
Is college worth the cost? - jyrzyk
http://finance.yahoo.com/expert/article/generationdebt/43193
======
cperciva
This article includes one of the most misleading statistics concerning higher
education: "People with bachelor's degrees... still earn an average of about
$1.2M more than high school graduates over a 40-year career". Yes, there is a
correlation between higher education and higher salaries -- no, this does not
imply causation!

There are many confounding factors: People who are more intelligent, have
parent(s) who pursued higher education, have parents with higher income, or
are white are both more likely to receive a bachelor's degree AND on average
earn more than other people with the same amount of education. (In the past,
being male was a predictor for both higher education and higher earnings, but
this is not a significant factor for people born after 1980.)

In addition, the statistic ignores the fact that pursuing higher education
shortens one's career -- people who spend 4-5 years in college on average work
for 2-3 years less than those who started their careers immediately after high
school. As a result, comparing "40-year careers" is bogus -- the only
reasonable comparison is between the total careers of individuals, including
the time when one person is at college while the other is working.

Finally, even if the statistic were computed correctly and reflected
causation, it would be misleading: Different careers are not influenced
equally by education. Generally speaking, people don't finish their education
before they start thinking about what career the will pursue; someone who was
planning on becoming a plumber isn't likely to suddenly decide that he wants
to become a brain surgeon just because he finds that he has a bachelor's
degree.

Decide what you want to do (either as a single career, or more likely thinking
of a number of careers which seem interesting), and look at what
qualifications are needed for those. And never forget what Benjamin Disraeli
said: "There are three kinds of lies: lies, damned lies, and statistics".

~~~
especkman
As noted, these influences can be very disentangle from any real-world
analysis.

There was an interesting study a few years back that looked at the "outcomes"
of a cohort of people who had all been admitted to an Ivy League school. Part
of the study group attended and graduated from the Ivy League school they were
admitted to. The control group ended up matriculating elsewhere for whatever
reason.

Past studies showed at a significant improvement in earning potential for Ivy
League grads, but they didn't have a distinguished control group. What this
recent study found was that for most students of similar qualification (all
judged to be Ivy League material by the admissions boards at Ivy Leage
schools), attending an Ivy conferred no obvious advantage compared to
attending a non-Ivy.

The only difference was for students who came from more challenging
backgrounds, those whose families may have flirted with poverty and/or didn't
have significant educational attainment. In those cases, attending an Ivy
conferred some advantage over going elsewhere.

~~~
pg
Do you have a reference for this study?

~~~
jlhamilton
It's probably <http://www.irs.princeton.edu/pubs/pdfs/409.pdf>. I found the
link from an article on CNN at
<http://money.cnn.com/2005/09/20/pf/expert/ask_expert/>

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ivankirigin
There is an interesting group of ideas around intelligence, education,
credentialism, and signaling.

Getting a degree is a sign that you are smart enough to get a degree. Getting
one from a good school is that much better. The biggest loss if you learned
the exact same material on your own outside a university is that others aren't
signaled that you've received that education.

If you build something good, it doesn't matter where you are. People know
you're smart from what you've done.

There are millions of people paying for a credential that means less as more
people get it. Companies treat college degrees as a sign that you're not a
total failure.

It would be nice if there were better tests for ability. They work for things
like the SAT II, but I can't imagine an accurate test for post-graduate
ability besides a review of what you've made.

But companies are lazy. They don't have the time or money to really look at
the quality of most candidates, so they use signaling tools as filters.

------
especkman
Let me propose the radical idea that a college education is not solely
justified by it's monetary value.

~~~
adamdoupe
Can one really put a price on learning how to do a kegstand properly?

~~~
mattmaroon
$27.95

~~~
adamdoupe
Who are you charging for this, and how can I get in on the action?

------
nfriedly
For me, college was absolutely worth the cost. Focusing on more than just the
money, I met dozens of current and potential business clients. My side work as
a freelance web developer has come mostly through people that I met in
college.

I went to a community college paid for entirely by scholarships, so the cost
to me as far as money goes was only that of the books. The largest cost to me,
though, was the time invested in classes where I learned very little.

Back to money though, my pay jumped $2.75/hr at my day job as a direct result
of getting my two associates degrees.

~~~
steve
There's another cost, some jobs you just won't be able to do when you have a
wife, kids, and lots of loans to pay every month. At college age is part of
the very short time in your life where you are free from all this and can
easily focus on something harder than virtually anyone else.

Of course, the majority of people will never consider even performing at this
potential. But could it be different if college as we know it wasn't so
severely required?

That's the first cost that came to mind when I read the title. On the other
hand, there were some good parties and women.

