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The average student loan debt in 2016 was $37,172. And while there are those that do take on significant amounts of debt, they typically are those seeking prof

by dlp211 9y ago

The average student loan debt in 2016 was $37,172. And while there are those that do take on significant amounts of debt, they typically are those seeking professional degrees, eg: M.D. or J.D. There are of course those who both take on large amounts of debt AND don't get a professional degree, and those people certainly made a mistake in their lives, but they are not your average graduating college student. Additionally, those with even an associates degree can, on average, expect to make more than the typical high school graduate. An Associates will net you about $400M over your lifetime, a Bachelors about $1MM, and a doctoral or professional degree will be about $2MM more. Now of course these are averages, and there are certainly overlaps where a high school graduate will out earn someone with a professional degree, but that is not the common case and should be considered an outlier. Taken even a step beyond that, if you fall into one of the top 10 occupations for a bachelor's degree, even in the worst case scenario, on average you will still make $400M more than your typical high school graduate. https://studentloanhero.com/student-loan-debt-statistics/ https://studentloanhero.com/student-loan-debt-statistics/ https://cew.georgetown.edu/wp-content/uploads/2014/11/collegepayoff-complete.pdf https://cew.georgetown.edu/wp-content/uploads/2014/11/colleg...

throwaway76543 9y ago
"The average student loan debt in 2016 was $37,172" To be clear, the opportunity costs of unearned and non-debt payments generally would be in north of 150k range. Assume 30k/year income 4x years is 120k, plus the 37k debt, plus non-debt spending. " An Associates will net you about $400M over your lifetime, a Bachelors about $1MM," And the same monetary investment in a fund earning 7% interest will be worth more than three times that over the same time frame. It is not a good financial investment, on average. Some degrees have positive ROI. Many - most - do not.
- matwood 9y ago
  > To be clear, the opportunity costs of unearned and non-debt payments generally would be in north of 150k range. Assume 30k/year income 4x years is 120k, plus the 37k debt, plus non-debt spending. Do people no longer work while in college?
  - throwaway76543 9y ago
    They necessarily do not work as much as they might otherwise. Even if we lower the wage opportunity loss to a mere $15k/yr, a 4 year degree falls short by a factor of two -- or a cool million dollars over one's lifetime. And that's without factoring in the non-debt costs. Realistically, the gap is much greater.
- dlp211 9y ago
  Did you just claim a 20x return on investment wasn't good? A 7% investment adjust for inflation will return about 4x over the same time period (40 years). I have no clue what the hell you are talking about.
  - throwaway76543 9y ago
    Saying "20x" return is meaningless without considering time. 1% growth will have a "20x return" if you're willing to wait 300 years. So no, a "20x return" is not necessarily good. What I've said is that the return from a degree program is less than half of a moderate investment return in the stock market. It's a very simple point I'm making here. You don't need to get confused with inflation - it applies similarly to both scenarios and drops out of the equation. Turning $150k into $3m over 45 years could be described as "average market performance." Turning $150k into $1m over 45 years using a degree could be accurately described as "a below average performing investment."
- TheCoelacanth 9y ago
  Good luck finding a bank that will let an 18 year old with no assets make a leveraged investment in stocks.

by dlp211 9y ago

throwaway76543 9y ago

"The average student loan debt in 2016 was $37,172" To be clear, the opportunity costs of unearned and non-debt payments generally would be in north of 150k range. Assume 30k/year income 4x years is 120k, plus the 37k debt, plus non-debt spending. " An Associates will net you about $400M over your lifetime, a Bachelors about $1MM," And the same monetary investment in a fund earning 7% interest will be worth more than three times that over the same time frame. It is not a good financial investment, on average. Some degrees have positive ROI. Many - most - do not.

matwood 9y ago
> To be clear, the opportunity costs of unearned and non-debt payments generally would be in north of 150k range. Assume 30k/year income 4x years is 120k, plus the 37k debt, plus non-debt spending. Do people no longer work while in college?
- throwaway76543 9y ago
  They necessarily do not work as much as they might otherwise. Even if we lower the wage opportunity loss to a mere $15k/yr, a 4 year degree falls short by a factor of two -- or a cool million dollars over one's lifetime. And that's without factoring in the non-debt costs. Realistically, the gap is much greater.
dlp211 9y ago
Did you just claim a 20x return on investment wasn't good? A 7% investment adjust for inflation will return about 4x over the same time period (40 years). I have no clue what the hell you are talking about.
- throwaway76543 9y ago
  Saying "20x" return is meaningless without considering time. 1% growth will have a "20x return" if you're willing to wait 300 years. So no, a "20x return" is not necessarily good. What I've said is that the return from a degree program is less than half of a moderate investment return in the stock market. It's a very simple point I'm making here. You don't need to get confused with inflation - it applies similarly to both scenarios and drops out of the equation. Turning $150k into $3m over 45 years could be described as "average market performance." Turning $150k into $1m over 45 years using a degree could be accurately described as "a below average performing investment."
TheCoelacanth 9y ago
Good luck finding a bank that will let an 18 year old with no assets make a leveraged investment in stocks.