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Is College Still Worth It? The New Calculus of Falling Returns [pdf]

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Re: Is College Still Worth It? The New Calculus of Falling Returns [pdf]

#221

Post by dustinmoris »

vharuck wrote: post #186
dustinmoris wrote: post #157

Disclaimer: I don't have a degree and I've had a very successful career as software engineer so far. I think the concept of university is mostly a time waste and the reasons for it is: - University is the concept of someone teaching you a topic and then you being able to claim you are qualified in this topic. However, people nowadays need to train themselves in complete new fields multiple times in their lifetime and…

> University is the concept of someone teaching you a topic and then you being able to claim you are qualified in this topic. University is supposed to be learning from the experience of experts. Having a person with experience on hand cuts down the time needed to learn things. Online articles and tutorials aren't a dialogue. Online forums are good, but often can't promise somebody will care about your education. Uni…

I respectfully disagree with all your points. Unless you are privileged enough to attend an ivy league university you will not be taught by experts of a field. The majority of university teachers across the world are average people of average skill who often failed to achieve success in the open market and then defaulted back into a comfy uni job.

Also there’s no evidence for your claim that 4 years university get you better skilled than 4 years of self disciplined learning and work experience.

Maybe you went to a top university in the states but with all respect these universities are not even a fraction of what the average student experienced in every other university.

EDIT: btw i went to uni in Europe, but never finished due to the reasons which I mentioned above, so i’ve got some experience what uni life is.

Re: Is College Still Worth It? The New Calculus of Falling Returns [pdf]

#222

Post by [deleted] »

te_chris wrote: post #125
soperj wrote: post #104

Earlier quoted context omitted.

What are you talking about? Otago is what dreams are made of!

Otaaaaaaaagoooooo! Wouldn’t change it for the world. Local undergrad is way more sensible. If you want to be elite, kill it locally then do a masters at Oxbridge or whatever.

[deleted]

Re: Is College Still Worth It? The New Calculus of Falling Returns [pdf]

#223

Post by macspoofing »

Retric wrote: post #218
macspoofing wrote: post #213

Earlier quoted context omitted.

>Policy circles are hotly debating right now how to overhaul the entire system. No guaranteed federal loans would fix everything. This means tuition loans could then be discharged and the lender would be more discerning about loaning to a student heading to some boutique private college with sky-high tuition and ending up with a humanities degree.

Discharable loans would also increase interest rates by about 2%. That’s 100$ a month for 60k worth of loans, which makes them even harder to pay back.

The key here is that you wouldn't get a loan to a college that won't provide you a useful degree for the tuition rate they charge the student. You want the lender to be discerning and not give out bad loans.

Right now, the entire industry assumes students are not price conscious and you only need to sell them on the college experience instead of the price and value of the degree.

Having said that, the government can always provide grants to make things more equitable.

Re: Is College Still Worth It? The New Calculus of Falling Returns [pdf]

#224

Post by scarface74 »

macspoofing wrote: post #213
brownbat wrote: post #195

This is a really interesting addition to the literature if you dig through it, with subtle distinctions between income gains and wealth gains and interactions with demographics. It's not a simple "college ain't what it used to be" story. The biggest puzzle is how to explain why recent grads still command significantly higher incomes than nongrads without accumulating significantly more wealth. Increasing tuition is a…

>Policy circles are hotly debating right now how to overhaul the entire system. No guaranteed federal loans would fix everything. This means tuition loans could then be discharged and the lender would be more discerning about loaning to a student heading to some boutique private college with sky-high tuition and ending up with a humanities degree.

How “discerning” could you be when making loans to teenagers with no income and no credit history?

The only thing that would happen is that the banks would force all loans to be co-signed. Guess who is statistically unlikely to get loans in that scenario?

Re: Is College Still Worth It? The New Calculus of Falling Returns [pdf]

#225

Post by macspoofing »

learc83 wrote: post #220
macspoofing wrote: post #213

Earlier quoted context omitted.

>Policy circles are hotly debating right now how to overhaul the entire system. No guaranteed federal loans would fix everything. This means tuition loans could then be discharged and the lender would be more discerning about loaning to a student heading to some boutique private college with sky-high tuition and ending up with a humanities degree.

Loans aren't federally guaranteed anymore. They are made directly by the government.

Ooof. That's worse, but the equation is the same. The lender does not evaluate the value of degree given the loan amount. That's the market distortion taking place, and why administrative costs (and consequently cost of education) has skyrocketed.

