The United States has long been the gold standard for higher education. Its colleges and universities top global rankings and draw students from every corner of the world. But the shine is fading fast. Public support for these institutions is in free fall, and it’s not just a vibe: enrollment is dropping, even at some of the nation’s most storied campuses.
Part of the problem is political. Many universities have become echo chambers, where free speech takes a back seat and administrators push racially discriminatory policies—often targeting white, Asian, and male students—under the banner of “diversity, equity, and inclusion” (DEI). But the trouble runs deeper than politics, as Richard Vedder, a long-time Minding the Campus contributor and National Association of Scholars Board member, argues in Let Colleges Fail: The Power of Creative Destruction in Higher Education.
Tuition has skyrocketed while the practical value of a degree has dimmed. Many graduates leave with crushing debt and little lasting knowledge. And access for low-income students has shrunk. Colleges squander their vast resources, most glaringly by ballooning their administrative staff tenfold, siphoning funds from real teaching. Vedder’s take is blunt: these aren’t fixable flaws but a clear sign it’s time to let the system crash.
Vedder, with economist precision, hammers home that markets outperform governments in allocating resources, thanks to competition and consumer demand sparking innovation while driving down costs. Government setups flounder in inefficiency and stagnation. American universities, bloated with federal loans, subsidies, and grants, act more like cozy monopolies than lively institutions.
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Today’s universities, public and so-called private, are basically state pets, Vedder says. They are shielded from market downturns and swayed by political whims. Some flops even get bailed out—not for brains, but for clout—like those propped up in Alabama and recent attempts to do so in West Virginia.
Vedder saves his sharpest bars for the federal student loan system, which he has dubbed the most disastrous blow to American higher education. By guaranteeing a steady stream of dollars, the Fed has given colleges a blank check to jack up tuition. The result? An affordability crisis and graduates buried under debt.
There was a time when investing in universities made sense, or so Vedder seems to hint. But that time would have been when they were focused on forging and spreading knowledge, and when graduates provided significant value to society. The modern university, however, is more of a credentialing mill than an intellectual hub, with inflated costs and deflated standards. Even Milton Friedman, whom Vedder cites, once cautiously backed subsidized higher education but later admitted its flaws:
I have not changed my view that higher education has some positive externality, but I have become more aware that it also has negative externalities. I am much more dubious … that there is any justification at all for government subsidy of higher education. (Page 37).
Administrative bloat is another target of Vedder’s. Universities now often employ more administrators than faculty. At his alma mater, Ohio University, Vedder found that administrators outnumbered the teaching staff. These desk-jockeys oversee everything from DEI initiatives to sustainability campaigns, tasks that stray far from education’s core. If colleges had kept their 1970s faculty-to-administrator ratios, Vedder calculates, tuition could be 20 percent lower today.
College athletics also catch flak. Most programs lose money, Vedder argues, yet students, many of whom never set foot in a stadium, subsidize them through tuition and fees. Coaches earn salaries that make university presidents look like they’re on a grad student stipend. And Title IX’s unintended fallout—think biological males crashing women’s sports—only bolsters Vedder’s case for letting these institutions face the music.
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As Vedder closes in, he branches from his economic rationale and adds that federally funded higher education isn’t just an economic misstep—it might also be constitutionally suspect. The U.S. Constitution skips any nod to education, and America’s earliest colleges were mostly private gigs. He also addresses some national patterns: college closures have spiked in recent years, especially among for-profit or non-endowed schools, while institutions with substantial state support or large private donations rarely face the axe, no matter how poorly they perform. Political culture shakes things up—liberal states often outspend conservative ones on higher education, though he notes some exceptions. And busting a common myth: Vedder shows public funding didn’t dry up post-2008 but bounced back—though he’s no fan of that rebound.
Doom without hope isn’t Vedder’s style, though. Let the current system crash, he argues, and let innovation rush in. America might be staggering, with higher education tripping it up, but its institutions could still ignite a comeback.
Universities shape the nation’s intellectual vibe, and reforming them could send ripples far beyond the lecture hall. Let Colleges Fail isn’t just a takedown—it’s Vedder’s call to yank the safety nets from failing schools, let them fold, and clear the way for sharper, smarter ones to rise.
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Cover by Jared Gould using Let the Colleges Fail cover from the Independent Institute and book shelf background by Stasys on Adobe Stock; Asset ID#: 370157316
