On average, skipping college and investing tuition costs nets a higher return • Hacker News Board

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

#531

Post by randomdata » Mon, Jun 05, 2017, 1:16 PM UTC

LoSboccacc wrote: post #404

pishpash wrote: post #397

Earlier quoted context omitted.

You're thinking of college by looking at the average. College doesn't work like that. It never did. You'll always find a "Jim" that went to college and did fantastically well for it. Elitism works like the lottery, or the Netflix prize, or the Olympics. When the aggregate resource spent is averaged out per head, it's never worth it. But for the winners it is always worth it.

The article averages all colleges, some major have significantly higher returns, choosing engineering for example you get both high returns but also a lower tuition cost and better outcome on average than, say, law schools where prestige and connections play a major factor in lifetime earning

The key is to leveraging a degree is to major in a profession where labour supply is artificially constrained through the possession of that degree. There is good reason that 49% of the top 1% in the US have post-graduate degrees, while the high school or less group actually outnumber those with bachelor degrees only. It is not because of the education, but because the post-graduate degree bought them quota into a supply management system, so to speak.

The trouble is that these outliers, who are able to realize artificially high incomes due to the artificial labour supply constraints, make it appear that everyone with a degree can do better than without when observed on average. But closer inspection of the data does not continue to back it up. Despite substantial increases in college attainment over the last several decades, incomes have remained stagnant.

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

#532

Post by reading-at-work » Mon, Jun 05, 2017, 1:28 PM UTC

imesh wrote: post #54

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…

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 may have been true 30 years ago. These days kids who make the "responsible choice" to attend an in-state school can still pay upwards of 20-30K a year in tuition and fees (source: me and everyone I know at my large state school). And many colleges force students to stay in student housing until their sophomore or junior year.

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

#533

Post by reading-at-work » Mon, Jun 05, 2017, 1:32 PM UTC

CuriouslyC wrote: post #242

rhino369 wrote: post #193

Earlier quoted context omitted.

First, there must be a dividing line between when we are no longer going to pay for a persons education. 18 years old is a pretty good dividing line because that when society deems people responsible for themselves. Second, college is a good cut of because it's highly specialized education. Third, almost all the benefits are captured by the precipitant of the education. Finally, most of the country would either be un…

The point of subsidizing college is to give the person who might otherwise become a roofer the option of a more pleasant, lucrative career. Scientific and technical knowledge drives innovation. Economic growth on a per-capita basis is entirely driven by innovation. Thus scientific and technical education directly impacts your quality of life. With regards to liberal arts education, I'm inclined to agree that governme…

> With regards to liberal arts education, I'm inclined to agree that government subsidies may not be the best use of tax money.

Who do you think will start going to college more once it's free? Students who are driven to get a STEM career are already pursuing college. Making it free will attract the people who think along the lines of "I don't wanna start working yet, might as well go live the college lifestyle for free and get a sociology degree before I end up as a barista anyway." (I'm exaggerating slightly but you get the idea).

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

#534

Post by fivestar » Mon, Jun 05, 2017, 1:33 PM UTC

wmeredith wrote: post #328

learc83 wrote: post #294

Earlier quoted context omitted.

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...

I came here to say this. My wife left the private sector four years ago to work in higher ed. This was a huge epiphany to both of us after she had been there a while and we could see the big picture from the inside. Sure there are a couple other factors at play, but it's small potatoes, comparatively. If you look at the big state schools and the support they receive from the community, they've systematically had thei…

Um, not sure what you are talking about wrt community support? The community, and the state was supporting the university quite liberally.

My observations from attending and then later working at a large southern public university is that a bunch of things happened:

1) The financiers got in bed with the financial aid office, figuratively and possibly literally.

2) The campus went on an inexplicable building boom the likes of which no one had ever seen before. The state funded those projects, but they were clearly handouts to construction companies and pork spending. Sickening, really.

3) The quality of the average student plummeted. I blame the financiers for this, too--asses in seats is a thing.

