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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

#311

Post by iron0012 »

varenc wrote: post #307
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!

https://scholar.google.com/

The magic phrase to locate the literature you're interested in is "returns to education"

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

#313

Post by del82 »

BrandonMarc wrote: post #309
tedivm wrote: post #267

Earlier quoted context omitted.

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?

Causation goes the other way: Reagan's prioritization of tax cuts over public education led to tuition increases, which lead to an increased demand for loans to pay the higher tuition.

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

#314

Post by jtcond13 »

These calculations seem fishy, for reasons stated above and others (e.g. why 20-year ROI? why exclude graduate degree holders?).

However, it is true that rising education costs are eating much of the ROI of attendance and lack of transparency has made it harder to see where that crossover point is.

But in a world in which the equity and college wage premiums are headed in the directions that they're headed, I would not give this advice to an intelligent 18-year-old.

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

#315

Post by weirdstuff »

imjustsaying wrote: post #297
kcdev wrote: post #289

Earlier quoted context omitted.

Bankrupt-able student loans will not help the problem. The universities who are taking advantage of the easily available money from the government will still get paid. During bankruptcy, the loan write down hurts the lender. In this case it's us taxpayers. The real answer is to cut what's funded by the government, make the rest of the financing come from the universities themselves, AND make it bankrupt-able. Then as…

>The real answer is to cut what's funded by the government Guaranteed downvotes

No worries, I'll upvote it. ;)

I think he/she is right-ish about the supply-demand calculus on this; looking at history, overextended credit/margins often lead to nasty bubbles because of the distortion effects.

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

#316

Post by learc83 »

cmurf wrote: post #201
imesh wrote: post #54

Earlier quoted context omitted.

Education in America is cheap, the problem is people don't go to their local school, they see college as an experience where they travel halfway across the country and stay in student housing.

That's not true, it's highly variable. Community colleges are much less expensive, that is true. But depending on the chosen career, a diploma from a community college means lower starting pay than a state university or a private college. Just the way it is. There are some worthwhile tricks, where you do 2 years at a community college, transfer credits to the state university, and finish a degree there and you get a…

It's not a trick.

Most community don't offer 4 year degrees. When people are talking about community colleges they are generally talking about a place where you get an associates degree and then transfer.

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

#317

Post by wwarner »

Maybe college is too expensive -- maybe it's expensive because there is a very high demand for well educated people. In other words, in my field, computer science, you will meet very few immigrants without a hard won master's degree or better. They are paying premium prices for these degrees, and they are getting the jobs that come with them. You can't simultaneously argue that the job market is being divided by STEM knowledge and that learning about STEM is a waste of time.

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

#318

Post by johnmarcus »

sillysaurus3 wrote: post #6

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.

unless your a trust fund baby like myself and your funding source is your parents.

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

#319

Post by tikhonj »

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…

CS is one of the few fields where you can get even the best jobs without a degree. You will have to clearly demonstrate your skills somehow but if you manage that not having a formal degree is no barrier. This is a massive step up from most other fields where a degree is—for arbitrary, historical or even legal reasons—completely non-negotiable.

I didn't finish my degree but still got a pretty awesome (and high-paying) job—even one that "officially" required a Masters degree. I got it through a mix of writing articles, giving talks and networking. (Connections are, unfortunately, one of the only consistent ways to get around obstacles to getting a job.)

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

#320

Post by johnnyb9 »

learc83 wrote: post #294
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…

This article from 538 argues that almost 3/4 of the rise in tuition is accounted for by a drop in state support. https://fivethirtyeight.com/features/fancy-dorms-arent-the-m...

https://www.newyorkfed.org/medialibrary/media/research/staff...

"We find a pass-through effect on tuition of changes in subsidized loan maximums of about 60 cents on the dollar, and smaller but positive effects for unsubsidized federal loans."

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