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The four-year college degree has come to cost too much and prove too little. It's now a bad deal for the average student, family, employer, professor and taxpayer.

A student who secures a degree is increasingly unlikely to make up its cost, despite higher pay, as I'll show. The employer who requires a degree puts faith in a system whose standards, you'll see, are slipping. Too many professors who are bound to degree teaching can't truly profess; they don't proclaim loudly the things they know but instead whisper them to a chosen few, whom they must then accommodate with inflated grades. Worst of all, bright citizens spend their lives not knowing the things they ought to know, because they've been granted liberal-arts degrees for something far short of a liberal-arts education.

I'm not arguing against higher learning but for it -- and against the degree system that stands in its way. If that offends, read on, then post a comment at the bottom of this page.

Sometimes things we believe for good reason our whole lives turn out one day to no longer be true, because circumstances have changed. In 2007, for example, I argued, to the anger of many, that renting had come to make more financial sense than homeownership. House prices have since fallen drastically, wiping out buyers nationwide.

With college degrees, I don't want to persuade families not to buy. I want to explain the injustice of the system and introduce a better alternative.

Image: Degree holders earn more

College grads start out behind

Consider two childhood friends, Ernie and Bill. Hard workers with helpful families, each saves exactly $16,594 for college. Ernie doesn't get accepted to a school he likes. Instead, he starts work at 18 and invests his college savings in a mutual fund that tracks the broad stock market.

Throughout his life, he makes average yearly pay for a high school graduate with no college, starting at $15,901 after taxes and peaking at $32,538. Each month, he adds to his stock fund 5% of his after-tax income, close to the nation's current savings rate. It returns 8% a year, typical for stock investors.

Bill has a typical college experience. He gets into a public college and after two years transfers to a private one. He spends $49,286 on tuition and required fees, the average for such a track. I'm not counting room and board, since Bill must pay for his keep whether he goes to college or not. Bill gets average-size grants, adjusted for average probabilities of receiving them, and so pays $34,044 for college.

He leaves school with an average-size student loan and a good interest rate: $17,450 at 5%. The $16,594 he has saved for college, you see, is precisely enough to pay what his loans don't cover.

Bill will have higher pay than Ernie his whole life, starting at $23,505 after taxes and peaking at $56,808. Like Ernie, he sets aside 5%. At that rate, it will take him 12 years to pay off his loan. Debt-free at 34, he starts adding to the same index fund as Ernie, making bigger monthly contributions with his higher pay. But when the two reunite at 65 for a retirement party, Ernie will have grown his savings to nearly $1.3 million. Bill will have less than a third of that.

How can that be? College degrees bring higher income, but at today's cost they can't make up the savings they consume and the debt they add early in the life of a typical student. While Ernie was busy earning, Bill got stuck under his bill.

Image: Saving early beats earning more

My example is a crude one. I adjust neither wages nor investment returns for inflation, resulting in something of a wash. I don't take out for investment taxes, since it would take Ernie only a few years to move his starting sum into a tax-shielded retirement account, and both savers could add to such accounts thereafter. I assume 2007's income-tax distribution holds despite ensuing changes that shifted it in favor of Ernie's lower income. I'm comparing only savings, not living standards. Bill will presumably be able to afford nicer things than Ernie along the way.

But maybe not: I assume that Bill completes college in four years. More than 40% of students who enter a bachelor's program don't have a degree after six years, according to Ohio University economics professor Richard Vedder, whose book "Going Broke by Degree" sounded an alarm over college costs in 2004.