~~~
jraines
Shotgun weddings and medical emergencies aside, nobody's going to force
anybody to get married, have kids, and take on a heavy debt burden. Screw the
Joneses. And this isn't to say you should be a bachelor for life; I'm sure
there are women out there who value freedom and a man who's willing to make
sacrifices and go his own way in search of that freedom.

~~~
steve
Should I limit myself to that supposed "woman out there" who is willing let me
work for many months at a time?

I hear that worked out great for hans reiser.

------
rokhayakebe
Take it from someone who quit. If you want to climb the corporate ladder than
definitely go to college and sell your parents house to finance it. It will be
worth it. I've seen it work. If you want to build your own ladder (as what I
am doing now), then I suggest you check that college thing again. I look
around and I see my friends who graduated from school and they all make 1.5 to
twice what I make a year, but not for long. The difference shows sometimes in
our lifestyle and the way we look at the future. They see title, I see users.
They see corporate car, I see users. They see 401k, I see Acquisition. Their
biggest dream is to make Project manager or CEO. Fuck it I am CEO, and my
wildest dream is to get that call from Sergey asking me for advices.

~~~
trekker7
Cool post. Do you have a website going right now? What do you do?

~~~
rokhayakebe
I sort off have a website for the consulting stuff I do now, but because I
sometimes get crazy here I would like to keep that aside. As for what I do, I
had 2 jobs and left one lately. Now I am focus on my main one, as a part of a
mobile software devel team ( I am not a coder, just a talker, but I sure know
how to bring in deals ).

------
jraines
Private, no. (Northwestern and NYU are up to $48K a year just in tuition. Are
you kidding me?)

Public, especially an in-state school if your state is fortunate enough have a
quality one, definitely yes.

College: still the best four years of your life. (Then again, I've yet to live
the four years one would experience after selling a startup for big money.
Maybe we could get input from pg or that Broadcom guy who built the
underground party den)

~~~
especkman
You do know that a lot of people going to private schools aren't paying full-
price, right?

Need based financial aid grants are often available (ie not loans) and
sometimes they are substantial. I've known people who have paid less for a
private school than they would have at a state school.

~~~
jraines
Yeah, I guess I didn't really consider that -- based on how the question was
phrased I was trying to consider the whole range of potential costs of college
from the most outrageously high to free.

~~~
especkman
It's a fair outer bound to place. I just like to be really clear about the
fact that people don't necessarily pay sticker price at private schools. I've
volunteered for my alma mater at college fairs and there are a lot of people
who are interested and then freak when they see the tuition. I have to imagine
that there are an equal number who don't even stop by our table because
they've done just enough research to think "expensive."

~~~
vlad
How about a "nutrition chart" requirement for each college of any type? It
would disclose the lower, more average charge per student over 4 years
computed by each college using federal standards.

Secondly, the government should run the loan program themselves for public
universities, since it's a lot cheaper for it to offer loans than to subsidize
banks to do the same.

~~~
especkman
The government used to have more involvement in the student loan programs. My
father started up a non-profit under the state board of regents to service
guaranteed student loans in Utah in the late 70s or early 80s after the feds
passed some big program. They did quite well for a few years, until the
regents made them transfer everything to various banks and shut the thing down
because it had the potential to be fabulously profitable.

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far33d
Name one other place where are surrounded by smart, thinking people of the
same and opposite sex constantly for 4 years.

Name one other place where the law basically doesn't apply and you are
basically encouraged to take huge risks with your friendships, your learning,
and your life (sometimes).

Sure, college is expensive. Sure, you have to do a lot of things you don't
want to do. But, you also don't have many opportunities to learn things that
are totally impractical from true experts in the field. Take advantage. Love
every minute. Get out of there and do something amazing.

Last, a lot of the people I met in college are incredibly smart and amazingly
successful. Some of them work on the most innovative software around. Some
write for world-renowned publications. And some of them just have really rich
parents. No matter what, if you go to a good university, you will meet people
that will help you someday later. Yah, privilege is a bitch, but if you have
the opportunity to have it, why not?

~~~
AdamG
Because it makes you feel guilty?

I find the feelings of guilt and responsibility are very much intertwined. It
seems the best-adjusted people don't feel either.

~~~
far33d
I try not to feel guilt about it. Rich white folks get what they want through
privilege. Going to a top notch college is a great equalizer for everyone else
who wasn't lucky enough to be born to the right parents - if you can get
there.

------
bmaier
If you haven't realized it yet, most of the education you're paying for in
college isn't found in a classroom. College is a nice buffer against the
transition to the real world where you can take risks without consequences for
the most part. A lot of a college's value comes from your peer group, which is
why smart people congregate at the top schools for the most part (aside from
career prospects and prestige).

------
chaostheory
Like a lot of things in life, it depends on what you want and how you want to
get there. It also depends on the institution's culture (we're going to ignore
GetDrunkAndParty U).

For technical and engineering pursuits, a good college is a great place to get
a fast and wide overview of theory, competing technologies (or philosophies),
and different specializations/tech aspects (database, programmer, ...). (I
think this is why I'm more of a generalist as opposed to java or php
master...)

