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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

#441

Post by kinkrtyavimoodh »

johnfn wrote: post #364
throwawayjava wrote: post #258

Earlier quoted context omitted.

> ...again, that's why you don't do that with hypotheticals intended to be social commentary. Good social commentary helps us identify and solve problems. I don't think this particular commentary puts us in a good mindset for understanding or solving the problems with higher education funding in the united states. > The article is saying "wow, college is sure overpriced for the amount of money you invest." The articl…

I don't know how to convey to you any more that this is a hypothetical rather than a real thing worth considering as much as you are doing. Like your entire argument is "the S&P is pushed forward by people who go to college." Not to be rude, but that has no relevance whatsoever to the article. The article could have said to invest in real estate or god forbid bitcoin. The specifics don't matter. Again not to be rude…

You can't generalize from specifics when the characteristics of the specifics are what makes the specifics work.

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

#442

Post by linkregister »

jimmaswell wrote: post #421
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 didn't end up with virtually any useful networking from college like you're supposed to, and the job fairs were all worthless - not a single programming related employer showed up to a single one of them. I've never heard back from any of the places nearby that I've ever applied to (there were a lot of them) except for one that called me to tell me they accidentally posted the ad for junior level when they meant se…

What state is your university located?

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

#443

Post by Rapzid »

cbhl wrote: post #231
forkandwait wrote: post #228

Earlier quoted context omitted.

Out of the 100 or so people I know my experience is very typical.

But the 100 people you would know would be biased towards Math grads, and less towards English or Environment majors, right? Survivorship bias means you would be less likely to be in touch with collage drop-outs.

Which, is something you'd expect a college graduate to realize...

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

#444

Post by sopooneo »

I have always assumed that going to college is not necessarily the ideal financial path for any particular individual, but rather that an educated populace is better for everyone. In other words, it is a collective good that "we" have a "liberal" education.

And I stand by by that assumption.

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

#445

Post by matt_wulfeck »

bbcbasic wrote: post #340
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…

And they'll all offer coding bootcamps, for max ROI, and nothing else. Future doctors can be imported.

How is that worse than producing an overabundance of literature majors that have very little ROI?

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

#446

Post by taneq »

wutbrodo wrote: post #295
MrTonyD wrote: post #254

Earlier quoted context omitted.

I remember reading an article describing how college costs can be explained by an analysis of supply and demand. There have been a variety of historic reasons for demand rising at different times - mostly related to unemployment and lack of other economic choices. I keep hearing the meme that low-cost college is the cause of college expense - but college is free in many countries where they are doing quite well. So I…

> I keep hearing the meme that low-cost college is the cause of college expense I think you've misunderstood what you're hearing: low cost college by definition can't be the cause of high cost college. The claim is that high availability of funds/liquidity for college is what pushes up prices,since there are more dollars available to chase a supply that hasn't kept pace[1]. > college is free in many countries where t…

> The claim is that high availability of funds/liquidity for college is what pushes up prices,since there are more dollars available to chase a supply that hasn't kept pace[1].

Exactly. It's no different to what causes a real estate bubble: Extremely low interest rates and lax lending policies make borrowed cash very cheap, which pushes up the amount that the average buyer can 'afford' to borrow.

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

#447

Post by linkregister »

CuriouslyC wrote: post #226
ma2rten wrote: post #65

Earlier quoted context omitted.

No, education in America is expensive. If tuition was free or cheap, you could work part-time to pay living expenses and take more time to finish your degree as many students in Europe do.

Community colleges and state colleges aren't expensive at all. I went to community college for ~4 years, and I never paid for a class because of something called the board of governors fee waiver. Beyond that, I got pell grants and scholarships that were my primary source of income. With the addition of food stamps, the occasional side hustle and some creative cost cutting measures I was able to make it work with a s…

> Community colleges and state colleges aren't expensive at all.

> I never paid for a class

Your survivor bias makes you think that is the case for everyone. It isn't. State schools are no longer affordable in most regions of the U.S. without high debt load. It is true that community colleges for the most part are affordable, but the acceptance rate of students coming from community college is not optimal.

I congratulate you on your considerable achievement. You truly earned it through your hard work and good fortune to receive the grants and scholarships.

Many students had the misfortune of being raised in states without affordable state schools, despite being willing to put in the same amount of effort that you did.

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

#448

Post by linkregister »

HarryHirsch wrote: post #99
ma2rten wrote: post #65

Earlier quoted context omitted.

No, education in America is expensive. If tuition was free or cheap, you could work part-time to pay living expenses and take more time to finish your degree as many students in Europe do.

More important: if tuition were free you could fail your students. With the present model there is a perverse incentive to pass everyone no matter what because they pay the salary.

This is an interesting hypothesis. Do you have any information to indicate it is a trend?

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

#449

Post by rebootthesystem »

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…

> reconsider mortgaging the house (figuratively) to

No, this is real.

One of my kid's friends is going for Mechanical Engineering at a school that will cost her $60K per year. And she is committed to go past and Bachelor's and obtain a Masters.

I have begged and pleaded with her to reconsider. I have done all the research for her showing salary potential, payments and a comparison showing what would happen if the delta in payments were to be invested in a Roth IRA for, say 30 years. She won't budge.

This girl is going to graduate with an M.E. degree and $300K in debt. This is insane beyond belief. That degree is not worth that kind of money, not by a long shot. Average salaries are in the $60K to $80K range depending on location and industry. Getting significantly north of $100K is very difficult and getting to $200K seems down-right impossible. And so this girl is going to have MD level debt with an earning potential nowhere near that of an MD.

In other words, she is signing up for financial slavery.

And worst than that, she is making a bad decision today that will cause severe damage to her future family. She will realize this when she marries and has kids. And, if her husband comes in with another $200K in debt. Well, that's a formula for a really shitty life for 30+ years. Great education, shit life.

I have to admit I don't understand how these decisions are made.

BTW, I forget the exact number but investing $500 a month on a Roth IRA from, say, 20 to 50 years of age has you waking up one day with something like $1.6 million in the bank. Keep at it until age 65 and it is somewhere around $3 million. Which means that paying an extra $500 a month for a high dollar student loan has a huge opportunity cost. A $300K loan probably means payments that are $1000 a month above those for a loan to go to a mid-tier university.

And so she said: "My parents are going to take out a second mortgage and pay $200K out of the $300K. It'll be OK."

To which I replied: You are smart, you took a lot of advanced math in High School. Go figure out how much you would have in 30 years if your parents gave you $200K and paid for you to go to an investment adviser to invest that money wisely. Then do the research and find out how much more you might earn if you pay $300K for your degree rather than $100K.

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

#450

Post by conanbatt »

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...

Interesting!

Does this mean that education budgets for the states has had cuts in the last 16 years? Where is that state money saved going?

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