7 ms·

This is certainly a factor, but I think HN's main demographic tends to overestimate the effect of college-related issues on the fortunes of the general populati

by bsanr2 7y ago

This is certainly a factor, but I think HN's main demographic tends to overestimate the effect of college-related issues on the fortunes of the general population, where college graduates are still a minority. I imagine that the most important factor is the lowered rate of home-ownership.

dd36 7y ago
Due to what?
godelski 7y ago
[0]: 2017: 33.4% of Americans (25+) have a Bachelors or higher 2007: 28% of Americans have a Bachelors or higher 1940: 4.6% of Americans had a 4+ year education (post high school) You're right, college graduates are still a minority, but there is definitely a largely increasing. There's definitely more people enrolling than that. 70% of Americans will enroll in a 4 year degree but <2/3 of them will get a degree and 56% will drop out by year 6.Also Full-time students are 55% less likely to drop out of college than students who go to school exclusively part-time.[1] So while college graduates are still a minority, it doesn't look like Americans who enroll in college are. They are clearly in the majority, and just because they don't graduate doesn't mean they haven't gathered debt. [0] https://thehill.com/homenews/state-watch/326995-census-more-americans-have-college-degrees-than-ever-before https://thehill.com/homenews/state-watch/326995-census-more-... [1] https://www.collegeatlas.org/college-dropout.html https://www.collegeatlas.org/college-dropout.html
- rayiner 7y ago
  Even if they don’t have debt, while they’re enrolled in college they’re not building net worth.
- brandonmenc 7y ago
  > just because they don't graduate doesn't mean they haven't gathered debt ...and end up even worse off - they have the debt, but not the degree that could get them the higher paying job.
- benj111 7y ago
  "56% will drop out by year 6. (of a 4 year college course)" I'm guessing I'm missing something here? I'd be dropping out of a 4 year course, after 6 years too.
  - gizmo686 7y ago
    Graduating does not count as dropping out. Since a 4 year degree does not require completion within 4 years, it makes sense to extend the statistics longer. That way you include people who tried to spend extra time to be able to graduate.
    - benj111 7y ago
      Perhaps? How do US universities work with regards to this? In the UK you don't really need to pass anything to graduate. I've got a BA (Hons), the BA I got for showing up, the (Hons) indicates I actually passed something. Second I would guess the vast majority of drop outs are within the first 6 months? How many people are going to waste 6 years for nothing?
      - dragonwriter 7y ago
        > How do US universities work with regards to this? In the UK you don't really need to pass anything to graduate. In the US you have to maintain both satisfactory overall GPA to not be dismissed and pass a required set of classes (which may include a number of electives) in order to graduate.
      - JamesBarney 7y ago
        Not necessarily. The reasons people drop out are family emergency, cost, personal emergency, and not being able to deal with the workload. Most of these reasons don't necessarily cluster in the first 6 months.
      - burfog 7y ago
        Somebody needs a pair of math classes to meet the requirements. They ignore it for 3 years. They then begin a 2-semester sequence of really basic math that is pretty much 7th grade (12 year old) level. They drop the first class, tray again and fail, and then pass. They fail the second class, fail the second class again, fail it yet again, and then are prohibited from attempting it because there is a limit of 3 attempts.
unityByFreedom 7y ago
The drop in net worth is caused by people not buying homes? Huh?
- whenchamenia 7y ago
  I have half a million I can liquidate, because I bought instead of rented. Many friends said it was a 'bad investment', but when the money gets spent either way, even a bad investment is better than none. It has never been easier to buy a home that you can afford thanks to loan programs and historically low rates, although now rising... But yeah, even though in many ways a home is a liability, it has equity you can leverage. In many countries, homeownership conveys other perks. In the usa, homeownership is also a strong sign of being a 'good neighbor' as you have skin in the game, while renters see little reward or penalty for being poor neighbors. There are of course shades of grey and other factors, but in general, the modern marketing to milennials that homeownership is futile or worthless is partly its own downfall.
  - argv_empty 7y ago
    when the money gets spent either way* The core of the "bad investment" argument is that the money doesn't necessarily all get spent either way. renters see little reward or penalty for being poor neighbors "We have chosen not to renew your lease."
    - patrick5415 7y ago
      > The core of the "bad investment" argument is that the money doesn't necessarily all get spent either way. Yes but that is part of the problem with the argument: it basically assumes perfectly rational actors who never cheat contributing to their index fund so they can go do/buy whatever. It’s a lot harder to just not pay your mortgage one month.
  - unityByFreedom 7y ago
    A home is an investment, and depending on the market, it may make more sense to rent and invest the rest in an index.
pjc50 7y ago
> the lowered rate of home-ownership Surely this is a result, not a cause? You have to clear a substantial wealth hurdle to get a mortgage.
- bsanr2 7y ago
  It's actually cheaper to own in many areas than to rent. What stops most people is their inability to save for a down payment and/or obtain a reasonable interest rate on their mortgage, both tools used by banks to hedge against the risk of lending. I'd argue that measures of that risk are somewhat arbitrary and reflect an institutional lack of faith in Americans' creditworthiness. So it's not that people can't own homes because they lack wealth, it's that wealth is hard to come by because they're not allowed to own their domicile.
randyrand 7y ago
You dont need to graduate college to have loans though, just attend. "The official four-year graduation rate for students attending public colleges and universities is 33.3%. The six-year rate is 57.6%" Accounting for that, a large majority of people attend college.

