
Is College Still Worth It? The New Calculus of Falling Returns [pdf] - SQL2219
https://www.stlouisfed.org/~/media/files/pdfs/hfs/is-college-worth-it/emmons_kent_ricketts_college_still_worth_it.pdf
======
seem_2211
I have a degree from a no-name university in New Zealand. I'd do it again for
a few pragmatic reasons.

1: Lots of companies will reject you on sight without a degree. I don't think
it's a good thing, but it is reality.

2: With a degree your ability to move overseas dramatically improves. I moved
to America after graduating. I flat out couldn't have done that without a
degree. Points based systems immigration systems like New Zealand have
dramatic bonuses for people with degrees.

3: You don't have to jump through the hoops and explain why you don't have a
degree all the time. Stupid reason I know, but it's something I've seen
friends without degrees have to do constantly - and not just in career
situations. As I mentioned, I went to a no-name university. If you live in NZ,
you'll know it. If you're an American, chances are, you've never heard of it.
But because I have a degree, it doesn't ever really come up.

4: The cost isn't that bad, when you spread it out over a career. My degree &
living costs cost about $60k NZD (~$40k USD). That's $1k USD / year, or $.50
per hour. Considering how my income has multiplied in the few years since I've
graduated (SF wages help tremendously here), the actual cost is barely
anything, even when you control for the opportunity cost of studying.

Where I think College returns make a lot less sense

• Paying out of state tuition for lifestyle reasons, when you're going into a
relatively low paid field afterwards (e.g. teaching).

• Paying private school tuition at a school without a strong reputation

• Grad school, in general, seems to be a rip off

~~~
amiga_500
You didn't go to uni in the USA and the paper is by the St Louis Fed on USA
grads.

You took your degree in a country with far lower inequality and better inward
education investment, and then jumped over to work in a country that doesn't
tax people enough to support USA students.

I'd imagine that is pretty good value.

~~~
seem_2211
I went to university in a country with a Gini coefficient of .35, and now live
in a country with a Gini coefficient of .39 (See OECD link below)

The funny thing is, my student loan is one of the highest out of my American
friend group† (although very normal amongst my NZ peers). Unlike the US, there
was a lot less much in the way of financial aid/scholarships available, so
sticker price was what people actually paid.

[https://data.oecd.org/inequality/income-
inequality.htm](https://data.oecd.org/inequality/income-inequality.htm)

† For people with undergraduate degrees

~~~
amiga_500
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...](https://en.wikipedia.org/wiki/Student_loans_in_New_Zealand#Student_debt_levels)

2: [https://studentloanhero.com/student-loan-debt-
statistics/](https://studentloanhero.com/student-loan-debt-statistics/)

~~~
cipher_system
$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%.

~~~
CydeWeys
$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.).

~~~
sokoloff
Yes, but think of it as someone else lent you money to be housed, fed, and
clothed for four years while you earned no income. That’s going to cost money
anywhere in the world, before a single book is purchased or lecture paid for.

------
brownbat
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 factor, as is the declining return on capital gains
over successive generations. Limited financial literacy and predatory lending
seem to be hurting recent grads too.

Most notably, the inability to discharge school debt in bankruptcy since 2005
may have had strong effects.

That last legal change remains bewildering to me. You have three parties:
schools, financial institutions, and teenagers. So uneducated teenagers are
expected to know whether or not their choice in school, degree, expenses, and
personal background will make their education worth it? When the other parties
have all the data and experience? And if it turns out everybody was wrong, the
now barely-employed twenty-something is least prepared to absorb the burden.
More importantly, the least susceptible to incentives to improve this endemic
situation for other future students. It creates a moral hazard which drives
schools to overprice courses of education that are higher risk, and removes
any incentive for lenders to educate borrowers on expected returns from
different choices.

Policy circles are hotly debating right now how to overhaul the entire system.
Maybe we should acknowledge the policy changes that helped break everything in
the first place, and reverse those as soon as possible.

~~~
rayiner
The three parties are schools, teenagers, and _the government_. More than 90%
of existing student loans, and nearly all new loans, are issued by the
government.

The student loan system will cost the government $170 billion in losses over
10 years, because interest doesn’t cover money written off due to hardships
and loan forgiveness. The non-dischargability of student loans protects the
government from further losses.

Non-dischargability is a reasonable feature given the other aspect of federal
student loans: they offer income-based repayment. Under Obama’s REPAYE, your
loan payments are capped at 15% of your discretionary income.

~~~
dahart
> The student loan system will cost the government $170 billion in losses over
> 10 years

I don’t doubt this, but it’s a statement that focuses only on losses and
completely ignores the economic benefits of the educated workforce.

$170 billion over ten years is on the order of 1% of education spending. Since
graduates and postgraduates are earning, on average, roughly 2x and 3x non-
graduates respectively, the extra income taxes paid by the non-defaulting
group of college graduates alone makes the loan forgiveness losses a drop in
the bucket, the income makes up for the losses many times over.

~~~
rossdavidh
Once the job market got better a couple years ago, the percentage of job
postings which required a college degree dropped. In other words, the
"requirement" was mostly a way of filtering, not something that actually
increased productivity.

Speaking as a person with two degrees myself, I can say that non-degreed
programmers seem to be just as productive as those with degrees. In fact, CS
majors in particular have a problem just solving the problem in front of them,
and often want to over-engineer things using the techniques and patterns they
learned in school that are applicable to huge systems, whereas non-degreed
programmers often just solve the actual problem they have without trying to
justify (in their own minds) years spent learning other techniques.

I am not at all convinced that a college-educated workforce is more
productive, for more than half the jobs in which it is required.

~~~
dahart
Productivity isn’t the metric that determines whether the government recoups
student loan defaults, income is. And the income of graduates is still
multiples that of non-graduates, as shown by the data in this article.

~~~
rayiner
Individually, yes. But that doesn’t mean that people are making more money in
the aggregate by more people going to college. If the government subsidizes
college and that results in more people going to college, but employers just
respond by taking previously non-college jobs and making them require college
degrees, there isn’t actually more money in the economy as a result to justify
the government expenditure.

~~~
dahart
You’re moving your own goal post. You complained about the government’s
relatively small outputs from the student loan program, which is absolutely
recouped many times over by today’s income premium, in the form of income
taxes, regardless of whether the economy grows.

Your hypothetical isn’t the way things are actually playing out, so I don’t
feel like it needs to be argued. Degree holders are generating value on
average, so the economy does, in fact, have more money as a result of
education. And the government also makes money on it’s investment in education
on top of that.

~~~
Akababa
I feel like you're talking past a lot of the other commenters in this thread.
I'll try to frame it another way:

Generating value is synonymous with growing the economy and being more
productive. You can't inflate incomes without either increasing productivity
or printing money. If degree holders command higher incomes without offering
higher productivity, it comes at the expense of non-degree holders earning
lower wages than they would have without the degree holders around.

In my opinion, much of the income premium comes from employers using degrees
as a filter (similar to a standardized test). Doing well on the SAT doesn't
make you more productive, but does give you a leg up over your peers.

