For example, things you think we would know—like why it is that college grads make more money than high-school grads—we actually don’t have a very clear answer for. Is it because they are better off before they go to college? We know that that’s generally true: Kids who go to college have resources, they’re smarter, they would have done better even if they didn’t go to college. We know that the ability to graduate from college signals something that simply getting into college doesn’t signal. Then there’s the idea that you might actually learn some things useful to employers.

But if you look at what employers say, at least about bachelor’s degree folks, they’re not particularly interested in the academic material that you learn in college anyway. So, answering the basic question of why [college grads] make more money is not completely obvious to me. Yet, you would think, listening to the rhetoric, that it was absolutely a slam dunk that you’d make more money because of all the things you're learning in college and that it’s obvious you should go.

In particular, the reason that I was worried about this is that you get lots of people who are going to college who are really struggling to go. And the reason they’re going is because they have been persuaded that it’s going to pay off financially. There’s a big concern that a lot of people are getting into big financial trouble on this promise that these college degrees are really going to pay off.

Lam: Has this always been the way people talked about college? Is it a recent phenomenon to look at college as a financial decision or an investment?

Cappelli: A lot of these ideas are driven by, not academic research per se, but academic frameworks. And the human-capital framework in economics is that education is an investment and there’s a payoff from it. That got picked up by people in policy who were arguing about how we’re going to pay for college. The implication or extension of that argument was, “Well, individuals should pay for it because they’re benefiting from it.”

That argument, which we didn’t hear so much 30 or 40 years ago, is pervasive now—that you should pay for the things you benefit from. As in, cut back on the government investment in these things because it pays off for the individual who paid for it. So once you head down that line, and then policy adjusts to it, there have been pretty dramatic cutbacks at the state level in funding for the universities, which is where 80 percent of U.S. kids go to college. Income has gone nowhere for parents, and college costs have gone up. The cost has gone way up; the ability to pay is flat. You as an individual now are being told you should go because it’ll pay off. It’s a changing way of thinking, but it’s also a necessity for a lot of people because if it doesn’t pay off and they borrow the money to go, they’re in big trouble.