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On average, skipping college and investing tuition costs nets a higher return

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Re: On average, skipping college and investing tuition costs nets a higher return

#301

Post by Steeeve »

mncolinlee wrote: post #73
staticelf wrote: post #47

Earlier quoted context omitted.

What about... offering college for free like the rest of the modern world? Then you would only have to worry about living costs and those loans are pretty small. I could pay off mine in like 4-5 years if I really wanted to. Plus, then people still could get an education even if their parents didn't save up for you. What about as a society/culture you start telling people that the country should offer education for fr…

We already provide free college to the best performing students and those students very likely achieve much higher ROI. I benefitted from a four-year tuition, room, and board scholarship from my college, as did my brother and sister from theirs. However, only a fraction of a percent receives academic scholarships and a good portion of scholarships go to star athletes instead. The German system is nearly comparable. O…

> a good portion of scholarships go to star athletes instead.

That's simply not true. There are vastly more academic scholarships available than athletic scholarships. Athletic scholarships are regulated and limited to ensure that all schools can compete on even ground for student athletes. Even if you have an athlete who is a star student on academic scholarships it counts against the schools athletic limits.

Aside from academic performance based funding, there is also plenty of needs based funding in the US. We have a set of standard forms that everybody who wants financial aid fills out, and a determination is made based on their personal and family financial situation as to how much financial aid they qualify for - which can come in the form of funding directly from the institution, federal and state grants, and in subsidized or guaranteed loans. It stops there for most people, but it doesn't have to. You don't _have_ to get loans, you can seek out independent scholarships, grants, and other means of financial assistance. There's something for everyone - for people who live in urban areas, for people who live in rural areas, for people with certain ethnic backgrounds, for people who represent a particular struggle or ideal, etc. etc. etc. A lot of those scholarships don't amount to much individually - $500 here, $1500 there, but even $25 is $25 that you don't have to borrow.

There are frequently less expensive housing options, dining options, book options, etc. that can be taken advantage of. There are frequently options for students to earn money while in school.

I don't know about german students, but I do know that Sweden has "free college" as well, and their students generally come out of school with just as much or more debt than students in the US.

Re: On average, skipping college and investing tuition costs nets a higher return

#302

Post by FalcorTheDog »

dsjoerg wrote: post #90
brians wrote: post #17

Earlier quoted context omitted.

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.

that's effectively only ~4 observations then (100/24). i wouldn't want to make a very important life decision based on data from only 4 observations. with only 4 observations, "common sense" and other forms of first-principles reasoning are much more important than the 4 data points. also one should consider data from other countries and other historical eras.

It's not though. There are ~75 24-year windows you can use between 1913 and today. I suspect you will find similar results with almost all of those windows. Obviously past performance is not an indicator of the future, but 75 data points is a pretty decent amount of data.

Re: On average, skipping college and investing tuition costs nets a higher return

#303

Post by iron0012 »

There is a massive body of existing literature (the kind that's published in peer reviewed journals) examining the returns to education. A lot of that research, maybe most of it, suggests that going to college is a very, very good idea financially.

PLEASE, before you let a blog post dictate your position on this issue--and certainly before you recommend to an impressionable 17-18 year old that they not go to college--take the time to properly educate yourself.

Re: On average, skipping college and investing tuition costs nets a higher return

#304

Post by imjustsaying »

matthewmarkus wrote: post #64
staticelf wrote: post #47

Earlier quoted context omitted.

What about... offering college for free like the rest of the modern world? Then you would only have to worry about living costs and those loans are pretty small. I could pay off mine in like 4-5 years if I really wanted to. Plus, then people still could get an education even if their parents didn't save up for you. What about as a society/culture you start telling people that the country should offer education for fr…

The problem is that people are long education and short learning. Learning is free and useful. We should all do more of it.

The primary thing universities offer for jobseekers is a demonstration to an employer that a person probably learned contemporary skills in the field of their degree. They also offer licenses to join oligopolies.

They are of course not the fastest way to learn. Learning quickly is a secondary or even tertiary goal. If you want to learn something the fastest, you gotta teach yourself or use a tutor.

Re: On average, skipping college and investing tuition costs nets a higher return

#305

Post by afuchs »

ue_ wrote: post #235
smsm42 wrote: post #87

Earlier quoted context omitted.

I've interviewed many people for starting position in software. I've looked at their degree only if there's literally nothing else to look at, and even then it wasn't a major sign. I've seen many people with degrees that are useless, and many people who were very skilled and who I don't even know whether they have a degree and what it is worth. It goes like this: 1. Experience 2. Experience 3. Experience 4. Knowledge…

How might one get experience? For example, I want to try programming for a client, but I don't even know where to find such a thing. I've programmed for a while by myself, but I have no connections. And to get experience, many companies want you to have experience, so that becomes a catch-22. This is why I viewed having a degree as having a foot in the door, as it were.

