I think the better question is why exactly are we pouring so many resources into higher education? Most of my classes were taught by lecturers making at best $80 an hour teaching a class of a hundred. The real work is done by the TAs who make at best $15 an hour. Where is the rest of the money going to?
Yes, there are tradeoffs anywhere - which means we should rationally assess what we're putting into education and whether at least some of those resources can be put to better use in other ways.
Too much optimization reminds me of what happens when removing all slack from supply chains: when it fails it takes down the whole system. I'd leave some inefficiencies here and there, we're human after all. Of course, I'm not talking about gross inefficiencies. But are there any? By what measure?
Tax dollars that go to universities for one reason or another are tax dollars that cannot be spent on healthcare - tax dollars that can't be collected from tax exempt institutions (like almost all universities) are tax dollars that can't be spent on maintaining infrastructure. The possibilities are endless. The questions isn't whether or not education is "good", because it obviously is, it's whether the level of resources devoted to it can be spent to better effect elsewhere, which is probably true.
Hm, is it? My guess is that government spending on college probably is probably a net positive investment in terms of revenue for the govt due to downstream growth, likely also lowers the cost to do other things in industry.
There is extensive evidence that further public spending on healthcare does not have a size-able impact on outcomes, unfortunately. [0]
> the level of resources devoted to it can be spent to better effect elsewhere
But why the focus on education? Why not increase, say, inheritance taxation and then use it to fund those additional things? Couldn't we make better use of the resources our society devotes towards making sure that the kids of rich parents are also rich?