~~~
dahart
I totally agree that a big factor in income differences is due to cultural
biases that favor degree holders. I don’t think degrees are economically zero
value though, for example patents are primarily held by inventors with
postgraduate degrees, and more businesses are started by degree holders.

I’m not really sure how to answer your first part, I’m not trying to talk past
anyone, but I feel like people are responding to my point that the income
premium is what matters to the student loan program by repeating the
conclusion of the paper that the wealth premium is going to zero.

The income premium and the wealth premium in this paper are two different
things, and even though people with degrees might end up having net zero
additional wealth accumulation at the end of their lives, that doesn’t mean
the student loan program is also net zero, or that people with and without
degrees have the same lifestyle.

The student loan program gets to make it’s money back before degree holders
get to save the money, so the income premium matters to the government more
than the wealth premium, when figuring out whether forgiving loans is worth it
or not.

~~~
Akababa
Right, so the issue with the income premium without economic growth argument
is that the government would have collected those incomes anyway, just from
different people (unless the student loans are structured as a % of future
earnings, in which case I apologize for my ignorance).

Of course, degrees aren't zero value, but the subsidies for education (student
loans) could still be distorting supply in a way that results in a net loss
for the government. For example, a self-taught engineer or entrepreneur spends
years in school instead of inventing or starting businesses. This is a poor
allocation of investment and human capital which results in a net economic
loss (including a loss for the government).

~~~
dahart
Why do you believe that school years take away from invention and business?
There’s no evidence of that, and a lot of evidence in the other direction.
Right now, both inventing and starting businesses are _strongly_ correlated
with degrees. The evidence we have suggests not only that student loans are a
very good investment, it suggests the investment is so good that the
government would make almost as much money back if they subsidized education
completely, if they paid for education and didn’t ask for the money back. The
evidence in countries like Norway and Finland seems to back this up as well.
They subsidize education, and their economies are strong, and their education
systems out-rank the US globally.

------
ransom1538
A person in our family is a specialized nurse. Two years of school, then some
more training. $60hr any hour they "wish" to work. Saturdays/Sundays are
$90hr, so is any hour after 8 hours. The demand is so high he just rejects
work. If he wants to work in American Samoa or Miami: hired. I hired a person
to install a garage door. $900 for an hour of work. My plumber wont show up
for a 30 minute $300 job. I will call again, tomorrow fingers crossed. Get
your brakes replaced - look at that bill. Try outsourcing that.

Everyone I meet that works at starbucks has a masters AND 90k in student debt.
Bankruptcy doesn't make student loans go away.

I think things are about to start swinging in the "non-college" direction.

~~~
prepend
You need some better contractors. I have multiple plumbers with same day
service for $95 service calls. My garage door was installed for $400 and it
took an afternoon.

Obviously prices vary.

I can make a living with a trade skill, but data shows I’m more likely to make
a lot more with a college degree. You have billionaire dropouts and baristas
with phds. But on average, degree nets you a lot of lifetime income.

Maybe that will change.

~~~
john_moscow
I would argue averaging across all degrees is makes no sense. STEM degrees do
pay off. Liberal arts degrees can pay if you want to boost a specific skill
and have a solid plan for using it. E.g. getting an English degree to become a
more persuasive speaker while promoting your otherwise sound and solidly
executed startup.

Aside from those 2 examples there are plenty of colleges with a business model
of selling overpriced useless degrees to people who can't be bothered to do
some due diligence before getting a loan. Those degrees won't pay off and
despite sharing the "college" name, I wouldn't average between the 2 groups.

~~~
seem_2211
Does STEM actually pay off, or does engineering/technology pay off?

I've got a few friends who work in science, and it seems to be a pretty poorly
paying field, with a real lack of job prospects, unless you secure a job at a
government research department.

~~~
prepend
I have friends with stem phds who aren’t making tons of money. But, I think in
general, stem degrees pay well.

I try to use reliable data sets [0] to help understand because anecdotes are
hard for me to make decisions. The data are almost always a few years old so
they aren’t perfect and could miss a new trend. But it’s the best I know how
to use.

[0] figure 4 shows stem 3rd highest after health and management
[https://www2.ed.gov/policy/highered/reg/hearulemaking/2011/c...](https://www2.ed.gov/policy/highered/reg/hearulemaking/2011/collegepayoff.pdf)

~~~
seem_2211
Fair enough. When it comes to career advice, I prefer anecdotes to large data
sets, because there are far too many variables, and it's too easy to torture
numbers.

~~~
kortilla
I take it you didn’t go the STEM route then. ;)

More seriously, anecdotes are terrible when giving advice to fresh high school
seniors on their way to graduation. When people think of degrees in certain
fields, they gravitate to the successful people (“I’ll study acting and make
millions like the famous actors I know”, etc). They don’t think of and aren’t
even aware of how many people get those degrees and fail hard.

That’s why they need to see the placement and salary stats to understand what
their up against. Once they understand a French Comparative Literature degree
has approximately no economic value, then they can make that decision
knowingly. Papering over that by pointing out the one leader that happens to
have that degree does more harm than good.

~~~
ipython
If that friend is himself an actor, or someone else who can influence hiring
decisions, then I would say go for it!

At the end of the day, people hire you. Not data. After all, who says that a
teenager can tell apart badly interpreted data any better than poor anecdotes?

~~~
prepend
At the end of the day, data reflects what all those people hiring people do.
Anecdotes are randomly useful for predicting because maybe you luck out and
find the right person, but probably you won’t.

Teenagers should be able to understand data by the time they pick a college or
career.

------
kerkeslager
One thing I don't see talked about a lot is the _risk_ involved in going to
college.

All the frequently-cited studies about college look at the incomes of college
graduates versus the incomes of non-college graduates, and then compare that
to the cost of education, and that generally looks fairly positive.

But of students who enroll in 4-year programs, _only 60%_ graduate within 6
years[1]. For these students, college has actively harmed them: they're
saddled with crippling debt, but don't get the benefits of a college degree.
Also consider that they aren't working as many hours, if any, during college,
so they lose even more in wages they could have earned.

The EV if starting and finishing college is coming into question, but the EV
of starting college is _clearly_ negative if you have only a 60% chance of
finishing.

[1]
[https://nces.ed.gov/fastfacts/display.asp?id=40](https://nces.ed.gov/fastfacts/display.asp?id=40)

~~~
kevindong
The 6 year graduation _heavily_ differs based upon selectivity of the
university in question. From one of the related tables linked in your source
[0]:

> Graduating within 6 years after start, males and female

> 2011 starting cohort: 60.4%

> Open admissions: 30.7%

> >=90% accepted: 42.3%

> 75-89.9% accepted: 57.8%

> 50-74.9% accepted: 62.0%

> 25-49.9% accepted: 70.3%

> <25% accepted: 86.9%

[0]:
[https://nces.ed.gov/programs/digest/d18/tables/dt18_326.10.a...](https://nces.ed.gov/programs/digest/d18/tables/dt18_326.10.asp)

~~~
kerkeslager
Yes, this is one of the problems: many schools are letting in students who are
unlikely to succeed without extra help, and not providing that help.

