I agree with a lot of the article, but a couple of idiots who pissed away the fruits of their education on too many vacations and fancy cars (obviously not any real investments, otherwise they could have refinanced their student debt) don't give a very good example.
Sadly I know _many_ people that make six figures and complain about things like student debt and credit card debt. One guy claimed he was lower middle class (he was making $110k at the time, with only a wife, who didn't work, to support). If $110k is lower middle class, then I must be in poverty.
It's like the idea that they can lower their living standard slightly to achieve financial goals just doesn't occur to some people. People that make good money and manage it poorly garner zero sympathy from me.
Then you say, "well then don't live in Manhattan", which is probably true-but-not-obvious, but also implies you're going to take a wage cut to work somewhere else. And not everyone is as geographically mobile as a 25 year old hacker.
You could also live on $110k manhattan if you are willing to live north of 111th st. A 2br 2bath up there ran $2100/month back during the bubble (less now).
(1) I'll spare you yet another hypothetical family budget monthly itemization.
(2) I'll concede that it is clearly possible to raise a family in New York on $110k/yr.
(3) I'll assert again that it is not comfortable to raise a family in New York on $110k/yr, nor does it appear to be easy.
There are obviously a lot of sacrifices you can make to make the budget work out, but in a family scenario, not all sacrifices are tenable.
I've also done the math and lived it. Commuting from jersey is better, but even manhattan (north of 111'th st) is quite livable.
Aggressively assume $2500/mo to rent a house (forget buying). Assume part-time child care @ $900, commute @ $400, lowball utilities @ $500 (I pay more than that in Chicago), food @ $1000, car insurance for one car @ $200, and dependent health care at $150.
At $110k/yr, you're now less than $1000/mo over break-even. Lose an alternator in the car, you're in the red. Fill 3 cavities, you're in the red. Fly to Tucson for a funeral, you're in the red.
Can you do it? Yes. But I'm not going to call it easy.
The apartments I'm talking about are close to the path, so forget the car (save $200). Path+subway every single day is $185/month (save $215), for a 23 min commute.
So using your numbers, you are $1000 over break-even. In reality, you are closer to $2500 over break-even. How is this uncomfortable?
At the other end of the spectrum, dry rice is 33¢ a pound, beans and corn are 50¢ a pound, vegetable oil is $1.29 a liter; multivitamins, water and gas are basically free. The standard corn/beans/rice diet costs about 10¢ per pound of cooked food, which is a meal for four people, 1% of what you were spending.
There are obviously meals we can spec here that cost nowhere close to $8/person. But:
* A plurality of families in America don't cook every night; that doesn't make them clueless crypto-rich people, it makes them normal. If you don't cook, your meal cost goes up.
* A couple contemplating a family life together could reasonably break up over the issue of feeding itself for 5-10 years off bulk dry rice, beans, and corn.
$1000 isn't $10/meal/person; it's $10/meal.
If a family is concerned about the corn/beans/rice diet, which costs like US$40/month according to my "other end of the spectrum" figures, then maybe they could splurge and add some oatmeal, some greens, some fruit and vegetables, milk, herbs and spices, spaghetti with sauce, peanut butter sandwiches, ramen, the occasional chicken. That could raise the price to US$100/month or even higher. But it isn't going to bring it close to US$1000/month.
US$2.50 of raw shoulder steak is therefore half a pound of steak; you'll be grossly obese and get gout by 35 if you eat that every meal. I don't know if that includes delivery, but it's on their delivery site. On the same site, boneless chicken breasts cost the same amount but drumsticks are a quarter of that, and that's before the discount for buying with your Albertson's Preferred Card, or buying on sale, or buying in bulk at Costco instead of Albertson's. I can't find any packages of chicken breasts there that cost $9.00 for a pound.
Where do you shop?
What can you do with chuck, kragen? You can, if you are among the 4% of people in the US with the means and expertise, grind it into hamburger or chili meat. You can, if you are among the 10% with a crock pot, make pot roast.
