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The Great College Hoax

forbes.com

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Re: The Great College Hoax

#61

Post by tptacek »

yummyfajitas wrote: post #57
tptacek wrote: post #38

Earlier quoted context omitted.

I don't know about "lower middle class", but in Manhattan and San Francisco, $110k is definitely "bachelor-class". You might not be able to comfortably raise a child, commute from Jersey to Manhattan, and make student loan payments on $110k/yr. Then you say, "well then don't live in Manhattan", which is probably true-but-not-obvious, but also implies you're going to take a wage cut to work somewhere else. And not eve…

You can easily commute from Jersey to Manhattan, make student loan payments and raise a child on $110k/yr. I did the first two on only $20,000/year (though I admit, my loans were a lot more sensible than those of the couple described in this article). You could also live on $110k manhattan if you are willing to live north of 111th st. A 2br 2bath up there ran $2100/month back during the bubble (less now).

I was offered a job at Bloomberg in 2003, at a significantly better starting than $110k/yr, moving from Ann Arbor, MI. I did this math. So, three things:

(1) I'll spare you yet another hypothetical family budget monthly itemization.

(2) I'll concede that it is clearly possible to raise a family in New York on $110k/yr.

(3) I'll assert again that it is not comfortable to raise a family in New York on $110k/yr, nor does it appear to be easy.

There are obviously a lot of sacrifices you can make to make the budget work out, but in a family scenario, not all sacrifices are tenable.

Re: The Great College Hoax

#62

Post by Retric »

tptacek wrote: post #58
acgourley wrote: post #56

Earlier quoted context omitted.

I appreciate your breakdown, and your post below about how its harder to rent with a family. I still think it's ridiculous. I'm not going to go into a point by point rundown because it would take a lot of space and fork the argument several times, but basically I feel that if you ran these numbers by most Americans they would first laugh out loud, then get a little angry. You seem to think access to top schools and a…

Let's you and I be clear: I agree with you that 2.8k/mo is not a dealbreaking debt load for a couple with a joint income of 200k. I'm just suggesting that, on the story's own terms, it clearly could be: their marriage could have easily broken up because that (large) amount of debt was incompatible with their life plan.

Breaking up is not going to reduce their debt.

Re: The Great College Hoax

#63

Post by Retric »

tptacek wrote: post #50
acgourley wrote: post #43

Earlier quoted context omitted.

Yes it's a lot of money, but it also leaves them with a lot of money left every month. I don't know exactly what your net income in CA on 200k is (and if they filed jointly, etc), but they should take home at least 10k a month. They still have 7k a month to live on. I don't see the problem.

Assume they're living in a house and they have one child. Then: $2800 for loans. $3500 for mortage and escrow. $1300 for child care (both work). $1000 for food and day-to-day living expenses. $1000 for utilities, Internet, services and recurring expenses --- parking, commute, health care copay and (with most employers) dependent coverage, etc. I get $9600. Survivable? Of course. You can clearly survive in America wit…

First off they started at over 200k/year and one consulted on the side so they where probably into 300k/year fairly quickly. With 200k in student debt you should not buy a house until it's paid down. Rent a nice place for 2500$ / month in 1995 and in 3 years that's down to 160k. This is normal for most people starting out. My guess is they where trying to keep up with the jonzes and living way above their means.

Re: The Great College Hoax

#64

Post by gaius »

time_management wrote: post #39

Shutter the bad and mediocre colleges, law schools, and business programs. These diploma mills border on fraud. Most people who think they went to "college" didn't. They were expensively babysat for four years because the job market couldn't figure out what to do with them (and, alas, still can't). The upper-middle tier schools (respectable but not distinguished state schools) shall stay in business but should be hal…

I think it's time to go to an "elitist" European-style system where only qualified students get to go to university

What system is that? Here in the UK the ex-polys churn out Media Studies grads like there's no tomorrow. You don't even need good A-levels to get in. GMTV did a story the other day on how they're working manual labour jobs now. Now don't get me wrong we need people to do those jobs but we didn't need for them to spend 3 years partying on the taxpayer first.

Re: The Great College Hoax

#65

Post by tptacek »

Retric wrote: post #59
tptacek wrote: post #38

Earlier quoted context omitted.

I don't know about "lower middle class", but in Manhattan and San Francisco, $110k is definitely "bachelor-class". You might not be able to comfortably raise a child, commute from Jersey to Manhattan, and make student loan payments on $110k/yr. Then you say, "well then don't live in Manhattan", which is probably true-but-not-obvious, but also implies you're going to take a wage cut to work somewhere else. And not eve…

Median household income income in the US 48,000 USD (2006). Let's say you get to keep 1/2 of the 60,000 per year over that for rent. That's easily 2,500 extra rent to cover living close to Manhattan / San Francisco over the national average and you probably don't need a car. The secret is to avoid Starbucks and other expensive things that are not part of the normal middle class lifestyle but seem so important to yupp…

That's a gross oversimplification. Drink a $5 cup of Starbucks every working day, and you've added $100 to your budget. Cut that expense; congratulations, you've saved 3% of your college loan payment. (Can you tell I've had this argument with Erin before?)