Many students who enter college lack the prerequisite knowledge to complete
even introductory college classes, and are placed in remedial classes. These
classes don't count for college credit, but cost the same as college classes
there's a limited pool of financial aid available to a student, and typically
this pool is smaller for remedial students, who are less likely to qualify for
merit-based aid. The results are devastating: only 9.5% of remedial students
graduate from two year programs within three years, and only 35.1% of remedial
students graduate from four year programs within six years.

[1]
[https://postsecondary.gatesfoundation.org/remedial/](https://postsecondary.gatesfoundation.org/remedial/)

------
cm2012
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://conference.iza.org/conference_files/CoNoCoSk2011/gens...](http://conference.iza.org/conference_files/CoNoCoSk2011/gensowski_m6556.pdf)
shows that if you control for IQ, the average person makes $100k more over the
course of their whole working life by getting a bachelor's.

\- This doesn't even account for the four years of work you lose by going to
college instead of working.

\- Its based on data from people who mostly graduated before the year 2000,
and by all accounts the value of college is becoming less, not more. It's also
based on a calculation when college was much cheaper.

~~~
throwawayjava
Those studies say something more like "UW Madison/U Washington/UIUC really do
give you as good an education as the ivies" and quite a bit less like "college
doesn't matter/is just a signal".

~~~
Spooky23
Ivy League matters if you want to be in finance or white shoe consulting.

Everything else, you just work hard at your first job and nobody gives a shit.
I went to a big SUNY school and was a mediocre student. We all made out fine.

~~~
Bootwizard
Agreed on the Ivy League part. I work with a guy that went to Princeton. I
went to a public University in Florida.

Sure he learned a lot more and had to do a thesis for his undergrad, but we
have the same job now.

He has no more leverage than me when it comes to that.

~~~
minblaster
And when that guy’s roommate strikes it big, who gets the call to join the
rocketship?

Steve Ballmer was Bill Gates’ roommate. You are getting free networking
lottery tickets with high achievers at an Ivy.

------
throwno
If trades make so much money, how come no one is bitching about fatcat
plumbers and roofers? Why hasn't the NY Times published any articles about how
"Big Plumbing is soaking the middle class" etc.? For all the ways the middle
class is getting hammered, I have yet to see one book about how plumbers are
killing the middle class like I have with doctors, lawyers, techbros, and
bankers. Until a journalist from NY Times or Bloomberg writes a book about how
the decline of the American middle class is due to a plumbing conspiracy,
you're just not bourgeois. Sorry.

~~~
throwaway100773
The issue is that trades don’t scale like all of the things you mention. Even
if you own a very successful plumbing company, your ability to scale is
constrained by geography, labor costs and finding people you can trust to
manage your company. Not to mention, there are market forces working against
the plumber trying to scale, and the plumber’s ability to affect policy is
proportional to the ability to scale.

Anecdotally, plumbers charge more per hour in some cases than many lawyers
make. Their income, however, is limited by their ability to book many jobs and
actually carry them out. The opportunity cost of one job is exactly another
job. So comparing to other wage earners their income is high, but compared to
a banker that can make several loans in the course of a day where the
opportunity cost is only capital (which they have practically unlimited access
to being that theyre a banker) changes the situation quite drastically.

~~~
chrisseaton
> The issue is that trades don’t scale like all of the things you mention.

The UK famously has a plumber worth $100 million - Charlie Mullins.

~~~
harrisonjackson
This is a great argument for starting a company in an industry where you are
an expert, but this guy isn't doing house calls for hourly pay. He's taking a
big cut of alllll the house calls.

According to wiki he is paying his plumbers more than I'd expect, which is
cool.

>The company promotes itself as providing a high-quality service, employing
"£80,000/year plumbers", charging £80–200/hour depending on time of day and
service performed."

~~~
chrisseaton
Someone said a plumbing business wouldn’t scale. He scaled a plumbing
business. Obviously in scaling it, this multi-millionaire is not personally
doing the plumbing anymore - you are right. I don’t see how that means he
hasn’t scaled it though?

~~~
thebean11
Exactly, none of the tech billionaires got where they are by coding or even
designing software forever. I don't see a fundamental difference between that
and managing a plumbing business.

~~~
throwaway100773
The point I was trying to make was that the trades don’t scale like tech or
banking do. It’s clear that this guy, who did manage to scale a trade, has a
net worth of about 100mm after almost 40 years of scaling, whereas the most
successful tech entrepreneurs have multiples of that in a quarter (or less) of
a timeframe. This guy is an exception, but still sort of exemplifies what I’m
trying to say. It’s worth noting that this guy may be the most successful
plumber in the world (or at least on a short list of the most successful
plumbers in the world). If we made a list of people in tech or finance, the
people would be younger and richer by several orders of magnitude in some
cases which is saying something when we’re talking about 100mm bucks.

My argument wasn’t that the trades don’t scale at all (this would be an
asinine argument as I know contractors that do scale and this guy is clearly
an exception to that argument), but rather that the trades don’t scale the
same way tech or finance do.

------
Animats
_" The rate of underemployment—working in a job that does not require a
college degree—was 42.5 percent among recent graduates."_

Wow. That, plus debt, is a huge hit.

The big item that analysis doesn't consider is the commonality of college
education. _" Between 2000 and 2018, the percentage of people 25 years and
older who had completed a bachelor's degree or higher increased by 9
percentage points, from 25.6 percent to 35.0 percent."_ \- Census Bureau[1].
That's for the entire population, so it lags changes for young people.

How did the St. Louis Fed miss that?

[1] [https://www.census.gov/library/stories/2019/02/number-of-
peo...](https://www.census.gov/library/stories/2019/02/number-of-people-with-
masters-and-phd-degrees-double-since-2000.html)

------
throwawayjava
Their familial controls don't make much sense to me.

An actuary's kid will have an easier time becoming an actuary. Same for
lawyers and doctors. That doesn't mean that college is a non causal factor in
those students lifetime earnings... Quite the opposite. You're not becoming
any of those things without college.

The student went to college precisely because they understand viscerally and
precisely _how_ college sets them up for a life of higher than average
earnings. And what they need to do at college to tap into that potential.

Similarly, I'm not sure I believe the claim that there's no obvious causal
link between education and financial acumen.

The big difference seems to be "do you know WHY you are at college?" And in
cases where the answer is yes, it's still a good choice.

~~~
mlyle
> Their familial controls don't make much sense to me.

There's a lot of recent evidence that, all else being equal (controlling for
educational attainment, test scores, and grades) parental income/social class
has a huge impact on income.

That is, if you come from a lower social class, you can expect a lower income
increase from college than someone coming from a higher social class.

There's significant policy implications here-- our long-standing goal of
getting lower income kids to take college loans and go to college may not have
a positive expected return for them.

