Posner writes and unfortunately I tend to agree:
Most American colleges and universities are nonprofit, but that just means that are don’t have shareholders; profit residuals are dissipated in generous salaries for administrators and faculty, student amenities designed to attract rich kids and thus increase (along with high-powered sports programs) future donations, and lavish building programs. The colleges compete with each other with Darwinian ferocity. Federal financial aid has them to increase tuition at an astonishing rate, which has funded the competitive extravagances. The nonprofit colleges and universities seem just a tad less avaricious than the profit-making ones.
The competition has greatly increased the number of college graduates—to the point where many cannot find a job requiring a college education. IQ is a limiting factor in the value of a college education in the job market.
So below the very top tier of institutions, the picture of American higher education has become rather depressing. The President’s newly announced program seems unikely to work any significant improvement.