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From the article: " Over the course of his working life, a college-educated white male .... will have earned about $2.3 million. His high-school-educated white-

From the article: " Over the course of his working life, a college-educated white male .... will have earned about $2.3 million. His high-school-educated white-male partner will have earned $1.2 million." Let's say college costs $100,000 (tuition plus opportunity cost of income, etc). Now let's say instead of spending that $100,000 on college we invested the money instead at 6% per year returns. That will give you $1,028,572. The difference between college and no college is about $1,100,000. My point isn't that college isn't worth it (most of the time I think it is). My point is that the gains are not as great as a simplistic comparison might suggest. On a final note: The analyses comparing college to no college rarely adjust for things like IQ or emotional intelligence, which should really be the included so that there's no bias towards college simply because the smarter more conscientious part of the population decides to attend and complete college.

NinetyNine 15y ago
I'd like to refine this calculation after including the interest rates on student loans.
rayiner 15y ago
So let's say that everyone takes this advance and doesn't go to college. How does the economy earn that 6% return?
- glenra 15y ago
  Those people who don't go to college just go get a job instead. (If jobs need training, they can apprentice or otherwise learn-on-the-job, but they won't be spending half that time learning french literature or what-have-you) Since people are doing something more productive with their time than sit in a classroom, their lifetime productivity improves, hence the productivity of the economy as a whole improves. Given that college is a bad investment for most people, we'd be better off if fewer people did that. (Though the optimum is probably that some people go to college, not all or none.)
brc 15y ago
A good point well made. The problem is that we're all told 'go to college'. What we're not told is 'go to college and learn a worthwhile skill'. Personally I think the value of a college degree has dropped enormously while the cost has risen. Thus these types of calculations are going to look even skinnier 20 or 30 years down the track. Again, I'm not agitating to not go to college, but I would counsel any college-entry age students into asking what the real-world skills they are getting, and whether it is really worth the cost of admission. Sometimes it's a binary choice - you can't work in a field without a degree. In other cases, it's much less cut and dried. This particularly applies to higher degrees, where the marginal benefit of each additional qualification drops lower and lower.
- rcfox 15y ago
  > The problem is that we're all told 'go to college'. > What we're not told is 'go to college and learn a worthwhile skill'. I almost agree with this. I think that there is some ideal number of humanities students to be cranked out of universities per year, but we're way over that. As a result, the demand can't meet the supply. In fact, the demand might be reduced due to the troubles involved in filtering through the flood of applicants. The real problem is that universities behave like anything else: they'd rather make a quick buck. They admit way more humanities students than are needed because they can make more money that way. Engineering students cost a lot of money, they're whiny, and they smell bad. (Disclaimer: I was a whiny engineering student.) Why would you want more of them when you could surround yourself with kids who cost less and will pay you tons of money just to get away from their parents?
  - brc 15y ago
    Yes, I kind of agree, but I don't blame the universities. They merely respond to demand for humanities by teaching them what they want. I don't want to live in the type of place where students are effectively denied their choice even if it is a stupid choice looking from a monetary point of view. If kids with rich parents want to learn greek literature on their parents dime, well, good luck to them and I hope they get laid with their ability to wear a toga with panache. It's up to the students to work out for themselves that they're doing a pointless thing, and that it won't pay off. I suspect this is partly an information problem and partly a societal problem - there's too much emphasis on going to college as a social marker and not enough emphasis of what happens when you finish. Maybe there's a good website weekend project in there to do an cost/benefit analysis of different types of study which calculates the debt, the 1 year, 5 year and 10 year salary ranges for the graduate, and also compares other non-college trades and vocations for equivalent payoffs.
eel 15y ago
Won't it take a very long time for the high school graduate to even reach $100,000 in his investment account, assuming he doesn't win a lottery? If the high school graduate is contributing some monthly amount to an investment account, then the college-educated graduate could also invest at the same rate, making the difference in gains greater again. On top of that, a college graduate has the potential to invest an greater amount than the high school graduate based on the difference in income.
tedunangst 15y ago
Why does only the high school graduate get to invest? Can't the college graduate invest some of his excess earnings?
skeletonjelly 15y ago
Tricky one. College is an investment in your future. And it's not a linear gain I suppose. And if we're talking long term, inflation is going to bite that deposit in the ass no? But yes your point is correct, it's not a simple formula. A bit of risk, a bit of "gambling", a bit of crystal ball.

