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If your parents were going to pay for your college you could do this.
Your parents being willing to pay college fees vs giving you all the money to invest are very different things
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The people whose parents are paying for college already have more of an advantage so they would be more likely to have an ROI from college.
Actually, from the student's perspective, there would be a 0 investment, so ROI becomes infinite.
I wonder how much of this is just a result of US tuition costs being out of control. Does this analysis hold for coding bootcamps? What about Canadian colleges (say, Waterloo, Queens or Toronto)? What about community college? Restricted to only CS/EE degrees? Becoming a doctor? Does it account for the probability of dropping out of various college progams?
How do you skip college and invest the tuition in the S&P 500? Ah, you can't: Of course, lenders won't give out large loans for an individual to skip college and dump tuition into the stock market, this is just a hypothetical scenario. So this article is unrealistic.
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Actually, from the student's perspective, there would be a 0 investment, so ROI becomes infinite.
Ah yes, the old "finding a dollar on the street gives you infinite ROI, much better than __________"
At college, you can live a pretty comfortable life. You get a place to live, food to eat, work to do, material to learn, friends to talk to, supervisory staff to help you with hard problems, etc.
I hate to say it, because I think US higher education costs are absolutely ridiculous, but I still think that higher education is more rewarding than working a salaried job for a couple years to dump some money into S&P. I'd even go so far as to argue that people who have graduated a college or university are more likely to be prepared to safely, responsibly handle problems that occur in the real world moreso than someone who just happens to have a lot of money from S&P. I know that's a bit vague, but I think my point is clear enough that having wealth is not a replacement for having a satisfactory, stimulating wealth of knowledge and a sense of purpose for one's life. Not to knock people in finance, I love finance, but it's not for everybody and if the whole next generation of college students just decided to structure their whole lives based on how much money they're LIKELY (ie, not necessarily guaranteed) to make, then it'll be a boring generation that the next one has to learn from.
Student loan debt regulations need a rethink. How can we: a) not lose money from paying for kids' school
b) not fuck kids over, incurring hundreds of thousands of dollars of debt for admittedly mediocre education (compared to some euro schools, or asian schools)
c) keep new system automated enough to reduce politician's potential for corruption by manipulating the money
and d) provide some sort of transition schedule to move current students (paying traditional loans off) to new system, without fucking over agencies/firms that are rightfully owed
???
We owe our kids better solution than this
This article doesn't explain why we should believe that stockmarket performance, going forward, will be anything like the S&P's performance from 1993 to now. It's also not clear why we should believe the Payscale College ROI figures. I clicked around a bunch and couldn't find any description of their actual methodology for computing it. In particular, before we can take it seriously we need to know how well they've d…
Well, you could repeat it for all the 24-year periods from 1917 through now. I wouldn't expect very different results, though accounting for college deferments will be fun.
In today's environment, however, I might be inclined to agree. When I went to school, I could get a minimum wage job for the summer, and pay for tuition and dorm fees for the year. Education costs are wildly out of whack and something needs to be done to cut down these costs, because at this rate, I will NOT send my two kids to college. I'll tell them to open up a business or something, because it's simply not worth it.