by bsanr2 7y ago

dd36 7y ago

Due to what?

godelski 7y ago

[0]: 2017: 33.4% of Americans (25+) have a Bachelors or higher 2007: 28% of Americans have a Bachelors or higher 1940: 4.6% of Americans had a 4+ year education (post high school) You're right, college graduates are still a minority, but there is definitely a largely increasing. There's definitely more people enrolling than that. 70% of Americans will enroll in a 4 year degree but <2/3 of them will get a degree and 56% will drop out by year 6.Also Full-time students are 55% less likely to drop out of college than students who go to school exclusively part-time.[1] So while college graduates are still a minority, it doesn't look like Americans who enroll in college are. They are clearly in the majority, and just because they don't graduate doesn't mean they haven't gathered debt. [0] https://thehill.com/homenews/state-watch/326995-census-more-americans-have-college-degrees-than-ever-before https://thehill.com/homenews/state-watch/326995-census-more-... [1] https://www.collegeatlas.org/college-dropout.html https://www.collegeatlas.org/college-dropout.html

rayiner 7y ago
Even if they don’t have debt, while they’re enrolled in college they’re not building net worth.
brandonmenc 7y ago
> just because they don't graduate doesn't mean they haven't gathered debt ...and end up even worse off - they have the debt, but not the degree that could get them the higher paying job.
benj111 7y ago
"56% will drop out by year 6. (of a 4 year college course)" I'm guessing I'm missing something here? I'd be dropping out of a 4 year course, after 6 years too.
- gizmo686 7y ago
  Graduating does not count as dropping out. Since a 4 year degree does not require completion within 4 years, it makes sense to extend the statistics longer. That way you include people who tried to spend extra time to be able to graduate.
  - benj111 7y ago
    Perhaps? How do US universities work with regards to this? In the UK you don't really need to pass anything to graduate. I've got a BA (Hons), the BA I got for showing up, the (Hons) indicates I actually passed something. Second I would guess the vast majority of drop outs are within the first 6 months? How many people are going to waste 6 years for nothing?
    - dragonwriter 7y ago
      > How do US universities work with regards to this? In the UK you don't really need to pass anything to graduate. In the US you have to maintain both satisfactory overall GPA to not be dismissed and pass a required set of classes (which may include a number of electives) in order to graduate.
    - JamesBarney 7y ago
      Not necessarily. The reasons people drop out are family emergency, cost, personal emergency, and not being able to deal with the workload. Most of these reasons don't necessarily cluster in the first 6 months.
    - burfog 7y ago
      Somebody needs a pair of math classes to meet the requirements. They ignore it for 3 years. They then begin a 2-semester sequence of really basic math that is pretty much 7th grade (12 year old) level. They drop the first class, tray again and fail, and then pass. They fail the second class, fail the second class again, fail it yet again, and then are prohibited from attempting it because there is a limit of 3 attempts.

unityByFreedom 7y ago

The drop in net worth is caused by people not buying homes? Huh?

whenchamenia 7y ago
I have half a million I can liquidate, because I bought instead of rented. Many friends said it was a 'bad investment', but when the money gets spent either way, even a bad investment is better than none. It has never been easier to buy a home that you can afford thanks to loan programs and historically low rates, although now rising... But yeah, even though in many ways a home is a liability, it has equity you can leverage. In many countries, homeownership conveys other perks. In the usa, homeownership is also a strong sign of being a 'good neighbor' as you have skin in the game, while renters see little reward or penalty for being poor neighbors. There are of course shades of grey and other factors, but in general, the modern marketing to milennials that homeownership is futile or worthless is partly its own downfall.
- argv_empty 7y ago
  when the money gets spent either way* The core of the "bad investment" argument is that the money doesn't necessarily all get spent either way. renters see little reward or penalty for being poor neighbors "We have chosen not to renew your lease."
  - patrick5415 7y ago
    > The core of the "bad investment" argument is that the money doesn't necessarily all get spent either way. Yes but that is part of the problem with the argument: it basically assumes perfectly rational actors who never cheat contributing to their index fund so they can go do/buy whatever. It’s a lot harder to just not pay your mortgage one month.
- unityByFreedom 7y ago
  A home is an investment, and depending on the market, it may make more sense to rent and invest the rest in an index.

pjc50 7y ago

> the lowered rate of home-ownership Surely this is a result, not a cause? You have to clear a substantial wealth hurdle to get a mortgage.

bsanr2 7y ago
It's actually cheaper to own in many areas than to rent. What stops most people is their inability to save for a down payment and/or obtain a reasonable interest rate on their mortgage, both tools used by banks to hedge against the risk of lending. I'd argue that measures of that risk are somewhat arbitrary and reflect an institutional lack of faith in Americans' creditworthiness. So it's not that people can't own homes because they lack wealth, it's that wealth is hard to come by because they're not allowed to own their domicile.

randyrand 7y ago

You dont need to graduate college to have loans though, just attend. "The official four-year graduation rate for students attending public colleges and universities is 33.3%. The six-year rate is 57.6%" Accounting for that, a large majority of people attend college.