Otherwise, you can cube it and braise it for a stew, and that's about it. Most families can't do much with $20 worth of chuck.
A package of chicken breasts --- enough for 4 people (in my house, 3-4 breasts) is between 1.5 and 2 pounds.
I'm not sure your evidence is rebutting my argument.
- You can spend more than US$1000 a month feeding a family of four on 100% Safeway (or Albertsons) steak. I was wrong about that. It looks like your bill could go up to US$2000.
- I definitely don't know how to cook beef. In fact, I'm mostly vegetarian. I didn't move to Argentina for the steak. I'm surprised to learn that chuck steak is inedible without special equipment, except in a stew.
- Enough pre-deboned chicken breasts to feed four people for a meal also costs US$10, which is similarly US$1000 a month, if you eat something that pricey three meals a day.
I still want to know how you spend US$1000 a month on food without factoring in restaurants. Even approximately? I'm sure you're not eating a 100% meat diet, are you?
Let's say you get to keep 1/2 of the 60,000 per year over that for rent. That's easily 2,500 extra rent to cover living close to Manhattan / San Francisco over the national average and you probably don't need a car. The secret is to avoid Starbucks and other expensive things that are not part of the normal middle class lifestyle but seem so important to yuppies.
The big-ticket items I don't trust you're considering:
* Child care will cost between $1000-$2000/month.
* Commute will add $300-$500; parking $500-$900 (plus car payments --- $250-$400, plus car upkeep --- $100, plus gas, $150).
I know that people do live on $50k/yr, even near major metro areas. But I also know that 3 fillings at a dentist for my 7 year old cost over $1000, so I don't know how people do it on 50k/yr. I don't know, but I am pretty sure, that it isn't comfortable.
I currently live on $14k a year.
Granted, I'm 25 and live in a college town in the midwest. My share of the rent is $255/mo (live with g/f). I spend $115/mo commuting. My car is paid for. My high deductible insurance is $60/mo. I spend about $220/mo on groceries and another couple hundred eating out and entertaining myself. Of course I have no children.
I'm in no way saying everyone should live like me, but I'm quite content living so cheaply. It's not because I have to (I make about $60k/yr) but the vast majority of it goes towards 'vacations' of 6 months or so between jobs (sometimes that involves traveling). I could easily afford a mortgage if I was willing to be tied down, but I'd rather not be. I tend to work for 6-12 months and then take that much time off. The rest of it goes towards my Roth IRA and savings.
In the end my list was: My girlfriend, my cat, a week of clothes, my computer, my magic cards, and a couple books.
All the rest of it is just stuff that takes up space.
Once you realize what really matters, you start to question purchases. For a while I thought I really wanted to start a DVD collection, but then I realized it wouldn't be something I'd save from a burning building, so what was the point in having it? Even if the cost of the DVD is only about what two movie tickets cost, at least you don't have to store the movie tickets.
By the way, my dentist charges less than $100 per filling. Does the nitrous oxide cost an extra $700? (Ah, I miss getting fillings as a kid.)
I think Costa Rica is a more popular dental tourism destination.
All due respect to Argentina --- I've got team members from Argentina -- but come on.
Plus you make a good point on why people should avoid junk food and exercise better hygiene, and teach they're children to do so as well (I know that's not always the case, but I bet studies show it is a huge majority of the time).
Some people just have weak teeth.
On a more serious note: It would be nice if some finance education was mandatory. Ex: there is no good reason for having any credit card debt and yet people still have tons. It shows that they don't know how to manage their income even if they have lots to go around.
They still have 7k a month to live on. I don't see the problem.
$2800 for loans.
$3500 for mortage and escrow.
$1300 for child care (both work).
$1000 for food and day-to-day living expenses.
$1000 for utilities, Internet, services and recurring expenses --- parking, commute, health care copay and (with most employers) dependent coverage, etc.
