Trying a year of school never ensures success, Bryan Caplan explains (in The Case Against Education):
Students can and do pay tuition, kill a year, and flunk their finals. A small risk of failing a year of school, like a small risk of defaulting on a loan, sharply depresses education’s return. Any respectable estimate of the return to education must account for these academic “bankruptcies.”
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Of course, schools often allow students to repeat a failed year, but this gives students who waste a year’s time and tuition only the chance to gamble another year’s time and tuition. Every casino offers the same deal.
Unreflective researchers naturally overlook noncompletion because it falls far outside their personal experience. The researchers finished their degrees. So did almost everyone they personally know. How bad can attrition be? Dismal. Overall dropout or “noncompletion” rates are high at all levels of American education. About 25% of high school students fail to finish in four years. About 60% of full-time college students fail to finish in four years. Half of advanced degree students never finish at all.
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After reviewing available evidence, the Technical Appendix ends up assigning Good Students the following probabilities: 92.3% to finish high school in four years, 43.5% to finish a bachelor’s degree in four years, and 32.7% to finish a master’s in two years.
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In terms of measured cognitive ability, Excellent Students are around the 82nd percentile, Good Students the 73rd, Fair Students the 41st, and Poor Students the 24th.
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Results closely match common sense. High school is lucrative for all four archetypes. Even Poor Students can reasonably expect the resources they invest in high school to out-perform high-yield bonds. College, in contrast, is a solid deal only for Excellent and Good Students. Largely owing to their high failure rate, Fair Students who start college should foresee a low 2.3% return on their investment. For Poor Students, it’s a paltry 1%. Master’s degrees, finally, are a so-so deal for Excellent Students, a bad deal for Good Students, and a money pit for Fair and Poor Students.
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The results are parental wisdom incarnate. The electrical engineering degree pays very well, especially for stronger students. The fine arts degree pays very poorly, especially for weaker students. Remember: zero and negative returns don’t mean fine arts degrees are worthless in the labor market. A fine art degree raises expected income over 20%. What zero and negative returns mean, rather, is that capturing that raise is more trouble for Fair and Poor Students than it’s worth.
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Measured by Barron’s ratings or average SAT scores, many public schools—such as UC Berkeley, the University of Virginia, and the University of Michigan—approach the top of the pecking order. As long as your state’s best public school admits you, there’s no solid reason to pay more.