More importantly, (a good) college puts a lot of smart, driven people in the
same place and time. Going to college allows you to form important
relationships with these people that can strongly affect both your personal
and professional life both now and in the future. I think both Apple and
Microsoft are great examples of my last point.

Finally (assuming you got a useful degree), in case all your entreprenuerial
endeavors fail in the short term; a degree can net you a high paying job with
a lot of free cycles to relax/regroup and get ready to start that next idea
you have =)

------
aswanson
Mine was free. However, a flaw in my character led me to believe that a) It
was trade applicable 2) They would teach me to build things. I studied
electrical engineering, and it was mostly applied mathematics and physics with
little systemic perspective. If I had to do it all over again, I would have
studied pure mathematics, comp sci, and physics and built things on my own.
But hey, free is free.

------
imgabe
Here's some interesting numbers. Let's say you go to a college for four years
and it costs $25,000/year, $100,000 total. To pay for it, you take out some
college loans at 7% interest that have to paid back in 10 years. So, your loan
payment is $1161.08/month. In total you'll pay $139,329 by the time the loan
is paid off. So, you earn 1.2 million more over your life time than the non-
college grad, but after the cost of college you're only ahead by about
$1,060,000. I'm supposing here that by "over your lifetime" means until you
retire, that is say from age 22 to age 65.

Now, suppose you don't go to college but instead you start working at 18. You
apply yourself to your job, learn what you can on your own time, and by age 22
you've got four years experience and you've been promoted the point that you
can sock away $1161.08 per month in savings. Say you do this for 10 years and
keep the money in a conservative mutual fund that earns an average return of
7% per year. After the 10 years are over you've got $200,965 in savings. At
this point, you stop investing. Even with no additional money, by the time
you're 65 (33 years later) you'll have $2,011,064.27 or roughly $1 million
more than the guy who invested his money in college.

Of course these are just some made up numbers. A lot of people who aren't
motivated to go to college are probably also not motivated to save that much
money and live that frugally. If college costs you less than $25,000 per year
it might be worth it, or you might go into a profession that allows you to
earn way more than $1.2 million more than the average high school grad. On the
other hand, lots of colleges cost a good deal more than $25k/year. Also, the
high school grad might invest his money more aggressively and earn more than
7% interest. It would be interesting to see where the crossover point is in
terms of college cost, loan interest rate, investment interest rate, and so
on. The point remains that a return of 1.2 million over 43 years on a $100,000
investment is pretty crappy (around 5.8% compounded monthly, slightly better
than an online savings account)

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dawie
Yes it is. I believe that the best investment you can ever make is in
yourself. Colledge cost me $40K and I have made more than $160K in 2 years
after Colledge working. I have made an 33% ((40/120) * 100) on my investment
in myself and its still growing. The growth of my investment in myself is
infinite and way bigger than any other investment.

~~~
AdamG
The _price_ of college is only a small fraction of the _cost_ of college.

And yes, I learned this in an economics class... in college.

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mynameishere
People should be apprenticed at 13, and should enter professions at about 18.
Only jobs requiring memorization of a large body of prior work (medicine or
science) need more than that.

~~~
david
Well, I liked your comment. High school has mostly been a waste of time for
me. I don't see why kids can't get apprenticed or go to college or do
something productive at that age.

~~~
AdamG
High school wasn't all that bad, and hell, I learned some things - a lot my
own, but a lot from good teachers, too. Something I noted when I hit a rough
spot a few months ago was that there is no teenage angst when you're working
from six AM till eight PM doing hard labor. Not that I was asking for it!

I think it's simply a matter of human nature; given too much leisure, or too
high a quality of life, our brains will still be physiologically unable to
feel a proportional level of happiness. At the chemical level, there are only
so many neurotransmitters to go around.

Anyway, the point of all this is that I would have been thrilled to get a
"real" job at that age, but I'm not sure that was right. I was always very
much in a hurry to finish school, and now that I have a job and am in college
early, I keep wondering if, and feeling like, I've made a terrible mistake.

And a separate point about the article: The cost of college is almost entirely
the fact that it uses up the four most productive years of your life. That
most people choose college almost on instinct surprises me. Forget buying a
house or a car - this decision is orders of magnitude more expensive. If you
want to have an extraordinary life, you're going to be on that path by the
time you're 22, or you're not. It's worth noting that Einstein made his
contributions to physics at the age of 25, and even that was somewhat old to
develop something so innovative. At the same time, while he stayed influential
and productive in physics, he never published anything as revolutionary. At a
certain age - I'm inclined to think it's usually in the early to mid twenties,
based on anecdotal evidence only - you just lose that ability. If you go to
college, you're basically saying "I'll trade my ability to change the world
for a predictable life." And honestly, right now that's a trade I would like
to make, but I'm just not doing it, and I don't know why.

And besides, every time I put this in writing I am struck by the incredible
level of arrogance and hubris in my words (I'm no freaking Einstein!) and I
really don't feel like writing again for a long time.

