College tuition has risen 1,200% since 1980 but the degree's wage premium is shrinking — the ROI is turning negative for many majors

Average annual tuition at a public university: $3,100 in 1980, $10,740 in 2024 (inflation-adjusted: $11,000 in 1980 dollars vs $10,740 — wait, it is MORE in real terms). Total 4-year cost with room and board: $100,000-120,000 at a public university, $200,000-320,000 at a private university. Average student loan debt at graduation: $37,000. Meanwhile, the college wage premium (how much more a degree holder earns vs a high school graduate) has stagnated since 2000 at roughly 65% — meaning the benefit is flat but the cost tripled. For humanities and social science majors at non-elite universities, the lifetime earnings premium often does not cover the loan cost. So what? A 22-year-old graduates with $37,000 in student loans at 6-7% interest. Monthly payment: $400-450 for 10 years. They earn $45,000/year in their first job. After taxes ($3,375/month take-home), rent ($1,200), loans ($420), car payment ($330), insurance ($200), food ($400), they have $425/month for everything else. They are functionally broke despite doing everything society told them to do. They cannot save for a down payment, cannot take entrepreneurial risks, and cannot invest in their 20s when compound returns matter most. By the time their loans are paid off at 32, they have lost a decade of wealth-building. Why does this persist? Universities face no price discipline because student loans are guaranteed by the federal government regardless of the student's ability to repay. A university can charge $60K/year, the government lends the student $60K, and the university gets paid whether the student graduates and finds a job or not. The financial risk is entirely on the student. Income-share agreements and outcomes-based pricing exist but cover <1% of enrollment.