In Forbes, Tim Worstall (via Phi Beta Cons) notes that the characterization of higher education as a public good is rot.
It’s rivalrous and excludable. If I am on a degree course that’s a place you cannot take. And it’s entirely possible to attend lectures at Yale or Cambridge for the requisite number of years and find that the university won’t grant you a degree. Thus education itself if not a public good.

But perhaps there is some other public good that is created by education? Adam Smith certainly thought so about primary schooling. Being part of a generally literate and numerate nation is perhaps a public good. But does college meet that standard? Opinions can differ here but I would say no. Certainly not at the level that 30 to 50% of the age cohort go to college.
That second paragraph gets into a more challenging area, that of spillover benefits, or, to get formal, positive nonpecuniary externalities.  Here, though, Adam Smith might have had it about right, although it helps to have a village in which the parents are inculcating bourgeois habits in their kids.

Here's Mr Worstall, without the normative implications.
Much of the benefit of a college degree accrues to the person who gets the college degree. Therefore, to my mind, they should be the person paying for it. And as there is no public good created by more having degrees that’s pretty much it.
But he's on board with continued government guarantees for student loans, as collegians don't have a credit history.  The risk there, as I've been pointing out for years, is that not all matriculants have their eyes on a Nobel Prize or a Pulitzer Prize or the Lasker Medal or Olympic Gold.  "The socially prominent clique in my high school spent much of senior year evaluating whether the parties were better at LaCrosse, Oshkosh, or Whitewater. Universal access might mean an even larger infusion of party animals into the less famous universities with no concomitant surge in economic growth or any of the other spillover benefits."  Still the case today.

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