A popular camp fire story among the managerial types is the looming collapse of the college system in America. On the one hand, it seems like a manufactured crisis, as collapse is unlikely. The boom times may end, but boom times always end. On the other hand, the problems get worse every year and no one has any idea how to arrest the decline and reform the system. That’s probably why the death of college is such a popular story these days. This one made the rounds yesterday.

At a Dowling College campus on Long Island’s south shore, a fleet of unused shuttle buses sits in an otherwise empty parking lot. A dormitory is shuttered, as are a cafeteria, bookstore and some classrooms in the main academic building.

“There’s a lot of fear here,” said Steven Fournier, a senior who lived in the now-closed dorm for his first three years. “It’s not the same college I arrived at.”

Dowling, which got a failing grade for its financial resources from accreditors last month, epitomizes the growing plight of many small private colleges that depend almost entirely on tuition for revenue. It’s been five years since the recession ended and yet their finances are worsening. Soaring student debt, competition from online programs and poor job prospects for graduates are shrinking their applicant pools.

“What we’re concerned about is the death spiral — this continuing downward momentum for some institutions,” said Susan Fitzgerald, an analyst at Moody’s Investors Service in New York. “We will see more closures than in the past.”

I admit to having never heard of Dowling College. An applicant would probably be better off not mentioning it to me if they were applying for a job. If the resume did not list a college, I’d probably never notice. Seeing an unfamiliar one I’d look it up. Looking at the college website does not fill me with confidence. “Literacy Education Department” sounds bad for some reason. I’m sure it is fine college, but who knows what that even means anymore?

These people claim to know, but their methodology is dubious. The graduates of Harvard are most likely smart and motivated. Comparing their earnings to those of other smart and motivated people who lack a diploma would be useful, but that’s impossible to construct. Every decade someone does the math and announces that a college degree nets a higher salary, but not necessarily a higher net worth.

The reason for this, and the flaw in the college model, is simple. Wealth is not the same as income. The small plumber with one truck and an assistant may not have a high salary. He’s constantly buying tools and paying off that truck. Once he gets the truck paid off, he buys another truck and hires another plumber. His salary is not going up, but the value of his business is going up. By the time he retires, he had four or five trucks, a paid off house, some real estate where he runs his business and so on. His brother the manager has none of that, despite making considerably more in salary.

Strangely, college is all about preparing a young person for life as an employee. The son of the plumber may go to state college to make dad proud or he may just go into the business. The manager’s son is taking out debt to finance college so he can work for someone just like his father did. If you want of nation of renters, debtors and employees, our university system is great, until it collapses. If you want a nation of plumbers building up their asset base, then you need something different.

Harvard Business School professor Clayton Christensen has predicted that as many as half of the more than 4,000 universities and colleges in the U.S. may fail in the next 15 years. The growing acceptance of online learning means higher education is ripe for technological upheaval, he has said.

He is most certainly wrong, but, if he is right it will not change much of anything. Half of college students at state universities have no business in college. The world has all the communication majors it needs. Sending kids to major in criminal justice or physical education is a waste of everyone’s time. The kids sit in class learning nothing useful, while the instructors get to extend childhood indefinitely.

In some respects, it is amazing how things evolved in the West. No one imagined taking out tens of thousands in debt in order to attend college. Someone majoring in gym would have seemed hilariously implausible a generation ago. Arithmetic says this arrangement has a short shelf life, but our rulers have managed to keep the plates spinning for three decades now.

The comments in this post at ParaPundit suggest the probable future. Taking an IQ test is a simple thing.  It will not be long before some company pops up offering a packaging of services to people so they can bypass the system in some way. A DNA test to show you have no genetic markers for expensive diseases could lower your insurance premium. An IQ test score from a credible company can help the truly gifted bypass college entirely. It may even be possible one day to use DNA to indicate raw IQ, language skills, math skills and so forth.