Re: Is College Still Worth It? The New Calculus of Falling Returns [pdf]

#226

Post by scarface74 »

brownbat wrote: post #195

This is a really interesting addition to the literature if you dig through it, with subtle distinctions between income gains and wealth gains and interactions with demographics. It's not a simple "college ain't what it used to be" story. The biggest puzzle is how to explain why recent grads still command significantly higher incomes than nongrads without accumulating significantly more wealth. Increasing tuition is a…

You have three parties: schools, financial institutions, and teenagers.

You have four - parents. Students can’t get a loan without filling out FAFSA which requires their parents involvement. Parents could guide children in the right direction.

Re: Is College Still Worth It? The New Calculus of Falling Returns [pdf]

#227

Post by CydeWeys »

cipher_system wrote: post #128
amiga_500 wrote: post #51

Earlier quoted context omitted.

Interesting. I knew NZ was pretty messed up but I didn't realise it was that bad. The friend bit is anecdata. Looks like NZ avg debt is $28k NZD [1] USA is $29 USD [2] So USA is 50% more expensive, on avg (NZDUSD 1.5). IMHO both are a disgrace, but that's another thing. 1: https://en.wikipedia.org/wiki/Student_loans_in_New_Zealand#S... 2: https://studentloanhero.com/student-loan-debt-statistics/

$29k is not that much is it? That is about what I ended up with for my degree in Sweden where higher education is free but you borrow for living expenses. I repay it with about $100 per month for 25 years. Perhaps the biggest difference is the interest rate which is government backed and around maybe 1-2%. According to first result on Google the interest rates on US student loans seems to be around 6-8%.

$29k is a decent chunk of change of you don't have a high paying job. It'll take you many years to pay off because of all your other expenses (housing, transportation, healthcare, food, clothing, etc.).

Re: Is College Still Worth It? The New Calculus of Falling Returns [pdf]

#228

Post by macspoofing »

scarface74 wrote: post #224
macspoofing wrote: post #213

Earlier quoted context omitted.

>Policy circles are hotly debating right now how to overhaul the entire system. No guaranteed federal loans would fix everything. This means tuition loans could then be discharged and the lender would be more discerning about loaning to a student heading to some boutique private college with sky-high tuition and ending up with a humanities degree.

How “discerning” could you be when making loans to teenagers with no income and no credit history? The only thing that would happen is that the banks would force all loans to be co-signed. Guess who is statistically unlikely to get loans in that scenario?

>How “discerning” could you be when making loans to teenagers with no income and no credit history?

Very. They may very well take into account your grades and SAT score to determine feasibility of repayment.

>The only thing that would happen is that the banks would force all loans to be co-signed.

They may and why shouldn't they? This will deter expensive colleges and push students to cheaper alternatives like trade schools, community colleges and state schools. What's wrong with that?

>Guess who is statistically unlikely to get loans in that scenario?

People who can't pay back loans? I don't follow your point. Are you saying that loans should be made without consideration of feasibility of repayment?

Re: Is College Still Worth It? The New Calculus of Falling Returns [pdf]

#229

Post by LoSboccacc »

macspoofing wrote: post #223
Retric wrote: post #218

Earlier quoted context omitted.

Discharable loans would also increase interest rates by about 2%. That’s 100$ a month for 60k worth of loans, which makes them even harder to pay back.

The key here is that you wouldn't get a loan to a college that won't provide you a useful degree for the tuition rate they charge the student. You want the lender to be discerning and not give out bad loans. Right now, the entire industry assumes students are not price conscious and you only need to sell them on the college experience instead of the price and value of the degree. Having said that, the government can…

and once profitability gets in the lenders' equation you'll see lot of art colleges and similar reduce their tuition costs to match their value in the job market

Re: Is College Still Worth It? The New Calculus of Falling Returns [pdf]

#230

Post by woopwoop »

dahart wrote: post #114
cm2012 wrote: post #7

I can't find the citation now but the biggest argument against college I've seen is that once you control for family income, life success is way more correlated to SAT scores/the college's you apply for than the ones you actually attend. This would imply that college success stats merely indicate that they are selective in who they choose to enroll. EDIT: Its not the one I'm looking for, but I found a good one. http:…

IQ correllates somewhat with income and even more with school performance, so by “controlling for IQ”, the authors are intentionally flattening and hiding some of the income variation. They’re effectively discounting for the probability of going to college in the first place. That will, of course, hide differences in income due to going to college. The actual data shown in that reference seems to tell a different sto…

The 100k is a net present value calculation, which includes a 5% per year discount, which is quite steep. 1/1.051530<0.25. The undiscounted difference in lifetime earnings looks, just eyeballing the figure, to be around 300-500k.
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