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

#611

Post by vkou » Mon, Jun 05, 2017, 5:26 PM UTC

exclusiv wrote: post #553

fivestar wrote: post #544

Earlier quoted context omitted.

But it's not about "making very good money"--you look at who runs the country and it's a tiny few who attended a select group of institutions. It makes the whole "American Dream" concept a huge lie. But you can't tell a kid "you'll never be a CEO" but chances are if their father isn't one and they don't go to a big name school, they truly will never be one. Everything about our country is one big lie.

The American dream isn't about becoming C-level or running the country. College is oversold but the American Dream is alive if you go to a cheap school and buy a house in a smaller city or burbs. There are plenty of great cities and emerging ones with jobs and reasonable cost of living. However, if you choose to buy crap you don't need and succomb to debt, that's not America's fault. That's yours. But yes it's dead i…

> There are plenty of great cities and emerging ones with jobs and reasonable cost of living.

Which cities? How long will it be until they too turn into LA, NYC, and SF (While being surrounded by oceans of hopelessness and poverty)?

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

#612

Post by learc83 » Mon, Jun 05, 2017, 5:27 PM UTC

stale2002 wrote: post #580

matchbok wrote: post #440

Earlier quoted context omitted.

You don't think they know that? I'm sure they do. But the other option is to stay the same size, but charge much more. Either way, more money. Only one solution demands building more classrooms and housing.

Competition would prove otherwise. If a single college doubles in size, the effect on total college supply is minimal. You double the amount of quantity sold, for You, while only slightly decreasing price, because Total college supply has only barely increased. It is simple supply and demand in a competitive market.

It's not that simple. A huge part of what makes a particular college attractive is selectivity. Acceptance rates are tracked and reported.

Harvard and Yale are ranked so highly that they could get away with it. But they won't do it for other reasons. Mainly that they don't need the money coming in from tuition. If you take a private school a bit further down the list though, their rankings would tank if they accepted twice the students.

Also there are other limiting factors. Many colleges don't have the physical space to just double in size. Their isn't land for sale within walking distance of their current campuses. Adding satellite campuses is one way around that, but that adds logistical problems that will reduce desirability. In addition to satellite campuses not always inheriting the reputation of the main campus.

Additionally you can't simply double the student to faculty ratio b/c that would tank rankings, and hiring double the faculty takes time.

You also don't know which departments you need to scale beforehand. If you decide to double your enrollment in the next 5 years, which majors will the new students choose? It's unlikely the ratios would stay the same. Good programs don't always scale well either. If a department worked hard over the last 20 years to build a good reputation, they can't just hire 20 new faculty members and teach twice the number of students without impacting quality.

Schools do expand all the time, but it is a very slow process that by its nature can't keep up with a constant growth in demand.

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

#613

Post by ThrustVectoring » Mon, Jun 05, 2017, 5:40 PM UTC

moomin wrote: post #560

wmeredith wrote: post #328

Earlier quoted context omitted.

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…

Serious point: let's say that, to you personally, investing in the stock market and going to college are a wash. They're not a wash for the state. The state gets more taxes from your higher-paying job. The chances are you're also helping to support some lower-paying jobs as part of your industry. So it's not unreasonable to expect the state to contribute to actually making this happen. The benefits are actually much…

>The state gets more taxes from your higher-paying job.

That's if you accept the higher-education-as-training model. Under the higher-education-as-signaling model, the primary effect of education is to choose how to allocate a fixed set of high paying jobs. If there's 100 slots for new lawyers this year, then the difference between sending 150 and 151 students through law school is an additional unemployed lawyer.

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

#614

Post by sametmax » Mon, Jun 05, 2017, 5:48 PM UTC

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…

You already have a serious education problem in the US. But now, with more and more people that will avoid college, the country future seems quite bleak. Trump like events are going to accumulate. And with the US dept and war lord attitude, this is looking bad for the whole planet.

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

#615

Post by vkou » Mon, Jun 05, 2017, 5:50 PM UTC

headmelted wrote: post #492

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…

We've had free access to college courses via the web for quite some time now (Coursera, edX etc.), but they have not yet usurped the status quo in the way many (myself included) had hoped. I figure there's two factors behind this: 1) People want a "college lifestyle". It wouldn't really matter much to me, but I know this is something kids leaving home care about, so it's surely a massive factor. 2) People NEED to hav…

1) People want a "college lifestyle". It wouldn't really matter much to me, but I know this is something kids leaving home care about, so it's surely a massive factor.

This is manufactured demand. Many other countries have a norm of commuter schools (Where most students live with their parents).

Those that don't tend to have cheap, barracks-like housing, instead of 'lavish' dorms.