I get $9600. Survivable? Of course. You can clearly survive in America with a $2800/mo student loan burden offset by a $200k/yr income. But:
* It's not "comfortable"; for instance, they aren't putting away money to put their kid in college.
* It's not resilient; they're fucked as soon as one of them loses their job.
* It's not flexible; for instance, they might literally not be able to afford to have a second kid.
Now, they don't have kids, I get that. But the moral of the story was, their student loan debt load was so high they couldn't stay married. They're smart enough to make 200k/yr, they're smart enough to do this math.
It's doable, more than doable. I hate being judgmental or assuming more than I know from their situation but these people just reek of getting overextended and not being able to apply any discipline in their lives.
Then again, they're both law students and didn't read the fine print. Would you really trust a lawyer that did that? I wouldn't.
I still think it's ridiculous. I'm not going to go into a point by point rundown because it would take a lot of space and fork the argument several times, but basically I feel that if you ran these numbers by most Americans they would first laugh out loud, then get a little angry.
You seem to think access to top schools and a luxurious lifestyle are prerequisites for a marriage. Empirically, this is false.
That's looking at this situation WITH children. Once you take the children out, as was true with the original case, it gets even more ridiculous. They no longer have such a case for a mortgage and even if they do keep it, they can put away about 1500 a month by not feeding and babysitting a kid.
"One breath of scandal, and not only would the Giscard scheme collapse but his very career would be finished! And what would he do then? I’m already going broke on a million a year!
The appalling figures came popping up into his brain. Last year his income had been $980,000. But he had to pay out $21,000 a month for the $1.8 million loan he had to take out to buy the apartment…
Of the $560,000 remaining of his income last year, $44,400 was required for the apartment’s monthly maintenance fee… $18,000 for heat, utilities, insurance and repairs, $6,000 for lawn and hedge cutting, $8,000 for taxes.
Entertaining at home and in restaurants had come to $37,000. This was a modest sum compared to what other people spent."
UrbanBaby is an anonymous message board frequented by some typical New York UES/UWS mothers. Here they talk about not being afford private school on $400k/yr
DC = dear child, DH = dear husband
Again, they didn't die. They just broke up. And $2800/mo is a shitload of money, however you want to rationalize it.
My point was that they could comfortably go from 2,000/mo in interest down to under 1,600/month in three years. Interest is API / 12 per month so principle gives (1 + API / 1200) ^12 return per year. (1.01)^12 = 12.8% that's after taxes and powerful. They should also be making more money over time even as their debt is less of a problem and you feel good that debt is shrinking fast. Which should help the psychological situation.
Using 12% an extra 1000 down saves them 10$ in next month and every month after that it keeps compounding. At 1000$ per month over interest you pay down 12,700 in principle in one year (assuming you don't reduce your payment as interest drops). In 3 years they are saving 430$ / month, but assume they roll that savings into paying down principle in a ~9 years it's all payed off.
But, they don't need to wait that long, they just need to find the right cushion so they feel comfortable taking on more debt. Pay down 82k (saving 820/month) in 5 years and the world looks like a brighter place, your making more money, and buying a house might be a good idea. Don't want to wait that long, fine share a 1 bedroom, drive a used Honda civic etc and and all that debt just about GONE in 3 years.
Thank heavens I have no loans, just have to pay my wife's off....
Again, I don't see the problem.
* Commute distance, which will determine how often they actually see their children.
* Lease security; it is extremely traumatic to move a school-age child to a new school district, or even just a new school.
* School quality: the places with the best rental stock are not necessarily places with acceptable public school, or accessible child care.
Again: the article's claim isn't that a couple can't survive on 200k. It's that they couldn't stay married. I can see reasons why.
1) education is valuable
2) education has become too expensive (implicitly stated)
3) the "hoax" is that of how our credit/debt system works, not about the collegiate system
Already people on this thread are jumping the gun and stating that college sucks and you don't need it. But this is a subjective view and should be taken as such. The only fact that I can get from this article is that college is becoming a financial burden - not that the education obtained is worthless.