~~~
vasilipupkin
no, that’s completely wrong. You are confusing averages and conditional
probabilities. On average, those from higher classes may do better - that
doesn’t mean that a kid from s lower social class should take that as
guidance. It means we should try to erase or lessen differences of
opportunities between classes. Some of these differences are probably innate.
A brain surgeon is likely smart and his kids are probably also smart. Some,
but most are due to informational deficiencies and networking effects.

~~~
mlyle
> no, that’s completely wrong. You are confusing averages and conditional
> probabilities. On average, those from higher classes may do better - that
> doesn’t mean that a kid from s lower social class should take that as
> guidance.

??? You're saying that someone should not consider the outcome distribution of
people similarly situated to themselves when making a choice? Isn't that
completely rejecting empiricism?

If, from a public policy standpoint, our effort has been to get to the poor to
college to end poverty; and the educated poor _do_ do better with education,
but not nearly as well as their middle-class cohort; and the present-value of
education is smaller than the present-value of their lifetime wage increases--
one has to question whether the policy is well informed.

If you're asserting that the picture is unduly distorted by those at the very
highest spread of the income distribution-- you're right. But the effect is
still when we look at median outcomes.

> Some of these differences are probably innate. A brain surgeon is likely
> smart and his kids are probably also smart.

Presumably we'd be able to measure this and control for this.

> Some, but most are due to informational deficiencies and networking effects.

Yes, and various kinds of cultural cues about class of upbringing that persist
after education and act to limit opportunity.

~~~
vasilipupkin
“??? You're saying that someone should not consider the outcome distribution
of people similarly situated to themselves when making a choice? Isn't that
completely rejecting empiricism?“

No, what I’m saying is presence of a statistical pattern in a whole population
is not evidence that we shouldn’t make policy to change it. Statistically,
those who live in Miami are more tan than those who live in Wisconsin, on
average. But if you expose a Wisconsin resident to the same amount of sun, on
average they will be just as tan.

~~~
mlyle
??? We're comparing the income difference (and ratio) between (poor background
+ college education) and (poor background + no college education) to the
income difference between (non-poor background + college education) and (non-
poor background + no college education).

In your example, you'd expect the Wisconsin guy to increase in tan _more_ when
you put him in the Bahamas and give him a dose of sun than the guy who started
out in Miami and was given an equivalent further dose of sun.

But we've measured the opposite-- the guy in Wisconsin (poor background) does
get more tan, but doesn't increase in tan (increase in income) nearly as much
as the guy who started in Miami (non-poor backgrounds).

~~~
vasilipupkin
No, because we haven’t done nearly enough for the poor guy. It’s not the case
that we’ve done everything possible for the poor and they still didn’t improve
much. That’s false.

~~~
mlyle
We're measuring the effect of one thing-- getting a poor person to college--
composed with all the other interventions that are spread through the
population.

We measure the value of this-- getting to college-- as very small and even
possibly negative.

We also measure interventions and their values / impacts on earnings much
higher.

Going "la la la but college would be much better and _itself a win_ if we did
50 other supportive things" is all great, but it's fundamentally handwaving in
the absence of evidence.

~~~
vasilipupkin
No, we don’t measure this. The study in question tries to make college wage
premium go away using questionable control variables. Sure, some skilled
trades can make more money than liberal arts grads. But very few people want
to be plumbers or work on an oil rig and for good reason.

------
JMTQp8lwXL
One of the costs that is often excluded, if you go the "not college" route, is
the toll of physical labor on one's body. Medical expenses can be substantial
and you didn't earn as much as an office job may have paid.

~~~
monoideism
> One of the costs that is often excluded, if you go the "not college" route,
> is the toll of physical labor on one's body

That's why, for people interested in technology, software development is an
incredible blessing. If you're clever about it, and plan ahead in HS, you can
easily skip college and come out making $100,000/yr within 3-4 years, even in
small markets.

I've never taken a single computer science class, make well over $100,000 in a
highly-challenging software development job, and no one has ever asked me
about a college degree (with the exception of one job that I regretted
accepted and which I quit in 8 months).

There are other similar routes available to people without college degrees.
Several wealthy people my parents know started out in construction, but
rapidly moved into flipping houses and real estate, and made a fortune. Their
physical labor was over by their late 20s.

There are many paths that skip college and don't end up working physical labor
after a decade or two. But you have to be clever and proactive (if you're on
HN, I'm going to assume you're at least the former).

~~~
cm2012
Same for marketing. College degrees in marketing are _useless_. Real work
experience can get you pretty good jobs much quicker

------
kucing
Coming from a small town in Indonesia, went to Singapore to study. Will end up
with about 30k SGD (~22k USD) in student loan. Fresh graduate pay for software
engineering in Singapore ranges mostly from 60-100k.

I think the decision worth it* because it opens up horizon, opportunities to
working overseas (not just Singapore) and much better living standard.

I didn't even know what a CS degree will do after graduation and just randomly
chose it because I like Math back in HS. I guess the real benefit of a degree
is the pointers and community you get. Surely this can be replaced with a good
mentorship, but that requires a good network beforehand.

*the quality of education in Singapore University IMHO is far from the quality of the content I found in the publicly shared course content in US universities.

------
mch82
The first two paragraphs of page 23.

    
    
        - Usury ceilings eliminated
        - Costs ballooning
    

In other words, the return on investment is falling because society is taking
financial advantage of & reducing investment in young people.

------
keiferski
A proper title would be _Is College Still Worth It [Financially]?_ Evaluating
an education purely on economic terms is the wrong move to make, but
unfortunately an increasingly common one.

~~~
mooreds
What other terms should be included? I can think of a few:

* Life experience

* Knowledge gained

* Friends made

But what would you add?

~~~
keiferski
Those three categories are pretty broad and essentially cover everything, but
my own personal addition would be: becoming aware of "unknown unknowns". A
proper university education exposes you to knowledge and worldviews that you
previously had no idea even existed.