The big-ticket items I don't trust you're considering:

* Child care will cost between $1000-$2000/month.

* Commute will add $300-$500; parking $500-$900 (plus car payments --- $250-$400, plus car upkeep --- $100, plus gas, $150).

I know that people do live on $50k/yr, even near major metro areas. But I also know that 3 fillings at a dentist for my 7 year old cost over $1000, so I don't know how people do it on 50k/yr. I don't know, but I am pretty sure, that it isn't comfortable.

Re: The Great College Hoax

#66

Post by tptacek »

Retric wrote: post #62
tptacek wrote: post #58

Earlier quoted context omitted.

Let's you and I be clear: I agree with you that 2.8k/mo is not a dealbreaking debt load for a couple with a joint income of 200k. I'm just suggesting that, on the story's own terms, it clearly could be: their marriage could have easily broken up because that (large) amount of debt was incompatible with their life plan.

Breaking up is not going to reduce their debt.

No, but if both of them want kids, it will allow them to find a partner that isn't saddled with $1600/mo in college loans. As a partnership, breaking up potentially cuts their debt load in half.

Re: The Great College Hoax

#67

Post by tptacek »

Retric wrote: post #62
tptacek wrote: post #58

Earlier quoted context omitted.

Let's you and I be clear: I agree with you that 2.8k/mo is not a dealbreaking debt load for a couple with a joint income of 200k. I'm just suggesting that, on the story's own terms, it clearly could be: their marriage could have easily broken up because that (large) amount of debt was incompatible with their life plan.

Breaking up is not going to reduce their debt.

No, but if both of them want kids, it will allow them to find a partner that isn't saddled with $1600/mo in college loans. As a partnership, breaking up potentially cuts their debt load in half.

Re: The Great College Hoax

#68

Post by gaius »

silvajoao wrote: post #11
vaksel wrote: post #3

In this day and age college is worthless. Its pretty much 4 more years of high school, except this time you are paying $40-160K for it. The problem is that most college students deceive themselves. They go to school thinking that all those people who graduate and get $80-100K jobs are the norm, when they aren't. So they get into debt to pay for school, because "its an investment" and then when they graduate they find…

So you pretty much put off 4 years of salary, 4 years of raises, 4 years of building contacts, 4 years of climbing the corporate ladder [...] While I agree with much of what you say, 4 years in college surely builds contacts (likely of much better quality than otherwise), and you surely get a kick-start in the corporate ladder (if this is fair or not is another matter).

4 years in college surely builds contacts

I've not worked with or for anyone I was at college with, nor found a job through them, nor interacted with them professionally in any way. Sure we're good friends an' all, but the networking people think they're going to do in college doesn't really exist.

Re: The Great College Hoax

#69

Post by tptacek »

Retric wrote: post #63
tptacek wrote: post #50

Earlier quoted context omitted.

Assume they're living in a house and they have one child. Then: $2800 for loans. $3500 for mortage and escrow. $1300 for child care (both work). $1000 for food and day-to-day living expenses. $1000 for utilities, Internet, services and recurring expenses --- parking, commute, health care copay and (with most employers) dependent coverage, etc. I get $9600. Survivable? Of course. You can clearly survive in America wit…

First off they started at over 200k/year and one consulted on the side so they where probably into 300k/year fairly quickly. With 200k in student debt you should not buy a house until it's paid down. Rent a nice place for 2500$ / month in 1995 and in 3 years that's down to 160k. This is normal for most people starting out. My guess is they where trying to keep up with the jonzes and living way above their means.

I don't understand your math here. In 3 years, they reduce their debt to 160k. They can't buy a house until their debt is basically 0. How many years from now do they have to wait to raise children in a house?

Again, they didn't die. They just broke up. And $2800/mo is a shitload of money, however you want to rationalize it.

Re: The Great College Hoax

#70

Post by yummyfajitas »

tptacek wrote: post #61
yummyfajitas wrote: post #57

Earlier quoted context omitted.

You can easily commute from Jersey to Manhattan, make student loan payments and raise a child on $110k/yr. I did the first two on only $20,000/year (though I admit, my loans were a lot more sensible than those of the couple described in this article). You could also live on $110k manhattan if you are willing to live north of 111th st. A 2br 2bath up there ran $2100/month back during the bubble (less now).

I was offered a job at Bloomberg in 2003, at a significantly better starting than $110k/yr, moving from Ann Arbor, MI. I did this math. So, three things: (1) I'll spare you yet another hypothetical family budget monthly itemization. (2) I'll concede that it is clearly possible to raise a family in New York on $110k/yr. (3) I'll assert again that it is not comfortable to raise a family in New York on $110k/yr, nor doe…

Could you define comfortable? I'm really curious to know what goods and services are beyond your reach at $110k/year.

I've also done the math and lived it. Commuting from jersey is better, but even manhattan (north of 111'th st) is quite livable.

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