Generally, open source projects or volunteer work. Unfortunately, taking time to do unpaid work can be a burden for those working low-wage jobs, or who otherwise exist near or below the poverty line.

Re: On average, skipping college and investing tuition costs nets a higher return

#306

Post by learc83 »

jimbokun wrote: post #269
forkandwait wrote: post #168

Earlier quoted context omitted.

> Wasting four years is a huge cost. At college I: learned calculus, computer programming, advanced mathematics, urban planning, how to communicate like a grown up, and those are just the big topics. I also took acting classes and learned social skills and made lifelong friends. When I graduated, a professor arranged my first professional job which was an order of magnitude better than any blue collar gig I had ever…

"I took out 20,000 in loans to go for the last two years after transfering from community college (with no loan for that)." This is the key. If your debt was an order of magnitude larger, would the benefit still be worth it? And if you got a degree that led to a $45k / year job instead of $90k? It's no longer easy to say "going to college" is always a worthwhile investment. It is highly contingent on future earning p…

Very few colleges will leave with student loan debt an order of magnitude greater than $20k.

That's about the sticker price for 4 years at Harvard. But 70% of their students receive financial aid.

Average student loan debt is around $30k. Very few people have $200k student loan debts.

>And if you got a degree that led to a $45k

Considering that the vast majority of student loans are public loans, and public loans all qualify for income based repayment, I'd say yes.

>It's no longer easy to say "going to college" is always a worthwhile investment. It is highly contingent on future earning potential with the degree and how much it costs.

Again since public student loans all qualify for income based repayment, there is almost no scenario where it isn't worth it to go to a state school. Income based repayment plans are very generous:

10% of your discretionary income (income after 150% of the Federal poverty level), and cancellation after 20 years of payments.

Re: On average, skipping college and investing tuition costs nets a higher return

#307

Post by varenc »

iron0012 wrote: post #303

There is a massive body of existing literature (the kind that's published in peer reviewed journals) examining the returns to education. A lot of that research, maybe most of it, suggests that going to college is a very, very good idea financially. PLEASE, before you let a blog post dictate your position on this issue--and certainly before you recommend to an impressionable 17-18 year old that they not go to college-…

I'm open to believing you, but would love some references on this!

Re: On average, skipping college and investing tuition costs nets a higher return

#308

Post by madengr »

ue_ wrote: post #55
krakensden wrote: post #46

As a culture, we really need to stop telling 17 year olds to not worry about money, go to college, and figure something out. There is always someone ready with a romantic appeal to a classical education, and it is so frustrating for me. Wasting four years is a huge cost. Years, decades of debt is a huge cost. Going to college with no plan about money? The costs are assured. Plus, the degrees people are actually getti…

I'm in university right now, and the reason why I'm here is mainly so that I can get a degree in order to get hired for a job in the field I want. My parents probably got me into it beacuse of the appeal of classical education but also the fact that they want me to get a job, too. Is there any solution to getting a job without a degree? Especially in those technical subjects such as electronic engineering (what I'm d…

For EE? No, stick it out, and go to grad school too.

Re: On average, skipping college and investing tuition costs nets a higher return

#309

Post by BrandonMarc »

tedivm wrote: post #267
twotwotwo wrote: post #246

Earlier quoted context omitted.

And college got expensive partly through policy choices. Offering easy loans tends to make people price insensitive, so tuitions go up and a lot of that money goes to things like increasingly fancy buildings and making textbook publishers' shareholders rich. Meanwhile often less is going to state schools that, with low in-state tuitions, were historically a way up for a lot of people. (An older friend went to Berkele…

Government spending on higher education peaked in the mid 70s, dropped in the 80s, and has not kept up with the population increases. The focus on loans, instead of government funding, was basically a new tax on the poor and middle classes in order to fund the Reagan tax cuts for the rich.

How does an increased demand for loans lead to funding the Reagan tax cuts?

Re: On average, skipping college and investing tuition costs nets a higher return

#310

Post by learc83 »

ecshafer wrote: post #218
Cyph0n wrote: post #151

Earlier quoted context omitted.

> We should not aim to make college free by means of government sponsorship, but rather education free or inexpensive by means of lowering the actual costs. I think that you're vastly underestimating how much money is needed to provide quality higher education. Trust me, the last thing we need is a race to the bottom when it comes to higher education.

The amount of money that goes towards marketing, administration, and buildings that are far fancier than they need to be is the issue. The professors are a fraction of the costs. Universities spend far more money than they need to on useless extraneous offices and bloat. Get back to focusing on education and the costs will drop.

https://fivethirtyeight.com/features/fancy-dorms-arent-the-m...
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