This is the fundamental problem with self-education: you tend to get stuck in
local loops based on your current interests, motivations and knowledge. Sure,
the information is out there, but without a proper introduction by an expert,
real-world peers learning the same material, and the overarching school
structure, it may as well be written in hieroglyphics. External education,
when properly designed, should broaden the mind and prepare it for self-
education, but without it, you often end up with a fairly limited view of the
world shaped by whatever you personally find interesting.

~~~
paganel
Agree with the unknown-unknowns, the problem is (at least from my pov) that
University nowadays mostly familiarizes you with unknown-unknowns that are
kind of boring, i.e. stuff that will potentially bring you (the University
atendee) financial and societal returns further down the road (I get why they
do that, I’m not criticizing them for it, just exposing what I think happens).

Again, from my pov most of the interesting and not-boring stuff that can be
studied does not have that many financial or societal benefits further down
the road, and as such self-education seems one of the few ways of gaining
knowledge about that stuff.

------
esotericn
I would have paid hundreds of thousands for my Physics degree if they'd have
loaned me it.

The thing is that it makes sense if the degree leads to a dramatically higher
income and you actually use the chance.

If I'd stayed in my hometown instead of moving to London, it'd still be worth
it, but probably to the tune of 100-200K.

All of these numbers are probably lower than the benefit I'm likely to derive
over my working life but 18 year old me would have risk adjusted.

Across the population of course, the balance changes dramatically, because
huge numbers of people are terminally skint, working unskilled jobs, etc.

Most people probably shouldn't get a degree.

Who actually wants to be 'most people' when they're an 18 year old?

------
thrwaway69
Regardless of any opinions on either side, I don't understand why we have made
degree a social prestige? Someone in the comments said degree values will
degrade and they are probably right as it happened with lower education as
more and more people got in. Maybe there are lack of jobs or companies are
exploiting people by making them grind more in an artificial constraint
environment or some people are hogging off the resources and causing major
inequality in pay gaps? I have no doubt education is valuable and so is
experience but why does that have to compress or translate into a paper?
Should we really be running on an old feudal model of producing workers in
2020? I have a lot of questions. I dropped out of school recently due to the
toxic culture degrading my health to the point I am severely antisocial and
definitely depressed enough for no reason. The competitive grind is worse in
countries with overpopulation and the quality is just outrageous. I just
wanted to work on something cool, become a surgeon but that route was sealed
at 10. No money, no family prospects, grinding is too difficult and being a
drug addict and die young seems a better option if you had a non functional
childhood due to the whole burden later on. I thought life would improve with
vast improvements in productivity and industrial revolution but what we got in
the end seems to be mostly cosmetic for the past 20 years. Yes, having the
ability to order food or communicate is nice but that was doable before too.
Taxi on demand? Well, we had numbers before (even though I was born in 00s),
my dad has stories of it. Fancy animated avatar on social platforms seems
cosmetic. What else really changed in life quality?

------
obilecantrem
I have a degree from a state school in chemistry, it's been worth it for me.
In part because the GI Bill paid for it, but it also landed me several jobs
writing software where domain knowledge is required and not so easy to come by
without formal education.

------
motohagiography
College isn't worth it, but that's the whole point. It's becoming what
economists call a Giffen Good, that is, something people consume even more of
the more expensive it becomes.

The biggest value factor of all is Metcalfe's Law of network effects, where
the almost universal availability of higher education means that not pursuing
it places your starting position in life on the outer long tail of the success
curve. Not going to college is like being a business that decided to just
never bother getting on the internet, or a person who doesn't know how to
drive. Unless you move to some isolated backwater that isn't subject to the
network or are some kind of extreme outlier, you are at a huge disadvantage.

Notable that these articles about the doubtful value of a university degree
are written exclusively by people who have one.

The wider availability of education (via cheap debt) and downward mobility
means a degree (all things equal) is no longer as distinguishing and does not
have the same impact on life outcomes as it once might have. Even previously,
the people who went to college had such a huge social head start anyway, it
would be difficult to control for education as the determining factor in
success.

University is starting to resemble a "radical monopoly," (Ivan Illich,
summarized here:
[https://twitter.com/fietsprofessor/status/112207372586260070...](https://twitter.com/fietsprofessor/status/1122073725862600705))
where there is nothing discretionary about it.

Outside of STEM, I'd argue modern colleges offer students very little more
than a tribal affiliation, which is the elephant in the room for articles like
these. If you told kids why they need to go to college, it would devalue the
degree even further as they re-tribalized around other rites of passage. This
doesn't mean don't go to college, it means do absolutely everything in your
power to graduate college, because the arbitrary biases and disadvantages of
the alternative defy all reason and make anyone with an IQ above 90 insane.

When you look at college as a Giffen Good, which people need for participation
in a radical monopoly over the labour market, created by a network effect from
its debt fueled availability, of course it seems like a college education is
not worth it - but it's only ever not worth it to people who already have one.

I'd like a mainstream platform to write that view and put these "is college
worth it?" navel gazer articles to rest. If only there were an institution to
affiliate with...

~~~
deepnotderp
Nitpick: Veblen good, not giffen

~~~
motohagiography
Was going to go with Veblen because of status signalling, but when the price
elasticity of demand gets inverted, it was Giffen.

~~~
deepnotderp
Isn't that true for Veblen too?

~~~
motohagiography
If I remember F&D correctly, Veblen was more of a back fitted narrative
construct around luxury goods, where Giffen was the "impossible," artifact of
inverting the price elasticity of demand. They are related, but Veblen didn't
write that a wave of debt would cause leisure consumption, whereas the wave of
debt fueled demand is just the distortion that would make Giffen goods
possible.

------
mooreds
I have some kids and college is about a decade away for them, so this is
pretty timely. I remember reading a post in the 2000s about whether the
internet (or, more precisely, some application built on the internet) would do
the same thing to colleges as Craigslist did to the newspapers. Peel off the
valuable bits and by doing so disaggregate and destroy/heavily damage the
institution.

Still waiting for this to happen, but maybe lambda school and bootcamps are
the start. I expect credentialing of schools and the longer engagement with
colleges to make the transition longer. Bit I don't see how colleges avoid
being unbundled.

~~~
emodendroket
I have a degree, but not in CS, and after seven years in the industry I still
occasionally come across recruiters who treat me like I must have no idea what
I'm doing, or interviewers acting like I must be a genius for solving easy
problems. It's got to be worse if you have no degree at all. I'd tread
carefully.

~~~
non-entity
When my coworker discovered the other week that I didn't have a degree, he
straight up told me a couple of years ago, the company wouldnt have even
thought about hiring me.

------
PaulDavisThe1st
Hint to paper writers: you can put your figures inline instead of all at the
end.

What a dismal reading experience, skimming from pages of text to the end to
see what the cited figure(s) actually show, then back to the text again.

Who sanctions this sort of thing?

~~~
smnrchrds
For digital publishing, sure. In academic publishing, for print, or if the
same file is used for both digital and print copies, colour pages are often
clustered together to reduce the production cost. If you have 20 pages of
mostly black and white text each with a small colour figure, you have to print
20 colour pages. If you cluster them together, you can print 18 black and
white pages and 2 colour pages instead.

This practice will go away as all publishing moves to digital formats. But as
long as there is a print version for purchase as well, it will be more cost-
efficient to organize papers like this.

------
jackcosgrove
There is a line of thinking that college tuition should rise until the ROI on
higher education drops to zero, using some twisted Pareto logic. I would
consider such an outcome to be neither optimal nor efficient.

~~~
amiga_500
This is happening with education, healthcare and housing.

It's a logical mechanism of near unlimited credit creation to absorb all
productivity gains for capture by rentiers.

------
ryanmercer
I don't have a degree and am constantly told in rejections by potential
employers, and my own employer when applying for advancement, that they are
looking for degree holders. Many job listings also flat out state a 4-year
degree is a minimum.

A degree would absolutely, positively, beyond any shadow of a doubt improve my
chances of increasing my income. At my current job only about 7%.

But the tens of thousands of dollars of debt I'd have to take on to get that
degree at 4.5-7% interest (or higher)... yeah thanks but no thanks.

So, anecdotally at least, I can agree that there are pretty diminishing
returns to getting a degree. While I'd be all but guaranteed to increase my
income, I'd be paying out more though:

a 20k 10-year loan at 6.8% (finaid.org suggested this %) interest means I'm
paying 27,619.31

a 40k 10-year loan at 6.8% interest means I'm paying 55,238.63

At my current income the 20k loan, bumping up one position and considering our
raises inside a position are limited to less than 3.5% annually based on a
rather arbitrary 'merit review'. It would be 7-10 years of my increased pay
just to cover the loan, assuming no taxes were taken on the increase but also
factoring in insurance increases. That means in 14 years I could start keeping
more money from that 4 year degree if I could manage a 20k$ degree.

Ha!