So while it may be generally good that more people had access to higher education, at the same time the quality dropped, and I seriously doubt the outcomes for many of those people actually improved over attending community college or perhaps no college. Their debt loads had to be tremendous, after all.

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

#535

Post by fivestar » Mon, Jun 05, 2017, 1:35 PM UTC

prostoalex wrote: post #455

learc83 wrote: post #294

Earlier quoted context omitted.

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...

For a pure apples-to-apples price comparison it's reasonable to use an out-of-state tuition that's free of state support, grants or scholarships, as that reflects the true price sticker. The rise in college tuition is the most baffling, as this industry refuses the amortize costs. The buildings have been built, the books have been written, the intro courses have been handed down to graduate students, the handouts are…

There has to be a top--there is no demand at some price point, even with loans.

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

#536

Post by matwood » Mon, Jun 05, 2017, 1:36 PM UTC

rebootthesystem wrote: post #449

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 del…

What other options are you presenting though? I keep seeing really expensive school vs. no school when in fact there is a wide sliding scale. If someone can get into a top tier school, then by all means try to make it work. But most people will not go to a top tier school, so they should be going to local colleges. Too many kids only see college as a 4 year party away from their parents, and to my dismay many parents encourage this thought.

I went to a local college while living at home with my parents. That saved tons of money. I also worked 20-30 hours/week while in college and paid for most of while I was going. I get that not everyone lives close to a decent college, but many do and still go away.

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

#537

Post by reading-at-work » Mon, Jun 05, 2017, 1:38 PM UTC

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.

You could try Upwork. It basically lets you be a contractor, remotely, for programming projects that people have.

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

#538

Post by fivestar » Mon, Jun 05, 2017, 1:39 PM UTC

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?

It doesn't--this is one of those times where the statement makes zero sense, but it was fun to bash Reagan. No, the whole story of runaway costs can be explained quite easily by the financialization of higher ed--the liberal student loan policies championed during the Clinton Administration tied to the typical greed of Wall Street bankers, enabled by the bleeding heart "everyone should go to college" drama.

Everyone got paid, except the sheep who got sheared.

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

#539

Post by throwawayjava » Mon, Jun 05, 2017, 1:40 PM UTC

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…

> ...this is a hypothetical...

Ok. And it's a bad hypothetical because it emphasizes individual roi instead of systems-level effects when discussing a problem where all the interesting action is in the systems-level effects.

I understand it's a hypothetical. I think it's a distracting hypothetical.

> Not to be rude, but that has no relevance whatsoever to the article

It has every bit of relevance to the article because college is more than just an individual investment opportunity. The benefits of a large college educated population are enjoyed by an entire society.

The real take-away from the article is that we apparently don't tax capital well enough because there's an absurd arbitrage opportunity for lazy people who have 200k in the bank. Or that the benefits of a college educated populace are high enough, and the cost also high enough, that we should be subsidizing college more than we currently are. Not that college is over-priced. The fact that your jump to the latter conclusion instead of the former is exactly the problem with this hypothetical.

> The specifics don't matter.. Again not to be rude but I often feel like people on here have this disease that doesn't allow them to generalize from specifics. ;-)

Look. Either I'm not supposed to generalize from this specific case, or else your entire complaint is really confusing. Generalizing from this specific leads to all the wrong conclusions.

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

#540

Post by matwood » Mon, Jun 05, 2017, 1:40 PM UTC

dsacco wrote: post #427

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…

I believe the cost-benefit analysis you speak of desperately needs to become part of public consciousness sooner rather than later. We can't rely on students to have the maturity and direction to maximize their college experience, but we also cannot rely on them to succeed without any educational structure for precisely the same reasons. There should be something in place, but it is often predatory under the current…

> 1. Privatize student loans entirely, and give them eligibility for bankruptcy.

Lenders will just requires parents to co-sign so anyone who is not from a well off family can no longer go to college. It will also stop the ability for the student to go into bankruptcy and discharge the student loan debt.