There are clearly external benefits to higher education (although they may be inframarginal) but there are also external costs as well, something usually overlooked by those looking at the positive spillovers from higher education spending. See, for example, this article from Inside Higher Ed. Colleges and universities spent $94.6 million on lobbying Congress. This number undoubtedly understates the amount of deadweight loss due to rent-seeking because there is a lot of activity that is not captured by direct lobbying expenditures (such as lobbying of state officials). The net effect of higher education spending may be positive but these costs cannot be ignored in comparing the costs and the benefits.