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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

#411

Post by shados »

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 went to college not for the money, but because I wanted to get good at something specific that was taught in college.

The problem right now is that the culture (especially in the US, as in many other countries its not as bad) is to consider people who didn't go to college failures. People who go through trade schools or apprenticeships are shunned over college grads (even in the case where the later can't get a job while the former does). So people go to college out of peer pressure, not because it's worth it.

That's all sorts of messed up.

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

#412

Post by gozur88 »

bjourne wrote: post #405
gozur88 wrote: post #327

Earlier quoted context omitted.

College in the US is used by employers as a proxy for intelligence, something that's an outgrowth of laws and court rulings that date back to the '70s. So if you want to put yourself on the path to the C-Suite in a Fortune 500 company or to a partnership in a major law firm, you have to get into one of the very top colleges in the country. That, in turn, means top colleges can charge pretty much whatever they want an…

But wait. The more colleges charge for tuition, the harder it becomes for intelligent but poor people to get admittance. Therefore, the worse a college degree from a "top college" can act as a proxy for intelligence.

That's why top colleges give generous scholarships to exceptional poor kids.

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

#413

Post by davismwfl »

Not saying anyone going to college isn't good (I have a son going to college now). But frankly is this really surprising?

I have known this for years. I have a college education but NEVER advertise it because it has absolutely ZERO to do with my career. And I rarely have told anyone that I graduated. Even straight out of school I relied on my capability not an education and that capability got me a better job offer at a higher salary then I could have reasonably expected if I claimed a new grad.

Not saying school is bad or not worthwhile, there are things I wish I would've taken the time to learn earlier but the reality is at some point it becomes useless compared to if you can do the job. When I hire, I absolutely never care about the education except that if you have one I expect certain answers that if you have experience I wouldn't expect.

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

#414

Post by bigger_cheese »

ma2rten wrote: post #83
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…

like the rest of the modern world Many countries outside of Europe have tuition fees. Do we really have to label those countries as not part of the modern world?

I graduated from university in Australia 10 years ago. At the time I did not have to pay anything upfront but I did accrue a debt while I was studying. The cost for me studying Engineering was ~$750 per subject (8 Subjects a year * 4 year degree = $24K debt at graduation).

The entire debt was interest free and repaid out of my tax return once I started full time work (i.e. I effectively paid higher tax rate until I had paid off my university debt).

The expensive part in Australia is not cost of university. It is all the living expenses and other costs while you are studying (rent, food, transport etc.) In some cities like Sydney cost of living is stupidly high especially compared to low wages you'd get doing typical student work (waiting tables, bar tending etc).

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

#416

Post by stale2002 »

sarchertech wrote: post #398
gozur88 wrote: post #385

Earlier quoted context omitted.

But private schools have to compete with each other. If this was really about increased demand from students who would have otherwise gone to public schools, what we'd see is an increase in the number of private schools, not an increase in tuition.

Assuming the number of private schools that students want to go is in no way supply limited, which is an incorrect assumption. How long does it take to build and staff a private school? How long to get it into US News top 500? Even something like increasing the number of students admitted to existing private schools is tricky because they are tracked on their admission percentage.

You don't have to create a new college.

All that has to happen is for EXISTING colleges to realize that they can make a ton more money by expanding in size.

Obviously, this doesn't happen overnight. You have to hire new employees, buy more land, and build more buildings.

But I'd argue that this process would happen a lot, lot quicker than "create new college". Colleges are already expanding all the time.

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

#417

Post by [deleted] »

habitue wrote: post #200

I think a lot of people are looking at this as "maybe this article is offering advice" instead, the way I'm looking at it is this is giving us a rough quantification of what we all know intuitively: that college is so expensive it's reaching a natural ceiling. The way this manifests in reality isn't millions of people all doing a cost/benefit calculus like this and coming to the rational conclusion they can skip coll…

[deleted]

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

#419

Post by Aqueous »

Unfortunately I suspect this ends up being similar to the "paradox of thrift" [1]. It might make sense for one person to do this, but if people did it en masse, it would be catastrophic for our economy and therefore for each of us individually.

[1] I learned about the paradox of thrift in college.

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

#420

Post by ChuckMcM »

The analysis has a huge gap in that it looks only a pay differences and not at employment differences. The pay gap is large (37K vs 71K) [1] and the unemployment gap is over 2 percentage points [2]. Being unemployed for 6 months wipes out most of the nominal 'gain' by investing your tuition in equities. (and of course it depends on when you invest etc etc).

[1] https://www.bls.gov/emp/ep_table_education_summary.htm

[2] https://www.bls.gov/emp/ep_chart_001.htm

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