

How much a college degree is actually worth, in dollars - akharris
http://blogs.edweek.org/edweek/college_bound/

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rayiner
I'm not sure these figures are particularly illuminating, for two reasons:

1) Many realistic outcomes are obscured by the averages. The average college
doesn't lead to very good opportunities, and the average student doesn't work
very hard. Working hard at a good school (top 50) or even not working that
hard at a mediocre school (top 10) can lead to dramatically different results
than what might be expected from looking at the results of all students from
all ~5,000 or so universities in the country.

2) While the use of net present value is technically correct (the best kind of
correct!) it's also somewhat misleading. Say a college graduate earns $100,000
more than a high school graduate in the final year of his career. The net
present value of that (using the historic S&P 500 return of 7%) is $6,700.
Yes, if you're comparing a choice between earning $100k more in the final year
of your career with $7,000 right now, the latter is the better choice.
However, that is never the choice! A high school graduate cannot get $7,000 in
loans to invest in the market at 7% return. So from a practical perspective,
using net present value compares against a choice that the graduate doesn't
have.

It all makes sense when you look at things another way. The student is not
making an investment. He is the investment, one the bank is making in him. The
investment directly creates real value (as opposed to an investment in the
market, which does so only indirectly), so both the bank and the student might
come out ahead even if the net present value of the education is _less_ than
the amount borrowed to finance it.

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sanswork
I would like to see this with the cost of tuition subtracted and say the top 3
paying professions post college being removed. Take out doctors, X, and Y and
see what the numbers are.

Even for lawyers I was reading an article the other day that said more than
half of all law students in the US won't ever make a high enough salary from
law to justify their tuition costs.

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akharris
i had the same thought - the npv would change significantly, i would imagine.