~~~
tmpz22
Would you be willing to name names? Outside of government and defense
contractors I personally have not run into any blocks from not having a
degree, but I am in the SV bubble where up is down so I have a heavy bias.

~~~
non-entity
Not OP, I applied to a Wells Fargo job in Charlotte that wouldn't even let me
continue the application after entering that I did not have a degree. This was
about maybe 3 or so years ago. I had talked to several recruiters about jobs
at various companies (from consulting firms to small businesses) which cut
communication after learning I dont have a degree. Most recently was a few
months back when I talked to a recruiter about a job I was "perfect for" in
Atlanta, he called me back later that day to say he couldnt submit me because
"the position required a degree". I work at a fortune 500 company, and one of
my coworkers straight up admitted the company wouldnt have hired me a few
years ago.

These are just the example I could remember at the moment, I'm sure there have
been more.

~~~
ryanmercer
> that wouldn't even let me continue the application after entering that I did
> not have a degree.

I've had gobs and gobs of jobs found via indeed do this to me as part of the
'pre-qualification'. They want to know where you got your degree, sometimes
your GPA etc.

------
dahart
> we find that controlling for the education of one’s parents reduces our
> estimates of college and postgraduate income and wealth premiums by 8 to 18
> percent. Controlling also for measures of a respondent’s financial
> acumen—which may be partly innate—, our estimates of the value added by
> college and a postgraduate degree fall by 30 to 60 percent. Taken together,
> our results suggest that college and post-graduate education may be failing
> some recent graduates as a financial investment

There is no doubt in my mind that someone’s parents’ status and education, and
someone’s financial acumen, are both leading to higher incomes and wealth.

Why does it make sense to “control” for these things? Doesn’t this lead to a
distorted view, where large real differences in income between two people are
factored away?

Sure, financial acumen might be partly innate, or correlated with IQ or family
status, but some people surely gain financial acumen precisely by going to
college? Sure, parent’s education is a great predictor or ‘own education’, but
does that really imply the alternative- that when the professor’s kid is a
high school dropout that the kid is better off than other dropouts? Is that
supported by the data? Maybe yes, because daddy prof has more money to support
his kid, but what happens with the dropout’s kids and future generations?

I’m not arguing that the premium isn’t going down, it’s true that tuition is
out of control, but I’m not sure I understand how the methodology here isn’t
painting a starker picture than reality. Discounting 50% for ‘acumen’ is a
_huge_ influence on the numbers, and when you don’t discount for parents and
acumen, the reality is that people with college degrees are earning a lot more
actual money.

------
drallison
Acquiring the "college income premium" is not the reason for going to college.
College and universities allow students relatively unfettered exploration of
ideas and social interactions. While some of us manage to do that without the
umbrella of academia, most of us fare better at a college.

Moreover, colleges and universities (especially the great research
universities) provide a way to push back the boundaries of human knowledge and
transfer concepts and technology to a new generation. College is where you
meet friends and lovers.

------
50
Look, I'm studying undergraduate philosophy with no intention other than why
not. Would I say I could learn the material on my own w/o college? Absolutely
but I like the organized structure of college w/ professors, peers, etc. Am I
getting into debt? A fair bit. Is it worth the trade off? I certainly think
so. Will I say that five years from now? Most likely. Because here's the
thing: education as a means to an end is not what it's all about, and so many
of us subscribe to this fiction―to this warm stupor of society's fictions―that
we forget what it is truly about. College will always be worth it such that
you have an endless curiosity or enjoy erring in the direction of learning
which is deeply rooted into failing, or rather, not understanding, over and
over again.

~~~
monoideism
> Look, I'm studying undergrad philosophy...Am I getting into debt? A fair
> bit.. Is it worth the trade off? I certainly think so. Will I say that five
> years after I graduate? Not sure but most likely.

Spoiler. Been there, done that. Unless you're at an Ivy, if you're majoring in
philosophy, you'll not think it was worth it in five years. My sin was
Classics, but similar outcome.

Assuming you're on HN because you're teaching yourself programming, the sting
will be somewhat lessened (that's the route I took), since you'll at least be
able to get a job.

But it'll still sting to make those massive loan payments knowing that nothing
you learned is helping you with your professional life, and that things like
philosophy, mathematics, and languages (and computer science!) can be learned
just as easily with discipline, YouTube, and a few good textbooks.

It's _very_ easy to delay the pain of loan payments when you're in school, but
they'll be there waiting for you, inevitably, through sickness and health,
marriage and divorce.

If you have endless curiosity, college is even less worth it. Instead, being
loan-free gives you the freedom to work in areas that truly intrigue you, and
to work in very low-paying internships while you're learning.

But I know I won't convince you. Likely no one could have convinced me at the
time (although only one person tried, once).

Edit: if this were the 1970s or earlier, when you could pay for college
classes from waiting tables or a $10,000 loan (inflation adjusted!), I'd
absolutely say go for it. But taking out even $50,000 in debt at age 18 for
anything less than a guaranteed job with a good income (physician assistant,
nursing, accounting) is mortgaging your future. Taking out $200,000, which is
the going rate for most [edit: should read "many, private", and is probably
closer to $100,000] liberal arts 4-year-degrees, is insanity, but between
culture BS about degrees and "academic counselors", I know it may not seem
that way to you right now.

~~~
50
Thank you for the input. It's interesting, and hey, it might be the case down
the road. But my main philosophy behind my seemingly naive post is this: I
don't mind what happens. I'm of the opinion that it doesn't matter what is but
how you think about what is that matters.

Edit: I saw your edit, and again, thank you for your input. I would just like
to note that I'll be graduating with ~12k in debt - I went to a community
college first while living with my parents and transferred to a UC, and
California's higher education system supports low-income, first generation
households fairly well - to which I owe great gratitude to.

~~~
10000100001010
I'm about to finish paying off about $65,000 dollars that I took out for my CS
degree. I graduated 4 years ago and have a good paying job. So, I'm lucky to
have to be paying it off early. However, even with my 6 figure income, paying
off this large sum off money has been a huge burden and has majorly affected
other choices in my life like investments, career (I.e. I had to take the high
paying jobs), buying a house, etc etc. If I could go back and do it again I
would avoid any student loans like the plague they are.

Edit: just saw your edit reply to above edit :) that is much more reasonable
than the situation that I put myself into. Still, I would recommend doing
everything you can to avoid the debt. Paying back 1000's of dollars is a large
burden.

~~~
learc83
The $40k I had to pay back wasn't a burden to me at all because I went to a
state school and took public loans.

