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

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

#321

Post by learc83 »

virmundi wrote: post #211
adpoe wrote: post #205

Opinion: Just like the stock market, college is also an investment. There is risk involved. One of the main problems is that this is NOT communicated well. (If it all.) Too many people take on huge long-shot risks that are unlikely to pay off. Yes, if you get an English degree and become a professional writer selling books and screenplays at $1MM a pop -- that's an awesome and incredible gig. But not many people can…

You can't discharge college loans if taken from a federal program. Unlike other ventures where you can pay pennies on the dollar when you bet and lose, such loans are pursued by the full force of the United States.

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.

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

#323

Post by munin »

nikdaheratik wrote: post #272
vowelless wrote: post #68

Earlier quoted context omitted.

On the other hand, one should wonder why college is so expensive in the US in the first place. Even without any subsidies, non-American tuition is a fraction of the cost of the big universities in the US. Why? Why are book so expensive here? Why is so much money spent on buildings, stadiums and hiring football coaches? The highest paid public employee in 39 states in the US is a college sports coach! [1] Throwing mor…

Sports have little to do with it as most of that money is completely separate from the operating budgets of the Public Universities. It does seem to be a good way to attract students for whatever reason. Textbooks are expensive because they have a limited monopoly, but they still aren't a huge expense compared to the per-hour tuition and fees. The issue, IMO, comes down to decades of budget cuts from state legislatur…

Most sports programs (>80%) are subsidized by the university through mandatory fees charged to the students.

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

#324

Post by grafporno »

mncolinlee wrote: post #73
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…

We already provide free college to the best performing students and those students very likely achieve much higher ROI. I benefitted from a four-year tuition, room, and board scholarship from my college, as did my brother and sister from theirs. However, only a fraction of a percent receives academic scholarships and a good portion of scholarships go to star athletes instead. The German system is nearly comparable. O…

> Only 10% of Germans are accepted to Gymnasiums followed by Universitat

I just registered to point this out: This is completely untrue and has been for decades. Just have a look at this https://de.wikipedia.org/wiki/Abiturientenquote_und_Studiena... wiki article, the table on the right should give you an idea how the development looks like, even if it's in German, the "B erechtigten, Ges." column shows the percentage of pupils that get the Abitur (the certificate that qualifies you to study at an university).

It's been pretty much half of each year of pupils for a while now.

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

#325

Post by eveningcoffee »

branchless wrote: post #271
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…

Nope, it hasn't reached a natural ceiling. As the article says it's adding no real value above the background growth rate. The reason why it has overshot it's natural ceiling is because the price of college is set by available credit. The govt said they would lend X, that was the price. We should also learn this lesson for land. This is how prices are set.

I think you both are right partially. In the meantime too many people learn to detest higher education and people with a degree.

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

#326

Post by [deleted] »

Steeeve wrote: post #301
mncolinlee wrote: post #73

Earlier quoted context omitted.

We already provide free college to the best performing students and those students very likely achieve much higher ROI. I benefitted from a four-year tuition, room, and board scholarship from my college, as did my brother and sister from theirs. However, only a fraction of a percent receives academic scholarships and a good portion of scholarships go to star athletes instead. The German system is nearly comparable. O…

> a good portion of scholarships go to star athletes instead. That's simply not true. There are vastly more academic scholarships available than athletic scholarships. Athletic scholarships are regulated and limited to ensure that all schools can compete on even ground for student athletes. Even if you have an athlete who is a star student on academic scholarships it counts against the schools athletic limits. Aside…

[deleted]

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

#327

Post by gozur88 »

MrTonyD wrote: post #254
twotwotwo wrote: post #246

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 remember reading an article describing how college costs can be explained by an analysis of supply and demand. There have been a variety of historic reasons for demand rising at different times - mostly related to unemployment and lack of other economic choices. I keep hearing the meme that low-cost college is the cause of college expense - but college is free in many countries where they are doing quite well. So I…

College in the US is used by employers as a proxy for intelligence, something that's an outgrowth of laws and court rulings that date back to the '70s.

So if you want to put yourself on the path to the C-Suite in a Fortune 500 company or to a partnership in a major law firm, you have to get into one of the very top colleges in the country. That, in turn, means top colleges can charge pretty much whatever they want and it's still worth the money. Not because of the instruction students receive, but because getting admitted is highly competitive and those students managed to do it. In other words, it's a positive feedback loop driving up prices for a scarce resource.

Even when you get out of the nosebleed tier, colleges are easy to rank by their accept/reject ratio. So if you're a big employer and you have a candidate from Brown (acceptance 9.5%) and one from Cornell (acceptance 15.1%), you'd probably prefer the one from Brown, everything else being equal.

The sad part is adding more money just makes the problem worse for the same reason adding money to real estate markets just makes everything more expensive.

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

#328

Post by wmeredith »

learc83 wrote: post #294
twotwotwo wrote: post #246

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…

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 their legs cut out from under them over the last couple decades. It's horrifying. And the students are paying for it. As are the teachers.

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

#329

Post by tastythrowaway2 »

staticelf wrote: post #47
krakensden wrote: post #46

As a culture, we really need to stop telling 17 year olds to not worry about money, go to college, and figure something out. There is always someone ready with a romantic appeal to a classical education, and it is so frustrating for me. Wasting four years is a huge cost. Years, decades of debt is a huge cost. Going to college with no plan about money? The costs are assured. Plus, the degrees people are actually getti…

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…

As a butthurt American I only have one real gripe with what you said - our roads aren't free. Our taxes pay for them. I think we need to change this mentality and acknowledge that our taxes going to something else useful is actually a net good - not 'welfare.'

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

#330

Post by akhilcacharya »

gozur88 wrote: post #327
MrTonyD wrote: post #254

Earlier quoted context omitted.

I remember reading an article describing how college costs can be explained by an analysis of supply and demand. There have been a variety of historic reasons for demand rising at different times - mostly related to unemployment and lack of other economic choices. I keep hearing the meme that low-cost college is the cause of college expense - but college is free in many countries where they are doing quite well. So I…

College in the US is used by employers as a proxy for intelligence, something that's an outgrowth of laws and court rulings that date back to the '70s. So if you want to put yourself on the path to the C-Suite in a Fortune 500 company or to a partnership in a major law firm, you have to get into one of the very top colleges in the country. That, in turn, means top colleges can charge pretty much whatever they want an…

Hmm, what happens if we don't go to any of these schools?
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