My kid will go to Starfleet AcademyWed, 30th Nov '11, 11:14 am::
Imagine a spherical cow in a perfectly competitive market of commodity widgets. That is, ignore intricate details like job satisfaction, industry regulations, and personal pride and prejudices.
Now let the lifetime income of a college graduate be A, high school graduate/dropout be B. Thus the lifetime income benefit of going to college is A-B. If college tuition < A-B, you go to college. Otherwise it is smarter to not go to college. For the past century, tuition has been lower than the lifetime income benefit of going to college so it is rational to go to college if you can make it happen. But tuition has been steadily rising and A-B has been constantly falling. Someday in the future, tuition > A-B and depending on your major/field of study, this might already be true.
For decades now, rational parents have been saving up for their children's college education. It is better to equip the kids with the right tools so they can earn more money in their lifetime than just giving them a lumpsum inheritance that they might squander. But if tuition > A-B, college education is economically inefficient and inheritance seems like the logical choice.
This isn't new. This is exactly what happened before 1950s, before the public was sold the dream that the only way to success is higher education. It is certainly true that in fields of science and engineering, higher education corresponds with higher standards of living and will remain so for the foreseeable future. But if tuition for a BA in Marketing is higher than the lifetime financial benefits that the degree brings, it makes economic sense to forgo the degree. Today, it might still be worth it but 15 years from now, the situation will not be the same.
If you're a parent, you should still save up for your kids but they might not use the funds towards a college education but a downpayment on a house or investment in their own business. To people today who have been raised believing that college degree is a must, this will seem appalling. But if tuition > A-B, it will simply be rational.