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

#616

Post by learc83 » Mon, Jun 05, 2017, 5:57 PM UTC

astrodev wrote: post #603

learc83 wrote: post #321

Earlier quoted context omitted.

They also come with income based repayment plans that mean you'll never have to pay more than 10% of your discretionary income (income above 10% of the poverty line), and they are cancelled after 20 years of payment.

If that's the case, then I don't understand why the student loans are said to be such a big burden. It's just another tax, I wish more taxes were voluntary like that.

It's definitely the case. Part of the problem is that not everyone knows about income based repayment plans.

You mostly get a few groups complaining about the burden. People who don't know about income based repayment, people who make too much to qualify (basically what they'd pay if they paid 10% of their discretionary income is higher than the standard 10 year repayment plan), and people who took out private loans to go to for profit universities, or expensive private schools that weren't top tier (private loans are only 7% of total disbursements).

Add to that the arm chair analysts who see news stories about student loan debt and complain for them.

That's not to say that some of these grievances aren't legitimate. There really are people with $100k loans with useless degrees from for profit universities, but they are a small subset of loan borrowers.

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

#617

Post by vkou » Mon, Jun 05, 2017, 6:06 PM UTC

haihaibye wrote: post #527

ThrustVectoring wrote: post #262

Earlier quoted context omitted.

Savers are counter-parties to debtors. Every debtor that consumes real goods and services now in exchange for forgoing later consumption gets paired with a saver that forgoes current consumption in exchange for later. The market has to clear, and the price is the risk-free rate of return. More people interested in saving? The natural effect of this pressure is to drive interest rates and credit standards down until y…

Interest rates aren't set by a free market.

The prime rates aren't, but the rates at which the overwhelming majority of debt is issued are.

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

#618

Post by tutufan » Mon, Jun 05, 2017, 6:17 PM UTC

throwawayjava wrote: post #287

GCA10 wrote: post #275

This is a provocative but deeply misleading calculation. It assumes that our no-college-S&P-investor is a stoic enough soul to live on truck drivers' wages for 24 years, so that the stock market can do its magic, before collecting what genuinely would be a giant windfall. That's really hard to imagine. Missing out on the more robust income of a college graduate in your late-20s and early-30s means making sacrifices i…

> ...is a stoic enough soul to live on truck drivers' wages for 24 years Truck drivers make decent money. $40k, usually closer to $50k+ if you're experienced without accidents. Much more importantly, you don't need to be in an office building in a high rent area every morning. If your spouse also works, those salaries buy a REALLY nice house in Nowhere, MS/WI/KS! "Has the nerve and patience" might be a better way of…

Possibly true, but I cannot think of a worse occupation to get into right now, with self-driving trucks on the horizon.

(Also, I have a trucker in the family, and the financials are harder than they look.)

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

#619

Post by sobani » Mon, Jun 05, 2017, 6:27 PM UTC

matwood wrote: post #536

rebootthesystem wrote: post #449

Earlier quoted context omitted.

> 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…

Read reboot's last sentence again:

Then do the research and find out how much more you might earn if you pay $300K for your degree rather than $100K.

So the suggested alternative to a 300K college is a 100K college.

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

#620

Post by PatentTroll » Mon, Jun 05, 2017, 6:37 PM UTC

vkou wrote: post #615

headmelted wrote: post #492

Earlier quoted context omitted.

We've had free access to college courses via the web for quite some time now (Coursera, edX etc.), but they have not yet usurped the status quo in the way many (myself included) had hoped. I figure there's two factors behind this: 1) People want a "college lifestyle". It wouldn't really matter much to me, but I know this is something kids leaving home care about, so it's surely a massive factor. 2) People NEED to hav…

1) People want a "college lifestyle". It wouldn't really matter much to me, but I know this is something kids leaving home care about, so it's surely a massive factor. This is manufactured demand. Many other countries have a norm of commuter schools (Where most students live with their parents). Those that don't tend to have cheap, barracks-like housing, instead of 'lavish' dorms.

Yeah, I'd support throwing some cold water on the demand for a 'college lifestyle' too. You know what, I would also like to be young and have all of my bills paid for (by loans) and live in a small town with only other young, similarly situated people. Sure, it's cool and all, but does it benefit society at all? It's a monumentally stupid cultural norm that should be dissuaded as much as possible. As should the norm that people should go to college right after high school. Maybe that's good for some people, but it's a silly cultural norm too. I guess the problem lies in the fact that uneducated 18 year olds are pretty much useless otherwise, but maybe we could grow the idea of apprenticeship for white collar jobs more to fill that gap. In many ways, undergraduate education is the new high school degree, and post-graduate is more like what a bachelors used to be like. And that follows the pattern I'm advocating above, people are older and have some work experience.