There needs to be a way to make education accessible to all. Instead, the cost of getting an education is becoming yet another factor in further dividing the wealthy from the debt-laden.
The article states: A correlation between B.A.s and incomes is not proof of cause and effect. It may reflect nothing more than the fact that the economy rewards smart people and smart people are likely to go to college.
I would say that there is likely to be a strong correlation between being foolish enough to take an 18% student loan and getting a low-paid job later (taking on that kind of loan shows a staggering lack of common sense).
Seems to me that that's the only problem there. People should not be allowed to turn that kind of profit on student loans of all things. If there's one kind of loan that should be government-sponsored, this is it.
For the record, in the UK, student loans come in at about 2.5%.
It's because of this reasoning I'm surrounded by people who studied CS as a major and learned Java because it was projected to pay well (hint hint about the age level of developers I'm working with lately). The result is that I fix the mistakes of people who possess coding skills that I wouldn't even qualify as AP high school level. My point here is to highlight the idea of choosing an education that compels you to develop yourself into a "somebody" instead of being an "anybody".
Education is polish for the mind. It's best used towards developing yourself as an individual. Unfortunately it has devolved into a tool to charm money out of the system.
Her and her family are not good at finance or math, and they got swept into the popular way of looking at college in America: Get into school, take loans, finish school, pay off loans.
That was all true for a long time, but interest rates have risen sharply for loans in the last 5 years, and the value of a degree (especially a liberal arts degree) has fallen.
I'm not making excuses for them, I'm just offering a data point. My feeling is that we're about to see a shift in the popular view of college, but these views always lag the reality. Because of this lag, newly graduating students are going to have it worst of all.
Allowing people the opportunity to reach their full potential, no matter where they started from, adds value to our society. Intelligence matters a lot in how far you can go, but, for most people, so does education.
I said: It should extend to all because we all benefit from a more educated population.
Now you say: but someone has to end up working at McDonald's - and I think it'd probably be better if that person hadn't wasted $80k getting a degree they will never use in a subject they may not even like or really understand and have almost no hope of paying back the loan.
I think you're arguing against a strawman. I didn't say people should be shoved into university whether they want it or not. I said people should all have the opportunity to go there, and in a way that won't bankrupt them.
College costs should not be the device by which we filter university admissions. University entrance exams and interviews are a much better tool for that job.
Education is valuable, but it's far from proven that college is.
"See, the sad thing about a guy like you is in fifty years you're going start doing some thinking of your own, and you're gonna come up with the fact that there are two certainties in life. One, don't do that. And two, you dropped a hundred and fifty grand on a fucking education you coulda got a dollar fifty in late charges at the public library."
"Yeah, but I will have a degree," he says in return.
It's an open question whether the markets in general (i.e. not just startups, tech, etc.) will get over the apparent value baked into a college degree / GPA, and start worrying about what kids can do, what they know, and how they think.
the couple was $194,000 in debt. each landed a six-figure job. interest accruing at up to 12% a year.
"the pretax median household income in 2007 was $50,233," they where both making twice that in 1995. Even 12% of 200k = 24k/year should be easy when the couple is making over 200k/year. OMG, they only get to live off 3 times the median household income after graduation how they must have suffered.
Granted it would nice to have zero debt, but I suspect their real problems had little to do with debt.
> took out $60,000 in student loans
College isn't a bad idea. Majoring in subjects that lead to careers with more job seekers than jobs and taking out student loans is are bad ideas.
Taking out $60,000 in loans to go to law school of all places is not such a bad idea. Your pay after graduation would certainly make it worthwhile, and they both are making $100K+ a year.
Too many people think of college as just career preparation. But an education can be useful during the hours of your life when you are not in the office, too. Someone with a degree in history might not be able to get a job as a historian, but I'll bet you they will be more interesting at parties than someone who majored in accounting, works as an accountant, and spends his idle hours watching cable TV.
