always been surprising to me that this isn't the natural way of thinking about college, but it seems that that's not the way that we have encouraged people to think and shop about college. If you suggest that people can do that, I think there's often a sense of relief that I hear from especially parents who feel like this is a natural way of thinking about college, but are living in a system in which those sorts of trade-offs are really not celebrated as the way of thinking about where to go.

Allison Schrager: Do you think that could be because—just thinking about the way college evolved, is initially it was something for the trust-funders and you got this very liberal arts education who taught you how to be this thoughtful, elite citizen, and somehow then it morphed into, as I said, as you say, this ticket to the middle class. Do you think we really have to rethink what college aims to be and liberal arts should just remain this elite thing?

Beth Akers: I think so. I sometimes say going and getting a liberal arts degree from a fancy campus is sort of like having a country club membership. Right? It's an expensive, elite experience that I don't think we need to ensure that every single person in the country has access to. I don't think that should be a national priority for our lawmakers. I think what should be a priority is that we have a system of skill development that's accessible, doesn't necessarily look like degree programs, but that succeeds in allowing people who want to to develop skills so that they become higher earners. I think that's necessary. I think we adhere too strongly, as I said, to the system of degrees. I think we'd be in a much better place if we could acknowledge that the unit of education was skills, rather than the degrees, because I think that it's wildly inefficient to think of education as either a degree program or nothing.

Allison Schrager: That is it. That is a big jump. Maybe that's why maybe why a lot of European universities have it, maybe because they are starting more from zero, of no longer this idea that well-rounded, educated citizens read Plato.

Beth Akers: Yeah. I don't read Plato.

Allison Schrager: I've actually never read Plato. It's so embarrassing to admit, but I haven't either.

Beth Akers: Yeah. I have a good life and I tend to think that that is not necessary for our publicly funded system of higher education to prioritize. I know a lot of people, especially on the left, would vehemently disagree with me on that, and there's a sense that that is an important and even critical part of the education experience, and I think that's a place where we'll have to agree to disagree because to me, the outcome that I care about is social mobility. We have an economy that does not have an abundance of safety nets compared to other developed countries, and what makes me comfortable with that is that we do have the opportunity for social mobility and that education is the mechanism. It's really the primary mechanism that people can use to get that mobility. So, we need that to work, and I think that requiring, demanding, or even expecting that Plato be a part of that process is actually diminishing our ability to accomplish that goal.

Allison Schrager: Do you think, though, we could achieve this at the secondary level? When I was in junior high, and I think it still happens, but not to the same extent, I went to a public school in a rural area. So, they sat us down, and they were like, "There's three high schools you can go to. You can go to an agricultural vocational school, you can go to a tech vocational school, or you can go to a college-bound high school," although everyone went to the last one, and those who didn't, actually there was a social stigma with it, which, in retrospect, is awful. But do you think a lot of these skills you're talking about could occur in high school and should? Is this just a failure of our high school system that we need to have this happen at a college level?

Beth Akers: I don't know if it's a failure, but I think we could do better. My teenage babysitter who lives across the street was off to school this fall and I saw her mom post a picture of her wearing a full set of scrubs to school on her first day, and I was sort of thrilled to learn that she's part of a program where she's learning to be a dental assistant. Now, she's not tracked into a career-oriented path. She's not at a specific high school or is going to get any sort of different diploma, but it's an integrated part of their standard high school degree program.

I think moving towards a system like that where skill-development can be integrated and not necessarily require what's called tracking, somebody to be choosing whether or not they're the college sort or not at an early stage in their life, will actually be more successful. I think it's an unnecessary distinction to pull people out of the system so that they can develop skills. I talked to this young woman about her plans and it sounded like she was looking forward to being able to have a well-paying job at a dental office while she went to college. So, I think it's thinking a bit more holistically about skills and not necessarily thinking of skills as a separate pathway from traditional education.

Allison Schrager: So, it would be more combining, because I think people who like to talk about vocational education—You were talking about how important it is to have mobility. We see this certainly in Germany, that the problem with tracking is you tend to end up on the same track your parents were.

Beth Akers: Yeah. No. I think that's the problem, and I think we're seeing all sorts of programs that are attempting to have skill development at high school level, sometimes bringing college-level courses into high schools that people can graduate high school with some college degrees. I think that is a better system, and it may be in time, it doesn't prove any more successful than a tracking system in offering social mobility, or maybe it does. There's probably other folks who are more expert on this than I am. But I think we definitely want to take advantage of the opportunity to impart skills at an earlier age when in the past, we might have been afraid to do so because of the tracking conversation.

Allison Schrager: Well, we're running out of time. So, thank you so much for joining me. That's all with Beth. You can find her work at the American Enterprise Institute, and we'll link to that page in the show description. Beth is also on Twitter at @DrBethAkers, and you can find City Journal on Twitter at @CityJournal and on Instagram at @cityjournal_mi. As always, if you like what you hear on this podcast, please give us a five-star rating on iTunes. Thank you so much for joining us.

Beth Akers: Thanks for having me.

Photo by Richard Baker / In Pictures via Getty Images

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