David Frum
David Frum - 
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TESS VIGELAND: Today, yet another student loan provider announced it will suspend lending at several schools. The credit crunch, and a drop in federal subsidies, are prompting more and more student lenders to put out "Not Open for Business" signs, and all this comes right at the time when high school seniors are making decisions about which acceptance letters to say yes to.

Commentator David Frum says it's time we reexamine the real value of a college degree in today's economy.

DAVID FRUM: Surging prices, collapsing returns, ending in a crash -- housing? Yes, but the pattern may equally apply to another area of middle-class aspiration -- college education. And as high school seniors receive their fat or thin acceptance or rejection letters this month, maybe we should all take a closer look at what their money buys.

Over the past decade the cost of college tuition has approximately doubled, faster at private colleges. This rapidly inflating investment is yielding a declining return. The earnings of bachelor-degree holders have been dropping this decade. After inflation, B.A. holders earned more than $54,000 in 2000. That dropped 5 percent over the next four years.

What happened? Some point to international trade. It used to be only blue-collar workers who faced international job competition. Today, so do bookkeepers, software engineers and certain health care technologists.

Others cite immigration. About one in five U.S. B.A. holders was born abroad, nearly double the proportion of just a decade ago. Foreign B.A.'s, especially those on temporary visas, may have less bargaining power than the native-born, exerting downward pressure on wages.

Here's another thought. The proportion of Americans with a college degree continues to rise. As more and more job applicants hold degrees, have employers become more discerning about what exactly those degrees represent? Do employers look past the degree itself, to the subject matter studied, the grades earned, the quality of the institution issuing the degree? If so, students, parents and universities alike will have to ask some hard questions about value for money.

Some politicians suggest that the best solution is for government to subsidize college even more than it already does, but what if subsidies are themselves the problem? Just as homeowners ignored dangerously rising home prices, so long as low interest rates kept monthly payments low, so students may ignore rising tuition, so long as aid and loans conceal the true cost.

Colleges and universities are charging more and more for a product that seems worth less and less. You don't need a college degree to figure out that cannot continue.

VIGELAND: David Frum is a resident fellow at the American Enterprise Institute.
His latest book is called "Comeback: Conservatism That Can Win Again."