By the way, history majors learn all sorts of skills that are useful in other fields; these people synthesize conclusions from large bodies of contradictory facts. If I were hiring intelligence analysts, or investigators, I would look seriously at a historian.
I didn't go to an Ivy, I went to state tech school. My loans were at 4.5% (!) when I started, and the last one was ~7.5%. My initial tuition was $2500/sem, ended at $4500.
Note, that's over an 11 year period, covering bachelor's-PhD. Folks covered undergrad, and I did a lot of research work to cover many semesters of graduate school. My loans are somewhere around $50k total. Each semester's loan usually left me with tuition covered and $5k of spending money.
There are some things about not going to MIT/CMU I'll always feel like I've missed. But there is the other side of the coin :-)
That choice of a law school was probably crucial in how the story unfolded. That's not a law school with a high return on investment in that local job market.
I wouldn't blame going to college, or college choice for poor financial sense.
a) with lower list price (and thus lower total cost of attendance)
b) even higher prestige (thus making a higher starting salary even more likely).
They started out with reasonably good starting salaries, but unreasonably high levels of student debt.
I was considering law for a while, and have done a little research into it. Basically law is a numbers game. Schools only care about g.p.a and LSAT scores. Law firms only care about where you went to school and your g.p.a if you went to a bad school. And the firms who care the most about your school's name also pay the most. So the difference in salaries from private law firms at a top ranked law school and a bottom ranked school can be as high as 100k.
Sure there are loan repayment programs at law schools for people who go into public service, but again it seems like the top schools are able to forgive the most debt.
So basically, that law school seems like it has a horrible rate of return, and it looks like Kellum was lucky getting 100k+ a year. Also not looking at the terms of the loan was stupid
Law School Numbers:http://calwestern.lawschoolnumbers.com/
Salary info: http://www.ilrg.com/rankings/law/median.php/1/desc/MSPrivate
The problem is that most college students deceive themselves. They go to school thinking that all those people who graduate and get $80-100K jobs are the norm, when they aren't. So they get into debt to pay for school, because "its an investment" and then when they graduate they find out that instead of $80-100K, they have to settle for a job paying $30K a year.
So you pretty much put off 4 years of salary, 4 years of raises, 4 years of building contacts, 4 years of climbing the corporate ladder, all on the premise that it'll pay off in the long term. But it doesn't.
As long as the person didn't get a job at McDonalds, he'll be making more money after 4 years, than you would as a fresh college grad. And he won't have the huge debt, like you do. And that goes double for a person who majored in liberal arts.
I'm in a class about religion, another about creative (physical) design, one about interactive multimedia, one about advanced PHP work. Each semester I'm hoping to learn more about things I don't already know much about.
It's not about the degree. I haven't checked to see if I'm on the "prescribed path" to getting my degree, and I'm avoiding some things I need to graduate because they don't interest me (secondary language, technical writing). I'm in college because I want to discover things and I want to have four years to work on the things that fascinate me.
You are taking only 12 college credits..do you really think you can't spend 12 hours a week to learn that stuff on your own?
If you are learning on your own, you could have "taken" all your major classes in 1 year. Gotten a job. And then while working, could learn all that "extra" in your spare time, while being debt free.
Off the top of my head: college gives me people to discuss with, parties to go to, a place to live on my own, a DC++ hub for me to access pretty much anything I want to, and a bunch of professors that I can talk to directly and discuss things with. Plus, it's public school, so if I go the four years I leave with no debt.
I'm not going to college just for classes. Partly I'm here for the social environment. I'm also applying to YC, which I'm hoping means I'll get to spend a year or two doing meaningful stuff, then return to college much wiser and certain of what I want to do.
The funny thing is, when it comes to my major I'm nearly all covered. I've been writing for 6 years, designing for 4, I've used Photoshop and Premiere extensively, and I've worked in teams before. So in classes, I spend most of my time talking directly to the professor about things, I get my work out of the way, and the things I do expect to learn won't strictly be my major. (I'm shoddy at designing with images, for instance.)