NinetyNine 15y ago

I'd like to refine this calculation after including the interest rates on student loans.

rayiner 15y ago

So let's say that everyone takes this advance and doesn't go to college. How does the economy earn that 6% return?

glenra 15y ago
Those people who don't go to college just go get a job instead. (If jobs need training, they can apprentice or otherwise learn-on-the-job, but they won't be spending half that time learning french literature or what-have-you) Since people are doing something more productive with their time than sit in a classroom, their lifetime productivity improves, hence the productivity of the economy as a whole improves. Given that college is a bad investment for most people, we'd be better off if fewer people did that. (Though the optimum is probably that some people go to college, not all or none.)

brc 15y ago

A good point well made. The problem is that we're all told 'go to college'. What we're not told is 'go to college and learn a worthwhile skill'. Personally I think the value of a college degree has dropped enormously while the cost has risen. Thus these types of calculations are going to look even skinnier 20 or 30 years down the track. Again, I'm not agitating to not go to college, but I would counsel any college-entry age students into asking what the real-world skills they are getting, and whether it is really worth the cost of admission. Sometimes it's a binary choice - you can't work in a field without a degree. In other cases, it's much less cut and dried. This particularly applies to higher degrees, where the marginal benefit of each additional qualification drops lower and lower.

rcfox 15y ago
> The problem is that we're all told 'go to college'. > What we're not told is 'go to college and learn a worthwhile skill'. I almost agree with this. I think that there is some ideal number of humanities students to be cranked out of universities per year, but we're way over that. As a result, the demand can't meet the supply. In fact, the demand might be reduced due to the troubles involved in filtering through the flood of applicants. The real problem is that universities behave like anything else: they'd rather make a quick buck. They admit way more humanities students than are needed because they can make more money that way. Engineering students cost a lot of money, they're whiny, and they smell bad. (Disclaimer: I was a whiny engineering student.) Why would you want more of them when you could surround yourself with kids who cost less and will pay you tons of money just to get away from their parents?
- brc 15y ago
  Yes, I kind of agree, but I don't blame the universities. They merely respond to demand for humanities by teaching them what they want. I don't want to live in the type of place where students are effectively denied their choice even if it is a stupid choice looking from a monetary point of view. If kids with rich parents want to learn greek literature on their parents dime, well, good luck to them and I hope they get laid with their ability to wear a toga with panache. It's up to the students to work out for themselves that they're doing a pointless thing, and that it won't pay off. I suspect this is partly an information problem and partly a societal problem - there's too much emphasis on going to college as a social marker and not enough emphasis of what happens when you finish. Maybe there's a good website weekend project in there to do an cost/benefit analysis of different types of study which calculates the debt, the 1 year, 5 year and 10 year salary ranges for the graduate, and also compares other non-college trades and vocations for equivalent payoffs.

eel 15y ago

Won't it take a very long time for the high school graduate to even reach $100,000 in his investment account, assuming he doesn't win a lottery? If the high school graduate is contributing some monthly amount to an investment account, then the college-educated graduate could also invest at the same rate, making the difference in gains greater again. On top of that, a college graduate has the potential to invest an greater amount than the high school graduate based on the difference in income.

tedunangst 15y ago

Why does only the high school graduate get to invest? Can't the college graduate invest some of his excess earnings?

skeletonjelly 15y ago

Tricky one. College is an investment in your future. And it's not a linear gain I suppose. And if we're talking long term, inflation is going to bite that deposit in the ass no? But yes your point is correct, it's not a simple formula. A bit of risk, a bit of "gambling", a bit of crystal ball.