He is right on. The value of work after college, in general, will no longer justify the astronomic costs of college time. It hasn't for nearly two decades. The same goes for prep-schools and many post graduate departments.
There are several points that Reynolds, as an academic, misses:
* Paying off the associated student loans is debilitating and destroys the working life and working opportunities for many people. If you have to pay off a student loan at $700 per month, you usually can't take a job where you will learn important lessons about the business world, or start your own business if you have the skills. You also must look forward to a very grim loan paying future with no likely reward in sight. Depression. You postpone a family at the time when you are most capable of raising children. Overall, for most people college loans are a disaster.
* Colleges are a business disaster. The administrative costs of college are far out of proportion to their contribution to the final product. I've consulted with several colleges and walked away stunned by the administrative overhead, not to mention the incredibly high salaries to faculty which is wasted in 98.3% of the positions.
* Many Universities just lost a bundle in their endowments. Maybe donors will be more cautious in the future.
* Most importantly, commercial colleges are stealing the sophisticated non-bubble students who are able to calculate the cost of education, match the specific appropriate academic field or training, and benefit from an efficiently delivered education.
*Plus, commercial colleges put a lot of resources into making sure their graduates get jobs.