The other problem with that is that I wouldn't know where to begin finding a job. I'm not satisfied with much. If I'm not working on my ideas, creating them as I see fit, I'm not happy. So I can't think of many jobs I could take that really would make it worth not going to college.
Perhaps it's better at places like MIT.
The other thing to remember is that chances are you're in the very slim minority of students who enter college with some sort of focus. As much as I'd like to rail against people who don't know what they want to do by the age of 18, it's pretty common. My friend is entering MIT, and he's extremely bright and I'm sure he'll get a lot out of being in a place with other bright people, but if I were in college with him I'd be just as frustrated at him as I am at the people around me who aren't working towards some great goal.
The problem of finding ultrafocused people is a tough one. I was in a program that assembled artists together for a month, and it was absolutely the greatest month of my life and I'm looking for a system that creates the same focus elsewhere. Dunno if other programs like that exist, sadly. Perhaps that's a problem worth solving as well.
While I agree with much of what you say, 4 years in college surely builds contacts (likely of much better quality than otherwise), and you surely get a kick-start in the corporate ladder (if this is fair or not is another matter).
I've not worked with or for anyone I was at college with, nor found a job through them, nor interacted with them professionally in any way. Sure we're good friends an' all, but the networking people think they're going to do in college doesn't really exist.
So that's two competing anecdotes. The number of variables here is enormous, but I'll pick out just one: my college network may be unusually meaningful (career-wise) because I'm still living in the same state that I went to school in.
When in reality you can self-teach yourself everything they teach you in college. Take programming for example, is it worth going into debt up to your eyeballs, if you could have learned everything on your own?
1. There are things you get in college that make life better outside of salary. If you're too reductionist to understand that, don't respond to me to debate, you already have my pity.
2. Tuition for a good state engineering school: $4500/sem. Average salary (2007, last time I checked) for a graduating computer scientist from the same school: $75k. If you want a good career, college is a great way to get it -- just think for 100 milliseconds past "should I go to college?" and ask "which degree program?"
3. The NY Times front page has a nice little unemployment stat graph today on unemployment rates by degree level.
4. I have friends who spent over $100k to get degrees in fields that barely pay $35k/year. They're brilliant and they love what they're doing -- some studies just don't pay well. For the larger decision, beyond income, enjoying life is pretty relevant. I doubt you'd understand, as you seem to look at school purely as a financial instrument. See point #1.
First, some comparison figures. Warren Buffett expects businesses he buys to return about 4% on capital. The US stock market during the 20th century returned about 10% on capital. A bank loaned me money to buy a house in 2000 at a 6.5% interest rate, before the mortgage bubble; presumably it thought that was a good return on the capital it invested in the loan. But it had some risk that I would default on the loan, which lowers its expected return on capital to something a bit below 6.5%.
This Joel Kellum guy spent US$36 000 a year on a law program, presumably for three years, for a total of US$108 000. Then he got a job that paid him at least US$100 000 per year, instead of the US$57 500 per year of an average college graduate. If we assume for the sake of simplicity that he only went to law school to make money (instead of, say, because of a passion for justice or the Socratic training in logic that are part of a law-school education) and that the difference in earnings is solely due to this legal training — rather than, say, because he was working 80 hours a week, or got very lucky — then his investment was returning at least US$42 500 per year. That's roughly a 42.500/108 = 39% return on investment.
That's not a full NPV analysis, of course, because it neglects the forgone income during his law-school years, the earnings difference he can expect over the years as his lawyer earnings increase at a more rapid pace than an average worker, and the three-year delay between investing his first tuition dollar and landing his junior associate position. Still, it's tough to manipulate those figures to get less than a 20% ROI.