I had the option of an income based repayment plan too, so if I wanted to take
a low paying jobs my monthly payment would have just dropped.

The only reason it would have been a burden was if I felt like I _had_ to pay
it off in 4 years.

------
LessDmesg
When signing up for my current job, I didn't even bother bringing them my
master's degree. Too bad because it's from one of top two tech unis in the
country. Not to downplay the benefits of higher education, but it's certainly
not a prereq for good employment these days.

------
anjel
Higher learning was is and will always be "worth it." Knowledge is good.
Bloatful College administrations not nearly as much. Funny how no one ever
studies their utility/cost returns.

------
bitxbit
The last time I looked at this data (lifetime earnings) the difference was
close to $1M on average for men and substantially lower for women. The
opportunity cost of going to college is about 1/5 of that difference if you
pay up front but substantially more if you take out loans. Here’s another
thought that’s not discussed in any of the studies: what’s the impact of
someone attending college later in life? Say in late 20s? I’d argue that the
degree has greater impact on remaining future income under that scenario.

------
mattbillenstein
I made a very simple one spreadsheet model just yesterday after talking about
this with a friend:

[https://docs.google.com/spreadsheets/d/1KpmT8JdF-0CKyRk8_DL7...](https://docs.google.com/spreadsheets/d/1KpmT8JdF-0CKyRk8_DL7m3EWB7v4Hguj8bVVws62Ym8/edit?usp=sharing)

Every student should do a cost/benefit analysis of what a degree from a given
institution will be worth to them - too many students fall into massive debt
they can never pay back.

------
kazinator
> _Combined with a continuing surge in the number of new college graduates
> entering the labor market, this resulted in stagnating wages in those jobs
> along with a “cascade” of college graduates into lower-skill jobs. These
> underemployed college graduates, in turn, pushed some low-skilled workers
> out of the job market altogether._

Right ... yet, believe this paper when it says that those pushed-out-of-the-
job-market low-skilled workers with no college degrees are not any worse off.

------
anovikov
I'd offer a much simpler explanation: education is mostly a competitive tool,
when more people have it, it's value naturally declines right? As fraction of
population with a college degree increased from about 4% in 1940 to about 30%
today, obviously advantage offered by it, declined. And went to essentially
zero if measured by wealth because wealth is something only top of population
pyramid has, in general: fewer than 30%.

------
NPMaxwell
This paper argues implicitly for getting a college education. Reason is that
very few people would be able to understand this paper before getting a
college education. Many Americans may graduate college without being able to
understand this paper. For those who do graduate able to understand the paper,
I'm sure college increased their earning power and wealth.

------
anewguy9000
just want to add something that seems missing from much of the discussion of
higher education; consider the question rephrased as, "is it worth learning to
learn?" higher ed is not just job training. its exposure to ideas, opinions,
people, and energy in an environment explicitly _not_ tied to a profit motive.
it should be cheaper, and more accessible, but..

------
megiddo
It's rent-seeking. This outcome was obvious.

------
awat
Personally I feel like, one one of the variables that isn’t considered in the
returns conversation is time. Lots of employers have reimbursement programs
that can be used while working up even of you currently work in big retail or
corporate food.

It will likely take much longer but will leave you in a more controllable
financial situation in the interim.

------
fxtentacle
I wonder if HN is a good place to discuss this, because we have a pretty niche
group of ppl here.

A big chunk of the HN crowd seems to be self-taught highly intelligent and
highly motivated young guys who as a result became astronomically good in
their craft. For those people, potential employers will go out of their way
and bend their own corporate hiring rules to get the no-degree candidate past
HR.

And then there's the normal people working normal jobs. For those, not having
a degree will immediately disqualify them from 50%+ of the available job
openings. But this crowd is only marginally represented on HN.

Since it's like the last thing where young people need to be disciplined, I'm
sure many companies will treat a degree more like a proof that you're reliable
enough than like the additional education that it was supposed to be.

That also explains why "degree" has become a HR checkbox where nobody cares
about the specific skills that you supposedly learned.

So the correct question is: How do you prove your reliability (by getting a
degree) in the cheapest way possible?

As for grad school, that's really only for people who are idealistic and value
research higher than job security or having enough money to feed a family.

~~~
wojcikstefan
You seem to make a lot of assumptions about people who do and do not
visit/participate on HN. Is it based on a feeling or is there some data
available on that topic?

~~~
TheGallopedHigh
Sometimes data is not the only thing you need. Example: the statistical
significance of a parachute to avoid death or trauma when jumping from a
plane. “Conclusions: parachute use did not death or major trauma when jumping
from a plane...”

[https://www.bmj.com/content/bmj/363/bmj.k5094.full.pdf](https://www.bmj.com/content/bmj/363/bmj.k5094.full.pdf)

------
hurricanetc
Three words. Income Sharing Agreement. Banks and insurance agencies have
already calculated what a degree at a particular college is worth.

People just tend to get really butt hurt when they see that a degree in Tuba
Performance from NYU is not valuable.

------
blondin
college provides such access to knowledge not available anywhere else (not
legally to my knowledge). any progress is most likely to come from academia
first due to that concentration of knowledge.

so if we are truly heading towards a collegeless future, i am hoping that
anyone who can contribute to research can get access to that knowledge. money
is a major concern, but if we can't make progress then we have a bigger issue.

~~~
crimsonalucard
The internet changes this in a major way. However, colleges force students to
learn what experts deem as important.

This is very important as students tend to want to learn what's interesting
over what's fundamental and important.

In my mind, university is ALWAYS better then no university, the actual thing
that puts this in question is... is the cost worth it?

------
jakobmi
Why not study at a top German university instead? It's 100% free and you get a
ton of international experience, learn a new language, and can still go to
MIT/Harvard/Stanford/... for your master's or thesis

------
grumple
Wasn't worth it in the US when I went (graduated 10 years ago). If I could go
back in time, I'd tell myself to go right into industry.

------
t34543
I work in software and I’m a high school dropout. I’ve never even been asked
if I have a degree, I just leave that field blank.

------
dustinmoris
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 therefore we already have to teach ourselvs new things all the
time and be able to proof that we are qualified in something without a
university degree. So why a degree in the first place?

\- Before we had the internet, digital books, online training courses and
other learning materials at our fingertips one had to go to a different
physical location packed with other students and learn a subject at a slower
pace so that everyone could equally follow the topic. Today this is a waste of
time. If one has access to all the learning materials themselves, then they
can consume it at their own pace, possibly learn a 3 year course in a single
year. Why slow yourself down unnecessarily?

\- Experience > degree. After the first 2-4 years of work experience nobody
cares anymore about your initial degree, unless it's medicine or law. Once
you've worked, people are interested in your actual ability to deliver and
after 2-4 years there's enough data to convince someone how good you are.

\- The more people have a degree, the less it's something which makes you
stand out. I believe that being different is the best way to stand out from a
crowded and competitive market, no matter how. Basically you want to be part
of the minority. If nobody has a degree, you want to have a degree, if
everybody has a degree, then you don't. People like to see something special
in other people, if you can convince them that you know something without
going through a lengthy programm like everybody else, then people will think
you are smarter or something like that (even if it's not true). This only
works though if your in the minority. It's the same pshycology which allows
one person to charge 300% more than competitors and having the largest share
of customers, because they think that there's something inherently better
about it.

\- In many countries attending university means creating debt. There's good
debt and there's bad debt. If I take credit to buy a property which has very
high and real chances of drastically increasing in value, then it's good debt,
but if I take credit in order to learn something which I can learn myself and
which after 2-4 years won't even matter anymore, then it's possible very bad
debt.

I know someone who paid 150k for an MBA at a business school and I think the
money was wasted. If you pay 150k on an MBA in business, then clearly the
course material will be entirely wasted on you. 150k is good money that could
have been spent so much better in other areas, like buying property and then
see the value grow whilst receiving passive income through rent or investing
in an actual business which you want to create after the MBA.

