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

erikrood.com

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

#461

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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?

Pension plans of retired college professors and staff typically include some wildly optimistic investment expectations, and states are on the hook for compensatory payments when those expectations [surprisingly] do not materialize.

This is not limited to education pension funds, public sector or prison guard pension funds typically negotiate the same deal, very frequently with people they themselves have helped get elected, so you know those negotiations are extremely tough.

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

#462

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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?

It means the education system is design to pump out workers rather than thinkers. Taking this to the logical conclusion, why teach science, history or sport in high schools? Low ROI. Stuff that!

Why not make the coding bootcamp start at kindergarten. And why not let parents pay for such schools so they can choose the best ROI for their kid.

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

#463
post #381

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Above and beyond that, and to crib on one of the grandparent comments re: "Eventually, demand will decrease if prices continue increasing": If the minimum barrier to employment is having a college degree, then people will continue doing whatever they have to in order to get a college degree. The only way you're going to change demand is if decent jobs start being created that don't require a bachelor's degree. And I…

Electricians, plumbers, etc. all make very good money without 4- year degrees. But nobody aspires to these professions nowadays - everybody assumed they must go to university.

New Zealand has a reasonable education system where tertiary vocational education is treated on par with a two-year degree, meaning one can still be a professional and then spend just two extra years to achieve a college diploma, if they so desire.

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

#464
post #289

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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…

Why have special rules for student loans at all? If a degree is not very important anymore then it should be just free choice. Banks will step in to provide private loans on whatever terms they feel like. They'll be bankruptable. The banks can make their own judgements about the borrower's ability to repay it - eg. higher interest rates for useless degrees or low grades. I thought the whole business of government hel…

> Banks will step in to provide private loans on whatever terms they feel like. They'll be bankruptable. The banks can make their own judgements about the borrower's ability to repay it

Banking industry does not have a concept of a college loan. A loan is either secured (mortgage, auto, HELOC) or unsecured (personal, credit card). Without government participation all college loans are treated as unsecured, which means that everybody will get roughly the same offer as they do today on personal loans. High interest rate, payments must start immediately, bad credit requires a co-signer (time to talk to Mom and Dad).

Banking sector interest in unsecured private loans to people with bad credit (which describes most 18-year-olds) is so close to zero that LendingClub pretty much owns the sector.

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

#465

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Obviously I was wrong, but it is free in many european countries. Payed for by tax payers. The same tax payers that once enjoyed a free education.

Minus the ones which went to US and other countries with lower taxes.

Yeah sure, but far from everyone drives a car and still everyone pays for the roads. College is just one of these common goods we should all pay for.

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

#466
post #351

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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…

I come from one of your "paradise European countries with free higher education" and it's astounding to me that in the 21st century, people still fall for this "free lunch" fallacy. You do realize the education is not really "free", right? That word is such a red herring. It's just tying up resources in a way YOU like, at the expense of other people's preferences. Many people here, teachers and doctors included, are…

Yes of course, I am not retarded. But you maybe don't own a car, go much to the hospital etc. but I assume you don't want to privately fund those things?

Education is just one other thing that is simply good for everyone and something you shouldn't have a less opportunity in because you had the "wrong" parents.

But if you're from a paradise country as you say, I assume you enjoyed your free education and now just simply shit on it for no good reason. Do you think you could've really afford it since your parents probably didn't save up? Unless you would have worked your ass of in several years and saved every dime you could not. It was probably good for you with free education, as it is good for the society.

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

#467

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…

I don't have an answer either. I do think they should make student loans bankrupt-able. It's time. Oh yea, and put a hiring freeze/salary cap on all administrative personnel for any school that accepts federal loans. The best teachers I had were at community colleges, and usually had summer jobs. I never figured out what most of the administration did besides irritate the better teachers.

> I never figured out what most of the administration did besides irritate the better teachers.

As a teacher who has experienced that irritation, I hear you. But I also know that multitudes of administrators are a necessity in the modern world. There are a number of reasons for this; one of the biggest is regulatory burden.

Pick your favorite downtrodden group. Some politician makes a speech about how Group X has gotten the shaft for too long; he says he wants to pass a law that says no federal money is going to go to a university that hires people from Group X at a lower rate than other groups. Everyone says, "Yay, politician." And the law is passed.

Now, I am not (repeat: NOT) arguing against such policies. If thoughtfully enacted they can be beneficial. But they also come at a cost. And much of that cost is administrative.

Basically, this politician has just invented a new form to fill out. Before receiving federal $$$, we have to fill out this form that describes our good-faith efforts to hire qualified people from Group X.

Now, someone has to fill out that form. They have to keep the necessary records. They have to tell their coworkers what they need to do to be in compliance. They have to get periodic training, because government requirements change. That person needs office space and equipment. They need a parking space, and their trash needs to be emptied, and their restroom needs to be cleaned and stocked, and their paycheck needs to be deposited, and someone needs to supervise them. And none of this is free.

The modern world comes with a huge number of policies like this. "Let's prevent hard-working Americans' money from being misspent. I'm going to require that any scientist who receives a government grant has to account for his time, so we know where the money is going." Fine. And every university hires someone for a new administrative position.

"Every new construction project must conform to stricter safety requirements." Great idea. Another hire.

And again, none of this is free.

> Oh yea, and put a hiring freeze/salary cap on all administrative personnel for any school that accepts federal loans.

Ah, but the reason the administrative personnel are necessary in the first place is to ensure that the organization meets the qualifications to accept federal money. So the idea is, I'm afraid, completely impractical.

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

#468

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…

"butthurt americans" Please don't put insults like this in HN comments. Just one can ruin a whole thread.

Why? Does it offend you? People are just commenting stupid shit like "ITS NOT FREE OMG, TAX PAYERS PAY FOR IT" when it's so obvious that's exactly what I mean. Free for the student, not for the society.

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

#469

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…

>What about... offering college for free like the rest of the modern world? Paying for tution with tax money doesn't make it free. If you aren't willing to invest in yourself, why should society do so? Free college tuition is a waste of resources on the upper middle class.

It is free, for the student. If I had to pay for college I couldn't afford it. That doesn't mean I am not willing to invest in myself.

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

#470

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…

Nothing is free in life except sunlight. Colleges employ people and build buildings and have ongoing costs. Taxpayer money would need to be used to pay for this, and that money must have continued value, otherwise no amount of money would actually get the job done (see Venezuela) Not everyone learns valuable skills at college. You have to watch out for conflating "learning valuable skills" with "occupying space on a…

It is free for the student just as it's free for you to drive your car on the public roads to work.
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