I don't see Joel Kellum gets off complaining about a 39% or even a 20% return on his investment. Better yet, it wasn't even his investment — he borrowed most of it at rates that "have ticked as high as 9%"! Any investor would kill for yearly returns like that, even before you multiply by the leverage. Better still, in student loans, typically the lender shares in much of the downside risk — you don't have to make payments until you get a job, for example.
This is the kind of investment around which Forbes is tossing about phrases such as "consumer fraud" and "trading in half-truths that exaggerate the value of its product"? What is their agenda?
It's also kind of pathetic to see education as merely a means of making more money; but even if you see it in such narrowly self-centered terms, it's an extremely good investment.
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But the fact is that she's smart. Crazy smart. Quoted by the Supreme Court smart.
And she sees the world through glasses that are very, very different than my own. Our discussions are not about whether X > Y, but whether Y is even a measurable, meaningful value; whether this is the right question to be asking; what X means in a legal sense; what that implies for the how we build policy; and whether we can help people get understand Y.
This morning we argued about Robert Reich's premise of restructuring the economy and whether you could blame stagnant wages at the feet of Microsoft.
Every day that I talk to her I see nuances where I hadn't before. I get smarter.
I'd even go as far as to say I get smarter at a faster rate than I have talking to vast majority of the technical people I've ever interacted with.
However, I continue to be amazed at how many men I find that are scared by smart women. But that's a topic for another thread. And perhaps not on HN.
A historian obviously isn't going to be making lots of money later in life, but that doesn't make them worthless. A good education system should allow historians to come out of poor backgrounds too, not force everyone int apparently productive degrees. Hard sciences aren't everything in life.
However, to be a great historian is no less a task that to be a great physicist. Doing anything well is just as difficult as doing anything else well.
This problem is even more obvious in law school. "California Western School of Law" is not going to provide access to the level of means that most people associate with being a lawyer. These are the schools that law students call TTTs-- third tier toilets-- and the job prospects they provide don't offset the ridiculous debt one takes in order to attend them. A law program loses accreditation if less than 50% of its students fail the bar exam. There are many shitty law schools out there that take on mediocre, doomed students (like, 140 LSAT) and fail many of them in their first year, in order to improve their bar pass rate.
I think it's time to go to an "elitist" European-style system where only qualified students get to go to university and into professional programs, at least with the public schools. Only 5-15% of the population should be getting an academic college education, but it should be free (or very low-cost) for them. No student loans, no parents losing their retirement funds to tuition payments. The other ~85% can go to a private college if they can afford it, as in Europe, but it's not viewed as a universal right.
In Germany in 2006, 43,4% of people born in a certain year managed to make the necessary degree to be able go to a higher education system (universities, etc.). This is quite a difference to the 5-15% you assume to be "usual".
Additionally, the majority of universities here are public schools, with (recently introduced) fees of about 1000 Euros per year. This is also quite a difference to your assumption that 85% of students go to a private college.
Additionally, some traditional German qualifications ("Meisterprüfung", for example) are taught in other school forms, that are considered to be a university degree elsewhere.
Looking at the other European countries, the numbers are different, of course. That's party due to the fact that some countries require collage degrees for certain jobs not necessary elsewehere. In Sweden and Finland, for example, nurses seem to need one. In Finland, up to 71% of people born in a certain year seem to start a college education.
For other numbers, please see the fourth table here: http://tinyurl.com/dn22rh. The third column indicates how many percent of people born in a certain year start a higher degree. For example, it was 32% in Belgium according to the 2001 OECD study.
I should point out that I'm not against a third or half of Americans getting some kind of free higher education. I just think it's a waste for them to have an academic education, when only a minority of jobs require one. Appropriate vocational training would be better.
What system is that? Here in the UK the ex-polys churn out Media Studies grads like there's no tomorrow. You don't even need good A-levels to get in. GMTV did a story the other day on how they're working manual labour jobs now. Now don't get me wrong we need people to do those jobs but we didn't need for them to spend 3 years partying on the taxpayer first.
Guess a crummy school where more than 50% fail the bar wouldn't have any problems then.