~~~
vharuck
> 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. Universities have
staff who are paid to teach, talk with, and answer you.

That's not to say you're wrong about the value of universities in practice.
Kids are told to focus on reviewing textbooks with other students in the same
class, getting high grades, and graduating with a degree. People say "visit
professors during office hours," but don't stress that this is part of the
most valuable thing in a university: an expert who is required to help you
learn the field.

> Experience > degree. After the first 2-4 years of work experience nobody
> cares anymore about your initial degree, unless it's medicine or law.

Assuming a similar skill level. But a student can leave a 4-year university
with a higher skill level than somebody who learned on the job for 4 years.
Those people usually just have time to learn about the job they have, so they
might take longer to gain skills for the next rung on the career ladder.

~~~
dustinmoris
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.

~~~
vharuck
I've taken classes at two small private colleges and a community college in
the US (total of seven years, mostly part-time, for an undergraduate). None
were on the usual elite list. But you're right that I don't know much about
universities in other countries.

>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

Average skill of an expert in the field is good enough. Not an "expert among
experts," but an expert nonetheless. And most people will end up as experts of
average skill, so that's fine. I majored in math, and all my professors knew
more about the subject, knew how it was used, and had their own research going
on. Again, not an elite college, so they weren't big projects, but these
people weren't just failures who found a cushy job. As a student, "more
skilled than me" is all I needed. Anything they knew beyond what I should
learn in college wasn't useful to me. It only mattered they knew how to teach
it to me.

>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.

Alright, you got me there. Do you have links to non-anecdotal and contrary
evidence? Otherwise, I'm going study-hunting.

------
daodedickinson
Degree never helped me for shit. Someone rescue me...

------
lordnacho
College seems to be a thing to get done quickly, and cheaply. Probably even
with the easiest courses. Why do I say that?

\- The more time you spend, the more time you're not working and making
money/experience. You're also in a quite restricted social group with only the
professors providing contact with older, more experienced people.

\- There really is nothing you can learn in college that isn't public
knowledge. At best you get a better idea of what the experts think is
important in a field. So for instance I didn't read Marxist or Austrian
economics.

\- Nobody is going to know whether you did that advanced course on category
theory for coders. I'm sure it's both interesting and relevant, but you have
more time to learn this yourself, when you're not being judged by an exam.

\- You'll also learn things better when you're not constantly thinking about
proving it on an exam.

\- Everything is college is really an intro. A really evil one where you're
asked to fly over some field and then get asked some very specific questions
when it comes to exam time.

\- Of course there are things that really are work relevant at college,
especially programming related stuff. It's hard to know what they are as a
novice, but looking at it now it seems anything where you're in the practice
of using a repo and iterating a solution is what you're after, or using common
tools like git or tmux (there's a lot). That can occur in many types of
courses though, whether it's systems or human interface and so on.

Since there's a lot of Americans here, and I have some experience of that
system, I'd say go to Europe. Or the UK, if you like keeping it in English. In
Europe, most of the courses are very specific and short. I got a Masters
degree 4 years after high school, and I wasn't even at uni for most of the
year (3x8 weeks a year), so in theory it could have all been done in 2 years.
Which puts into perspective how much you're actually learning there.

------
WomanCanCode
College degree is only worth for high income positions like surgeon, medical
degree, nursing and some engineering field (chemical?). It's just not useful
for middle class income like teaching etc. But good luck in trying to get an
interview without any kind of diploma. They will think something is wrong you.

------
tardo99
It's funny to me that people can immediately see the issue with falling
returns here as prices increase, but can't see the same thing when it applies
to the stock market. In the stock market, the prevailing wisdom is "buy and
hold no matter what the price is, because you can't time/game the market." Why
doesn't the same logic apply to college? Shouldn't the efficient market cause
college costs to rise to the appropriate level? Given that, shouldn't you just
do it and ignore the cost?

------
WheelsAtLarge
What all these studies always fail to factor is that a college degree will
give you an advantage over someone that does not have one in just about any
situation. Just the fact that you have one will signal to the potential
employer that you can accomplish goals, meet a deadline and the many things
you need to deal with to get a degree over those that don't have one.

The real question is, "Does an ivy league degree, and those that are very
expensive worth it?" I suspect that in most cases it's not. An art degree from
Harvard will most likely not pay for itself. But an engineering one from a
respected state school will likely have a good return on investment.

Bottom line a degree is worth it. But you have to make sure you pick a major
that pays off in the end.

~~~
esotericn
I also find the analysis strange because it depends heavily on whether you're
profit focused.

If you are, then the average outcome probably doesn't matter to you, because
you're going to select for profitability in your degree choice, you're going
to move around for work, continuously study and train in adult life, and
generally you're gonna be fine financially (if perhaps not emotionally, oho).

If you're not profit focused - if you're doing the degree primarily and
substantially because you love X and want to do X - then what do you care if
it doesn't pay back? You got to be an X! The question is almost irrelevant.

I think a lot of analysis suffers from this averaging effect whereby actually
that average person doesn't exist.

There is no realistic path that would have lead to me making the average
income for my cohort, for example, because I'm just not that sort of person -
I'd rather just go relatively all out, or else work for a non-profit or
scrappy startup or whatever, so I either bin high or low.

------
virmundi
Hopefully the US can take a page from the Germans and institute vocational
schools. We look down on plumbers, electricians, etc. We constantly couch our
praise of them with phrases like, "Wait until your knee gives". I have a MSCS
from GA Tech. I've got about 18 years official experience. I get paid $95/hr.
Plumbers? $120/hr. Electricians are about the same. We need them. Let's teach
them. Maybe with apprenticeships.

~~~
bootlooped
Are plumbers actually working 40 billable hours a week? And how much are they
working that is not billable (driving from site to site)? I would be surprised
if they made more in a year than educated STEM professionals. The attention-
getting per-hour rate might not be a great metric.

~~~
astura
2018 median pay is $53,910 per year

[https://www.bls.gov/ooh/construction-and-
extraction/mobile/p...](https://www.bls.gov/ooh/construction-and-
extraction/mobile/plumbers-pipefitters-and-steamfitters.htm)

~~~
war1025
Which, to be clear, is nothing to sneeze at in large parts of the country.

